7.pdf This presentation captures many uses and the significance of the number...
Medical devices market research Russia 2012-2014
1. Devices – Public and Private
Hospitals Sector (DPPHS)
Medical devices market review
2014 + forecasts 2015-2016
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Disclaimer
4. 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
5. 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
6. 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
7. 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
8. 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.
9. 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
10. ‘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
11. In our report we will use a ranking of major accounts (hospitals) that is applied in many official documents and by the
majority 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 Russia
Specialization: particular area of specialization (oncology,
ophthalmology, Cardiac Surgery, etc.)
Location: Moscow, Saint-Petersburg, regional centers
2
Moscow and Saint-
Petersburg City
Clinical Hospitals
Major facilities covering
Moscow and Saint-
Petersburg
Coverage: all citizens of Moscow/Saint-Petersburg
Specialization: multi-disciplinary
Location: 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-disciplinary
Location: regional centers (Kazan, Kursk, Ufa, etc.)
4
Regional Perinatal
Centers
Major facilities located in
regional centers covering
definite region of Russia
Coverage: all citizens of particular region of Russia
Specialization: neonatology, obstetrics, gynecology, etc.
Location: regional centers
Methodology: key accounts segmentation
12. 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-disciplinary
Location: 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 town
Specialization: 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 specialization
Location: all larger cities across Russia (more than 60% of
private facilities are located in Moscow and Saint-Petersburg
Methodology: key accounts segmentation
13. 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.
14. 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
15. 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
16. 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
17. 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
18. 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
19. 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
20. 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_F
EB_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
21. 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
23. 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 (-$187.5 mln)
DPPHS: results of 2013
24. DPPHS: results of 2012
(chart: customs import value in US$)
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%
25. 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%
26. 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 (-$61.4 mln)
DPPHS: results of 2014
27. DPPHS: results of 2014
(chart: customs import value in US$)
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%
28. 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 $):
» Radiation therapy & nuclear medicine (expected reduction by 70-80%)
» X-ray, CT, MRI (expected reduction by 25-35%)
» Endoscopy & electro surgery (expected reduction by 30-35%)
DPPHS: forecasts 2015
30. Cumulative reduction in 2014
compared to 2012 exceeded 61%.
Major factors: demand oversaturation
in some segments; drop in demand
from public facilities (due to shortage
of funding); Ruble devaluation
It is considered that 2015 can be a
“bottom” for demand reduction trend
Recovery is supposed to start from
2016 following the expected Ruble
revaluation and growing demand from
public facilities attributable to
necessity of replacing the obsolete
equipment; private sector is expected
to grow at least 5-10% annually
DPPHS: overview 2012-2016
(chart: customs import value in US$ mlns)
$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
$3,500.0
$4,000.0
2012 2013 2014
31. DPPHS: major segments in absolute numbers 2012-2014
(chart: customs import value in US$ mlns)
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
Anesthesiology,
reanimation,
neonatology
X-ray, CT, MRI Ultrasound diagnostics Endoscopy & electro
surgery
Radiation therapy &
nuclear medicine
2012
2013
2014
32. DPPHS: major segments in absolute numbers 2012-2014
(chart: customs import value in US$ 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
34. 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 - $959.1 mln
*CBR – the Central Bank of Russia
DPPHS: forecasts 2015
35. Estimated CAGR in US$ 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 - $1,184.9 mln
DPPHS: forecasts 2016
36. Estimated CAGR in US$ 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 - $1,504.4 mln
DPPHS: forecasts 2017
37. Estimated CAGR in US$ 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 - $1,852.8 mln
DPPHS: forecasts 2018
38. Estimated CAGR in US$ 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 - $2,346.9 mln
DPPHS: forecasts 2019
39. Estimated CAGR in US$ 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 - $2,933.6 mln
DPPHS: forecasts 2020
40. In the table above are
provided calculated and
forecasted growth rates
yearly. We can see how
different are growth trends
in R and US$ 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
46. The segment is supposed to grow moderately in 2015-2016 due to construction and launch of 32 new perinatal centers
and 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 ≈ $30-60
mln in 2015-2017
» Construction and launch of cardiac centers – major
investment source. Equipment for cardiovascular OR units
incl. mainly operating tables and lights
» New launches and re-equipping – expected demand form
newly launched public hospitals, re-equipping of OR units of
existing hospitals
47. In scope:
» Operating tables
» Operating room lighting
» Hospital beds
» Hospital chairs
» Other furniture
» Other
CAGR for 2012 - 2014:
Operating tables - 36.8%
Operating room lighting - 43.2%
Hospital beds - 17.6%
Hospital chairs - 8.6%
Other furniture 7.6%
Other -
The product categories listed are combined in one segment due to a number of
implications: perfectly matches the business structure of major Russian distributors,
major manufacturers produce both OR equipment and medical furniture. Some
smaller categories are not included in frame of this part. Other major product
categories are presented in further segments.
Back to the list of segments
Structure
OR Equipment & Medical Furniture 2
48. Segment volume in 2014:
» Cumulative reduction by 31.0% compared to
2013 (in US$)
» 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.
Maquet
10%
Vernipoll
9%
Lojer
8%
Merivaara
7%
Hill-Rom
6%
Armed
6%
Schmitz
3%
Linet
3%
Trumpf
3%
Others
45%
valid.
Back to the list of segments
Indicators 2014
OR Equipment & Medical Furniture 3
49. 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
50. 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
51. Operating
tables
22%
Operating
lights
11%
Hospital beds
32%
Hospital
chairs
9%
Other
furniture &
appliances
(incl. rehab,
dental
furniture,
stretchers)
26%
valid.
2014
Operating
tables
20%
Operating
lights
13%
Hospital beds
41%
Hospital
chairs
6%
Other
furniture &
appliances
(incl. rehab,
dental
furniture,
stretchers)
20%
valid.
2013
Segmentation by product categories
(charts: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 6
52. Operating
tables
32%
Operating
lights
21%
Hospital beds
28%
Hospital
chairs
6%
Other
furniture &
appliances
(incl. rehab,
dental
furniture,
stretchers)
13%
valid.
2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other furniture &
appliances
Hospital chairs
Hospital beds
Operating lights
Operating tables
valid.
Segmentation by product categories
(charts: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 7
53. » 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 $63,750.6 -
valid.
estim.
estim.
Maquet
10%
Merivaara
9%
Trumpf
8%
KLS Martin
7%
Hill-Rom
6%
Lojer
5%
Vernipoll
5%
Schmitz
4%
Armed
3%
Others
43%
Segment volume in 2012
(chart, table: customs import value in US$ thds)
valid.
Back to the list of segments OR Equipment & Medical Furniture 8
54. » 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 $53,921.1 -
valid.
estim.
Vernipoll
13%
Merivaara
9%
Armed
8%
Hill-Rom
7%
Trumpf
6%
Maquet
4%
Lojer
4%
Schmitz
3%
KLS Martin
3%
Others
43%
valid.
Back to the list of segments OR Equipment & Medical Furniture 9
Segment volume in 2013
(chart, table: customs import value in US$ thds)
55. 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
56. 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
57. 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
58. 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 – $20-22 mln. Expected
limited growth due to severe Ruble devaluation.
Strong growth of the segment in Rubles due to
stronger federal funding
Started implementation of federal program 32 new perinatal
centers launch and construction and launch of new cardiac
surgery centers and departments
valid.
estim.
estim.
estim.
valid.Maquet
37%
Trupmpf
10%Mindray
9%
Lojer
8%Steris
5%
Others
31%
valid.
Operating tables in 2014
(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 13
valid.
valid.
59. 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
60. 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 – $10-11 mln. Expected
limited growth due to severe Ruble devaluation.
Strong growth of the segment in Rubles due to
stronger federal funding
Started implementation of federal programs 32 new perinatal
centers launch and construction and new cardiac surgery
centers and departments construction and launch
valid.
estim.
estim.
estim.
valid.
Berchtold
24%
Maquet
18%
KLS Martin
14%
Trumpf
6%
Draeger
5%
Others
33%
valid.
Operating lights in 2014
(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 15
valid.
valid.
61. 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
62. 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 – $10-11 mln. Expected
limited growth or slight reduction due to severe
Ruble devaluation. Strong growth of the segment in
Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal
centers launch and construction, demand from federal
facilities in frame of equipping/re-equipping
estim.
estim.
estim.
valid.
Hill-Rom
19%
Vernipoll
16%
Armed
15%
Merivaara
11%
Linet
9%
Malvestio
6%
Yguanbed
(Baiqiang
Medical)
5%
Others
19%
valid.
valid.
valid.
valid.
Hospital beds in 2014
(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 17
63. 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
64. 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 – $7-8 mln. Expected slight
reduction due to severe Ruble devaluation. Strong
growth of the segment in Rubles due expected
growing demand from public and private facilities
Started implementation of federal program 32 new perinatal
centers launch and construction
valid.
estim.
estim.
estim.
valid.
Digiterm
23%
Lojer
22%
Likamed
16%
Borcad
7%
Euroclinic
7%
Others
25%
valid.
Hospital chairs in 2014
(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 19
valid.
valid.
65. 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
66. 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 – $23-26 mln. Expected
limited growth due to severe Ruble devaluation.
Strong growth of the segment in Rubles due
expected growing demand from public and private
facilities
Started implementation of federal program 32 new perinatal
centers launch and construction, launch of new federal
facilities and private hospitals
valid.
estim.
estim.
estim.
valid.
Vernipoll
15%
Lojer
11%
Dental Art
10%
Merivaara
9%
Schmitz
8%
Others
47%
valid.
Other furniture in 2014
(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 21
valid.
valid.
67. 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
68. 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
69. 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
70. 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
71. 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
72. 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
73. 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
74. 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
75. 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
76. 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
77. 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
78. 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.
80. 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 ≈
$15-30 mln in 2015-2017
» New launches and replacement of obsolete devices –
expected demand from newly launched public
hospitals, replacement of obsolete devices
Back to the list of segments Ultrasound Diagnostics 1
81. Segment volume in 2014
» Cumulative reduction by 37.2% compared to
2013 (in US$)
» 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.
Esaote
3%
GE Healthcare
29%
Hitachi
4%
Mindray
6%
Philips
25%
Samsung
Medison
8%
Siemens
10%
Sonoscape
2%
Toshiba
7%
Others
6%
valid.
Indicators 2014
Back to the list of segments Ultrasound Diagnostics 2
82. 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 prices
exceeded $1070 mln in 2011-2013
» USDD is the most widespread diagnostic method
both in private and public facilities
» The highest rate of demand was in 2012 due to
combination of large-scale funding and
unsatisfied needs of numerous regional and
municipal hospitals. Demand from private
facilities was not crucial during that period
» Starting from 2015 major federal programs were
terminated due to complicated economic
situation. No changes are expected in the
midterm
Segment’s volume change in 2012-2014 + forecasts 2015-2016
(chart: customs import value in US$ 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.
83. 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.
84. » 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
Esaote
8%
GE Healthcare
22%
Hitachi
9%
Mindray
6%
Philips
12%
Samsung
Medison
17%
Siemens
6%
Sonoscape
3%
Toshiba
10%
Others
7%
valid.
85. » 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
Esaote
5%
GE
Healthcare
34%
Hitachi
8%Mindray
9%
Philips
7%
Samsung
Medison
10%
Siemens
6%
Sonoscape
4%
Toshiba
7%
Others
10%
86. 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
87. 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
88. 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
Esaote
3%
GE Healthcare
29%
Hitachi
4%
Mindray
6%
Philips
25%
Samsung
Medison
8%
Siemens
10%
Sonoscape
2%
Toshiba
7%
Others
6%
valid.
valid.
valid.
valid.
89. 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
90. Rank Clients categories Ownership Key products purchased
1 Federal State
Budget 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
91. 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
92. 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
93. 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
94. 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
95. 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
96. Rank Clients
categories
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
97. 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
98. 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
100. 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 ≈
$150-240 mln in 2015-2017
» New launches and replacement of obsolete devices –
expected demand form newly launched public
(preferably federal facilities) hospitals, re-equipping of
existing hospitals
» Regular purchases from public facilities
Back to the list of segments Anesthesiology, Reanimation, Neonatology 1
101. In scope:
» Anesthesia workstations & ventilators
» Patient monitoring
» Neonatal incubators, Infant radiant warmers, etc.
» Ceiling- & wall-mounted pendants
» Other devices (infusion pumps, defibrillators, etc.)
CAGR for 2012 – 2014:
Anesthesia workstations &
ventilators
- 43.4%
Patient monitoring - 59.3%
Neonatal incubators, Infant
radiant warmers, etc.
- 63.0%
Ceiling- & wall-mounted
pendants
- 37.3%
Other - 43.0%
Anesthesia devices, ventilators and patient monitors can be considered as
separate segments from business point of view. Nevertheless in Russia all these
segments tend to be combined in one segment.
Back to the list of segments
Structure
Anesthesiology, Reanimation, Neonatology 2
102. Segment volume in 2014:
» Cumulative reduction by 37.0% compared to
2013 (in US$)
» 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 Healthcare
11%
Hafner-Muschler
8%
Maquet
6%
HT
Labor+Hospitalt
echnik
4%
Mindray
3%
Viessmann
Technologies
GmbH
2%
MZ Liberec
2%
B Braun
2%
Others
25%
valid.
Back to the list of segments
Indicators 2014
Anesthesiology, Reanimation, Neonatology 3
103. 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
104. 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
105. 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 devices
12%
valid.
2013
Segmentation by product categories
(charts: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 6
106. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other devices
Ceiling- & wall-
mounted pendants,
climatized modules
Neonatal incubators,
Infant radiant
warmers, etc.
Patient monitoring
Anesthesia
workstations &
ventilators
Anesthesia
workstations
& ventilators
43%
Patient
monitoring
21%
Neonatal
incubators,
Infant radiant
warmers, etc.
9%
Ceiling- &
wall-mounted
pendants,
climatized
modules
19%
Other
devices
8%
valid.
2012
Segmentation by product categories
(charts: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 7
valid.
107. 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 - $1240 mln
» Strongest demand in the
product categories:
anesthesia ventilators,
patient monitoring systems,
neonatal equipment
» Stronger than average
demand rate due to higher
level of unsatisfied needs
» Total share of the segment
in frame of DPPHS equaled
to 18% - it was the second
largest segment
Draeger
Medical
Systems
21%
GE Healthcare
13%
Philips
7%
Berver GmbH
6%
Maquet
4%
Nihon Kohden
3%
Mindray
3%
Carefusion
3%
B Braun
3%
Chirana
2%
Others
35%
valid.
Segment volume in 2012
(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 8
108. 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 - $560.0 mln
» Severe reduction affected
all major product
categories: patients
monitoring systems,
neonatal equipment,
climatized modules and
pendants, anesthesia
ventilators
» The demand rate in 2013-
2014 returned to its
“normal” level
Draeger
Medical
Systems
29%
GE Healthcare
14%
Mindray
4%
Maquet
4%
Philips
3%
Hamilton
3%
Nihon Kohden
3%
Hafner-
Muschler
2%
B Braun
2%
Others
36%
valid.
Segment volume in 2013
(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 9
109. 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
110. 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
111. 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
112. 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 – $80-85 mln. Estimated
shortage due to severe Ruble devaluation. Strong
growth of the segment in Rubles due to stronger
federal funding
Started implementation of federal program 32 new perinatal
centers launch and construction
valid.
estim.
estim.
estim.
valid.
Draeger
Medical
Systems
60%
GE Healthcare
12%
Maquet
10%
Hamilton
3%
IMT Medical
2%
Mindray
1%
Others
12%
valid.
Anesthesia workstations & ventilators in 2014
(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 13
valid.
valid.
113. 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
114. 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 – $20-21.5 mln. Estimated
shortage due to severe Ruble devaluation. Strong
growth of the segment in Rubles due to stronger
federal funding
Started implementation of federal program 32 new perinatal
centers launch and construction
valid.
estim.
estim.
estim.
valid.
Draeger
Medical
Systems
36%
GE Healthcare
27%
Mindray
9%
Philips
5%
Nihon Kohden
Corporation
5%
Others
18%
valid.
Patient monitoring systems in 2014
(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 15
valid.
valid.
115. 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
Arjo
Huntleigh
$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
116. 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 Healthcare
32%
Draeger
Medical
Systems
31%
Atom
7%
Ardo Medical
AG
12%
Others
18%
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.
117. 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
118. 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%
Kendromed
4%
Others
28%
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.
120. $0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
2012 2013 2014 2015 2016
Anesthesia
workstations &
ventilators
Patient
monitoring
Ceiling- & wall-
mounted
pendants
forecasts
- 43.4%
2.6%
CAGR 2012-2014
CAGR 2014-2016
- 59.3%
6.8%
- 37.3%
- 11.8%
Stronger demand was
in 2011-2012 due to
implementation of
Healthcare
Modernization program
and unsatisfied demand
of numerous hospitals.
These three product
categories provide the
basis for the segment.
Expected slight growth
amid Ruble due to
construction and
launch of 32 new
perinatal centers.
Trends per product groups in 2012-2014 + forecasts 2015-2016
(chart: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 21
121. 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
$60,000.0
2012 2013 2014 2015 2016
Neonatal
incubators, Infant
radiant warmers,
etc.
Other devices
forecasts
CAGR 2012-2014
CAGR 2014-2016
- 43.0%
12.4%
- 62.9%
43.8%
Trends per product groups in 2012-2014 + forecasts 2015-2016
(chart: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 22
122. 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. 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
123. 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
124. 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