Medical devices market review

2014 + forecasts 2015-2016

Devices Public and Private

Hospitals Sector (DPPHS)

Contents

1. General part:
a) Foreword
b) Methodology
c) Macroeconomic trends
d) Major funding sources (federal programs), legislation initiatives
e) Sector financial results of 2012, 2013, 2014; forecasts 2015
f) Brief forecasts 2016-2020

Contents

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

a) Resume for 2012-2014
b) Structure 2014
c) Indicators 2014
d) Segments volume change in 2012-2014 + forecasts 2015-2016
e) Segmentation by product categories 2012-2014
f) Brief results of 2012
g) Brief results of 2013
h) Forecasts 2015-2016
i) Rate of demand, funding sources, major market players
j) Detailed data on product categories separately for 2014 and trends 2012-2014
k) Summary trends per product categories
l) Key accounts segmentation
m) Market capacity, expectations

Segments

1. Operating Room Equipment

& Medical Furniture

Operating tables
Operating room lighting
Hospital beds
Hospital chairs

Other furniture

3.

Anesthesiology,
Reanimation,
Neonatology
Anesthesia devices

Ultrasound Diagnostics

X-ray, CT, MRI

MRI
CT

Medical ventilators

Interventional x-ray (iXr)

Patient monitors

Mammography devices

Resuscitation systems

Fixed and mobile diagnostic

x-ray devices (dXr)

Neonatal incubators
2.

4.

Ultrasound diagnostics
devices

Ceiling- and wall-mounted

pendants, climatized
modules

Probes and accessories

Defibrillators
Infusion pumps
Other

Dental x-ray
Other

Segments

5.

Functional Diagnostics
ECG Devices
Blood Pressure Monitoring
Holter ECG and Blood
Pressure Monitoring
Neurology & Brain
DIagnostics
ENT Diagnostics (ENT
combines, Audiometers,
Laryngoscopes, etc.)
Other

6.

Radiation Therapy &

Nuclear Medicine

Linear accelerator
Gamma-therapy devices
Accessories (information
management system,
dosimetry equipment,
fixation systems, etc.)
PET/CT
SPECT/CT

7.

Sterilization & Disinfection

Sterilization Machines
Washing Disinfectors
Ultrasound Washing
Machines
Utilization Devices

Other

Segments

8.

Rehabilitation &
Physiotherapy

9.

Endoscopy &
Electrosurgery

Rehabilitation

Rigid endoscopy

Physiotherapy

Flexible endoscopy

Locomotor Therapy

Electro- and ultrasound

surgery

Mechanotherapy

Balneology
Inhalation devices
Biomechanical Systems
Other

Robotic endosurgery
Laser surgery
Other

Additional offers

Offer

Price

Complete list of Distributors

$100 / per segment

Complete list of major Accounts (federal, regional, municipal, private

facilities)

$50 / per segment

Methodology

The numbers in the report are based upon customs import data

Customs import data is a multi-parameter database provided by Federal Customs Service

(http://eng.customs.ru/)
The FCS database is one of two existing information sources (the second one is public auctions database)
As soon as all imported products are to be registered by customs the FCS database is a reliable source
providing 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 for
any commercial use of this report

DPPHS: results of 2012

(chart: customs import value in US$)

DEMO
12%

OR equipment & medical furniture

4%

Anesthesiology, reanimation, neonatology

18%

X-ray, CT, MRI

12%

Rehabilitation & physiotherapy

Sterilization & disinfection

2%

Ultrasound diagnostics
14%

Functional diagnostics
32%

Endoscopy & electro surgery

3%
3%

Radiation therapy & nuclear medicine

DPPHS: overview 2012-2016

(table: customs import value in US$ mlns)

DEMO

Segment

Demand rate
2012

2013

2014

2015
Forecast

2016
Forecast

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

$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

$66,5

$68,9

$34,3

$31,5

$40,0

Endoscopy & Electro Surgery

$392,7

$241,8

$176,2

$119,0

$146,5

Radiation Therapy & Nuclear

Medicine

$421,3

$127,7

$149,1

$35,0

$118,0

X-Ray, CT, MRI

Functional Diagnostics

DPPHS: forecasts 2012-2020

(chart: customs import value in US$ mlns)
$4,000.0
DEMO
$3,500.0
$3,000.0
$2,500.0

$2,000.0
$1,500.0
$1,000.0
$500.0
$0.0
2012

2013

2014

2015 (frcst) 2016 (frcst) 2017 (frcst) 2018 (frcst) 2019 (frcst) 2020 (frcst)

Structure
In scope:
DEMO

CAGR for 2012 - 2014:

Operating tables
Operating room lighting

Operating tables

- 36.8%

Operating room lighting

- 43.2%

Hospital beds

- 17.6%

Hospital chairs

- 8.6%

Other furniture

7.6%

Hospital beds
Hospital chairs
Other furniture

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

Other

OR Equipment & Medical Furniture

Indicators 2014
Segment volume in 2014:
DEMO

valid.
Maquet
10%

Cumulative reduction by 31.0% compared to

2013 (in US$)
valid.
Reduction by 16.8% compared to 2013 (in
Rubles)
valid.
Segments total in customs import prices for
2014 - $87.4 mln
valid.

Vernipoll
9%
Others
45%

Lojer
8%
Merivaara
7%

Estimated segments total in final customer

prices for 2014 - $150.0 mln
estim.
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.
Back to the list of segments

Hill-Rom
6%

Trumpf
3%

Linet
3%

Schmitz
3%

OR Equipment & Medical Furniture

Armed
6%

Segments volume change in 2012-2014 + forecasts 2015-2016

(chart: customs import value in US$ thds)
$160,000.0
DEMO

valid.

OR Equipment & Medical Furniture in 2012-2014

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

$140,000.0
$120,000.0
$100,000.0

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)

$80,000.0
$60,000.0
$40,000.0
$20,000.0

Overall deep decline in 2014 was a result of

significant Ruble devaluation and strong reduction
of funding in frame of federal programs

$0.0
2012

Back to the list of segments

2013

2014

2015

2016

OR Equipment & Medical Furniture

Segmentation by product categories

(charts: customs import value in US$)

DEMO
Other

valid.

furniture &
appliances
(incl. rehab,
dental
furniture,
stretchers)
26%

2014

Operating
tables
22%

Operating
lights
11%
Hospital
chairs
9%
Hospital beds
32%

Back to the list of segments

Other
furniture &
appliances
(incl. rehab,
dental
furniture,
stretchers)
20%

valid.

2013
Operating
tables
20%

Hospital
chairs
6%

Operating
lights
13%

Hospital beds
41%

OR Equipment & Medical Furniture

Segment volume in 2012

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

DEMO

valid.

Maquet
10%

Maquet
Merivaara
9%

Others
43%

Trumpf
8%

Schmitz
4%

Back to the list of segments

Vernipoll
5%

Lojer
5%

Hill-Rom
6%

$15,041.4

Merivaara

$13,410.3

Trumpf

$11,348.3

KLS Martin

$11,251.8

$9,098.8

Hill-Rom

KLS Martin
7%

Armed
3%

Major manufacturers in 2012

Lojer

$7,076.7

Vernipoll

$6,832.0

Schmitz

$5,463.9

Armed

$5,129.2

Others

$63,750.6

Total segments volume in

customs import prices $148.4 mln
valid.
Estimated segments volume
in final customer prices $250.0 mln
estim.
At least 1/3 of major
manufacturers offer both
operating tables and
lighting
estim.
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

OR Equipment & Medical Furniture

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

DEMO
Forecasts 2015
Based on assumption that macroeconomic situation is comparatively stable in 2015 expected volume will be =>
$88.0 mln
Expected growth only by 0.7% in $ equivalent due to strongest Ruble devaluation in 2015
The segment will grow by 52.2% in Ruble equivalent (attributable to the program of new 32 perinatal centers
and new cardiac surgery centers and departments construction and launch across all regions of Russia)

Forecasts 2016

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

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

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

Back to the list of segments

OR Equipment & Medical Furniture

10

Rate of demand, funding

DEMO
Demand rate is comparatively stable
No skyrocketing trends in the segment (even if the industry experiencing strong growth)
Possible moderate growth/reduction as a reaction on the industry trends
Basic for equipping of the OR units; medical furniture hospitals 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)

Back to the list of segments

OR Equipment & Medical Furniture

11

Major players
DEMO
Major players:
Operating tables: Maquet, Trumpf, Mindray, Steris, Lojer, Merivaara

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

Hospital beds: Hill-Rom, Vernipoll, Armed, Merivaara, Linet
Hospital chairs: Digiterm, Lojer, Likamed, Borcad
Other furniture & appliances: Vernipoll, Lojer, Merivaara, Dental Art

Back to the list of segments

OR Equipment & Medical Furniture

12

Operating tables in 2014

(chart: customs import value in US$)

DEMO

valid.

Indicator

Figure

Estimated total for 2014

Others
31%

Maquet
37%

$18.8 mln

valid.

Cumulative growth 2014/2012

-60.0%

valid.

Growth 2014/2013

-24.9%

valid.

Estimated CAGR for 2012-2014

-36.8%

valid.

6-17%

estim.

60-77%

estim.

Expected growth rate

2015/2014

Expected total for 2015 $20-22 mln. Expected

limited growth due to severe Ruble devaluation.
Strong growth of the segment in Rubles due to
stronger federal funding
Steris
5%

Lojer
8%

Back to the list of segments

Mindray
9%

Trupmpf
10%

estim.

Started implementation of federal program 32 new perinatal

centers launch and construction and launch of new cardiac
surgery centers and departments

OR Equipment & Medical Furniture

13

Operating tables in 2012-2014

(chart, table: customs import value in US$ thds)
100%
DEMO

2012

valid.

2013

2014

Maquet

$13,006.7

$3,856.7

$6,965.4

Trupmpf

$8,103.3

$6,138.6

$1,954.5

80%

Mindray

$1,267.7

$966.6

$1,657.5

70%

Lojer

$2,197.9

$2,085.5

$1,407.9

Steris

$1,400.5

$758.9

$970.1

Steris

MedifaHesse

$4,310.6

$868.6

$794.3

Lojer

Others

$16,756.6

$10,337.9

$5,032.8

2012

2013

90%

Others
Medifa-Hesse

60%
50%

Mindray

40%

Trupmpf

30%

Maquet

$45,000.00

20%

$30,000.00

10%
0%
2012

Back to the list of segments

$60,000.00

$15,000.00
$0.00

2013

2014

OR Equipment & Medical Furniture

2014

14

Trends per product groups in 2012-2014 + forecasts 2015-2016

(chart: customs import value in US$ thds)

DEMO
$50,000.0

forecasts

$45,000.0

Operating tables
Operating lights

- 36,8%

$40,000.0

8,2%

$35,000.0
$30,000.0
$25,000.0
$20,000.0
- 43,2%

$15,000.0

14,6%

$10,000.0

$5,000.0
$0.0

CAGR 2012-2014
2012

Back to the list of segments

2013

2014

2015

2016

CAGR 2014-2016

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)

OR Equipment & Medical Furniture

23

Key accounts segmentation

Rank Clients categories
DEMO
3

Ownership Key products purchased

Regional Clinical Hospitals Public

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

Back to the list of segments

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 310 OR units. Cumulative price of OR equipment set can vary within $13 mln per facility.
Mid price furniture from Europe, Russia, China. In more than 50%
cases tend to buy furniture from Russian manufacturers. Buy quality
hospital beds or chairs from European, China manufacturers.
Cumulative cost of hospital furniture can vary within $0.5-3 mln per
facility.
Regional Hospitals can use there own funding or receive target
funding from Federal Budget

OR Equipment & Medical Furniture

27

Market capacity, expectations

DEMO
Market capacity is generated by:
Purchases of devices for new facilities

Replacement of obsolete equipment

Increasing the equipment fleet for existing facilities
Purchases of OR devices and medical furniture for 32 new perinatal centers
Purchases of OR devices for new cardiac surgery departments and centers

Total market capacity equals to $1,810.0 mln

Operating tables $400.0 mln
Operating lights $330.0 mln
Hospital beds $600.0 mln
Hospital chairs $140.0 mln
Other furniture $340.0 mln

Back to the list of segments

OR Equipment & Medical Furniture

32

Market capacity, expectations

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

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)
estim.
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.

Back to the list of segments

OR Equipment & Medical Furniture

33