Slide 1: Investor Presentation / March 2013
——_— |. INVESTOR PRESENTATION / MARCH 2013
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation is for information purposes only. By this presentation, Elron does not intend to solicit offers to purchase its securities and the presentation does not constitute an invitation to receive such offers. Elron may make improvements and/or changes in the fe
Slide 3: Elron 2010-2012: Back to a Technology Holding Company
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY
Slide 4: Focus on Medical Devices
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY FOCUS ON MEDICAL DEVICES Our main focus since 2009 has been investing in medical device companies. The value of M&As in this industry in the U.S. and Europe totaled $35b over the last year. We leverage our know-how, expertise, and internati
Slide 5: $150m invested by Elron in med-tech companies
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY FOCUS ON MEDICAL DEVICES $150m invested by Elron in med-tech companies during the last 5 years
Slide 6: Specialty over Diversity: 60% decrease in G&A costs
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY SPECIALTY OVER DIVERSITY 60% decrease in corporate G&A Costs (between 2008 to 2012) + Appointment of new management + Personnel reduced by half
Slide 7: Specialty over Diversity: group companies reduced by 50%
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY SPECIALTY OVER DIVERSITY From 2008 to 2012 the number of group companies was reduced by 50%
Slide 8: Since 2009, Elron led exits amounting to $400M
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY SINCE 2009, ELRON LED EXITS AMOUNTING TO $400M IN THE AGGREGATE
Slide 9: Specialty over Diversity
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY SPECIALTY OVER DIVERSITY Investments which afford us significant influence and active involvement Early-stage companies, where control can be acquired at a reasonable value Flexibility for long-term support and commitment Game changers wi
Slide 10: Our Strategic Alliance
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY OUR STRATEGIC ALLIANCE Strategic partnership between Elron and Rafael, through a jointly owned subsidiary, that has access to state of the art technologies developed by Rafael and exclusive rights to commercialize them Rafael – Advanced Defense S
Slide 11: Our Strategic Alliance
ELRON 2010-2012: BACK TO A TECHNOLOGY HOLDING COMPANY OUR STRATEGIC ALLIANCE Combining Rafael’s extensive scientific know-how, advanced R&D capabilities, technological innovation and resourcefulness with Elron’s strong financial base, access to capital markets, management skills and strategic expert
Slide 12: From Debt to Dividend Distribution
ELRON 2010-2012/finance FROM DEBT TO DIVIDEND DISTIBUTION
Slide 13: Medingo & Teledata Netvision sales
ELRON 2010-2012/finance FROM DEBT TO DIVIDEND DISTIBUTION Medingo & Teledata Netvision sale sale 20 19.5 82.4 15 Wavion Sync-Rx sale 10 add‘l sale 9.4 Medingo 8.0 5 proceeds 3DV ($M) sale 3.1 0 0.8 -0.5 -4.6 -4.4 -5 -6.0 -6.2 -6.7 -7.5 -10 -12.1 -11.5 -12.3 -15
Slide 14: $15m dividend
ELRON 2010-2012/finance FROM DEBT TO DIVIDEND DISTIBUTION 50 43.0 43.3 40.7 40 38.1 30.0 31.1 30 27.5 27.0 20.5 21.2 21.0 20 13.2 10 3.2 ($M) 0 -10 $15m dividend -20 -30 -32.0 -40 -36.1 -39.0 -50 Quarter/Year
Slide 15: Investments and exits 2009-2012
ELRON 2010-2012/finance FROM DEBT TO DIVIDEND DISTIBUTION 180 160 155.9 140 120 100 $M 80 68.5 60 40 33.5 36.6 35.8 36.6 20.0 17.9 20 0 2009 2010 2011 2012 Investments Exits
Slide 16: Current Resources
ELRON 2010-2012/finance FROM DEBT TO DIVIDEND DISTIBUTION CURRENT RESOURCES $25m cash balance as of Dec. 31, 2012 $25m unutilized credit line from SVB $20m net cash balance at RDC as of Dec. 31, 2012 We continue to seek new investment opportunities in the medical device industry, and have resources
Slide 17: Elron 2013 > Catalysts
ELRON 2013 > CATALYSTS ELRON
Slide 18: Major Group Holdings
ELRON 2013 > CATALYSTS MAJOR GROUP HOLDINGS Business Shareholdings Elron’s investment world leader in GI medical devices and pioneer 31% of capsule endoscopy (8.57% by RDC) NA real-time & fully-automated microbiology laboratory system 41% $25m treatment of ischemic stroke in 24h window post symptom
Slide 19: BrainsGate overview
ELRON 2013 > CATALYSTS Elron’s holding: 30% Founded: 2000 First investment by Elron: 2005 ~$70m have been invested to date, of which ~$21m by Elron Main partners: Johnson & Johnson, Boston Scientific, Pitango, Cipio Partners Device for treating ischemic stroke in 24 hour window post symp
Slide 20: Cost and burden of stroke
ELRON 2013 > CATALYSTS The direct and indirect cost of stroke in the U.S. in 2010 was estimated at $73.7b 15 million people suffer a stroke worldwide each year of stroke victims receive treatment 5% in the limited 3-4.5 hour window 15-30% of stroke survivors are left permanently disabled Sources: Wo
Slide 21: BrainsGate catalyst 2013
ELRON 2013 > CATALYSTS In 2010 BrainsGate completed a clinical trial on approximately 300 patients, whose results strengthened the assessment that BrainsGate’s treatment has a considerable clinical effect, which is stronger than the effect found in current treatments. Since June 2011, BrainsGate
Slide 22: Pocared overview
ELRON 2013 > CATALYSTS Elron’s holding: 41% Founded: 2004 First investment by Elron: 2007 ~$61m have been invested to date, of which ~$25m by Elron Main partner: SCP Vitalife Real-time and automated microbiology laboratory system, using optical technology The system is designed for use
Slide 23: Global microbiology diagnostic market
ELRON 2013 > CATALYSTS The global microbiology diagnostic market at 2013 is expected to total approximately $4.5b million urine cultures are 125 performed each year in the U.S. of urine cultures return with 70% negative results, after antibiotics have been unnecessarily administered Sources: Frost &
Slide 24: Pocared catalyst 2013
ELRON 2013 > CATALYSTS In December 2011, the company received CE certification. During 2013, Pocared expects to commence the collection of urine samples for a diagnostic trial to prove the efficacy of its system's first application, UTI diagnosis. The trial is expected to support its planned FDA
Slide 25: Given Imaging catalysts 2013
ELRON 2013 > CATALYSTS Market cap - ~$500m (March 2013) 2012 revenues - $181m; 2011 revenues - $178m Cash - ~$124m (as of December 31, 2012) In 2012, Given Imaging acquired SmartPill, an ingestible capsule that uses sensor technology to measure pH, pressure and temperature in the gastrointes
Slide 26: Elron 2014+
ELRON 2014 + SMARTWAVE KYMA CARTIHEAL NOTAL VISION
Slide 27: CartiHeal
ELRON 2014+ Elron’s holding: 24% Founded in 2009; First investment by Elron in 2012. $7.85m invested in company to date, including $2.5m by Elron. Other investors include Accelmed (owned by Mori Arkin) and Access Medical Ventures. Implants for repairing cartilage and osteochondral defects
Slide 28: Smartwave
ELRON 2014+ Elron’s holding (through RDC): 50% Founded in 2011 by RDC. $1.5m invested in company to date. Miniature implantable atrial defibrillator. The defibrillator immediately and automatically detects and terminates atrial fibrillation (AF) episodes (a type of irregular heartbeat), wi
Slide 29: Kyma
ELRON 2014+ Elron’s holding (through RDC): 37% Founded in 2008; First investment by Elron in 2009. $7.5m invested in company to date. Miniature device for the continuous remote monitoring of chronic heart failure (CHF) patients, inserted beneath the skin or attached to the patient’s torso in
Slide 30: Notal Vision
ELRON 2014+ Elron’s holding : 23% Founded in 2000; First investment by Elron in 2003. $22m invested in company to date, including $5.6m by Elron. Remote monitoring of patients at risk of vision loss from AMD. AMD destroys sharp, central vision, necessary for common tasks such as facial rec
Slide 31: Elron 2012 > Financials
ELRON 2012 > FINANCIALS ELRON
Slide 32: Public Holdings, Private Holdings and Market Value
ELRON 2012 > FINANCIALS Public Holdings 1 ($m) (Market value as of March 8, 2013) Given Imaging 130.8 Other holdings 0.3 Total Public Holdings 131.3 Private Holdings 1 (Book value as of December 31, 2012) Pocared 1.8 BrainsGate 3.0 Jordan Valley 12.2 Other holdings 2 14.3 Total Private Holdings 31.3
Slide 33: Quote from Elron's founder Uzia Galil
“ Looking ahead, Elron should always understand that the ever evolving changes in the high tech industry will be exponential, and therefore, success will depend on choosing the right niches in the world market in which it can maintain and improve its relative advantage. Mr. Uzia Galil, Elron’s found
Slide 34: The Bottom Line
ELRON > THE BOTTOM LINE Unique access to Israel’s world-class human capital, R&D resources, universities, scientific institutions An operational holding company with the ability to provide long-term commitment to group companies Strategic alliance with Rafael and access to state of the art mil
Slide 35: Visit us at elron.com
visit us at elron.com