PolyNovo Limited

Thank you for standing by and welcome to the PolyNovo FY26 results webcast. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. And if you wish to ask a question via the webcast, please enter it into the ask a question box and hit submit. I would now like to hand the conference over to Mr. Bruce Headey, Chief Executive Officer. Please go ahead.

Good morning everyone and thank you for joining us. Since joining Polynovo last December, I've spent time with customers, missions, employees and shareholders around the world, while also reviewing the business in detail. My confident assessment is that Polynovo is developing into a stronger, more capable business with a sustainable runway of potential for us to capture. Looking ahead, FY27 is less about building capability and more about converting that capability into outcomes. Reliable performance, broader adoption of the portfolio, and milestone completion, leading to stronger returns and long-term shareholder value. And with that context, I will be sharing some key highlights from FY26, the opportunity ahead, and our key priorities for FY27, before handing over to Jan to review the FY26 financial results. We go to the next slide. We have here the standard disclaimers. Move to the next slide. So the origins of polynovo are centered around large complex burns. The Wayne Novus or BTM uniquely and specifically addresses the care needs of critically ill burns patients, providing surgeons with the time and control they need to address these complex cases as really truly redefined what is possible in this category. Increasingly, we are seeing Novosorb BTM and now MTX used across trauma, reconstruction, limb salvage and other complex wounds, reflecting the versatility of the Novosorb portfolio. As more surgeons are seeing positive outcomes in new procedures using our products, the potential for growth strengthens. Combined, these markets have an estimated total available market in excess of US$2 billion. I want to be clear, BTM in large burns built PolyNovo's clinical credibility and will remain an important growth lever for the future. But the opportunity for Novosilk is much broader. And that matters, because PolyNovo is fundamentally a platform company. with a significant complex wins business today and broader potential over time. It was important for me to include these images today. The patients' lives from around the world that we positively impact through our technology is a source of daily inspiration and pride for our entire team. During FY26, we increased our focus on strengthening our foundations. while our commercial momentum continued with more cases covered than ever before in more types of procedures in more hospitals and countries around the world. The clinical study report for the US pivotal RCT is now finalised, representing an important milestone for Polynovo. We have successfully completed one of the largest and most rigorous burn studies conducted in decades. And we look forward to updating investors on the trial results as we progress through the next stages of regulatory review and commercialization. And we're pleased to share that BTM received regulatory clearance in eight additional markets. MTX continued its commercial rollout, achieving close to 90% year-on-year growth in FY26. We expect the momentum to continue as clinical evidence and clinician experiences continue to grow. The new manufacturing facility construction has been completed with transition plans underway and our leadership team was strengthened with proven capabilities spanning science, quality, IP and governance. We also have invested in critical strategic marketing and market access capabilities to actively drive the next wave of growth. Each of these elements will make us more capable to scale the organisation empower the financial growth trajectory. Next slide. Sharing some of the financial highlights here. FY26 continued to deliver growth with the group, the US and the rest of the world sales all growing greater than 21% in constant currency. We've added constant currency detail in response to the volatile forex landscape over the previous year. and to give a more accurate reflection of the local market momentum. Importantly, EBITDA grew significantly versus prior year, while we continue to invest in the infrastructure and capabilities mentioned previously. We're very pleased with the improvement in operating cash flow, in line with expectations communicated in the first half earnings update, generating $9.4 million in free cash flow for the year. Jan will take you through the financial performance and key drivers in more detail shortly. Next slide. I recognise there may be some questions around the trajectory of growth in the United States during the second half of FY26, so let's address that here. This chart depicts the sales growth trajectory over recent years in the US, comparing revenue from large burn procedures to all other procedures. Large burn cases are lumpy by nature. The presentation of large burn cases are infrequent and variable in magnitude, which can impact sales variances more than other typical market forces. A good example is that we saw strong growth in large burn cases in the first half of FY26 after a period of lower growth. We saw less of those large cases presented in the second half of 2026. Meanwhile, the deliberate expansion into procedures beyond large firms, including the introduction of MCX, is paying off, with a 52.8% three-year CAGR coming from an increasing number of complex wound applications. Now this is important, because it demonstrates that complex wounds are not simply a future opportunity. They are already an increasingly important growth in turn. Finishing FY26 with a record sales month in June for the US provides confidence that this is not a business that is running out of opportunity. It does suggest our growth drivers are rightly changing, broadening and maturing. And I'm pleased to share that we started FY27, continuing the FY26 momentum with a group sales record for July. Next slide. MTX is a good example of our ability to leverage the Novasol platform into new clinical applications and generate meaningful commercial traction. In FY26 sales increased to $12.6 million from $6.7 million in the previous year with MTX now commercially available across six markets and the regulatory pathway is well underway for the UK. Most encouraging is what we are hearing from our clinicians about the positive outcomes they're experiencing using NTX, either standalone or increasingly in combination with BTM. We've just shared a few of the comments here on the right. NTX's versatility in combination with its oversold credibility gained from BTM is enabling use across a broad range of reconstructive and complex wound challenges supporting our confidence in the opportunity for further adoption. Next slide. Now, the body of evidence supporting broader adoption of Novasol's portfolio across a wider range of clinical applications continues to grow, validating the credibility of Novasol technology. While there is still a lot to focus on BTM in burns, we continue to see significant growth in evidence outside of burns applications, in an array of complex wounds. Another indicator of broadening clinical acceptance is the inclusion of Novus or BTM in academic textbooks. And this stat got me excited. BTM was included in nine published textbook chapters in FY26 alone, compared to just one chapter across all of the earlier years. Next slide. So moving to geographic perspective, All regions continue to experience strong growth, with America's exceeding $100 million for the first time. There's no single growth lever in which our outlook depends. We have different opportunities at different stages of maturity across each region. In North America, the major opportunity includes PMA approval and the RCT clinical study report. Entering outpatient care in FY27 and deeper penetration of existing accounts in NCX. Outside of the US, there remains significant runway through new products and indications. In FY27, we'll be about matching investment and commercial execution to the maturity of each market, deepening penetration where we're established, while selectively building markets with a quantifiable opportunity for an oversold introduction. So let me start here by confirming that our ambition as a growth company remains high. The focus of the leadership team is now to translate that ambition into clear direction and accountable actions. Our strategy starts with the strength of what we already have, which is a differentiated complex wound portfolio, established clinical leadership, and a significant opportunity for deeper penetration in existing markets. The next phase is about leveraging the portfolio more deliberately to maintain strong growth in BTM, MCX and soon-to-come Sympath by prioritising application opportunities where clinical need and potential commercial return are the strongest. By leveraging the platform, We commit to increase the velocity of our innovation engine. This includes next generation products to fuel expansion in our core business and getting back to the science of our polymer technology to unlock potential new ways. Every company goes through evolutionary inflection points. PolyNovo has grown substantially over the several years Our commercial teams are expanding. Our manufacturing output and capacity is increasing in a highly regulated market. So we plan to sharpen our focus on organisational capability and accountability during FY27 to translate clinical leadership into sustainable long-term value. Next slide. Our opportunity is broad. So one of the most important things we can do as a management team is be clear about where we focus our resources. For FY27, that means five priorities. Advancing TMA to approval and sharing the ICT results when appropriate. Launching SynPath into the US outpatients market. Accelerating MTX. Increasing our innovation velocity. including adding business development capabilities and improving operating leverage as we scale. The common thread is execution, converting the capabilities and investments we have made into commercial outcomes, sustainable growth and stronger returns. So I'll hand you over to Jan now with these thoughts. The platform is proven and its full potential has not yet been realised. burns remain an important foundation while complex wounds, MTX, outpatient care and other applications substantially broaden the opportunity. This isn't simply an aspiration. Non-burn indications are already growing considerably faster. MTX is gaining traction and there are multiple growth levers across geographies and care settings. The difference you should expect under the refreshed leadership team is focus and execution. Thank you. Over to you, Ian.

Great. Thanks, Bruce. Next slide, please. And thanks again, everyone, for joining the webcast today. I'll start with our commercial sales performance. Novosel product sales were $138 million for the year, up 16.7% on last year, and constant currency up 21.3%, as Bruce just mentioned. In dollar terms, sales increased by $19.7 million. The year ended with a strong June result, including a record sales result in the US. This was backed up recently in July with group sales exceeding $13 million for the month, a new record. This is a good indicator of the momentum in the business as we progress into the new financial year. We experienced continued growth in the US, achieving sales of $102 million, up 15.6% for the year. There were significant FX headwinds in FY27 due to the stronger Australian dollar against the US dollar. Taking this into account, US sales and constant currency were actually up 21.1%. The growth was driven by strong account acquisition, adding 200 new hospital accounts during the year and continued penetration of existing accounts, with total accounts now over 880 in the US. In regards to the rest of the world result, we recorded sales of $36 million, up 20% on last year and up 21.9% in constant currency. This includes some exceptional results in a number of markets with growth rates well above 30%, which I'll highlight a bit later in the presentation. An oversaw of MTX sales for the group of 12.6 million, up 89.6%, recording sales not just in the US, but also Canada, Australia, New Zealand, India and Hong Kong. Next slide, please. Moving on to additional highlights for the US. has just mentioned the US achieved 21.1% sales growth in constant currency for the year. Novosorb NTX sales in the US were 12.2 million, up 92.7% in constant currency. Surge in adoption of Novosorb NTX continues to grow and will accelerate across the customer base as more clinical evidence is generated and shared. Novosorb NTX has now been used in over 330 accounts in the US, doubling from the same time last year. We currently have 132 staff in the US, including 106 in the sales team. The average sales per sales team member continues to increase as we penetrate existing hospitals across a wider range of indications, also assisted by having additional product available, being Novasort MTX. As a result, overall productivity of the US team has increased, increasing operating leverage and profitability. Furthermore, the US business continues to generate strong cash flows with better days welling within our expectations. Next slide, please. So moving on to the rest of world results, as mentioned, sales were up 21.9% on the prior year in constant currency. We achieved some exceptional results, both in relatively new and well-established markets. In particular, Australia, our home market, we entered several years ago, grew by 33.9%, which is an excellent result. Ireland grew by 38.3%, is one of our best performing markets on a per capita basis. The results in long-standing markets, such as Ireland and Australia as an example, is a good indicator of the adoption by surgeons using Novus or BTM, not just in large burns, but across a range of indications. Sales in Hong Kong continued in strong weight, recording 49.9% sales growth for the year. Turkey's strong growth is also continued, up 79% for the year. India performed with a consistent growth rate, recording 52.8% sales growth for the year. Furthermore, following first sales in June last year in Malaysia, we've received monthly orders, each order increasing in value, and we'll be investing that market by hiring two sales reps this quarter. We've experienced similar growth in the Czech Republic following first sales late last fiscal year. The rest of the world's share of global sales now accounts for 26% of global sales, and we see significant opportunities for growth, particularly in Europe and the Middle East, in the short term. Moving on to the P&L, I want to start off by highlighting the underlying EBITDA performance for the year. After adjusting EBITDA for significant items, being the impact of the R&D lab fire, and unrealised Forex impact on translation of the balance sheet due to the strong Australian dollar, adjusted EBITDA was $13.4 million, up 50% on the prior year. There are a number of one-off items impacting the reported net profit after tax result, which I will now explain. BARDA revenue is down on the prior year as expected. The pivotal burns trial is complete and we are finalising the submission for pre-market approval to the FDA. In connection with the BARDA pivotal trial completing, The trial costs have reduced, which explains the lower R&D expense for the period. Onto gross margin, you may recall in the first half of the year, with inventory at comfortable levels after building them up during FY25, we took the opportunity to bring forward attending to various tasks in our manufacturing facilities in preparation for the pre-market approval submission and FDA audit that will follow in due course. To do so, we temporarily reduced manufacturing output in the first half, which in turn reduces the production recovery to cover manufacturing overhead costs. Despite increasing manufacturing output in the second half for 3.8 times the output of the first half, we recorded a modest improvement in gross margin in the second half of 89.2%, compared to 88.7% in the first half. The margin for the full year was 89%. At year end, a number of adjustments are recorded to account for the underutilisation of the facilities that occurred during the first half. As such, the underlying gross margin in the second half was much higher than 90%. Other income includes a $6 million insurance claim related to the R&D lab fire. This offsets the $4.7 million asset write-off recorded further below in the P&L. Employee-related costs were up 5.7% or 4.3%, excluding share-based payments, with employee headcount remaining steady at circa 300 employees at 30 June. Underlying corporate admin and overhead expenses were actually down in the prior year by 1%, after excluding unrealised 4X movement on translation of the balance sheet. This unrealised 4X movement comes about due to the Australian dollar appreciating against the US dollar during the period. resulting in an unrealized Forex loss of $2.7 million for the year compared to $2.2 million unrealized gain for the year. And this particular expense gets recorded in the corporate admin overhead line in the statutory P&L. So important to back it out and look at the underlying result there. In terms of operating leverage, it is increasing, and the bottom line is becoming more sensitive to sales growth, evident by the 50% increase in EBITDA after adjusting for significant items. Next slide, please. Moving on to cash flow on the balance sheet. We ended the period with $35.4 million cash on hand, an increase of $1.9 million on last year's balance of $33.5 billion. Cash flow from operations is $23.1 million and improved significantly compared to the prior year. It was over $3.1 million with strong debt at debtor collections in all markets. We completed construction of a new manufacturing facility in Port Melbourne with CapEx payments of $12.4 million for the period. We also commenced reconstruction of the R&D lab and offices with progress payments of $1.4 million, which are fully covered by insurance. $1.5 million in capex remains outstanding for machinery for the new manufacturing facility, and this will be paid in the first half. Even after funding $13.8 million in capex, the business achieved a free cash flow of $9.4 million, which is an important milestone achievement for the business. Finally, we ended the year with a strong balance sheet free cash flow, which will enable us to focus on further investment, driving revenue growth, and importantly, product innovation. Thank you. I'll now hand back to Bruce.

Thanks, Jan. And thank you all for joining us today and for your continued support of Polynovo. As you've heard, we are entering the first half with strong momentum, a clear strategy, and a deep commitment to execution. Our focus remains on delivering meaningful clinical impact, scaling globally and unlocking the full value of the NovoSort platform. I'm incredibly proud of what the team has achieved and confident in the opportunities ahead. We look forward to updating you on our progress and appreciate your engagement today. So I'll now hand over to the operator to move to Q&A.

Thank you. If you wish to ask a question via the phone, you'll need to press the star key followed by the number one on your telephone keypad. And if you wish to cancel your request, please press star two. If you wish to ask a question via the webcast, please enter it into the ask a question box and click submit. Your first phone question comes from Leanne Harrison from Bank of America. Please go ahead.

Good morning, Bruce. Good morning, Jan. Can we start with your slide 11 in terms of your 2027 opportunities? In terms of the PMA for BTM, can you tell us whether or not the submission timetable for the end of this calendar year still holds? Also, what needs to happen between now and submission? And then following submission, what are your expectations on the FDA review timeline?

Hi, Leanne. Thanks for the question. Yes, so as far as timeline is concerned, as we communicated earlier in the year, so we made the deliberate decision to take an opportunity to look at the scope of the program. With the updated guidelines from the FDA, we took the decision to bring some of those activities that were going to be post-submission to pre-submission in the intent to make a more complete and compelling submission all in one go. Also, it allowed us to line up the clinical report outcomes of the 18-month period, the follow-ups with the patients, so all tracking well. After the submission, I've always said our goal is a PMA approval, more than racing to a PMA submission, and we feel like we're in good stead for that as we've gone through this review timeline. So once that submission's in, then it's more appropriate to talk about the outcomes for the clinical study. and then we're more in the hands of the FDA as they go through their process over several months including an inspection of the facility we expect.

Okay so effectively in terms of approval for the FDA the expectation is perhaps you know middle of next calendar year is that right?

So it's definitely months and you know again you know we're We go to the FDA timeline, so we're prepared to work with them from experience and our understanding it's around that 12-month mark from submission.

Okay. But that hasn't sped up because of your additional submission activity?

It's difficult for us to say, but what I can say is that what we'll have is a very complete submission. The work being done prior to the submission rather than originally planned to do some work after submissions. for me, I'm more confident in how we would proceed in this sense.

Okay, thank you. And then if I could move on to Simpath, can you give us an update on where you're up to in terms of that outpatient opportunity, particularly on perhaps trying to secure reimbursement and where Simpath is up to in terms of the launch?

Yes, so we're in preparation for commercial launch as we move forward. As far as reimbursement is concerned, Simpath has Hixbix code already so we don't have any concerns there but as I think most people know as following this space is that it's been a market in a fair bit of turbulence over the start of the year getting used to the new policies through CMS. So we have added our market access capabilities to the organisation to help us navigate through this very different space than the inpatient market that We currently are in every day. So not only is it about the product or the reimbursement, it's also about provider confidence in that they can get paid through this new system. And with all of the different movements, that turbulence has something that we've kept an eye on as we prepare for launch into the market. So commercial readiness is underway. We're ready for our commercial launch. progressing well, I would say.

Okay, so what's your views then in terms of the ability to sort of penetrate that market, obviously given the challenges the market currently has?

So very deliberate in how we're going to approach the market. You know, we make sure that we have the right go-to-market strategy as well as, which includes not just the sales team, but also what indications make the most clinical sense for us to be involved in. and also has a significant commercial opportunity. So you're talking about procedures that are more single episode procedures rather than the repeat episodes that you might see in some of those chronic wounds. We see a lot of opportunity there and actually dovetails quite nicely with our current momentum in the inpatient space. Similar contact points, similar surgeons involved, just a different care setting.

Thank you very much. I'll leave it there.

Thank you. Our next question comes from Shane Story from Canaccord Genuity. Please go ahead.

Good morning, everyone. I think I might stay on the SYNPATH tack just for a couple of more minutes, Bruce. Sure. Just thinking about the settings there, would I be right in anticipating that you'd probably look to the outpatient setting, more hospital outpatient department, rather than going into, say, the broader private physician market at this point? Yeah, you got it, Shane. Thanks for the question.

You know, it's a logical first step for us. Like I say, there's that relationship that we already have with the surgeons in those hospitals. You know, we've got over 100 reps now in more and more hospitals every day. I think over 800 was the last count and increasing. So that makes a logical first step. You know, the indications, if you look at some of the oncology repair reports, type of reconstruction type procedures, they can be further outside of the hospital. And, you know, we are looking at opportunities to address those markets over time as well. But yeah, you're right. Logical first step and the hospital outpatients.

And when you think about just where the evidence sort of stands right now, just your thoughts perhaps on what additional evidence development you think might be appropriate. And I know that's a bit of an open question for everyone in your category, but just if you have some more thoughts on it.

Yes, it's true. The evidence requirements also need to be established as we go forward. We are gaining more and more evidence across multiple indications, as I mentioned in the presentation. And so whether that's in the chronic wound space as well as the more acute setting, we're seeing that evidence that is applicable to this space. But we're also mindful if there needs to be more evidence Let's say specific evidence generated that we're open for that. What I can say is that the strategy to move into the procedures that are more applicable to our product's capabilities and advantages, I think we're well placed with the evidence that we have.

Thanks, Bruce. I've got one final question just for Jan. Jan, thanks for tracking us, talking us through the various moves in gross margin over the halves. Sure. I suppose my question is really just around any of that sort of mechanics might reverse in FY27. I suppose just with new facilities coming online, just how you expect that overhead to affect the margin over the next year or two.

Yeah sure, the new facility isn't available for use at the moment so it's not hitting margin and we're not going to be transitioning to the new facility until around March next year and we'll likely start with NTX moving across. We're in the middle of validating machines and so forth. despite the facility being built. So we're not going to have that impact until sort of the fourth quarter. Before I talk about that, I'll touch on how margin is progressing and we're sort of back to the normal levels now out of our existing facilities. So July, gross margin was just under 95% and that's kind of what we're used to. and that comes about by, you know, strong sales, exceeding budget actually in July. We had 13 million sales for the group, which was a record, but we also hit budget or target for our production output in July. So when that happens, you know, you get a 95% gross margin. So, you know, with all that continuing and planned, we hit our targets between now and, say, in December, our first half, you know, our gross margins will be in that 90% to 95% range. The new facility comes on, that will have, you know, 1% to 1.5% impact on gross margin once it's up and running. But our sales will be a lot higher than where they are now too, so you've got to take that into account. But all in all, we're in a good spot in terms of being able to use that new facility and looking forward to sort of firing it up in the next couple of years. Thanks, Ben. That's all I had. Great.

Thanks, Shane.

Thank you. Once again, to ask a question by the phone, please press star 1. Your next question comes from Scott Power from Morgan Financial. Please go ahead.

Good morning, Bruce and John. It's just a quick question around some of the other research that you're doing. So you mentioned Synpath and the launch of that, but I'm just wondering if you'd give a bit of commentary around hernia repair and some of the areas that you're looking at. And I guess the second question to that is, with that R&D spend coming down in FY26, what's the sort of anticipated percentage of sales that we can look forward to going forward? Thanks.

Okay, thanks, Scott. And so just on the innovation pipeline in general, I think you'll recall that the half year, I spoke about the need of getting some velocity back into our innovation pipeline. And one of the first steps to do that is to bring in a chief scientific officer, which we did. Wonderful to have Martha Dondrand in the team now. And I can see, really two months in, we can see that rigor and discipline to the pipeline visibility and approach is definitely improving. So we have that. In that mix, like you mentioned, we've got a number of products. Hernia and breast recombinant we mentioned before. We've got products in that pipeline as well. that are going through a very deliberate prioritisation process. So we'll have, you know, my focus is to making sure that we have that velocity come back into the innovation pipeline and to be able to make the tough decisions. You know, unless there's a clinical differentiator, unless there's a very strong commercial need for the product as well, we'll make those tough decisions whether they stay in the pipeline or not. And I'm looking forward to sharing that more as we have. Marta has a bit more time under her belt. I think I'm very happy also with her approach to start bringing in some voice of customer with clinician groups, as well as she'll be planning to establish more formal forums for scientific advisory over time as well, starting in this calendar year. So I think, you know, for the most part, it's about making sure we have that discipline process in place for Innovation Pipeline to get that velocity back into our system. As far as the spend, I'll get Jan to speak about it, but I think as we shift away from the heavy listing linked to PMA preparation, we will see more of the investment going into R&D to help fuel this increase in velocity.

Absolutely. Just to add to that, in terms of R&D spend, the percentage of sales will be around 5%. of sales next year, and that excludes the R&D costs, which have historically sat in that line in the saturated P&L. That's all come to an end now. And to Bruce's point, though, Martha, our new CEO, has only been involved for a couple of months, and she's getting a handle on things, and we do want to invest more in R&D. We do want new products to come out and line extensions. So expect it to increase, but next year it'll be closer to the 5% of sales.

Right. Okay. Thanks, John. And just a second question, if I can. You've called out a number of the regions in the rest of the world that have done very well. Are there any regions that perhaps are underperforming and up for review?

So I think just to jump in on that one and the questions around the rest of the world, I think it goes back to what we've learned, particularly around that evolution of the markets. And we talk about markets being... at a different level of maturity. And again, as that mix between the large complex burns and the other complex wind applications, as that mix evolves, until that evolves, we'll have some variability in those markets. So that's why I called out the deliberate approach for this 2027, FY27, is to go deeper in some of those high potential markets rather than more emphasis on going to more markets. So definitely we think we've got some potential in particularly some of the European markets to go a little deeper and build up that momentum that we've seen in some of our more established markets. Like Australia performing extremely well as one of our most mature markets and you can see how that mix is changing in the US. I'd like to see that happen more in some of the European markets. Jan, I don't see you having anything to add. You're on mute. Apologies.

Nothing really further to add, but we've had some really great performances. We know what good looks like. We know how to get there in particular markets. are a driving force in supporting distributors. So we'll continue to do that and anyone that's sort of dropping off, we managed to pick them up again. But there's no shortage of opportunity. Also in the Middle East, we see opportunities because we've had product go into that region since the wars that occurred and all the activities that have been going, unfortunate activities that have occurred over there. So that's another opportunity as well we're going to be looking at.

Thanks guys, that's all my questions. Thanks Scott.

Thank you. Your next question comes from Andrew Payne from CLSA. Please go ahead.

Morning all, thanks for taking my questions. In the trading update you mentioned that you were seeing record sales in June. It would be good if you can just quantify those sales and maybe provide any insights in our sales. We're tracking. We'll start at FY27.

I'm happy to jump in there, Bruce. As of July, as we've already mentioned, actually, it was a record result for the group, so we actually achieved sales over $13 million. The US backed it up again, which is great. That's a really good sign of, you know, we hope the quarter will end. So, yeah, it hasn't gone off a cliff. It's gone the opposite, which is a really good indication.

That's great, Sarah. Might have missed that earlier. And then just... looking at the OpEx that you're giving a bit of leverage through 26. Just kind of interested, especially in employee-related expenses, obviously there's kind of SX movements there. Are you able to give any guidance around constant currency for employee-related expenses? So just looking forward on 27th.

Right now, not at this point, I haven't got it in front of me, but in terms of the volatility, we certainly hope you don't see the volatility we've seen this year and the impact it's had on the P&L, particularly revenue. In terms of costs overall, I mean, the leverage is definitely coming through. I mean, you look at corporate admin and OVED costs being 1% down on the prior year. We're getting a lot more productivity out of the entire group, particularly in all our sales and marketing sectors. subsidiaries so the US average sales per rep continuing to grow increasing profitability we're seeing the same in the UK and Australia and so forth and that will start to come through even more so this year. I think the EBITDA or the probability line is highly sensitive now to growth in sales, and you can see that with the underlying EBITDA growing by 50%. We did have an impact, but we're off to a good start with record sales, gross margin of 95% in July, and we're going to work towards making sure that continues through this first half.

That's great, thanks. And just one last thing, just looking at your adjusted EBITDA numbers for significant items, obviously those are right after the asset, just looking at the insurance, interim insurance claim, where's that coming through the P&L?

is sitting in other income. The net impact is $1.1 million gain to the bottom line, but we've added it back there, obviously, by adjusting for significant items, so the underlying result excludes any insurance impact and asset write-off impact.

Yeah, OK. I can see it in the notes as well. OK, that's all I had. Thanks. Thanks, Andrew.

Thank you. There are no further phone questions at this time. I'll now hand the conference back to your speakers to address your webcast questions.

Great, thank you. Bruce, we've got a few questions that have come through here. The first one being India. What are the plans for India? Is it breaking even? Are we going to continue to invest in that market?

Yes, great question. So we're very happy with the performance in India. You can see a strong growth again for that team. But I think more importantly, the underlying foundations of that business are very strong. The team there have built a solid, compliant, reliable business that is growing, particularly when I look at lead indicators like the work that has been done over several years in winning contracts within India. takes some time, you know, typically does. You know, two years down the track, we're starting to win tenders that have only just come up. So a lot of work to get there. We've got that, you know, runway of tenders and contracts that are in the pipeline, and we're seeing those convert. So we're in a lot more hospitals now. You know, several of the major AIMS hospitals in India, as well as the largest burn centre in Asia, which is based in Delhi. So very strong growth as far as profitability is concerned. That's expected within this financial year, really aiming for the second quarter to make sure that's a profitable business. But again, continuing to grow, putting discipline in the expense side of the business to make sure that we are starting to see returns on that investment before we go to the next phase. But all signs are looking positive. if you wanted to add anything there?

No, exactly right. So it's going to continue to organically grow and will break even this side of Christmas. And, you know, they are growing significantly. They do have a lot of cases that they, you know, continue to treat. And the growth has been exceptional, really, in terms of the number of patients, particularly compared to other markets. But we are making inroads into the bigger burns and it will just take time. Moving on, just another question now, Bruce, just on competition in the US, and there's a specific here around Evita and their synthetic products and other synthetic competitors that may be popping up. What are we seeing in the US market, and how are we responding?

So, yes, there's a little bit of noise in this space, and I think it actually relates back to also what we're seeing in that outpatient segment. You know, with the number of the players in the market having the turbulence that has... occurred due to the policy's changes. We are seeing a bit more activity in the inpatients. But I think it's important to ground ourselves in what BTM and MTFs and the NovoSort portfolio really does in the inpatient setting. So those large complex cases where BTM was designed to improve patient outcomes, Those results are well documented now as you see more and more evidence and the experiences of the clinicians are quite compelling. So we might see some activity in those lower burn spaces where faster grass and other length of stay criteria are being discussed. We have options in that space but again it's that larger and more complex cases where we really shine through. In those other areas, again, there's some trialing going on, but we're seeing more and more that the clinicians can't forget the great outcomes that they've had with our products, and we're seeing that come back. And that's evident in June being a record sales for the U.S., backing it up in July. So we're definitely up for the fight, and we have the product that we believe can stand up against any competition.

Great. Thanks, Bruce. Related to that, there's a question here from David at N&P, Evans & Partners, acknowledging the impact of FX in the second half and also the burn seasonality just on the second half sales result, even though there was potential growth of 5% in the U.S. but what gets the business back on track to a close to a 20% growth rate and how are we going with penetrating existing accounts and the 200 accounts added during the year? So really a question around how we accelerate growth in the commercial markets.

I think the priorities are clear. Like I laid out, we've got momentum in the large burn space which up until recent times the key focus was on winning more accounts. We're in a majority of the large burn accounts in the US, primarily if we talk about the US as a driver. And we have penetration into those accounts. But it's not just that. It's the credibility that we build from being in those accounts that you can see is driving adoption of the product, whether it's BTM, MTX, or BTM and MTX in those complex win cases. So that's where we see, and you can see the growth of the complex weaned applications outside of those larger cows growing over 50% on a three-year take-up. I think that gives us a lot of confidence that we've got a runway for growth. And again, outside of the US, with some more focused activity around those larger markets where we can improve penetration, I think we can see that happening as well.

Great, thanks, Bruce. Quite a few questions on the R&D pipeline here. It's probably a good opportunity to acknowledge where we're at and then just reinforce, I guess, what you said earlier, Bruce, about how we're investing in that area and how the pipeline would evolve and then to be chair there just to reassure shareholders that we are working on it.

Yeah, absolutely. Like we mentioned, so more resources going into that program through the course of FY27. now that we're starting to wind down some of the PMA activity. But we're bringing, I've got to say this, we're bringing greater discipline to our innovation and portfolio decisions. And that's going to be important so that we can make decisions whether it is to speed up or delay or even to kill projects so that we get the output that we are looking to achieve. So there's a lot of talk about hernia and breast recon. They're definitely in consideration as we decide on the focus areas for our portfolio. We've also got products that are in the pipeline that very much speak to our strategic pillar of scaling the core business that we look to advance those and keep fueling the growth in our complex wound application business. In addition to that, making sure that we've got works being done on the potential of the platform. Like I say, and what I've learned, you know, we've got this beautiful polymer, which is a gift to our business. And then, you know, over recent years, understandably, you know, we've had a lot of focus on growing the US and making sure we support BTM expansion, MTX coming into the market, now Sympath coming into the market. We are going to be assigning a portion of our innovation mindset and decision-making around what can we do with this platform to build that next growth engine for the business beyond the core business. I'm really excited about that, that we have now the opportunity and the capabilities in the business to be able to manage those well and keep the momentum in the core business.

Great, thanks Bruce. There's a question here talking about it's great to see the textbook publications referencing our products and so forth. What specific trials does P&V have underway so new regulatory approval submissions can actually be made to scientifically back new indications? Do we have any RCTs underway? Maybe there's also an opportunity, Bruce, to talk about the IQVIA studies and the health economics and the free flat compared to BTM in the UK that we're doing. But any evidence?

It's a really good point, Jan. So there are a number of investigator-initiated studies underway in multiple applications that we're happy to support. I think, you know, going back to the RCT that's linked with... the clinical study, like the PMA application, to me is going to be a real highlight and have far-reaching benefits beyond just the PMA application. Like I said, it's the largest of its kind, first for a synthetic, and a study like this hasn't been done for decades in this space. So making sure we maximise the awareness of those outcomes when they are able to be shared is going to be an important piece. But you make an important point there, Jan. So health economics is such an important part of driving growth in medical technology. So it's not just about the clinical performance, but that clinical performance can be matched up with a willingness and ability to pay and showing the economic benefits to some of our key stakeholders. So alongside this study, there's also a health economics work that's being done in partnership with IQVIA, that will be able to show the economic benefit of using BTM versus the current standard of care. That's one. And then also, as Jan mentioned, a second health economics arm looking at the economics of free flap, which is the current procedure for some of the larger oncology surgical reconstructions, and looking at how our products line up against that standard of care. So really important. And I'd say it's like the third arm to it. You have your innovation arm with R&D. You have your sales, marketing, commercialization arm. But market access and bringing that skill and capability into our business really completes that flywheel of growth. And I'm looking forward to all of these elements coming to market.

Great, thanks, Bruce. And on the back of that, a great question here. Can you please remind us of what the PMA approval could do for Polynovo, both commercially and in terms of clinical evidence globally?

Yeah, so number one, I think it's credibility. Like, it gives credibility to the platform of BTN going through what is, you know, really the highest level of clinical study and then having that approved, you know, by the PMA. is a real advantage. Also, though, it helps on the reimbursement side. It gives you the ability to apply for reimbursement. And I want to remind everyone that there's such an important point. The progress that we've made in the US has been against an incumbent technology that has reimbursement, that has that approval. We don't have the indication for deep burns until the PMA approvals. So the team, you know, don't promote it. This is a clinician-led expansion. To me, that's the most powerful message you could ever tell about BTM. The fact that this product, through clinician and peer-to-peer education, you know, sharing their experiences, has grown to the point that it has, is quite unique. And so that gives me confidence beyond the PMA approval that we can continue that good work, actively promote, actively defend the product. And I think the third element is that beyond the scope of the US, that credibility then helps us enter markets like we've mentioned some of the markets in Asia like Japan, maybe down the track China. That type of evidence helps. There's always going to be potentially local evidence requirements, but that is definitely going to help credibility from a registration perspective. and then outside into the European markets, for example, it really does give you the ability to have some swagger when it comes to our portfolio.

Thanks, Bruce. And you may have answered this in that question. I've been busy reading questions here. There's questions around Japan and China entry. In a comment, I believe you had discussions with the PMDA in Japan. Can you provide the latest update?

Sure, yes, yep. I was in Japan. I met with our distribution partner there, so commercial readiness is progressing as much as you can before registration. Understanding I was able to go to a Burns conference in Tokyo, all in Japanese. I had to use the translations, but I was able to follow along, and the enthusiasm is there for sure. Now, the other piece of the puzzle is... not only registration, of which the clinical study will help with that, but also reimbursement. So putting all of those pieces together to make sure that this is a market that is going to provide us additional sustainable growth for the long term, putting those pieces together. But I think the gating piece now is getting to the other side of that PMA approval and sharing that clinical study.

Thanks, Bruce. I'll give you a break for a sec. There's a question here, and I can answer this one. Can you please expand on the comment, augment the manufacturing footprint? Really what we mean about that is make that transition to a new facility, which we're going to look to do in March next year, and then it'll be a phased approach as we exit out of the other two facilities that were currently got in place, and one of those older facilities will be kept as a redundant facility or backup, if you like, which is a good thing to have. but that's really what that comment means. Just scrolling through, just give me a moment. A question again about the DFU outpatient market in the US. Any trials are we going to be conducting and what evidence have we got that we could use to submit to the CMS right now?

Yeah, so the CMS opened a window to send in more evidence and we are going to take that opportunity to send evidence from around the world. We have some evidence locally that is very strong for BTM in chronic wounds. So making sure we can share the details when appropriate, but that will form part of the package. It's not ideal, in a sense, for US. Local data is probably preferred, like most countries, but this is such a compelling piece of evidence. we wanted to make sure that that could be included. So that's an important piece. What was the rest of the question, Jan?

Yeah, I think it was really just around what can we submit to the CMS and do we have any specific RCT trial for DFU planned?

Yeah, I suppose the main point I want to get across with DFU and VLU as well, those chronic wounds, is that while we're gaining some very compelling real-world evidence along the way It's important to realize that outside of the inpatient setting, there are a number of factors, including the reimbursement factor, but also provider economics, those sort of things as well. And the one thing with those chronic wounds is that it's geared towards repeat application, of which our product is not designed to do. We are more around a high acuity. There's a surgical procedure. You put the product on and it does its work. So we're making sure that all of those factors line up as we look at that part of the market. That's the part of the market in our patients that is in the most amount of flux. And so we've got opportunities in areas that are very aligned with our customer base, very aligned with what our product can do, and a significant market potential that we can go after looking at those single episodic cases. So that's where we'll start.

Thanks, Bruce. This will be our last question. We're coming up to the hour and we've pretty much got through all of them actually. Any that do remain, we'll send an email after the call. Important question. This opportunity to talk about how we mitigate risks really too as well. So we've got here, what are the biggest risks you see to achieving your plan over the next couple of years?

Like I said, we've got a proven platform. We know that that works. I'm not worried about the product. I'm not worried about competition, to be honest. You know, our key focus is execution. And we're building that discipline into the organisation to make sure that we have the operating mechanisms from the leadership all the way through the organisation to ensure that we do what we say we're going to do. And that's key for me. And it always has been and it always will be. So setting up those forums, the operating mechanisms, to make sure that we execute. I'm very pleased with how we've progressed as an organisation since I joined in December. I think we've got a leadership now where we've added capabilities in, combined that with some great institutional knowledge for leaders that have been in the organisation for some time. This is a powerful team. We're going to get stronger as well. And having that rhythm that we've got in place now to make sure we're focused on the priorities, and we're delivering what we say we're going to do. I look forward to the year ahead as we update more of these milestones being completed.

Great. Thanks, Bruce. I think we'll leave it there. We're on the hour and I guess thank you everyone for dialing in and I'll hand it back to you, Bruce, just to close your remarks.

Just to close up, thanks everyone for joining. Thanks for your time. I hope this has been valuable information for you. We do intend to continue our communication to the market as appropriate when we have significant updates and keep watching for those. I think we've turned the corner as far as starting the year very well, finishing the year well, starting the year well in July. We look to bring that momentum into the rest of FY27 as we tick off these important milestones. An exciting year ahead.