#1Coloplast in China Presentation to Nordea Markets 9 September 2013 Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast#2Who are we? Ostomy Care Urology & Continence Care Wound & Skin Care Vagn Heiberg SVP Region China Mikkel Dalgaard Heuer Director, Wound Care, Region China Michael Juhl Petersen Holtze Director, Business Support, Region Chinal Hu Zhan Head of Public and Regulatory Affairs, Region Chinal Coloplast#3Ostomy Care Urology & Continence Care Wound & Skin Care China represents the fastest growing region for Coloplast, and today more than 500 people are employed in our commercial activities in China >500 CAGR +30% 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 60/80 09/10 10/11 11/12 Coloplast#4Our main business drivers in the region are Ostomy Care and Wound Care, which account for ~90% of our total revenue. Within both of these business areas we have achieved market leadership in China Ostomy Care Ostomy products include ostomy bags for people who have had a stoma, i.e. a surgical procedure in which part of the intestine is brought out to the surface of the abdomen. Wound Care Wound care products include dressings, which are attached to the wound using gauze or a built-in adhesive. Skin care products include disinfectant liquids and lotions. Continence Care Continence products include intermittent catheters to help users empty their bladder quickly and easily. It also includes urine bags to help users collect leakage. Ostomy Care Urology & Continence Care Wound & Skin Care 35% 55% 10% Coloplast#5The Ambition Plan evolves around 5 main strategic themes and a number of commercial priorities to support them 1 Raise productivity 2 Increase coverage 3 4 5 Ostomy Care Urology & Continence Care Wound & Skin Care Grow the market Pursue new opportunities Train and retain Coloplast#6And we have built a robust organizational structure to execute on both our short term tactical objectives and our long term strategic ambitions Vagn Heiberg SVP Region China Jesper L. Thomsen Director Chronic Care Mikkel D. Heuer Director Wound Care Michael J. P. Holtze Director Business Support Ostomy Care Urology & Continence Care Wound & Skin Care AP von Scholten Illum Director Strategy & BD Hu Zhan Head of Public and Regulatory Affairs Coloplast#7The current reimbursement status is "wide coverage, low benefit level" with a future trend of getting more funding from both central and provincial governments Different reimbursement schemes in China 17% OOP as % in total health expenditure 70% 60% 8% 14% 60% 50% 40% 38% 40% 61% 30% 20% 13% 10% 10% 0% Rural Urban residents Urban employee uninsured Country India Pakistan China Denmark UK Data Source: China Health Insurance Research Association Ostomy Care Urology & Continence Care Wound & Skin Care Data Source: WHO Coloplast#8OC enjoy a better reimbursement status than WSC, as it is recognized to be "must have" for a fixed number of patients Current CP product reimbursement status in China OC products WSC products 50% 0% 42% 34% 15% (National Average) 1% Provinces Jiangsu ■Liaoning Shaanxi 50% 0% 12% 9% 6% (National Average) 1% Provinces Jiangsu Liaoning Shaanxi Note: The GDP ranking: Jiangsu 2nd Liaoning 7 th, Shaanxi 16th Data Source: 1, China Health Insurance Research Association 2, China prevention medicine volume 7 2012 Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast#9Business Support China Finance & Admin Department Business Support Director Compliance Manager Distribution/ Warehousing Commercial Department IT Department Training Department HR Department Accounts R Accounts P Tax Controlling Admin Pick, Pack and ship goods SCM support function Distributor Management Tender management Operations and Data Ostomy Care Urology & Continence Care Wound & Skin Care Support Infrastructure Hardware Training Sales reps Sales mgmt Coaching E-learning systems Recruiting Compensation & Benefit HR Program's Communication Coloplast#10One of our key strategic themes is to reduce employee turnover, and in the past years we have been able to reduce the turnover rate dramatically by improving leadership skills. and by optimizing the compensation and benefits packages. Drivers for reduction in turnover 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2010/11 2011/12 2012/13* 2013/14* Involuntary 3% 3% 3% Voluntary 28% 22% 17% -Target 30% 24% 21% 17% Ostomy Care Urology & Continence Care Wound & Skin Care Improved Middle Mgmt Leadership • Leading to Win • People Survey • PDP Compensation and Benefits • Formulating Strategy • Set up new structure Coloplast#11OC market growth is mainly driven by an improving healthcare system and changes in population. Market size and growth Market dynamics Low cost OC bags Mid/high priced OC bags • 12/13 13/14 20/21 Ostomy Care Urology & Continence Care Wound & Skin Care Market value growth drivers • Aging of population Number of surgeries increasing 0-5% Product upgrading in hospitals Improvement of reimbursement system Main competitors ConvaTec III ALCARE STEADLIVE 思泰利 MEDICAL APPARATUS & HEALTHY NURSING B BRAUN SHARING EXPERTISE Hollister Coloplast#12By expanding our Direct to Consumer 24/7 business we will gain a stronger position in the growing community market Coloplast China already has a well- developed Direct to Consumer (DtC24/7) sales platform. Coloplast Coloplast ■ CARE has been launched ■ Increase the number of OTC stores and independent pharmacies ■ Consumer marketing Ostomy Care Urology & Continence Care Wound & Skin Care Mail Order service Ostomy magazine BOARD Direct to Consumer 24/7 Online sales platform OTC stores and Coloplast® Care pharmacies Coloplast#13In Continence Care we will focus on the most important Rehabilitation Centers and Departments in China to increase the use of intermittent catheters in Chinal -Urumqi XINJIANG UYGUR ZIZHIQU GANSU XIZANG ZIZHIQU (Tibet) Ostomy Care Urology & Continence Care Wound & Skin Care Xining QINGHAI Lanzhou HEILONGJIANG Harbin Changin NEI MONGOL ZIZHIQU (Inner Mongolia) JILIN Sheny BEUING LIAONING Hohhot Tayun HEUE TIANJIN Tianjin Shijiazhuang SHAANXO SHANK Jinan DONG Zhengzhou JIANGSU HENAN Heler HUBE SHANGHAI Shanghal an ANHU Hangzhou Changsha Nanchang Chengdu Lhass CHONGQING SICHUAN Chongging YUNNAN Kunming GUIZHOU JIANGX HUNAN Fuzhou Guiyang GUANG HUANGZU ZIZOUT Nanning MACAU HAINAN Hakou FUJIAN Taipei Xiamen Taichung ANGDONG Quangzhou TAIWAN . Rehab. Status Top 20 Rehab hospitals/ Departments •Approx. 2,200 beds 60% of patients are SCI patients Coloplast#14In Wound Care the overall development trends in China are still expected to be favorable to Coloplast in the years ahead Total China wound care market - traditional and advanced - mDKK 8000 Changing lifestyle 7000 Aging 6000 society 5000 Healthcare 4000 reforms 3000 Private Insurance 2000 Increasing 1000 wealth 0 2011 A 2012 E 2013 E 2014 E 2015 E 2016 E Note: Category in Espicom is "Bandages and dressings" Sources: China Medical device market Q1 2013, Espicom (exchange rate 1 USD: 5.7DKK) Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast#15While our WC team is stronger than ever it is also facing the toughest competition ever - mainly from international players Player rank estimate* H1 FY12/13 Comments 1 Coloplast 2 *URGO MEDICAL 3 4 5 6 7 8 smith&nephew MÖLNLYCKE HEALTH CARE ⑪ConvaTec A Brit Myers Squibb Company HARTMANN B BRAUN SHARING EXPERTISE Top-medical 9 3M Ostomy Care Urology & Continence Care Wound & Skin Care *advanced wound care (MWH) player positions - ➤No strong local competitors on the short term (1-2 years) ➤on the medium term (3-5 years) strong domestic competitors is expected based on Coloplast/Ipsos study - prescription rates Coloplast#16In FY 12/13 we set out with the ambition to retain our leading position in moist wound healing for chronic wounds Realizing the potential in our stronghold indications Build Biatain Grow Comfeel 2 Developing new business areas Build business with doctors Execute AtH community project 3 Winning in key accounts ➤Develop partnerships and KOL forums. 4 Expanding our coverage and growing the market Expand the sales force With an underlying theme of retaining, encouraging and developing employees trough improved incentive and training systems Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast#17We expect the growth journey to continue, and Region China's Ambition Plan lays out the strategic direction for developing China into becoming one of the top 5 markets for Coloplast China growth ambition Top Coloplast Markets (est.) WSC CC ос 1 USA 2 UK CAGR >XX% 3 France 4 China 10/11 ACT Ambition Ostomy Care Urology & Continence Care Wound & Skin Care 5 Germany Coloplast#18Questions ? Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast#19Our mission Making life easier for people with intimate healthcare needs Our values Closeness... to better understand Passion... to make a difference Respect and responsibility... to guide us Our vision Setting the global standard for listening and responding Ostomy Care Urology & Continence Care Wound & Skin Care Page 19 Coloplast