The European healthcare market from a textile service industry perspective :

1. The European healthcaremarketfrom a textile serviceindustryperspective: Trends, risksandopportunities Eurotape Customer Event May 30th and May 31stSherille Veira-Schnitzler, healiz, Essen

2. About healiz • healiz was founded in 2007 by Sherille Veira-Schnitzler. • healiz supports medical device companies introducing innovative products on the German market with … • … extensive healthcare and medical devices experience • … internationaland practically relevant experience • … a medical board consisting of well-known medical professionals • … a network of high-qualified specialists Sherille Veira-Schnitzler Master of Health Sciences Owner

3. How do we support our customers? • Market analyses: What are the opportunities and risks of the healthcare market for my medical devices? • Reimbursement:Are there payments and codes available for my medical devices and procedures? • Strategy development:Which strategy is promising for the market introduction of my medical devices? • Communication and Sales:How can I convince my target groups? Reimbursement Medical product strategies Market analysis Strategy development Communication Sales

4. Whatisthegoalofthispresentation? • Discuss the top-9 opportunities and risks in the healthcare market for the textile service industry.

5. Who supportedthisstudy? • Seven European textile service associations facilitated this market research: • Federatie van de BelgischeTextielverzorging (FBT, Belgium) • Brancheforeningen for Vask og Tekstiludlejning (BVT, Denmark) • Industrieverband Textil Service e.V. (intex e.V., Germany) • Associazione Sistema Industriale Integrato Servizi Tessili e Medici Affini (Assosistema, Italy) • Federatie Textielbeheer Nederland (FTN, Netherlands) • Verband Textilpflege Schweiz (VTS, Switzerland) • Die Verbände der Österreichischen Wäscher und textilen Dienstleister (Austria)

6. What were the project goals and approach? Kick-Off Meeting • This market study had the following agenda: • Describe the major trends in the healthcare market from a textile service industry perspective • Benchmark the market trends and the current market strategies in the different participating countries • Develop recommendations for the textile service industry to successfully position itself in the healthcare market April 2010 Desk Research May – September 2010 Country Workshop June 2010 Telephone Interviews July – September 2010 Strategy Workshop September 2010 Reporting October – December 2010 Presentations October – December 2010

7. Which opportunities and risks did we define? We defined nine major opportunities and risks in the healthcare market: Increasing consolidation in the hospital market Introduction of new payment systems in the hospital market Demographic changes lead to an increasing number of institutes and admissions Demographic changes lead to an increasing demand for products for the elderly The development from textile service companies to logistic service partners Increasing market growth of additional services Increasing number of public tendersfor textile services Patient hotels as a promising market segment for the textile service industry Out patient centers as a promising market segment for the textile service industry

8. Increasing consolidation in the hospital market • Different healthcare policies had the goal to streamline hospital capacities. • Almost 50% of the European member states reached a rate of acute care hospital reduction of -10 %. • The total number of hospital beds decreased on average by 7% • The number of hospital admissions although increased to 35 million hospitalizations in 2008 • Despite of a shorter length of stay, bed occupancy rate is stable and amounts 77% - 78% Total number of beds in all hospitals and in all acute care hospitals (participating countries), 2008 Development hospital admissions(all hospitals and acute care hospitals, participating countries)

9. Introduction of new payment systems in the hospital market • Public healthcare expenditures for healthcare increased with 27% from €259 billion in 2000 to €354 billion in 2008. Hospital costs share range from 30% to 50% of total costs. • The actual total hospital expenditure amounts around €78 billion in Germany, and less than €15 billion in the Netherlands, Austria, Belgium and Denmark. • Governments tried to cope with increasing hospital costs by implementing case-based payment systems (DRG systems). Total and public expenditure on health, 2000- 2008 participating countries in billion EUR Total and public expenditure on inpatient care, 2000 - 2008 (in billion EUR, participating countries)

10. Demographic changes lead to an increasing number of institutes and admissions • The old-age-depedency ratio increased from 23,3 in 2000 to 25,4 in 2008. This ratio is expected to increase to 53,5 in 2060. • The expenditure for long-term care increased from €43,6 billion in 2004 to €49,5 billion in 2007. This represents an increase of 14%. • The ageing of the European population will lead to a growing demand for facilities for the elderly. • It is furthermore expected that the number of hospitalizations will increase with 11% in the next 20 years. Old-age-dependency ratio in % in Europe, 2000 - 2060 Total expenditure for long-term care, 2004 – 2007(in billion EUR, participating countries)

11. Demographic changes lead to an increasing demand for products and services for the elderly • Demographic changes bring multiple opportunities for the textile service industry: • Independent elderly persons could rely on multi-functional textiles that integrate monitoring functions. • The demand for improved incontinence products will increase as the group of users is growing. • Additional services are needed for residential homes and elderly living at hometohandle residential textiles and clothing • Cooperations with home care organizations are needed to support the group of elderly people who decide to, or need to, stay at home.

12. From textile service companies to logistic service partners • Textile service companies learned that they could use their transports to distribute additional products, including disposables. • Advantages for the industry: • Reduction of empty spaces in trucks • Increasing revenue and margins • Preferred partner of healthcare institutes • Logistic services should contribute to the main goals of logistics management: cost reduction, process improvement and cost transparency. • 87% ofthe German hospitalsbelievethattheycould save costsbyoptimisinglogisticprocesses.

13. Increasing market growth of additional services • Italy shows that additional services can be major growth markets: • The total revenue in 2008 amounted about €704 million. • Wash and rental contributed to 84% of total revenue in the healthcare market, followed by textile sterilisation (10%) and surgical instrument sterilisation (6%). • Surgical instrument sterilisation shows a strong growth: The volume increased with 14,7% in 2008. • Also other segments are showing increasing demand: 7,6% growth for the compiling of sterile kits and a 3,8% growth for the traditional washing and rental of textiles. Healthcare textile market Italy (growth in %)

14. Increasing number of tenders for textile services Number of public hospital textile service tenders,2005 - 2009, participating countries • The number of public tenders for textile services has increased over the years. • Public hospital tenders increased with 53%; from 51 tenders in 2005 to 78 tenders in 2009. • 77% of the public hospital tenders were registered in Germany. • Public tenders for residential- and nursing homes almost doubled from 18 tenders to 37 tenders in 2009. • 41% of the public nursing homes tenders were published in Germany. Number of public residential& nursing homes textile service tenders, 2005 - 2009, participating countries

15. Patient hotels as a promising market segment for the textile service industry • The concept of patient hotels is well known in USA and Scandinavia. • Due to cost pressure in hospitals the number of patient hotels is expected to grow in other countries. • Patient hotels can lower the costs for standard hospitality services. • More than 50% of healthcare specialists see the highest potential of patient hotels in specialized clinics and university hospitals. • The main target groups could be stationary and ambulatory patients. Survey results: Hospitals with good opportunities for a patient hotel Survey results: Target groups for patient hotels Source: Deloitte. Krankenzimmer de Luxe. Patientenhotels in Deutschland. 2010

16. Out patient centers as a promising market segment for the textile service industry • Outpatient centers offering surgery should be in the focus of the textile service industry. • In countries like Germany, the Netherlands and Switzerland the number of outpatient centers is significantly increasing. • These centers will develop an increasing demand for work wear, surgical textiles, linen and scrubs. • Furthermore, services like logistics, financial services and order management & control will become increasingly relevant. Number of outpatient centers in Germany, 2006 - 2010 Source: Kassenärztliche Bundesvereiniigung (Germany). Entwicklung der Medizinischen Versorgungszentren. 2010

17. Which opportunities and risks did we define? We defined nine major opportunities and risks in the healthcare market: Increasing consolidation in the hospital market Introduction of new payment systems in the hospital market Demographic changes lead to an increasing number of institutes and admissions Demographic changes lead to an increasing demand for products for the elderly The development from textile service companies to logistic service partners Increasing market growth of additional services Increasing number of public tendersfor textile services Patient hotels as a promising market segment for the textile service industry Out patient centers as a promising market segment for the textile service industry

18. How could the textile service industry cope with these opportunities and risks?

19. What could be your next step? Benefit from the opportunities of the healthcare market ! Request the market report at your association Request a presentation and strategy workshop in cooperation with your association Request the “healthcare opportunity checklist”for your company at healiz

20. Thankyou! Sherille Veira-Schnitzler s.veira-schnitzler@healiz.com +49 (0)201 486404-10