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.