Executive Briefing Gary Robinson Resmed

Global leaders in sleep and respiratory medicine1 © ResMed CeBIT Conference 20101 © ResMed CeBIT Conference 2010

Born Global - Delivery on Export Excellence Across Global Markets

Global leaders in sleep and respiratory medicine

Gary RobinsonVP – Supplier Alliance

Global leaders in sleep and respiratory medicine2 © ResMed CeBIT Conference 2010

Agenda

• ResMed overview

• Sleep-disordered breathing

• Market growth drivers

• Product innovation

• Strategic alliances

• Global integration

• Global strengths


What Does ResMed Do?

Global leading developer, manufacturer and marketer of medical devices to treat sleep-disordered breathing (SDB) and other respiratory conditions


ResMed – Global Operations

• Operate in 70 countries through wholly owned subsidiaries and independent distributors

• Excellent leadership and a team of 3,000 personnel in direct offices in 18 countries

• Continuing innovation– 2,100 patents, 1,100 design registrations granted

and pending – June 2009

• Manufacturing in Australia, US and Europe, and Singapore

NYSE: RMDASX: RMD.AX


ResMed – Global Opportunity

The sleep-disordered breathing (SDB) market

• Global market size approximately $2.5 billion

• Market growth in US estimated at 15-20%

• Market growth in OUS estimated at 10-15%

• Market <10% penetrated


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Strong Sales Performance - Quarterly

Trailing 12 Months Revenue:

$1.0B

US

$ (M

illio

n) FY 2009 EPS $1.90

20% CAGR


Global Sales by Region & Product

Q2 2010

Americas 54%

Europe 38%

Asia-Pacific 8%

Masks &Accessories

41%

Flow Generators59%


Innovation

Patent new products to address current and unmet clinical needs in both sleep disorders and respiratory insufficiency with a commitment to providing the highest quality products in the market.

Education and awarenessEffective global marketing of sleep-disordered breathing via public relations and clinical education campaigns.

Investing for global growthReinvest capital into dedicated long term resources geared toward expanding our global reach.

Global Strategy


Sleep-disordered Breathing (SBD)


Types of sleep-disordered breathing (SDB):

• Obstructive sleep apnea (OSA)The most common type of sleep apnea.

It occurs when the upper airway closes but efforts to breathe continue.

• Central sleep apnea (CSA)This affects only 5-10% of the sleep apnea population. It occurs when

the muscles of respiration fail to act, though the airway remains open.

• Complex and mixed apnea (CompSA)

A combination of OSA and CSA.

Healthy upper airway:

Obstructed upper airway:

Partially obstructed upper airway:

What is Sleep-Disordered Breathing?


Treatment for Sleep Apnea

• CPAP - Continuous Positive Airway Pressure

• OSA treatment first described in 1981 by Sullivan (Lancet)

• Works as an air splint to keep upper airway open during sleep

• Prevents upper airway collapse and associated physiologic responses

• Most effective non-invasive therapy


Externally

• Choking arousals• Fragmented sleep• Nocturia• Unrefreshed on wakening• Morning headaches• Impaired concentration• Daytime sleepiness• Fatigue related industrial and automotive accidents

Internally

• Hypoxemia

• Hypercapnia

• Sympathetic activation

• Endothelial dysfunction

• Metabolic dysregulation

• Hypertension

• Arrhythmias

• Myocardial infarction

• Stroke

SDB


Metabolic Syndrome

• Sleep-disordered breathing is at the center of Metabolic Syndrome

• Treating SDB improves all major co-morbidities


Market Growth Driver


How Will the Market Grow?

OccupationalHealth & Safety

Healthcare Practice

Guidelines

Healthcare Economics

Reimbursements

MedicalAwareness

PublicAwareness

Co-morbidities & Demographics


Obesity Trends* Among U.S. Adults

1990 1998

No Data <10% 10%–14% 15%–19% 20%–24% 2 5%–29% ≥30%

(*BMI 30, or about 30 lbs. overweight for 5’4” person)

2008

Journal of Sleep: CDC Behavior Risk Factor Surveillance Survey (BRFSS)


Growth in SDB Publications


Product Innovation


• 6-7% spending on R&D – 2010

• Innovative culture (2,100) patients

• Market position of high end products

• Valued internally (P.Farrell Innovation Awards)

• Clinical Research group

• Close alliance with leading external research establishments

Drivers


Product Quality & Innovation


It’s all about... More. Comfort.

S9™ Series


Home Testing

• In 2008, Home Sleep Testing (HST) was approved by Medicare and all 5 of the major commercial payers

• Over 50% of US adult population has access to HST

Sleep Lab Home Sleep Testing


* New products includes all products that were launched in the last 12 months of each quarter

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Total Revenue YOY CC Revenue Growth New Products as % of Total Revenue

Innovation Metrics


Strategic Alliances


Market Creation through Distribution Agreements

• Careful selection of distributors in new markets

• Exclusive arrangements

• Internal development of market

• Acquisition of long term distributors

• Direct presence confirmed

• Integrated into Corporate structure


• ResMed sales subsidiaries in key healthcare markets:

– USA

– Europe ResMed: Germany, France, UK, Sweden, Switzerland, Spain, Finland, The Netherlands, Norway, Austria

– Asia Pacific: Japan, India, China, Australia, NZ

• ResMed controls the sales and marketing focus

• Distributors in the other ~40 countries

International Distribution


Global Integration


Business Evolution

• Start-up – one location, independent distributors

• Organic growth – one location, distribution network

• Acquisitions – multiple specialized operations

• Global – multiple design and manufacturing sites

Current Gap


1. Organizational change

• Establishment of CEO (Non-Founder)

• Customer focused business units (Sleep, Patient Interface, Ventillation)

2. Cultural Change

• “One ResMed”

• Continuous Improvement (Lean, Six Sigma)

• Learning Centre

• “Voice” Climate Survey

Bridging the Gap


Bridging the Gap

3. Systems Development

• Oracle is the Global Platform

• Local variations if justified

• ResMed Quality Management System

• Global Learning Management System

• Global IT Organisation


Bridging the Gap

All functions being challenged

• Global consistency

• KPI driven

• Eliminate waste


Changing role of IT in the organisation


Global Strengths

1. Global footprint

• Established by distributor acquisition

2. Global workforce

• Mobile

• Multicultural

3. Global Systems

• Current focus


Global Supply Chain Footprint

China –Supplier Alliance Team

-Component Suppliers

EuropePD, Ventilation Manufacturing

Service

AustraliaManufacturing, PD

& R&D

West USAPD, Logistics & Service CentreSingapore

PD, Purchasing &Manufacturing

East USALogistics

West USAMotor Manufacturing


Conclusion

• ResMed was born global

• Product innovation has driven global sales

• Now completing construction of a global business

Executive Briefing Gary Robinson Resmed

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