LISI GROUP - Integrated report 2022

AIMING FOR EXCELLENCE To respond to these developments, our customers offer complete ranges of solutions that include both simulation and imaging tools to better prepare the procedure upstream, robot-assisted minimally invasive surgery (MIS) instruments, operating guidance and implant positioning systems – to assist the surgeon – in order to limit post- operative risks and reduce hospitalization time. These new approaches impose permanent technological innovations – which are all differentiating factors for our customers – on which LISI MEDICAL is positioned. How does LISI MEDICAL respond to these new demands? We support our customers on the industrial aspect of these developments, by providing our expertise to optimize the design/production mix, what Anglo-Saxons call Design for Manufacturing (DFM). We advise them on the prototyping phases and support them during the ramp- up in order to guarantee the reliability of the processes – by reducing their variability – and to ensure the compliance of the products over time. In 2022, the division was mobilized on two major programs directly linked to the development of operating techniques in Minimally Invasive Surgery (MIS). The first one had been launched just before the COVID period, the second during the COVID period. The ramp- up phases went smoothly and are still ongoing. For these two programs, which have benefited from unprecedented capital expenditures, we have taken advantage of our solid positioning and our reputation among world leaders in orthopedics and MIS. One of these programs resulted in the signing in 2022 of a strategic contract valued at $170M over 4 years. It engages and strengthens LISI MEDICAL’s position as a leader in this market segment. The continued deployment of the EU MDR (European Union Medical Device Regulation 745/2017) regulations also obliges prime contractors present in the European market to update and resubmit their technical files. These complex and costly procedures cause some of them to rationalize their ranges to focus on high-volume products. Consolidation will continue. What are the impacts of these events on LISI MEDICAL and on the market? LISI MEDICAL remains little exposed to this streamlining movement because we are mainly positioned with the most important contractors, who have already made a good start on this movement by anticipating the new regulations. An extension of the EU MDR transition period has also been granted by the European Commission until December 31, 2027 for high-risk systems – mainly implantable devices – and until December 31, 2028 for medium and low risk systems – mainly instruments. Inflation and pressure on prices will accelerate the development of technologies to reduce the total cost of operations, and will therefore favor minimally invasive surgery and ambulatory surgery techniques. The trend is already very strong in the United States, where Ambulatory Surgical Centers (ASC) are multiplying. These technical platforms, rid of all the accommodation services and ancillary costs found in the hospital, focus solely on the procedure. However, these approaches remain reserved for patients without risk of complications. The fitting of hip prostheses on an outpatient basis is beginning to develop in such centers. One of the two programs completed by the division in 2022 resulted in the execution of a strategic contract valued at $170M over 4 years. It strengthens LISI MEDICAL’s position as a leader in this market segment.” – Lionel Rivet CEO, LISI MEDICAL LISI MEDICAL 68 LISI – 2022 INTEGRATED REPORT