Healthcare equipment market A short review

10 years later 2005, I came back 10 years after I left Turkey 1995 –Large public market – small private –Focus on: Military, Universities and large MOH –Government guarantees –High inflation and currency dynamics –Most if not all business in NLG or USD, LC based

10 years later 2005 –Less focus on a relatively smaller public market –Fast growing private market: universities, hospital chains, clinics –Intro of “Income Sharing“ models at public hospitals –Limited or no government guarantees –Reduced inflation and rather stable currency –More and more business in TL

Recently 2009/2010 –Strong focus on public healthcare for all (SSK incorporated in MOH) –Reimbursement reductions, changes in the labor law, hospital and equipment permits and licenses, regulatory actions –First signs of PPP (public private partnerships) –New regulations – future private market uncertain - strong reduction of the public market – many institutions in trouble –Foreign investments in some of the bigger hospital chains –Increased cross border business –Income Sharing reaching saturation –Reduced inflation and rather stable currency –Majority of the business in TL

At present 2011 –Growing public market via central bulk purchasing, new framework tenders, local tenders and PPP (…. elections in June) –Largest PPP funnel world-wide (28 projects) –Improved private market – foreign investors and financing are successful – investments and projects started again –A further reduction in the reimbursement rates, permits and licenses continue – Income Sharing projects in trouble) –Increased cross border business – ME, Russia, CEE and Africa – largely via construction companies –Stable single digit inflation and stable currency (although lost 6% in the first 5 month) –Majority of the business in TL

Highly diverse market place

Healthcare equipment market Public Market segment: 1000 MOH hospitals 60 Medical Universities 50 MOD hospitals Numerous clinics (low perception) Healthcare for all policy Some health Tourism Limited private insurance Largest PPP funnel in the world Private market: hospitals (no new licenses) 20 Medical Universities PFI’s (income sharing) Numerous clinics (struggling) Minimum reimbursement rates Limited private customers Dominating hospital chains Cross border activities Foreign investments GDP Healthcare expenditure 15% compared to European countries (OECD)

Great growth potential High volumes Very competitive Solid base for the region

Questions to answer: How would you: Define your market Find your potential growth segments Define your enablers for each segment Involve local insight Balance short term versus long term objectives