Ansell Limited

thank you and good morning all it's a pleasure to be back in melbourne today and in a position to comment on a successful fiscal year 25 and give you a look ahead head to fiscal 26. let me start with the contents page on page three this both gives you an overview of what we will cover today the team who'll present will introduce in a moment but also your key takeaways that i hope you gain from this presentation With regards to our performance overview that I will cover, we've seen successful delivery against all the FY25 performance objectives we set out, including EPS of $1.26 at the upper end of our guidance range. I'll then give a bit more color to the drivers behind that result, including the performance of our recently acquired KBU business and our successful integration of that business. I'm joined by Deanna Johnston, who's our CIO, who successfully led the KBU integration, but she is here, in fact, to talk about the next phase of our Accelerated Productivity Investment Program, APEC, that phase being the rollout of a modern ERP system across Ansell. And then Brian Montgomery will join us. Brian is our new Chief Financial Officer, four months now with Ansell. and he'll give you more colour on the strong financial results and also talk to our on-market share buyback, which we have announced with this result. And then finally, I'll look ahead to fiscal year 26, our strategy to adapt to higher tariffs, and our EPS guidance range, which you can see we have announced in the $1.33 to $1.45 range. So let's proceed with the performance overview. And this slide shows the similar format to the one we've had over the last few reporting periods. On the left-hand side are the goals that we set out at the beginning of the year, and down the middle you can see those green checks indicate we believe we've delivered on pretty much every goal that we set out. We'll provide more details on those as we go through this presentation. But there's also a nice summary of our synergy symmetry to our financial results. 8% organic growth translated to 10% EBIT growth, adjusted EPS growth approaching 20%, and we were able to reward shareholders with a 30% increase in the dividend. And that's a satisfying set of financial outcomes to report to you today. So let's continue with the story behind these numbers. And if I begin with the industrial segment, you can go to the next page, please. So overall, a record result for industrial record sales, a record EBIT margin. And of course, that also means record profitability. And I'm very pleased with that organic growth approaching 6% and the 10% EBIT growth. Breaking it out by business units, we saw that very strong first half in mechanical. We did indicate at the time that some of that was safety stock built by distributors and end users of our top-selling R840 style, and therefore we did expect it to moderate some in the second half. I still believe 3% growth in the second half is very creditable in an environment in which many of our core industrial verticals saw stuff to demand, and an overall 7% growth for the year for mechanical is a strong result. Chemical saw more consistent first half, second half growth. And what's pleasing in chemical is that we're seeing that growth come across the full portfolio of both hand and body protection. And again, supported by some very promising success from pretty important new product launches in that space. Turning to EBIT performance, so sales clearly benefited. We saw improved manufacturing utilization and also productivity in part from the APIP savings. A reminder that first half margins were lower. We saw these trends in both industrial and healthcare from elevated air freight that was needed to support that strong growth. But margins improved in the second half as freight costs returned more to normal, and we got some price increases through in business. So let me now turn to the healthcare segment. So here, encouraging to see healthcare back to a solid performance. Industrial has been very consistent the last two years. Healthcare now showing strong growth again, as the destocking effects that have affected this segment for the last couple of years are clearly now in the rearview mirror. Almost 10% organic growth and a slightly higher level of EBIT growth meant we also improved EBIT margins in this space. The reported EBIT margin improved much more than organic because of the benefit of the consolidation of the KPU business. Again, by business unit, strong first half in exam, but some of that 9% growth was the pull forward of orders that otherwise would have been invoiced in the second half as customers began to position for the first round of tariff increases that went into effect in January. The organic growth rate improved again through the half for exam's longer use, and overall that business is well positioned to grow again into this coming fiscal year. Very strong and very satisfying results for our surgical and our cleanroom business. Surgical, again, as we said at the half, was benefited in the first half by $17 million of orders that were delayed out of the fiscal 24-time period by shipping delays related to the Red Sea disruption. And so that 14% growth in the second half is very encouraging and 20% overall for the year of great result. Cleanroom is where we've doubled down with investment. Again, very strong first half. Second half at 8%, continuing to grow above our estimates of market rates. And that's through that period of KBU integration, which we navigated successfully, but we always expected to have a somewhat lower sales outcome with customers positioning ahead of the cutover. Again, EBIT growth benefiting from the same trends as industrial, the consolidation of KVU, improved manufacturing utilization and APIP savings. First half had the headwind from higher freight and raw material costs. Second half improved as those moderated and we got some initial pricing through. So we're all pleased with both segments' performance in the year. So let's move forward now to some further detail in the drivers behind that growth. And this page summarizes the four dimensions which I hope you as shareholders will think are the long-term source of shareholder value creation. And for each of these four boxes, I'm just going to call out one specific element and others we'll talk to in other parts of the presentation. So differentiated customer solutions. And I think perhaps our differentiation is still not fully understood by the market. I've mentioned already the success we've had with new products. Here I want to highlight how important our range of service offerings is to the customer. For example, under the Ansel Guardian brand, we have the world's leading database to inform customers on what the right PPE is to use, depending on the chemicals that workers may be exposed to in that environment. The use of the Ansell Guardian chemical system increased 30% year-on-year with more than 50,000 queries recorded, either by customers directly for a limited version of the system or in partnership with our sales teams for more complex queries. And we're seeing it lead to share gain in markets in which Ansell has previously struggled to gain share. For example, in Japan, where regulations around protecting workers from chemical hazard have been tightened, As a result, we've seen a significant increase in Japanese customers coming to Ansel Guardian for advice, and that in turn has led to increased share gains and growth in Japan. Our diverse vertical and geographic presence is another core feature of Ansel. And while some of our verticals are seeing reduced demand or limited growth, we have plenty of places in which we can still grow. We've doubled down in the pharmaceuticals and biotechnology area, but I want to mention here the success of emerging markets. Emerging markets, it's a mixed picture. Some of our reliable multi-year growth markets have not grown in the year, for example, Mexico, but in other places, Brazil, China, India, we saw solid growth in the year. So again, within the broad universe of emerging markets, we can find places to grow. The right-hand side talks more to productivity, capital allocation, and here, with the success of APIT behind us, ERP will talk about But I want to highlight our increasing confidence in being able to generate returns from automation investments. We have a number of pilots running this year, particularly looking at more automated packaging solutions, where a lot of our people are employed today. With success with those pilots this year, we should see another path forward to improve productivity. Brian will cover more on our capital allocation, but I want to highlight our internal capital expenditure, which is always our priority where we have good return projects. The most important project this year is our India Surgical Greenfield Facility, which is on track to begin zipping of gloves in the second half of fiscal 26. So let's move forward now to the next page. And here I summarize the performance of the acquired Kimberley Clark PPE business, or KBU as it's known within Ansell. So firstly, the performance of that business itself was ahead of business case. Secondly, the integration is complete. And Ansell's CEO has never been able to say that before, just one year after an acquisition. And this was by far the most complex integration task that we've taken on. And with success under those two headings, I'm able to now increase our synergies target from $10 to $15 million. So let me go through a few more details under each of those headings. Sales were ahead of business case also. Strong double-digit growth in our cleanroom products, which is really what we bought this business for. You're aware that when we bought the business, we did anticipate some decline in the industrial safety products, particularly in the period in which they were still being supported by the Kimberley Clark sales team. In recent months, they have now been transitioned to the ENSL sales team, and we want to get those products back to growth as well. So the overall moderate sales growth of 1%, but double-digit growth in cleanroom, very satisfying, and overall ahead of business case. EBIT also ahead of business case on those sales, better product margin, and the early exit of transition services means we started to record SG&A synergies ahead of our original business case assumption. So the integration was the most important job we had to do, and we had to do it well this year. Customers in the cleanroom area do not forgive you if you disrupt their operations with supply chain lack of reliability. And the real test of our success is our customers. They were nervous about this. It's a complex integration. They've seen issues with other companies before, and they've reported to me that they viewed this as a seamless experience for them, and that's very satisfying to hear. As a result, all our transition service arrangements from Kimberly-Clark were exited ahead of schedule. And now we can focus on our motto that we always apply to every acquisition. Where is the opportunity to leverage the best of both of the base hands of business and the acquired business? Two highlights here. KBU's right cycle Post customer use end of life recycling service really resonates and it resonates all over the world. Today we're looking to scale that up to improve the economics of the service which is subsidized by Ansell so that we can bring it to many more customers. And then as we dug into the quality of the business that we've bought and done research on the strength of the KVU brands, we've made a decision that we need to double down on those acquired brands. And we also need to simplify the overall Ansell brand portfolio. And that means today we're announcing that some older Ansell brands, which have equity, have value in the market, but they will be superseded by the key KBU brands, Kymtek and Klingard. So we'll transition products today under an older Ansell brand to either Klingard or Kymtek. This to me is a value creating step, but accounting rules requires to record an impairment because we will not be continuing with some of those other brands that have a current fund sheet value. And then an upgrade to synergies target. So remember our net figure of 10 million was a balance of gross cost savings with some offset for some revenue risk. 12 months in, we're seeing less of that revenue risk than we had anticipated. We have secured the SG&A savings, which is the biggest piece of the gross cost synergy with the success of the integration. And the opportunity I see is an increased supply chain savings opportunities. We're still working through that, but I'm confident that we should have at least a 5 million upside to our original 10 million target. Of that 50 million, we realized 5 million in fiscal 25. We won't be all the way to 15 in the next 12 months, but we'll get close to that 15 million figure. So now if I turn to our brand portfolio, I won't cover this page in detail, But really, I think this is by far the strongest set of brands of any player in the PPE world. Each one of these represents revenues in the range of $80 to $90 to $300 million. Each of these brands are known globally. Each of these have a clear role within the Ansell portfolio, and you can see how well Klingard and Chemtech fit into this portfolio. But the most important brand on this page is the Ansel brand in the top corner here. And so what we also want to make sure is that people buying Hyflex know very clearly they're buying Ansel. As Ansel, recent research confirms, is the best-known brand in our industry. But it also highlights the strength of our service brands, Ansel Guardian, the Right Cycle Recycling, and the Apex program, which goes more to the use versus the adoption of PPE. So now let's turn to the APEC program. And this is the last time that we will present the three strands of APIP here, because the organization work stream, the manufacturing work stream are substantially complete. And we have delivered to our upgraded savings target of $50 million, which you will see in full in the next fiscal year. So from here on, we will focus on the IT stream. We've had success to date, but the big work is still to come. And I'd now like to hand over to Deanna Johnston to give you further details on this.

Thank you, Neil. By way of further introduction, I've now been with Ansel over five years. And during that time, my role has evolved significantly. In addition to leading our global IT function, my responsibilities have expanded to include overseeing Ansel's broader portfolio of change initiatives. Most recently, this included leading the integration of KVU into our business ahead of schedule. There's three factors that really resulted in the success of that integration. First, we developed a tightly interconnected dependency plan, carefully mapped how all the complex parts fit together. Second, we really maintained a constant steering and rapid issue escalation, catching potential problems early and addressing them quickly. Lastly, and most importantly, we followed strict cutover readiness criteria, ensuring all of our stakeholders were aligned and confident in our preparedness. These criteria were defined in advance, measurable, and never compromised. We plan to apply those same principles to our upcoming digital transformation work stream within APIP. Before diving into that, let's just quickly review what we've accomplished in this space, though, over the past six years. In 2019, ANSA was operating 16 different ERP systems, a legacy from our many acquisitions. This created significant inefficiencies across our systems and processes. We made a strategic decision to consolidate all of our manufacturing plants onto a single cloud-based ERP platform. Over the last six years, we've been executing this transformation plant by plant. As of today, our nine largest facilities have successfully migrated, including our Thailand plant, which just went live earlier this month without an issue. The confidence we've gained from these transformations and from our successful KVU integration has positioned us to take the next challenge, which is migrating our customer-facing entities onto that same ERP platform. From here on, this becomes the core focus of APIP. These migrations are going to take place over the next three years, beginning with North America later this fiscal year. Once complete, ANSA will operate on a unified ERP system, unlocking benefits across cost efficiencies, process optimizations, and customer experience. Our customers will see an improved service and stronger partnerships, and we'll be better equipped to deliver value in areas like pricing, inventory management, and integration of future acquisitions. We're genuinely excited about the potential of this initiative. We're working really closely with our customers to ensure a seamless transition and look forward to sharing updates with you guys on our progress in the years ahead. With that, I'll hand it back to you, Neil.

Thank you, Deanna. So a few words on our sustainability progress before I then hand over to Brian for more details on our financial results. And two aspects of this I would highlight. Firstly, our net zero emissions goal has now been extended to include our scope three emissions, with our net zero target including scope three remaining at the FY45 date. And I'm pleased to say that the science-based targets initiative has validated our targets as well grounded and meeting their criteria for science-based targets. On the left-hand side of the page, I'd highlight our progress in reducing injuries. You may remember that in fiscal year 24, that was one year, we seldom see this, but one year in which we did see an increase in injuries, and so important to get back on track. I'm satisfied with a 16% reduction and the overall level of total recordable injury frequency rates, but I also think there's further progress that we can make. And so we're very focused on the leading indicators and the proactive risk reduction steps that we can take to get to the lowest possible injury occurrence in our company. And then finally, it continues to be very satisfying to see the recognition we gain from authorities around the world consistently rating Ansell as a leading company in our delivery of sustainability objectives. So now let me hand over to Brian Montgomery to go through our financial performance. Brian.