Tristel PLC

Good morning and welcome to the Tristell PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and could be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand over to Matt Sassone, CEO. Good morning, sir.

Good morning and thank you to everyone joining us online. This is TriCell PLC's Demarais Results presentation and I'm delighted to say that I'm joined by our new CFO, Anna Wuzzle. And what I'll quickly do is ask Anna to introduce herself and to say a few words and her first impressions of the company.

Thank you, Matt. Yeah, I just completed my six weeks at TriCell. It has been a very exciting and busy time. But really, really great. So as you can see here on the slide, I came from CMA Surgical, where I held positions of both CFO and Chief Commercial Officer for some time. And yeah, I'm really excited to join TriStell. I think it's a really critical time because of our increased traction in the US and all the opportunities that the US market is giving us. I'm the type of CFO who is quite interested in commercial models, in looking at the different market entry strategies. So I'm really keen to support Matt in the growth journey.

Excellent. Wonderful. Well, let's crack on with the presentation. I appreciate the vast majority of you online are very aware about the TriSoft story, but hopefully we have one or two new people. We are a global infection prevention company. focused on sort of like addressing the transmission of microbes between people, objects, etc. The way that we do this is through our highly differentiated powerful chemistry, the chlorine dioxide. And chlorine dioxide is highly effective against a broad spectrum of microorganisms in low concentrations. And what makes Tricell unique is our ability to create chlorine dioxide at the point of care in a manner that's safe for the patient and the user. So to the financial year ending June 2025, here are our highlights. Here was another year of double digits revenue growth. It's 11% and on a constant currency basis, it was 12.4% to 46.5 million. Gross margins ticked up a little bit to 81%, which contributed to adjusted PBT reaching 10.1 million, which was a year-over-year growth of 23%. We maintained our high EBITDA with an EBITDA margin of 28% on an adjusted basis. All of this contributed to strong cash generation. And I'm very pleased to say that on a full year basis, our dividends will be 14.2 pence per share, which is a 5% increase year on year. So as I said, it's been another successful year, but also a very busy year where we've achieved a lot. So much that we couldn't actually fit everything onto the slide. You know, we went direct in a number of different markets, including Spain, Austria and India. but some of the other highlights that we'll touch on during this presentation. We got our clearance for our second product in the US, Trisyl OPH, which is the first ever high-level disinfectant dedicated to the use of ophthalmology devices. We brought in some of our manufacturing, and Anna will talk a little bit more about that and the impact it's going to have moving forward. And then, obviously, a lot of the energy was on sort of like the US and the focus on the US. So we got updated, we're in the updated guidelines and that was a fantastic achievement and to show the impact we're making. Normally getting written into sort of like national or local guidelines can take many years. We were able to achieve this in the first year of commercial launch. We had published a study with Mayo Clinic sort of demonstrating the effectiveness of our chemistry and the impact it can have, not only on sort of the clinical workflow, but also the user experience. And we've got a strong engagement with over 200 health systems now in the U.S. And we'll talk about the U.S. in some of the future slides. One of the things that I will sort of touch on on the later slide, but I also want to take the time now just to mention in a bit more detail is You know, we speak about strategically, though, being our clinical leadership and investing in this. And in the year, there was a number of clinical studies that were published using our technology, which are going to be very impactful for us as we look to grow the business. There was a study from Italy with regards to HPV that sort of demonstrated that You know, we think about ensuring there's not a transmission between patients, but this study really highlighted the need to really worry about the healthcare professional. And this is something that as we go to markets and we're trying to convince them about the need for high-level decontamination, you know, really highlighting the fact that, you know, microbes like HPV, which, you know, can be a leading cause of ovarian cancer, is also a danger to healthcare professionals, is really impactful. And then, as we mentioned in one of these bullet points, a clinical study that was published in the Journal of Hospital Infection, demonstrating the efficacy of chlorine dioxide, our chlorine dioxide, on biofilms. And biofilms is a really hot topic within the healthcare segment at the moment. So, moving forward, let's talk a bit more about the market opportunity. seen this slide a number of times, both on our medical devices and our surface disinfection, there's huge, huge markets. And if we just look at the total addressable market of 1 billion and 5 billion, we can then consolidate this into what is the serviceable, obtainable market. And the point we put on this slide, and I recognize we use this slide a number of times, is just to demonstrate that whilst we're getting great success we have a tremendous growth runway ahead of ourselves. And if we take the medical device disinfection, you know, today our sales are 40 million, but we believe, you know, that near-term serviceable, obtainable market is closer to 400 million. So we're only 10% done yet on the job ahead of us. How do we look at this opportunity and how do we divide it? Well, for the first time, we're showing you a little bit more granularity about our market shares. We haven't identified all the different segments we're offering or all the different specialities that we work in, but just a few of notes. So ultrasounds is sort of the market we talk about the most. Here we're talking about invasive devices. I've actually got a prop. They look a bit like this. They go inside the orifices of the patient, touching the mucous membrane, and they need to be high-level disinfected. We estimate globally there's 200 million procedures annually, which, you know, we know from our data we are 15 million of those are using our chemistry. And the ultrasound opportunity represents 22 million pounds of our revenue. So we can calculate or estimate that we currently have an 8% market share in that speciality. ENC is another speciality that we've been tremendously successful over the years. These are single and non-lumined flexible endoscopes. The number of procedures is far less. It's only 24 million. And with us doing 5 million of those procedures every year, we can estimate that we have a 20% market share there. Ophthalmology is a segment that is a growing recognition for the need of high-level decontamination. And 60 million procedures globally. Two million of those procedures were carried out with tricel, chlorine dioxide last year, and therefore we estimate we have a 3% market share. And then on the surfaces, which is a very large market, we know and estimate that we have a circa 1% market share. All we're trying to demonstrate here on this slide is, you know, the growth runway we have ahead of ourselves and the opportunities are large and multiple. The market trends are also in our favor. You know, there's a continual expansion of the number of devices that are being used at the point of care or in clinics, taking them out of things like the operating room. Ultrasound, the use of ultrasound is exploding throughout the healthcare setting. And ultrasound visualization being used for far more procedures. And as that use is expanding, more and more of those procedures and those devices are falling into the category that require high-level disinfection. So we have a tremendous amount of tailwinds with regards to the size of the market and the need for high-level decontamination. However, we need to have the guidelines to endorse that and to recommend it and for people to be measured against. And we continue to focus on those guidelines. And every year, more and more guidelines are being published. And the vast majority of those guidelines get published with chlorine dioxide as a recommended means of high-level disinfection. There are some other trends within the healthcare setting that are helping us. That is the growing awareness of biofilms, whether they be dry or wet biofilms. This is much more of a problem for hospitals now. And, you know, as I mentioned right at the beginning with our operational highlights, you know, us coming out with evidence demonstrating our efficacy in this area is only going to help with our growth trajectory. Antimicrobial resistance remains a constant threat in the world of infection prevention. And the value we have here is that chlorine dioxide doesn't produce any byproducts that add to the antimicrobial resistance. So we are sort of a chemistry that aids in this fight rather than create future problems down the road. And then finally, maybe a sort of a headwind to mention when it comes to the global market trends. You know, we are coming off the back of an explosion in spend within infection prevention caused by the COVID outbreak, you know. we're now entering a cycle where hospitals recognize that, you know, they need to tighten the purse strings a little when it comes to the spend and infection prevention. So there's a lot more focus on sort of like the costs in this area. You know, so those sort of like heydays post-COVID I think we're now coming back to more normal, but the market is obviously significantly larger than it was pre-COVID. So moving on to our products, and I'll just whiz through these because I appreciate the vast majority of people know our products very well. Essentially, we are perfectly suited for the needs of global healthcare. We've got a broad spectrum at low concentrations. We are at the point of use and highly effective. And I suppose the thing that Silvite really tries to have done, because chlorine dioxide is not a unique chemistry, you know, but our power, what we bring and the value that we have is that we've solved the challenge of being able to create chlorine dioxide at the point of use in a means that is safe not only for the patient, but also the caregiver as well. And that's what sets us apart. As we look at our portfolios, we split them into two, the medical device decontamination and then the surface range. The vast majority of our revenues are generated in the medical device decontamination. And you can see that 87% coming from that product portfolio. How do we win and who are our competitors? Well, we win by being a very fast, convenient solution, but also from having this compatibility, we do not damage the devices that we're used with, and we enable the users to be compliant with the guidelines and recommendations that they have. When it comes to the surface disinfection side, Again, it's that efficacy, not creating the antimicrobial resistance problem, being kinder to the environment. All of these are the reasons why our customers turn to us and why they pay essentially a premium price for our chemistry. We talk to many, and our products are used by many different customers throughout the whole of the hospital landscape. We are focus on the healthcare market. But at the core of it, at the hub, is always the infection prevention teams. And that's where we have our strongest relationships. And then from there, we branch out into the different departments. And we have a very widespread across the healthcare setting, which really plays for our strengths, because we embed ourselves across the hospital. And that means that our products are incredibly sticky as we look at our customers and our portfolio. So to wrap up this section before we start talking about our sort of progress and our financials, you know, why Tri-Cell? Well, you know, the trends are in our favor. We have a fantastic chemistry which the customers really value. It's packaged in the right way. We're addressing of infection prevention today. and we're uniquely positioned as its global player to address our customers' needs and realize the opportunities that are there for us. What I'll do now is turn over to Anna, who can just take you through the progress so far.

Yes, thank you, Matt. I will start by sharing the breakdown of our sales by geography. You may notice that we have simplified this slide and as the company grows, also the bigger world regions will be presented. Firstly, Europe, Middle East and Africa. As you can see, the region grew 17%. The strong growth came from Italy, Spain, Germany, also from France, which recovered to high single-digit growth, and also from our Middle Eastern distributors as well as direct markets. Asia Pacific grew 6%. We had pockets of strong growth there, for example, in Singapore and China. However, Australia was flat. In America, we have registered high growth from low numbers, but the trend is what we want to see. And UK delivered a solid growth. And overall, if you take out the Forex impact, the group grew by 12.4%. If we look at portfolio, So we remain focused on our highly profitable medical device, the contamination product, the tri-cell portfolio that grew healthy 11%. The cash services infection grew by 9%. And the success that cash had in the UK and Europe was slightly offset by the declines in Asia. And here it's important to strengthen that we are walking away from customers that only buy on price. since our products have high efficacy and we want that the market values them accordingly. The highest growth rates from both portfolios came from our direct European operations as well as all of the distributor markets. It is important when we talk about the progress so far to reflect on customer feedback and the success with our customers. I will not read all the testimonials here in detail, but it is important to mention that our products are recognized for their high quality, high efficacy, and also good user experience, as well as our good approach to training and customer service. And the one area where I would like to spend a little bit more time on is how we perform in direct competition. So this slide presents what we have found in different markets and what we are now confirming also in the U.S. That's the customer journey for customers who are moving from disinfection machines to Tristel products. And the experience that we often see prior to implementing Tristel is the customers complain from inefficient workflow due to the need to disconnect and transport the probes. This is specifically focused on ultrasound probes here, and also to deal with the kind of long downtime. The use of machines is also related to the need for maintenance contracts, spare parts, and of course the use of consumables. And often the customers complain about the high cost of repairs to ultrasound probes, which get damaged in the machines. And in some markets, specifically I'm thinking here about Australia, we know that there is also a requirement to have a backup disinfection method when you use the disinfection machines. Now, what the customers are experiencing after moving to try the product is a significant cost reduction, and that's both for the kind of fixed operating cost as well as the per procedure cost. Also looking at reduced downtime from seven minutes for pure disinfection steps to two minutes for the full decontamination cycle. And I think here, again, I would like to mention something that Matt briefly touched on before. It is very important to be also able to decontaminate the parts of the equipment which are adjacent to the probes, the cables, the stands, probe holders, et cetera. One more progress area that I would like to comment on that I was very happy to inherit joining TriStell is the experience of insourcing of our Trio Wives manufacturing. As you can see here, last year we produced 21 million wives. These were produced by our supplier. However, from this year forward, about 75% of our production is moved in-house. It required an investment of 750K and creation of five new positions for operators of the line. But we do see a huge cost saving. So on an annual basis, we expect about 800,000 pounds of savings based on the 21 million volume. And, of course, we also see a drop in cost, which is related to freight and reduced business risk simply due to availability of dual sourcing and increased, let's say, simplification of our QMS environment. And with that, I would like to pass back to Matt, who will walk us through future opportunities.

Thank you, Aleks. Yeah, so the future opportunities and how are we going to drive success moving forward? Well, this remains the five strategic levers that we have communicated already to investors, and I'll go through each of these in more detail. Geographic expansion is our greatest opportunity for growth, and this is not just the U.S. We recognize the U.S. is a significant prize, but For us, also, geographic expansion is about rising all boats and being more successful in all of our direct markets. But allow me now to focus just on the U.S., because I recognize that this is an area that is a fantastic opportunity, but also a keen interest to our investors. So in the U.S., we have now two products that we go to market with. We have the ophthalmology products and the ultrasounds. And these markets are slightly different, and our go-to-market strategy also differs. So let's start with the latest product ophthalmology, a slightly smaller market where it's 16 million procedures, a slightly lower price point than the ultrasounds. But this is where we are going direct and via distributors ourselves. So on the ultrasounds, we are going through with a royalty model. We've partnered with Parker Labs. and we receive a 24% royalty. With the ophthalmology, we're selling direct to the customers with our own direct sales team, but also using a range of ophthalmology distributors in order to access that market. With ophthalmology, we're going to market with the world's first dedicated high-level decontamination disinfection product, and therefore we're finding that there's a tremendous unmet need with regards to customers, whereas in ultrasound, the market we're addressing, our main competitor has been established in the market since around about 2015, and therefore the need for high-level decontamination is much more well-established, but also the competition is more entrenched. So how are we doing? Well, on the Oldstown, we're making good progress and continued success. You can see with the charts a quarter by quarter success, but also a really strong Q1 of this financial year, FY26. And in fact, the Q1 of this year, the sales were greater than the first seven months of last year. So very encouraging. For those of you that were able to come to the capital markets, they were able to watch the video online, you were seeing the US customer, Tiffany Woolwine, talk about the experience. It was really good for the shareholders to hear what we've been hearing in the market, which is a tremendous response to what we have to offer. But we recognize that, you know, there's always that lag between that coming through and actually seeing sales and making an impact on business. So, you know, we remain extremely confident in our ability to execute in the U.S. market, very bullish about the opportunity, very bullish about our abilities there. And, you know, it's great to see that we're, you know, making progress. It's going to take time, but we feel like we're on the right course with regards to the U.S. on the ultrasound opportunity. In ophthalmology, we're off to a great start. So the product was launched in June. We got our clearance from the FDA around that time. The product was first manufactured in August, and we got out of the gate in a very strong fashion. Obviously, as I said, the customers have been waiting for this. They recognize that Today, their solutions for high-level decontamination of ophthalmology products is less than ideal. And therefore, you know, we're pushing, in many cases, against a bit of an open door. We've still got to, you know, go through that change to the clinical workflow, the education of staff. But it's incredibly pleasing to see that, you know, right out of the gate, we have 15 sites which are ordering and have received the products. We have a strong demand and a strong pipeline with a further 60 sites wanting to have an evaluation and a further 88 sites actively engaged. And we're doing this all with our own resources and through the help of one distributor at the moment. So in the U.S., we have three full-time employees. and kudos to them for everything they do. They're doing a fantastic job. And we have one distributor. We have another two distributors that are in the wings and hope to have signed up and on board soon. As well as all of this commercial activity, the team has been working with a few sites to get a multi-center case study initiated And this is going to be really impactful because it's going to help with regards to that clinical endorsement and that promotional effort and engaging customers and educating them on our offering. And at the same time, you know, working with all the ophthalmology equipment manufacturers, you know, we need to be in their IFUs, in their cleaning guidelines. And we are, in many cases, in those IFUs outside of the U.S., but we need to get those IFUs updated so the team are working with those OEMs to deliver that. So, you know, early days on ophthalmology, but incredibly encouraging and are off to a very strong start. Moving gears, shifting gears a little bit, just to talk about our surface disinfection strategy. As outlined in the slides, It's a very large market, a very sizable opportunity for us. But we've got to be honest, the vast majority of the market is kind of low gross margin and commoditized products. And that's not where we're best suited in order to get success. We are a company that's about delivering high value, but also a high price. So the way that we view the services perfection market is very much around being opportunistic and really addressing and focusing on those areas where we add the most value. And so that may reduce the size of the pie a little bit, but still it still represents a very significant large market opportunity for us, one where we feel that our chemistry is well-suited to deliver and address the needs of the customers there. So we continue to execute upon that But our primary focus will always remain on the medical device decontamination. I've spoken about how important it is for clinical influence. All of us are influenced by our peers and doctors and health care professionals are no different to that. And therefore, we continue to invest and continue to focus on you know, key opinion leaders, driving the national guidelines, being sort of in published papers. And, you know, that's why so much activity. And as I mentioned, you know, we're so proud of, you know, the studies that are coming out of Italy with regards to HPV, the studies we've done on biofilm and others, which we haven't mentioned, which are all driving us forward that way. And, you know, we really have a focus throughout the business on expanding our clinical reach and our inference. Another way we're going to be driving growth is through innovation. And, you know, we sort of announced the launch of a new product, Post Period Ends, which is our busy cleaning product. I'm going to try saying quite brave now. I'm going to try and demonstrate the product live during the call. So hopefully you can see me. I don't know whether the organiser can maybe reduce the slides so I can just go big so you can see me a little bit better than on the small. Let's see if they're paying attention. Oh, there you go. So what I have here is I have an ultrasound probe that the user B and I've got the combination pack which includes everything that the user would need to perform a high level decontamination. So So what I'm going to do first is get a dry wipe. So I'm just going to pull that packet. So I now have my dry wipe and, you know, I'm doing a sort of like an illustration. So there will be So I just put two squirts of our VisiClean product. So what is this product? This is a foam, a cleansing foam that we've put into a dye, which enables the user to sort of like clearly identify that they're covering the whole entire device. And this is providing not only just a validation that you have cleaned the whole device, but also the dye also works with the chlorine dioxide, so it provides a validation of the fact that it's high-level disinfectant. So hopefully you can see on the screen that this ultrasound probe is now sort of pink, and you can see on the wipe here we have the dye is clearly there. What I'm going to do now is just take our Tricel's Duro-Alt products. So this is our chlorine dioxide. I'm just going to put two squirts of the foam, two aliquots of the foam into the actual wipe itself. trying to see if I can demonstrate this. There you go, so it's in the white. And now I'm going to take my device, which is still pink, as you can see, and now just spread that chlorine dioxide all over the device. And what you can see immediately is that device is now being cleaned. Let me just get into the real nicks and crannies and make sure I've got all of that chlorine dioxide in there and being effective. And this is a visual verification to show, demonstrate the money if I cover the whole device, but also the fact that the chlorine dioxide is working and has been effective. And then what I'm going to show to you here is just the actual wipe itself. So you can see here the wipe is now sort of clear. And so what that's demonstrating is not that the wipe has just taken off the dye from the actual probe, but actually the chlorine dioxide that has worked on the actual dye and that reaction is taking place and therefore you can be confident that you've performed a high level decontamination procedure. If you wouldn't mind going back to the slides. So why are we excited about this? Well, cleaning is a necessary step for any high level decontamination procedure, whether you're using our chemistry or if you're using an automated solution, you have to do the cleaning step before you perform the high level disinfection. We are the only company that has that visual cleaning step and also that sort of validation of the chlorine dioxide. But it also gives us an opportunity to upsell to our existing customers. So we know today that we're selling with our duo 14 million procedures every year. Now imagine what would be possible if we can get every one of those procedures to be up-sold, to be using our VisiClean products as well. So financially, this is an exciting opportunity for us. And it's also a highly innovative and differentiated product we're bringing to the market, which just completely falls into what Tricell is all about. Finally, our final strategic lever that we're looking to invest more in and recognize it's important that there is a platform that we want to grow from is our digital leadership. Today, we go to market with our three key products, which is our train, track and trace offering. And this is all part of our augmented product that we bring to the customer. And we've provided free of charge to customers today. And the customers see a tremendous amount of value in that. And they really are grateful for us in doing that. Our customers actually do charge for their solution. But we are looking to move that way as well. And the way that we want to do it is have the base of what we offer today, but then add more features and value to our digital offering so that we can start to move the customers more to a premium tier, generate a recurring revenue stream, and support our infection prevention customers and partners with their move to digitalization. We know they're starting to adopt IT solutions today on some of their other needs, and we feel that we could offer a tremendous amount of value here and actually enjoy some of the spoils that comes from this emerging part of the market. So what does that mean? Well, what's our financial outlook as we look to the future years? And, you know, we've entered this sort of a period where we've finished our sort of three-year financial targets and we're looking to set new targets as we move forward. during the last decade or so, we've had tremendously strong growth. You know, it's a CAGR of nearly 12% over that period. But the company is getting bigger, and obviously on a percentage basis, it becomes more and more of a challenge to keep them growing at that rate. But what is realistic for us? Well, we certainly believe double-digit growth is attainable and achievable in the next five-year period. And if we were to grow at that kind of 10% CAGR, What would that mean? Where would we be as a company? Well, we'd be somewhere mid-70 million pounds of revenues. Well, as an organization, that'd be great, but we want to sort of stretch ourselves. We want to drive for more and aspire to a greater target. And let's be honest, 100 million pounds is a great threshold for a business like ours to break through. So, you know, we're setting that as a goal for ourselves internally. I think that we want to achieve by FY 2030. And if we were able to do that, that would be a CAGR of 17%. So there's a bit of a gap there, you know, between the mid-70s to 100 million. So how are we going to achieve it? Well, we believe that we can close that gap with more aggressive growth. more aggressive growth in our geographic expansion and especially from the US with new products, more new products coming through with everything we've spoken about on the sort of like the software commercialization and realizing the growth in the digital part of healthcare. And also we will be open to some inorganic opportunities should they arise. But those inorganic opportunities must be complementary to what Tristell is all about. And what do I mean? Well, I mean Tristell is about niche, highly differentiated product offerings with high gross margin. And whilst we don't have a pipeline of acquisitions on the table right now, if we could find a company that was maybe has something very novel that could really benefit from our commercial footprints and our reach, then that would be something that we'd be looking to execute upon and use our cash reserves that we have today in order to do that. But that's something for the future. For now, we're very much about executing on what we have and growing the business as fast as we possibly can. So the U.S., offers us some different opportunities. And Anna, do you want to just explain this slide?

Sure, I can walk you through the illustration of our go-to-market model and how it contributes to Tristell Financials. So these sales projections are based on Tristell reaching 4% market share of ULT and 8% of OPH by 2030. And the objective of this slide is to show you how these two different go-to-market strategies influence Tristell. So for ULT, The business model is based on royalties, which of course are great since that's 100% gross margin. However, as a result of this approach, you can see that even if the in-market sales, that's the green line, is growing to very high levels, the contribution to tri-sale top line is very limited. And of course, the benefit of it is that it's 100% gross margin. However, for OPH, we've taken a different go-to-market approach, which Matt already explained. And here, there is a higher proportion of sales that's impacting triceps revenue, and then also there is a bit of costs associated to that, and then it flows to the bottom line. These projections are quite conservative, and we do remain excited about the opportunities and hope to actually deliver higher growth rates than this. But I think it explains quite well what you can see as the final contribution of the US market to Trifect Financial. I'll pass back to you, Matt.

Thank you. So, as I said, we've come to the end of the three-year cycle of our financial goals. That was a time where we committed to 10% to 15% revenue growth during that three-year period. The company actually delivered 14% CAGR. We committed to an EBITDA greater than 25% and we achieved that every year. And then we also committed to year-on-year increases in PPT. So we're now at that point where we're setting our financial commitments for the years ahead and we've gone for a slightly longer cycle looking out towards 2030. And what we're committing to is double-digit revenue growth annually during that timeframe. maintaining that sort of EBITDA margin of 25% annually, and then their progressive year-on-year dividend policy. So what does this mean? Well, basically what we're trying to communicate is a financial discipline from the business, getting that balance right between investing in our people, in our products, in our market developments, as well as making sure that we give the returns back to our shareholders. So in summary, in Outlook, the business goes from strength to strength. We have our five strategic levers that we're looking to execute upon and deliver that growth. We remain confident in our opportunities in the U.S. and are building upon the success we've already achieved to date. And the fundamentals are there. We are a profitable company. cash generative, revenue growing, progressive dividends, and all debt-free as well. So thank you for your interest. Thank you for investing in the business. And we'll now pause to take your questions.

Matt, Anna, thank you very much for the presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the right-hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation, along with a copy of the slides and a published Q&A can be accessed by our Invested Dashboard. And Leanne, if I could just hand over to you to read out the questions and I'll pick up from you at the end.

Thanks, Lily. Yes, you've had a number of questions. So we'll start off with some financial ones. Is the new revenue growth target purely based on organic growth?

Yes, very much so.

Brilliant.

There's people pressing that one.

Can you confirm the royalty rate on the high-level disinfectant sales in the U.S. for the Parker relationship?

Yeah. So the relationship we have with Parker Labs in the U.S. is twofold. The first is that they are a manufacturer in the U.S., and they manufacture all the products we sell in the U.S., whether that be ophthalmology or ultrasounds. And obviously, in the current political climate, that's a very good thing because it means that we are not affected by any tariffs. But also, you know, locally, it's a very strong thing to be made in the U.S. because there's a tremendous amount of patriotism in that country. Commercially, then, we have the two products. So the ultrasound product, Tricel Ult, that operates under a royalty contract. where Parker does all the sales and marketing that makes all the investments. They've recruited a sales team of about 10 people and have been doing a tremendous amount of promotional effort. And, you know, they sell directly to the logistics partners and to the customers. We receive a 24% royalty of what their sales price is to those logistic partners. So that's the commercial model for the TriStyle Alt, the ultrasound product. For TriCell OPH, this is where Parker are manufacturing it. We pay them a small price premium on their manufacturing costs. And then we are selling to the customer ourselves. And we're doing that either using our distributive partner as their customer services and our logistics house and achieving those revenues that we're making there, or we're selling it to them as a distributor and then they're selling it to the customer. So you can see that we're gaining far more of the sales price, but obviously at a lower gross margin than the 100% gross margin royalty that we receive on the ultrasound product.

Fantastic. Accepting the scale of the opportunity ahead, do you have the right capital structure, investment, dividend policies, and the working capital capacity to pursue the growth at sufficient pace?

Yeah, I think we do. I think we have sort of getting the right balance. We want to invest more internally and be more aggressive with our investments, but we can do that in a way that still means that we can deliver our commitments. So I think we can do both.

Fantastic. So maybe turning to the US, previous presentations have indicated an ultrasound mark opportunity in the US of approximately 50 million ultrasound procedures each year. Does that figure include surface ultrasound procedures as well as intracavity?

So the simple answer to that is no. So we've publicly stated that we think that in the US there's 50 million procedures every year that require high-level disinfection. There's multiple different sources for that information. And what we're actually looking at is what we call the intracavity ultrasound product. So it's like products like I use for the demonstration of Visiclean. When you start to look at the skin surface ultrasound products, then the market becomes a lot larger. Now, Just to sort of visualize for people joining the call, the skin surface probes would be, you know, the probes that you would see used on a pregnant lady's belly to visualize the child there. And, you know, what we're seeing is a real expansion in the use of those probes for other mean, sort of like clinical, sort of like procedures. And some of these clinical procedures, if you think of placing sort of like lines, these can be sort of central lines or even more peripheral, then you're piercing the skin. That probe is at much higher risk of becoming into contact with bodily fluids or, you know, and therefore must be cleaned, sort of like pre and post. those procedures being done. So that is not included in our market sizing at the moment. We definitely see that as future growth. Why right now is it front of mind and something that we include in our numbers? Well, simply because the need for high-level decontamination on the invasive probes is well established. You know, the guidelines are there, it's all being written there, and it's very established. The clinical guidelines are catching up with the expansion of ultrasound use with the skin surface probes. But as those guidelines catch up, we feel that we are really well placed to benefit from that. And why do I say that? Well, these probes are used typically used in very busy areas of the hospital. You think of the A&E, the emergency room, think of the critical care departments, and these devices are being wheeled between patients and the devices themselves are incredibly portable. The intracavity probes tend to be used much more in a clinic setting and therefore much more static. When you're thinking about a skin surface probe that's very portable, you know, what do you need? Well, you need a solution that matches that portability, that has that ability to move and be there at the point of care. And that's what the Tri-Cell sort of like Juro and Trio products are all about, you know, being able to perform high-level decontamination at the point of care And therefore, we think that that is a real avenue or runway for future growth as the market recognises that these poison care ultrasound probes need to be high-level disinfected.

Just a clarity one, would you mind defining hospital systems? Are they individual hospitals or hospital groups within multiple hospitals?

Yes, we do use the word quite interchangeably, but hospital systems tend to refer to a network of different hospitals. In the UK, you can think of these as trusts where you've got your individual sites. In the US, they refer to them as systems. Sometimes these systems can be three or four. hospitals and sometimes his systems can become hundreds of hospitals together. Some of the largest healthcare systems in the US are a couple hundred hospitals. I suppose for clarity, I should say that in the US, off the top of my head, we are currently actively engaged with some 362 hospital sites. But obviously that's across multiple different systems.

Do your marketing and distribution arrangements with Parker cover all related products, specifically Tristel, ViviTheme?

So basically we would be saying any products which are focused on the ultrasound segments, we would be willing to work with Parker so they can commercialise those for us.

And with regards to US, are you able to split between your initial orders and repeat customers?

Yes, we have a very good relationship with Parker and we work very closely with them. So, you know, sometimes when you have like a royalty arrangement, it truly is a very hands-off and you kind of don't have much granular insight into what the activities are or what the successes are. I can tell you that that's not the case. Tricel and Parker work incredibly closely together. Our teams are in communication on a daily basis, and Parker respects us enough to really provide us with a lot of information, and we have a very good dialogue. So we know, you know, those repeat customers. We know the mix between smaller clinics and larger hospital sites. And it's getting that right balance, isn't it? You can go for the smaller clinics, which have a much faster buying cycle, but the volumes are a lot lower. And what we do know is that we've got a great mix of those smaller clinics, and we've also got some penetration on those bigger hospital sites. But have we really gone deep and wide in those hospital sites? No. We've got one or two departments, and we're building more traction. As we look to grow the ultrasound business with Parker, we know that they're focused on going much deeper into those hospital sites, getting more of those larger customers, as well as getting those quick wins and building the momentum in the sales there.

With regards to competition, what does the competitive landscape look like? Who are your main competitors? And could you detail the competitive threat from UVC? Are you confident that you can retain market share?

Yeah. So, you know, we've built this market and, you know, as we get larger and as we get more successful, naturally you get more competition, you get more people that are very interested in the space. And not only because it's a growing area, but also it's because, you know, it's an area where there's They can see, you know, the high gross margins we're making. So it becomes very attractive. I would put our competitive threats into sort of two camps. You get the pretenders that are coming in. So these typically tend to be low-level disinfection companies that do a little bit of testing and try and make claims beyond their reach. with regards to high level disinfection, but they try to charge more and enter into the market. And we work to squash their claims, educate the customer, inform the regulatory bodies or work legally in order to basically put them back in their right camp. and not sort of like coming to our market. And then you have those other products which have been regulatory approved for high-level disinfection, and they're typically two products, two companies, two groups of companies, really. They are the automated, and within that you have nanosonics, which is the vaporized hydroxide. They've been around a long time. and we've competed with them over the years. And then in more recent years, you have the UVC companies which have been coming into the market. Now, on the face value, UVC is very interesting. It's an automated solution that doesn't require any chemistry, it just requires a UVC. But what we're hearing from our customers is despite all the promise, the reality doesn't always live up to expectations. We see them as a threat. They're quite noisy in the market, but in reality we see that our customers are very loyal towards us and those that have temporarily shifted to UBC, their experience hasn't been what they thought it would be.

Around the world, how fast are your plans open in Japan?

So we continue to work to continue to expand. We have just recently recruited a distributor manager in Asia to work with the existing team there. She speaks many languages including Japanese and is helping us with the efforts we've already made in that market. Japan remains a very interesting opportunity for us. It's obviously the third largest healthcare market in the world. And it's somewhere that hasn't really, to date, kept up to speed with the rest of the world with regards to its adoption of high level disinfection. So we feel it's an area that we can really go in and enjoy some good incremental growth in the future. So it's Progress is being made, but we haven't commercially launched the product yet.

Getting a culture right for building global transformative businesses is generally poorly understood in the UK. How does China deal with its culture?

Yeah, I would say, first of all, I've been with the business for 12 months now, just over 12 months, and I feel like I really... have been incredibly energized and proud of what I've seen across the globe and from all of the team. We have a deep pool of very talented people, very focused on the goals and what we're trying to achieve. I can tell you that we just got the results of our engagement survey and the engagement within the businesses by highest rate has ever been, which is good to see that we continue to make strong progress there. So we have a highly engaged team and people that are very, very passionate. We try to get the rights of balance, recognising the different cultures around the globe, but I feel from the feedback we've received, we're on the right path and we're doing the right things.

Finally, given the time, could you explain where inorganic opportunities would come from?

Yeah, I tried to, I knew this was going to sort of bring up people's attention. I tried to sort of explain it to June that was on the slide. What we mean there is as we try to break through and achieve 100 million pounds of like aspirational goal, we always have our ears to the grounds and looking out for what may be some really interesting inorganic opportunities. But these must be things that fit and complement what we do. So they must be around being able to utilize our initial sort of existing, sorry, commercial network. They must be niche, novel, highly differentiated products where the customer sees value because they're solving currently unmet needs or addressing problems that can't be addressed with solutions today. And, you know, also got to be ones of where we can achieve a high gross margin. Do we have a list today? No, we don't. It's not something we've been actively spending a lot of time and energy on. We're focused on driving the results of the business with what we've got with our current product portfolio. But should one come along, we're not going to rule it out. But what I can say to investors is, you know, we're not trying to signal that, we're going to be raising lots of money and going to the market and diluting your shares that have today. We've got a nice cash sort of like reserve we've got and we feel that any sort of such of these acquisitions could be executed upon with that cash that we have in hand right now.

Matt, Anna, thank you for answering all those questions you can from investors and of course the company can review all questions submitted today and we'll publish those responses on the Investing Heat Company platform Just before redirecting investors to provide you with their feedback, which is particularly important to the company, Matt, could I please just ask you for a few closing comments?

Yeah. So thank you ever so much for attending today. And what I'd just like to say in closing is this. It's another year of fantastic set of results. The business continues to go from strength to strength. We are executing upon the opportunity. We remain incredibly encouraged by investors as the size of the market and the work we've got ahead of ourselves. And myself and the team are 100% focused on delivering that for you. So thanks ever so much and I wish you a great rest of the week.

Matt and Anna, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team or Tristel PLC, we'd like to thank you for attending today's presentation and good afternoon to you all.