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Operator: Good morning. Greetings, and welcome to the Fastenal Company 2025 Q3 Earnings Results Conference Call. At this time, all... Dre Schreiber: A question and answer session will follow the formal presentation and you may be placed into the question queue at any time by pressing star one on your telephone keypad. We ask you please ask one question and one follow-up to return to the queue. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dre Schreiber, Director of Investor Relations. Please go ahead, Dre. Welcome to the Fastenal Company 2025 Third Quarter Earnings Conference Call. Dre Schreiber: This call will be hosted by Daniel Florness, our Chief Executive Officer, Jeffery Watts, our President and Chief Sales Officer, and Sheryl Lisowski, our Interim Chief Financial Officer, Chief Accounting Officer, and Treasurer. The call will last for up to one hour and we'll start with a general overview of our quarterly results and operations with the remainder of the time being open for questions and answers. Today's conference call is a proprietary Fastenal presentation and is being recorded by Fastenal. No recording, reproduction, transmission, or distribution of today's call is permitted without Fastenal's consent. This call is being audio simulcast on the Internet via the Fastenal Investor Relations homepage investors.fastenal.com. A replay of the webcast will be available on the website until 12/01/2025 at midnight central time. As a reminder, today's conference call may include statements regarding the company's future plans and prospects. These statements are based on our current expectations, and we undertake no duty to update them. Important to note that the company's actual results may differ materially from those anticipated. Factors that could cause actual results to differ from anticipated results are contained in the company's latest earnings release and periodic filings with the Securities and Exchange Commission, and we encourage you to review those factors carefully. I would now like to turn the call over to Mr. Jeffery Watts. Jeffery Watts: Thank you. Good morning, everyone, and thank you for joining us today. To start, Q3 was a strong quarter, and more importantly, it was a consistent one. We delivered double-digit growth, we expanded margins, and continued to gain share in a flat market. Now that's not easy to do, and it speaks to the strength of our strategy and the execution of our teams. But before jumping into it, I'd like to extend a big thank you to our entire Blue team for their hard work this quarter. When I travel to branches and onsites and DCs, I'm always struck by the pride and energy in our people, and I'm happy to say that Fastenal's culture of service, the legacy Bob left us, is alive and well. So to every employee, thank you for your focus and commitment, the work you do every day in front of our customers and behind the scenes is what's really driving this performance. Also, to all of our employees up in Canada, I just want to wish them a happy Thanksgiving, and I hope you're getting to spend some quality time with your friends and family. Now let's get started and turn to slide number three. In the third quarter, we delivered net sales of $2.13 billion, which is an 11.7% increase over Q3 of last year. This is our second consecutive quarter above the $2 billion mark, which demonstrates the effectiveness of our plan and Fastenal's growing partnership with our customers. It's also worth mentioning that the growth this quarter came with the same number of selling days, so it's a clean comparison. Overall, again, it's a strong result. Let's discuss the cadence of the growth through the quarter. You know, one thing we pride ourselves on at Fastenal is solid execution quarter in and quarter out, and Q3 is a good example of this. Despite a couple of timing quirks, we pretty much met or beat our typical seasonal patterns each month. In July, we saw daily sales growth of 12.8% with a sequential dip from June of about 2.7%, and that's actually better than our historical benchmark, which typically sees about a 3.5% drop from June. So July came in stronger than expected. Now one nuance here is the timing of the July 4 holiday, and it landed on a Friday this year, which is important as it pulled some activity into that July. Jeffery Watts: The fall on a Wednesday or Thursday, kind of like it did last year, we wouldn't see that same activity. And our vending data confirmed this. We saw about an 8% increase in vending activity that week compared to when the holiday falls midweek. Didn't materially impact the quarter, but it did shift some intermonth cadence. When you add in what we saw in August and September, you know, our Q3 daily sales growth actually came in a bit stronger than our benchmark would have predicted. That was around 11.2%, which is an encouraging sign. And looking at the year-to-date picture, you know, our daily sales from January through September, they're up 15.9% compared to a historical benchmark of about 9.5%. Now that's a big delta, but even when we consider the weather-related issues stated in January, and the price cost through September, we're still showing double-digit sequential growth well ahead of our historic pattern. Jeffery Watts: I think the big takeaway is our underlying growth remains strong and steady. You know, we have a phrase we use internally: Plan the work and work the plan. And the team did exactly that in Q3, and it shows in the results. When we're looking at where the growth came from, the broader market wasn't much help. Jeffery Watts: Now the industrial economy remained sluggish, essentially flat. I think the PMI averaged about 48.6 in the quarter. Indicates contraction, but I think I'd characterize our growth as mostly self-help and share gains rather than any particular macro lift. Jeffery Watts: Pricing did contribute roughly 2.5 percentage points to growth. Somewhere in that 240 to 270 basis points, a bit lighter than we anticipated earlier in the year. But I think Sheryl's gonna dive into this in a little bit more detail later in the presentation. I would just add, though, that, you know, our team has done an excellent job communicating with customers on pricing. You know, the one thing I hear consistently from customers is appreciation of Fastenal's transparency and partnership in managing these cost changes. And we're not just passing on increases. We're working side by side with our customers to find solutions or alternatives and efficiencies. That kind of responsiveness, it builds trust, and it's a big reason we're continuing to gain share. Aside from price, the rest of our growth, roughly eight to nine points, came from volume and share gains. We saw meaningful wins with key accounts, you know, a steady stream of new contract signings, and deeper penetration in existing accounts. Our national accounts and on-site signings over the past year are now ramping up in revenue, and it showed this quarter. Slightly higher than the company, reflecting those new contracts really coming into fruition. Jeffery Watts: In fact, our national account sales were up double digits in Q3, and we turn to slide four. You know, in terms of our customer category results from our strategy, and we continue to see success with large accounts. Our aim has been to deepen relationships with big customers and in Q3, it showed. The number of active customer sites spending over $10,000 per month with us, those sites grew over 8.1%. And those spending over $50,000 per month, what we call on-site-like locations, the number of those sites grew 15.4%. Those are significant gains in penetration. In fact, some long-standing customers are now utilizing us in more plants for more product categories than ever before. And I was just down in Texas for some regional VP meetings, and I had a regional tell me a story. You know, one of a major manufacturer in this area has been a Fastenal customer for twenty years. Just expanded Fastenal's program from two sites with them to five sites, essentially making us the primary supplier nationally. And that didn't just happen by accident. It was our team proving themselves, offering new solutions and new product lines. It's a great example of earning more with existing customers by enhancing our services. Also wanted to highlight the growth we're seeing in what we call nontraditional markets, and that speaks to expanding our total market. In the quarter, for example, our business with healthcare, education, and government customers grew nicely, and our sales to warehousing and logistic companies, you know, they were up significantly. These segments are outside of heavy manufacturing, they help diversify our base. We've also signed several new on-site contracts with school districts this year, and it's an area we targeted after the pandemic. Those are now kicking in and contributing to growth and the resilience in our mix. Now as Dan noted, earlier in the year, institutions and warehouses, they may not boom like but they don't bust as hard either. I'm paraphrasing. So bringing them into the fold makes us a stronger company long term. Bottom line is our strategy is delivering. We set out to align the organization behind those three pillars: increasing sales effectiveness, enhancing our services, and market expansion. In Q3, we can see tangible results. Faster growth in our core product fasteners, more spend from big customers, and entering new pockets of business. Moving on to slide five. When I look at slide five, a few takeaways from me on this slide. The first is we continue to speak about alignment in our strategy, but most of that has been around just our sales departments. I think it's important to point out that this is a company-wide strategy. It's very important. And our fastener expansion initiative, you know, is a good example of this. This was a company-wide effort, not just a product push, but a coordinated strategy across sales, supply chains, and operations. You know, we improved availability in our DCs. We aligned our teams around some key SKUs, and most importantly, we made it easier for our customers to get what they needed. And the result, the fastener sales grew over 15% in September, outpacing overall company growth. It resulted in a meaningful lift in not just sales, but the gross margin as well. This is what company alignment looks like and it's driving results. Second thing on this slide, you know, for me, Q3 was a quarter of profitable growth. We achieved double-digit top-line growth in the soft market. And converted to even faster bottom-line growth, net income up 12.6%, EPS up 12.3%. Our margins expanded and costs were well managed, resulting in a 20.7% operating margin. The scenario that's really the scenario we aim for. The only cost of this success was really higher performance pay, and our team definitely earned that. Definitely not gonna get in the way of that. Now this combination of growth, profitability, and returns is exactly what we set to deliver. It speaks to the strength of our strategy and, more importantly, to the execution of the Blue team. It also gives us confidence as we head into the end of the year knowing that we're growing the right way profitably and sustainably. While creating value for our customers, our employees, and our shareholders. Now moving on to slide six, which highlights our digital engines. Jeffery Watts: You know, this is an area where we've been investing for years. And in Q3, we saw continued momentum. Averaged about 110 FMI signings per day, slightly below last year's pace, but still an extremely strong level of activity. It's over 7,000 weighted fast bin and fast bin devices signed in the quarter, you know, bringing our total installed base over just under 134,000 devices globally. Up 8.7% year over year. The sales through FMI technology represented 45.3% of total sales in the quarter. This was 43% a year ago, and when you look at the daily sales through FMI, they grew just shy of 18% year over year, well above company average, and the clear sign that, you know, this program is not just expanding. It's accelerating. On the e-business side, we saw 8% growth in daily sales. This includes both e-procurement and e-commerce activity. All this number is not where we want it. We believe the relaunch of fastenal.com will help improve this growth as we move into 2026. When you combine FMI and e-business, our digital footprint accounted for 61.3% of total sales in the quarter, and it reflects our long-term strategy to drive growth through technology, automation, and customer integration. And further, you know, it really furthers our motto of growth through customer service. So before I hand it off, Sheryl, maybe a quick summary. You know, we're winning with large customers. We're deepening customer relationships with technology and on-site. And we're aligning around the right priorities. We did it by investing in the right things. You know, our customers, technology, the development of our people. I'm very proud of the teams and how they've embraced and executed the strategy over the last year. I believe we're really starting to fire on all cylinders. We're aligned. We're adaptive, and we're customer-driven. With that, I'll pass it over to Sheryl. Sheryl Lisowski: Thanks, Jeff, and good morning, everyone. Now I'll turn to slide seven. Sales in 2025 were up 11.7%. That's the strongest quarterly daily sales rate since 2023. Despite sluggish end market demand and caution related to trade policy and tariff, margin pressures, government shutdowns, the potential for longer than normal holiday shutdowns in the fourth quarter, due to the Christmas holiday falling in the middle of the week, regional and other sales leadership expectations are generally favorable for continued strong goals due to share gains. In the absence of much external help, the improvement in our sales reflects two other variables. First, even as the market has stabilized, our comparisons have gotten easier. Particularly in the cyclical parts of our business. This factor helped produce our third quarter of growth for fasteners since 2023 and acceleration in manufacturing end markets. Second, contributions from our strong contract signings since early 2024 continue to build. We continue to experience a healthy pace and mix of signings in 2025 and our total national, regional, and government contracts grew in the high single digits. The quarterly sales growth rate is a fair representation of our performance, and we did see acceleration through the period. It was another solid Stealth Health driven result in a soft market. The pricing outlook warrants some discussion. Year to date, significant tariffs have been applied to products from China, as well as steel, including steel-derived products like fasteners on a global basis. We continue our long-term trend on diversifying our supply chain where possible to the size and timing of our suppliers' pricing actions. And we added some inventory to our own balance sheet. That said, supply chains have gotten more expensive and a part of our response over time has been incremental pricing. We have been proactively engaging with our customers for several months. We measure price on the sale of identical parts to the same customers in both periods. This represents approximately 50% of our business, and we've referred to this as like-for-like pricing. During the third quarter, we implemented one pricing in the month of August, which addressed the reciprocal tariffs that were finalized in July 2025. Our previously stated goal was for price to contribute 3% to 5% by the end of 2025. The phased approach to this rollout resulted in 240 to 270 basis points of additional impact in the third quarter with momentum building as we ended the quarter. Additional pricing actions will be necessary in 2025 with the potential to increase the impact of pricing on like-for-like parts to be in a range of 3.5% to 5.5% depending on where the tariff litigation ultimately settles and the pace and execution of our actions. Our revised goal for pricing on like-for-like parts in 2025 reflects the reduction from our previously stated goal of 5% to 8%. The other 50% of parts sold to customers exist in the current period but do not exist in the prior period. Making it hard to measure price impact on that group. That said, it has to be acknowledged that had we sold that part to that customer in the prior period, it would have been likely sold for less due to inflation. Therefore, in periods of inflation, there is an inherent price component that flows into share contribution. It is likely pricing is contributing to share contribution in the range of 1% to 2%. We are encouraged by the easier comparisons, the improved sentiment, and particularly our internal momentum. That said, we have limited visibility and share our customers' uncertainty over how current trade policy may impact demand in 2025. However, Fastenal has historically been able to win market share during periods of disruption on the strength of our nimble sales, our frugal and adaptive culture, the weight of the technologies and global supply chain resources we can apply to finding solutions to customers' challenges. That is our expectation in the current environment. Now turning to slide eight. Operating margin in 2025 was 20.7%, This is up 40 basis points year over year. Gross margin in 2025 was 45.3%, up 40 basis points from the year-ago period. The improvement was primarily driven by our fastener expansion project, other supplier-focused initiatives, and improvements in customer and supplier incentives. These benefits were partly offset by continued customer mix solution and higher organizational overhead cost. Price cost had a neutral impact on our gross profit percentage in 2025. We anticipate our gross profit percentage for 2025 will be relatively flat with 2024. This will be dependent upon our effectiveness in managing price costs and the degree of macro improvement will also influence the scenario. SG&A was 24.6% of sales in 2025, which was consistent with the year-ago period. Employee-related expenses increased faster than the rate of growth in sales largely due to the reset of bonus and commission programs due to improved financial performance. This increase was partially offset by leverage achieved in all other SG&A costs. We continue to invest in key areas of our business to support growth while managing other costs more tightly to reflect the sluggish business conditions. Putting it all together, we reported third quarter 2025 EPS of $0.29 per share, up from $0.26 per share in 2024. Reminder, we executed a two-for-one stock split in May 2025, The prior year EPS has been adjusted for this change. Now turning to slide nine. We generated $386.9 million in operating cash in 2025 or 115.3% of net income. Despite our investment in inventory, cash generation was above traditional third-quarter levels. The five-year average from 2020 to 2024 was 104.2%. We remain comfortable with the cash generation of our model and continue to carry a conservatively capitalized balance sheet with quarter-end debt being 4.8% of total capital. Accounts receivable were up 12.2%, reflecting sales growth, relatively faster growth to larger customers that tend to carry longer terms, and an uptick in quarter-end deferred payments from our customers. Inventories were up 10.5%, which was an improvement from the preceding quarter, have increased inventory as part of our effort to improve product availability in our selling locations and improve picking efficiency in our hubs. We have added stock to support customer growth and we accelerated some inventory schedules for future delivery into current periods ahead of tariffs. Inventory growth may remain elevated in 2025 as we continue to navigate tariffs and more inflation builds in. Accounts payable were up 143.3%, primarily reflecting the increase in inventory. Net capital spending in 2025 was $54.7 million, down slightly from $55.8 million in 2024. This increase is consistent with our expectations for the full year where we anticipate capital spending in a range of $235 million to $255 million, which is up from $214 million in 2024. This increase is from higher FMI device spending, distribution center outlays to reflect spending on our Utah and Atlanta hubs, and automated picking additions across our hub network, higher IT spend, which includes projects aimed at developing additional digital capabilities and higher spend on vehicles. The increased spend was partially offset by an increase in proceeds from sales of properties. With that, I will turn it over to Dan. Daniel Florness: Thanks, Sheryl, and good morning, everybody. And you know, I was sitting there thinking as Jeff and Sheryl were talking, what's kinda nice for me right now is we put up a great quarter. And Jeff and Sheryl, a few quarters ago, would have been really nervous about what they just did. Like, they did a wonderful job talking about the quarter, talking about where we're going. And giving insight to our shareholders on the call as well as our employees on the call. I think, as I was reading through some stuff last night, a few things dawned on me. One was it was ten years ago today that we put out the 2015. And, you know, the PMI was plus 50. We've gone through a year where we'd seen diminishing success. And the afternoon before I'd been named president and CEO, and the first message I had to deliver was a tough quarter. Our sales went negative in September. And as it turned out, they were negative for the balance of the year. And we needed to kind of regroup and figure out where we're going, not the chaos of today. And there were some simple themes that began to emerge. When we settled down. You know, it's a great organization. Great capabilities, great people, but we lost our way a little bit. Some other things that emerged over time was the idea of thinking big about where you're going. Taking steps towards the future, being willing to change and never cling to the past. Because it's comfortable and safe. Figure out where you're going and get there. It eventually chimed into some mantras: Find great people. Ask them to join. Give them a reason to stay. And we just introduced a new one. I liked his phrase. Plan the work, work the plan. I don't know if that's a Canadian thing or a hockey thing. It is there with growth through customer service. But it's pretty darn good and I love it. I would like to say thank you to the Blue team. For the quarter we just put up. Frankly, the last two quarters we put up was nice having a couple quarters above $2 billion where we're enjoying growth again. But I would like to give special mention to several people. To Bill Droszkowski. Thanks for thinking about the organization first. And stepping into the role of leading our national accounts, our contract sellers team two and a half years ago. A big part of the turnaround is the work of your team in collaboration with the network they serve. To Casey Miller, thanks for taking a big load on your shoulders when Bill stepped out of his role. I'm glad we were able to add some resources here in the last three, four months. To assist the effort. But, thanks for everything you've done. To Tony Borsma, thank you for the improvements we've seen in our supply chain over the last year and a half. It helped us tremendously navigating the tariffs of 2025 because it gave us a little bit of a cushion to make mistakes or as we did here in the third quarter, to delay a pricing action because of some uncertainty going on with, okay, what are the courts gonna do? What's gonna happen next? Heck, even over the weekend, there was some noise about what's going on. But the work of our supply chain team gave us a little wiggle room in which to navigate. And then, finally to Jeffery Watts, you stepped into a role. The first thing you did is you got our sales team pursuing a common goal. Challenge us to maybe stop being stupid some of the time on the things we were doing and remember we all serve our customers, and we serve each other. Nobody serves us. It's never about us. Never about I. It's about the customers in the market we serve. I did like the other quote Jeff had in his prepared remarks. Drive growth through technology. You know, a decade ago on that call, we couldn't have made that statement because we didn't have a technology to present. We didn't have a technology team to present. And, my compliment, John Soderbergh on your efforts over the last decade. To get us to where we are today and the resources we have to assist our sales team. Page 10 of the field message on the third quarter talks about an item that we mentioned actually on Page two of our earnings release. If you look at Page two of the earnings release, we've historically talked about three categories of products: fasteners, safety, and other. Within fasteners, we further break it down to OEM fasteners. And MRO fasteners. We started doing that some years ago and we did it by guesstimating the mix. We didn't have great reporting to tell us, but we did know that if it's a manufacturing transaction, we aren't charging sales tax. It's an OEM fastener. And so in there, you'd see about 19.8% of our sales are an OEM fastener. That's really predicated on looking at the US business and estimating it. On page 10, what of the flipbook, what you see is our folks we have better reporting systems now, and we can look at things differently, and we can look at it globally rather than, you know, kinda faking it because we're looking at nontax sales. That 19.8 is actually 20.9. And that's looking at it globally. In places like Mexico, bring the average up in, as we've gone through the year, one of the things we've talked about is our Americas business outside the US, particularly our business in Mexico. Having a tough year. That business is more heavily skewed towards OEM business. Especially OEM fasteners than the rest of the company. And when you have a sub 50 ISM, it beats them up. But we have great people down there doing great things. And I know we're building for the future. And that future will shine through. What we learned in this process of really going through, we want to understand the non-fastener business because we had no visibility of that in the past. If you'd asked me six months ago, what percentage of our business do you think is OEM? I would say, ah, it's probably about 30%. And the difference between the 20 and the 30 would be about a half of it would be, metalworking. And abrasives. And half of it would be everything else. As you can see from the information here, I was woefully understated in my number. And so as we move towards year-end and in each of the steps between now and then, an ask I have of the analyst community. When you're having conversations with Sheryl, and Kevin, about our monthly sales, about the follow-up to this call, challenge us on what you wanna see from this information. It's our intent to replace that table on page two or to supplement that table on page two. I'm not sure which at point. With a thought process of our business of here's our direct business. I.e., OEM, here's our indirect business, i.e., MRO. And give better visibility to what we're doing and where is our success taking us. As we move forward. Speaking of moving forward, I'm, can we switch over to the questions. I've used up my ten minutes. And I would and as mentioned, please limit your questions to one. With a follow-up. Thank you. Operator: Thank you. We'll now be conducting a question and answer session. You may enter the question queue. And as another reminder, please ask one question and one follow-up to return to the queue. Our first question is coming from David Manthey from Baird. Your line is now live. David Manthey: Alright. Thank you. Good morning, everyone. My question is on pricing out of the gate here. So the gross margin looked good. I assume there's no issue with you passing on price. But with the pricing being below expectations, I was wondering if you could talk about the mechanics there, the housing wise that is panning out slower than you originally thought. Daniel Florness: You know what? Dave, good morning. As I mentioned, when we were stepping into the quarter, we thought our cadence would be a little different than it played out. And, you know, every time we have a conversation like this, we're answering based on what we know at this point in time. And as you know, it's a pretty fluid environment. We ended up delaying it about thirty days. Our third quarter step. And in doing that, two things happen. Obviously, the benefit or the impact on the quarter is muted. However, by delaying it thirty days, I think we had better discussions with our customers. We had better options for them to have. I believe when you're pushing things too fast, you kind of negotiate differently. You have discussions that are different, and there's probably some territory you'd seed in that discussion that thirty days later when you have a little more insight and can have a more thoughtful conversation, you're probably more effective at your pricing. But more importantly, you're more effective at providing counter options to avoid part of the price through substitution. But it did slow down our cadence in Q3. As we step into Q4, as Sheryl mentioned, we've lowered that number a little bit. Part of it, when we gave that number for Q4, in the July time frame, part of it is, you know, you're doing the straight line look. And you don't really know what it is. The only difference between now and then is we know what we know now, and that is it's gonna be a little bit lower than we thought. Which is frankly a good thing. Because it tells me we've probably put in more substitutions in place. And you know, I cautioned in July about we might get a little bit of margin squeeze in the third quarter. Part of the reason for putting that message in the call is I thought it could happen. I wanted everyone of the Fastenal employees to hear it. I'm gonna make the same comment again. Could get a little margin squeeze in the fourth quarter, because costs are continuing to rise, and we've had some wiggle room because of what we talked about on the expansion of fastener product. That we stock in inventory that gave us some margin on some other products unrelated to the price. But, we could get a little squeezed in the fourth quarter. We're gonna work to avoid it like ever. But we think the number's a little bit lower. Most of that is because we have better information now than we did three months ago. David Manthey: Got it. Thanks, Dan. And so, when you're saying the numbers coming in a little bit lower, you're talking about the fourth quarter down from the 5% to 8% you thought previously. But is there a change in how you're thinking about peak pricing ultimately? Or does that 5% to 8% just get pushed into 2026 at some point? Daniel Florness: You know, I don't know if we know that answer at this point, Dave. There's going to be things that happen. We're going to do pricing actions every quarter. If the situation dictates it, you know, yeah, the optimist in me would say that, you know, things are calming. We had an economist come in and talk to our board the other night. And she was running through some of that stuff. And talking about what their expectation is coming into 2026. And, you know, you know how it is. You ask 10 economists the question. You're gonna get 12 opinions. But I think there is a feel, and I think there's a political will that that's get some of this stuff calmed down. Obviously, over the weekend, there was some noise going different directions. We'll see how that plays out. As we move into November. You know, the optimist in me would say, maybe the point we get to by we exit the year is the point we've gotten to. And now the real challenge is the fatigue on pricing is there. Doesn't mean there won't be some price changes after the first of the year. I believe there will be. There might be some that didn't agree to a price change three months ago or six months ago. That we have to go back and have that discussion again. Hopefully, the end result is we're better at pivoting sources of supply and the products served because I believe we're better at that than our peers because we have direct conversations with our customers. And we have great line of sight to supply chain. Operator: Thank you. Next question today is coming from Ryan Merkel from William Blair. Your line is now live. Ryan Merkel: Hey, everyone. Thanks for the question. Good morning, start with the bonus reset. Can you just explain why was the bonus reset so much larger in 3Q versus February? Daniel Florness: So there's a few aspects to that. One is the part of it's bonus reset. You know, in early August, when we had our after we've gotten the July numbers, we had a bit of a discussion with our leadership team that said, hey. SG&A is getting ahead of where we need to be. And there's a number of things that kick in. In fact, this morning on the, we always have a call at seven in the morning with our leadership team, and Cheryl runs through some analysis she provides for our board and shares it with our leaders. And in that discussion, I was doing some ad hoc calculating. And for the Fastenal leadership listing, I was wrong on my ad hoc. Because I was doing it on the fly. Matt Rantzenberg reminded me afterwards that, hey, Dan. We split our stock. So your math was off by a factor of two. So, if you think about it on a district manager, by district manager basis, we spent about $8,000 a month too much. Yeah. Because that would have gotten us closer to 30¢ if you do the reverse engineering on the math. And our district managers have been under incredible pressure for the last two years to manage expenses. They probably had some pay increases they needed to do. And there's probably some pay increases that were occurring as we were going through I'm talking about base pay. That we're going through the year. And we probably underestimated that a little bit. As we went through the second quarter, and we were realizing more success. There was also some changes that we talked about on some pay programs we were making. And most those programs center on the field. And they center on at what line you're measuring for pay purposes. Are you measuring at the sales line, the gross margin line, the operating margin line, what we internally refer to as the ROA, which is our internal P&L and asset document. A little bit more of an impact from some of those changes because we were discovering success than maybe we estimated. And then but the final mechanical piece is we have a lot of programs that are linked to performance of P&L growth and we pay out a meaningful piece. And you know how our proxy works. We all get a piece of the earnings growth. We had a few more months of success because we have better participation across the network. So you had a few more district managers that are programs are kicking in. District where programs are kicking in. And we underestimated number a little bit. If there's nothing in there that I'm gonna lose sleep over, other than cautioning everybody in August to slow that down. It really matters for '26. Because it doesn't do anything for Q3. It really doesn't do much for Q4. Because it's a big ship, and it requires a little more time to do some steering. On that rotor. But part of it was there was some base pay changes going on. We probably underestimate a little bit the impact of some of the new programs. And then the rest is we're finding success and we're paying. And we think that's a great thing. Ryan Merkel: Okay. Yeah. Makes sense. And then the follow-up is SG&A in the fourth quarter. Is it going to be similar, 11% year over year growth that we saw in 3Q? Daniel Florness: Tell you what, I'll defer that a little bit to some of the follow-up questions when you're going through your model. But we anticipate from the profit growth perspective will continue to kick in until we anniversary that as we move into the second quarter of next year. But you're gonna see similar expense growth, what you're thinking. Operator: Thank you. Next question is from Tommy Moll from Stephens. Your line is now live. Tommy Moll: Good morning and thank you for taking my question. Good morning. Wanna start off with a question on demand. Clearly, the broader market conditions remain sluggish. You've called out trade and policy uncertainty as reasons. I'm curious what you're picking up from the field. Does it seem like if we had greater policy uncertainty, there's some pent-up demand that can unlock relatively quickly, or is it more, you know, we're already talking about calendar issues in December production plans feel pretty well set. And even best case, we're probably talking about a 2026 potential tailwind here. Thank you. Jeffery Watts: Yeah. I would just add into that that we're not seeing a lot of, obviously, the tailwind today, and from everything we're hearing from our customers, everything we see, we're probably looking into, obviously, in the '26. We're not gonna get that in Q4, but now most of the nice part about it, almost all of our customers are telling us the same thing that this year is what it is, but they're spending even in Mexico, they're really looking at that Q1, Q2 time frame. And, actually, Dan mentioned that The Economist Everybody's right. They said the same thing to us. Tommy Moll: Thank you. And then just a question on the fastener stocking initiative that you've talked about. Maybe this is too simplistic, but is the rationale here share gain through better service levels? And if that's a fair characterization, and everything goes right, should this be accretive to ROIC, and what's a reasonable time frame for that to unfold? Jeffery Watts: Well, I'll talk about the share gain on it. And really, you think of it this way, we got a little tied on our inventory models. And what it did was made it very difficult in the field, for the branches to get standard inventory. They weren't efficient at it, and we started to lose some share. So we brought back the standard inventory that we were missing. We've actually increased it, and it's just made it a lot more efficient for our branches and our customers, to get that inventory. I'll let Dan answer the second part. Daniel Florness: On the ROIC, actually, the phase one and most of phase two is accretive to ROIC. And because what happened is to Jeff's point, having the inventory on the shelf just meant that it's easier for our folks to perform, it's easier for us to folks to give a quick answer to a customer of, yep. I can get it in as opposed to, doing a sourcing exercise and then calling the customer back. Because a lot of things can happen during that sourcing exercise, like maybe talking to three other suppliers because they need stuff. And if I can just answer the question, it puts it to bed. So there's capture of market shares you get. The other thing that happens is when you buy it in an orderly fashion, you always purchase it better. And so we're getting a nice return. When I look at the inventory dollars we added, the return on that is much better than ROIC as a company. The reason I say accretive and not ridiculously accretive is there's always a trade-off on efficiency. So we've given Tony and his team the ask of saying, keep looking at this kind of stuff. Bob Kurland always taught us, it's not about the P&L. It's not about the pretax the percentage of sales. Now that really matters. Don't get me wrong. It's about the returns. That's what our long-term that's what our shareholders will reward us for as is the returns on the investments on the decisions we're making. And if we're adding inventory, and it's enhancing our returns, we will continue to add inventory even if we add a few days to our inventory, if we can get a return on that, that's a better use of excess cash than even than a dividend. A dividend is you're throwing in the towel because you have more cash than you can deploy in a useful fashion. And what we've always believed in is that companies that have too much cash and they look for places to deploy it, usually destroy shareholder value. They don't create it. So we would rather dividend everything out unless we have a known need for it. And count on future cash flow to fund the ideas that we have. Operator: Thank you. Next question is coming from Nigel Coe from Wolfe Research. Your line is now live. Nigel Coe: Hello, can you hear me? Operator: Yes, please proceed. Nigel Coe: Okay. Great. Good morning, guys. Sorry about that. I'm not sure what happened there. Dan, can you maybe just expand on the price fatigue comments? I mean, I don't think it's particularly surprising, but I'm just wondering is this really just the uncertainty around tariffs? You mentioned the kind of litigation around that. Is there sort of a pickup in competition here and you're seeing some of your competitors are not pushing through price perhaps? Daniel Florness: Our competitors are pushing through price. The marketplace is pushing through price. We actually prefer not to push through price. We prefer to push through growth. We prefer to have conversations about technology we can deploy to your point of use. That lowers your consumption. Expanding the universe of what we're selling, the price conversation is only about costs are going up in your supply chain. And price is how a customer realizes that. And so we've always been reticent. On the flip side, we have great line of sight to our needs, and we have open candid discussions with our customers about what's happening in their supply chain. And that price is part of it. The biggest, I think, complexity to the conversation is things like what's the court system gonna say about it? What's the pivot in the political wind of chaos or is it settled down, it isn't so much what the prices reset to. It's are the prices done resetting? So customers can make decisions about what they wanna do. Because they know the economics of what they wanna do. And in the meantime, what happens is you get kind of a pause. And, you know, and I think that shines through in the comments The Economist said to us and Jeff was alluding to. Is that, you know, customers are doing what they need to do, but they aren't necessarily doing more than they need to do. Because they aren't building for the future because they're not sure what their cost structure is gonna be. And if they wanna do that thing. But the price fatigue is, you know, we all get tired of talking about that because we'd rather talk about growth. Nigel Coe: Yeah. Okay. Thanks, Dan. That's really helpful. And then just a quick one, maybe for Sheryl. Just to maybe can we just put some boundaries around 4Q gross margins? I mean, you mentioned the potential of a little squeeze in the fourth quarter. I'm just wondering if there's any sort of more refined comments around that. Sheryl Lisowski: Yes. So in the fourth quarter, we are expecting that we'll see a drop in our gross margin, which is consistent with quarter four performance historically. But we are still targeting that we will be flat on our gross profit percentage for 2025 when compared to 2024, and that's really driven by the faster expansion project promoting our gross margin. Daniel Florness: If somebody would ask me in January with all the chaos going on, what's a win in 2026. I would have said, getting our growth to double digit as it moves through the year, and if we can maintain a gross margin, a flat gross margin in this environment, I think that's a huge win. And part of that was didn't appreciate how chaotic the year would be on tariffs. I don't know if any of us really did. And secondly, I did I knew mathematically how much the faster expansion could help us, but knowing mathematically how much it's gonna help and realizing that in actual activity aren't always the same two things. Operator: Our next question today is coming from Stephen Volkmann from Jefferies. Your line is now live. Stephen Volkmann: Great. Good morning, everybody. Dan, maybe can we go to your slide 10? And I'm curious how you use this data. Is this percentage something that you're trying to manage to either grow it faster or not, I guess, to the overall business? And I'm curious if there's any I'm assuming the margins are higher in this area, but any commentary there would be great. Daniel Florness: Actually, the margins in direct materials are lower, but your cost structure is lower because it's planned activity. Here's how I use it, and I'm gonna think out loud. And, Steven, thank you, for that question, by the way. But I'm gonna think out loud. So if you're writing these down, use a pencil. Instead of a pen because as the information becomes more available, to you and, frankly, to us, some of these things might be conceptually dead on. They may be off by a little bit. So when I think of the PMI going sub 50, in November 2022, and our business falling off as we got into 2023. There's obviously a cause and effect there. And the PMI and the industrial production, subset of information that we've historically talked about internally. When I look at that, even we didn't really understand how much of this was production shutting down versus we're just not executing or we need to get our head out of somewhere and get executing. And what this gives us insight if we appreciate that 40% of our business or 38.8. Excuse me. But almost 40% of our business is direct material production related. The story that subset of information tells I suspect we'll have a strong correlation to industrial production and to the PMI in general. I also believe that close to you know, we talk about 45.3% of our sales go through FMI. I suspect on that piece of our business, probably 50% of that business goes through FMI. We don't know the answer to that right now, but that's what I suspect it'll be. When the dust settles. Then the other 60% are indirect. It's truly MRO spend. That's really a good comparison benchmark to some of our peers that are more MROs centered businesses. It's a good comparison to the things we're doing to broaden our breadth of customer base because that's less impacted by the PMI, less impact it's impacted, but less so as far as industrial production as well because you know, 8% of that business is going into supplying e-commerce distribution. 8% of that business is going into the government and sector where we're supplying their needs. It really has nothing to do with PMI. And we believe about of that 60% that's indirect, we believe about 40% of that is going through FMI. So if you meld those two together and do your math, it's about forty-five. Is the mix. Now time will tell if Dan is full of it on that and if the numbers come in a little bit. We'll learn that in the weeks and months to come. And as we learn that in November with our monthly release, we'll put out some insight on it. If we learn some new things in December, we'll put or in November, we'll put it out with our December release. And then talk about it a bit more in January and a bit more in our annual report because our goal is to provide you with better information for understanding our business, where we're discovering our success, where we're struggling, are the factors of struggle internal i.e., execution, or external, and we're gonna focus on growing our business long term. Always. But we think it provides better insight than purely, hey. Here's fasteners, and here's everything else. Stephen Volkmann: Great. Okay. Thanks. That's helpful. And maybe from long term to super short term, anything in October to call out relative to how we should think about top line for the fourth quarter? Daniel Florness: Whenever I use October on the thirteenth of the month, I'm always wrong. So I'll defer that to our November release in early November. Operator: Thank you. Next question today is coming from Chris Snyder from Morgan Stanley. Your line is now live. Chris Snyder: Thank you. I wanted to follow-up on the conversation about price. Is this softer is there any impact here from that the producers are maybe just pushing less on you guys? Than you thought previously. And then or when we kinda see, you know, the Q4 step down, is it just that the company is comfortable being underwater for maybe a short period of time on price cost? And does that tell us that it's getting more competitive in the market? Thank you. Daniel Florness: We're never comfortable being underwater in price cost. Sometimes that happens. We're never uncomfortable. If we're growing double digits, we don't like our incremental margin to be below 25 but I'm not gonna lose any sleep over this quarter where we're closer to where we're at essentially 24. I don't think the here's what I'd like to think. But this is me just giving an opinion. And, you know, that and $3 about a cup of coffee, at QuickTrip in Winona. But, I believe our duty to our customers is to push back on supply base. Now in the case of things like tariffs, that's a mechanical thing. Now we can push back on our supply base and get price concessions or cost concessions potentially, or we can move business to other geographies and avoid some of the tariffs. But there's trade-offs. You might be paying more to save tariff and that more might be in the cost of product. You know, as a we've diverted product going directly into Canada. So it doesn't come through the US and get the toll. Coming through the US. But it's more expensive for us to break shipments down and divert it to the West Coast of Canada and bring it in that way. But that might be 8% more expensive, but if tariffs are multiples of that, you choose to do that. Because it makes the most sense. I would like to think that producers also realize that if you use tariffs as a means to we're very, very surgical with our tariffs. Some companies aren't so surgical. They're just like, hey. We're just gonna raise prices x to everybody. And when somebody does that, a supplier of ours does that, we'll say, you know what? You can set your pricing where you wanna set it. The marketplace is gonna decide where it wants to source its product. And if you're not being surgical, we're gonna punch you in the face. And we're gonna take that product sourcing somewhere else. And I'd like to think some of those activities, and I'm being I'm not being literal with that comment. I like to think some of those activities cause pause of our supplier base to you know, the old adage pigs get fed, hogs get slaughtered. Don't be a hog. Figure out what you need surgically by product based on cost components, but don't do a broad brush on this. And perhaps you're seeing some of that but we will never be comfortable with price cost being anything but neutral. Chris Snyder: Thank you, Dan. Really appreciate that thoughtful answer. Maybe just following up, you mentioned earlier about making in inventory and not providing a great return. Do you think customers did anything similar in the first half of the year? There's very well flagged telegraphed price increases coming. Do you think there was any pulling forward of inventory at the customer level? Just to get ahead of that? Thank you. Daniel Florness: I can't speak to supply chains that don't come through Fastenal. Because I'm sure there's customers that bought some components because they knew what their needs are, and they bought some, assuming they can get them in. And they can get produced and get them in before the toll started charging. But I don't believe they did any of that activity through us. Because we're a real-time supply chain partner for them. That's the value we bring. And what we do broadcast to our customers is things we're doing so we can tell them, hey. Here's how many weeks of supply we have of your part. And here's where the cost increase is gonna kick in. And the price increase to you. So I don't think our customers did in the products we sell. I can't speak to products outside of that. But with that, I see we are two minutes to the hour, so that will be our last question. Thanks to the Blue team for everything you did. I would share with the group sorry if I've been a little bit unavailable the last couple weeks. My 95-year-old mother passed away a couple weeks ago, and she lived a wonderful life. Time takes its toll on all human beings, and I'm really glad that my four children, particularly our daughter Anna, who's 20 years old, had a grandmother who lived long enough that she was part of her life, and she knew her as a human being. Thanks, everybody. Have a good day. Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.
Operator: Good morning, and welcome to the Tristel plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Matt Sassone, CEO. Good morning, sir. Matthew Sassone: Good morning, and thank you to everyone joining us online. This is Tristel plc's preliminary results presentation. And I'm delighted to say that I'm joined by our new CFO, Anna Wasyl. And what I'll quickly do is ask Anna to introduce herself and to say a few words on the first impressions of the company. Anna Wasyl: Thank you, Matt. Yes, I just completed my 6 weeks at Tristel. 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 CMR Surgical, where I held positions of both CFO and Chief Commercial Officer for some time. And yes, I'm really excited to join Tristel. I think it's a really critical time because of our increased traction in the U.S. and all the opportunities that the U.S. market is giving us. I'm the type of CFO, who is quite interested in commercial models, in looking at different market entry strategies. So I'm really keen to support Matt in that growth journey. Matthew Sassone: Excellent. Wonderful. Well, let's crack on with the presentation. I appreciate the vast majority of you online are very aware about the Tristel story, but hopefully, we have 1 or 2 new people. We are a global infection prevention company, focused on sort of like addressing the transmission of microbes between people, objects, et cetera. 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 Tristel 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. It was another year of double-digit revenue growth. It was 11%. And on a constant currency basis, it was 12.4% to GBP 46.5 million. Gross margins ticked up a little bit to 81%, which contributed to adjusted PBT reaching GBP 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 dividend will be 14.2p 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 on to the slide. 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 U.S., Tristel OPH, which is the first-ever high-level disinfectant dedicated to the use of ophthalmology devices. We brought in some of our manufacturing, which 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 the U.S. and the focus on the U.S. So we got updated. We're in the updated guidelines, and that was a fantastic achievement and just shows the impact we're making. Normally, getting written into sort of by national or local guidelines can take many years. We were able to achieve this in the first year of commercial launch. We have published a study with Mayo Clinic, 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 a later slide, but I also want to take the time now just to mention in a bit more detail is, we speak about a strategic lever 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 is a study from Italy with regards to HPV that demonstrated that we think about ensuring there's not a transmission between patients, but this study really highlighted the need to really worry about the health care 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, really highlighting the fact that microbes like HPV, which can be a leading cause of ovarian cancer, is also a danger to health care 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 health care segment at the moment. So moving forward, let's talk a bit more about the market opportunity. You see 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 GBP 1 billion and GBP 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, today, our sales are GBP 40 million, but we believe that near-term serviceable obtainable market is closer to GBP 400 million. So we're only 10% done yet on the job ahead of us. How do we sort of 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 offer in or all the different specialties that we work in, but just a few of note. So ultrasound 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 mucus membrane and they need to be high-level disinfected. We estimate globally there's 200 million procedures annually, of which we know from our data, we are 15 million of those are using our chemistry. And the ultrasound opportunity represents 22% -- sorry, GBP 22 million of our revenue. So we can calculate or estimate that we currently have an 8% market share in that specialty. ENT is another specialty that we've been tremendously successful over the years. These are single and non-lumened flexible endoscopes. The number of procedures is far less. It's only 24 million. And with us sort of 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, 2 million of those procedures were carried out with Tristel 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 circa 1% market share. All we're trying to demonstrate here on this slide is the growth runway we have ahead of ourselves and the opportunities are large and multiple. The market trends are also in our favor. 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 health care 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. 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 health care 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 as I mentioned right at the beginning with our operational highlights, 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 sort of a headwind to mention when it comes to the global market trends. We are coming off the back of an explosion in spend within infection prevention caused by the COVID outbreak. We're now entering a cycle where hospitals recognize that they need to tighten the purse strings a little when it comes to the spend on infection prevention. So there's a lot more focus on sort of the costs in this area. So those sort of heydays post-COVID, I think we're now coming back to sort of more normal, but the market is obviously significantly larger than it was pre-COVID. So moving on to our products, and I'll just whip 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 health care. 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 so far really Tristel has done because chlorine dioxide is not a unique chemistry. But our power of 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 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 focused on the health care market. But at the core of it, 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 wide spread across the health care setting, which really plays to 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, why Tristel? Well, 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 infection prevention today, and we're sort of uniquely positioned as a 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. Anna Wasyl: 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 region, 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 Americas, we have registered high growth that come from low numbers, but the trend is what we want to see. And U.K. 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 decontamination product, so the Tristel portfolio, that grew healthy 11%. The Cache Surface Disinfection grew by 9%, and the success that Cache had in the U.K. 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 high user -- 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 of our 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 Tristel 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 the reduced downtime from 7 minutes for pure disinfection step to 2 minutes for the full decontamination cycle. And I think here, again, what 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 stand, probe holders, et cetera. One more progress area that I would like to comment on that I was very happy to inherit joining Tristel is the experience of in-sourcing of our Trio wipes manufacturing. As you can see here, last year, we produced 21 million wipes. 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 GBP 750,000 and creation of 5 new positions for operators of the line. But we do see a huge cost saving. So on an annual basis, we expect about GBP 800,000 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. Matthew Sassone: Thank you, Anna. Yes, so the future opportunities and how we're going to drive success moving forward. Well, this remains the 5 strategic levers 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 price. 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 product and the ultrasound. 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 16 million procedures, a slightly lower price point than the ultrasound, but this is where we are going direct and via distributors ourselves. So on the ultrasound, 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 the mid -- well, 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 ultrasound, we are making good progress and continued success. You can see with the chart a sort of quarter-by-quarter success, but also a really strong Q1 of this financial year, FY '26. And in fact, Q1 of this year, the sales were greater than the first 7 months of last year. So very encouraging. For those of you that were able to come to the Capital Markets Day, were able to watch the video online, you would have seen the U.S. customer, Tiffany Woolwine, talk about the experience. And 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 there's always that lag between that coming through and actually seeing on sales and making an impact on our business. So 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 it's great to see that we're 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've 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, we're pushing, in many cases, against a bit of an open door. We still got to go through that change in the clinical workflow, the education of staff, but it's incredibly pleasing to see that 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 sort of 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 3 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 onboard soon. As well as all of this commercial activity, the team has been working with a few sites to get a multicenter 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, working with all the ophthalmology equipment manufacturers. 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 early days on ophthalmology, but incredibly encouraging and are off to a very strong start. 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 are best suited in order to sort of get success. We are a company that's about delivering high value, but also a high price. So the way that we view the surface disinfection market is very much around sort of 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 it still represents a very significant large market opportunity for us, and one where we feel that our chemistry is well suited to deliver and address the needs of the customers there. And 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 key opinion leaders, driving the national guidelines, being sort of in published papers, and that's why so much activity. And as I mentioned, we're so proud of the studies that are coming out of Italy with regards to HPV, the studies we've done on biofilm and others, which we have mentioned, which are all driving us forward that way. And we really have a focus throughout the business on expanding our clinical reach and our influence. Another way we're going to be driving growth is through innovation. And we sort of announced the launch of a new product post period end, which is our VISICLEAN product. I'm going to try saying quite brave now. I'm going to try and demonstrate the products live on -- during the call. So hopefully, you can see me. I don't know whether the organizer can maybe reduce the slides, so I can just go big, so you can see me a little bit better than on the screen. I see if they're paying attention, that would be interesting, there you go. So what I have here is, I have an ultrasound probe that the user be and just I've got the combination pack, which includes everything that the user would need to perform a high-level decontamination. 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. I'm doing sort of like an illustration. So I just put 2 squirts of our VISICLEAN product. So what is this product? This is a foam, a cleaning foam that we put into a die, which enables the user to sort of 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 die also works with the chlorine dioxide. So it provides a validation of the fact that it's high-level disinfected. 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, the die is clearly there. What I'm going to do now is just take our Tristel Duo ULT product. So this is our chlorine dioxide. I just going to put 2 squirts of the foam, 2 aliquots of the foam into the actual wipe itself, trying to see if I can demonstrate, there you go, so it's in the wipe. 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 nooks 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 demonstrate that not only 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 clear. And so what that's demonstrating is not that the wipe has just taken off the die from the actual probe, but actually it's the chlorine dioxide that has worked on the actual die and that reaction is taking place. And therefore, you can see confidence that you 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 sort of 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 are 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 upsold 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 bring to the market, which just completely falls into what Tristel is all about. And then finally, our final sort of strategic lever that we're looking to invest more in and recognize it's important and is a platform that we want to grow from is our digital leadership. Today, we go to market with our 3 key products, which is our train, track and trace offering. And this is all part of our sort of augmented product that we bring to the customer. And we 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 -- well, 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 sort of 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 sort of our IT solutions to date and some of the 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 we've entered the sort of a period where we finished our sort of 3-year financial targets, and we're looking to set new targets as we move forward. During sort of the last decade or so, we've had tremendously strong growth. 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 on growing at that rate. But what is realistic for us? Well, we certainly believe double-digit growth is attainable and achievable in the next 5-year period. And if we were to grow at that kind of 10% CAGR, what would that mean? Where will we be as a company? Well, we'd be somewhere mid GBP 70 million of revenues. Well, as an organization, that'd be great, but we want to stretch ourselves. We want to drive for more and aspire to a greater target. And let's be honest, GBP 100 million is a great threshold for a business like ours to breakthrough. So we're setting that as a goal for ourselves internally and say 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 between sort of the mid-70s to GBP 100 million. So how are we going to achieve it? Well, we believe that we can close that gap with more aggressive growth and more aggressive growth in our geographic expansion and especially from the U.S. with 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 health care. And also, we will be open to some inorganic opportunities should they arise. But those inorganic opportunities must be complementary to what Tristel is all about. And what do I mean? Well, I mean Tristel 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 had a very novel that could really benefit from our commercial footprint and our reach, then that will be something that we'll be looking to execute upon and use our cash reserves that we have today in order to do that. But that's saying 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? Anna Wasyl: Sure. I can walk you through the illustration of our go-to-market model and how it contributes to Tristel's financials. So these sales projections are based on Tristel reaching 4% market share of ULT and 8% of OPH by 2030. And the objective of this slide to show you how these 2 different go-to-market strategies influence Tristel. 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 Tristel 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 Tristel's revenue and then also there is a bit of cost associated to that and then it flows through to 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 U.S. market to Tristel's financials. I'll pass back to you, Matt. Matthew Sassone: Thank you. So as I said, we've come to the end of the sort of the 3-year cycle of our financial goals. That was a time where we committed to 10% to 15% revenue growth. During that 3-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 PBT. 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 time frame, maintaining that sort of EBITDA margin of 25% annually and then a 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 development 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 5 strategic levers that we're looking to execute upon and deliver that growth. We remain confident in our opportunities in the U.S. and 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. Operator: [Operator Instructions] And Leanna, if I could just hand over to you to read out the questions, and I'll pick up from you at the end. Unknown Attendee: Thanks, Lily. We'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? Matthew Sassone: Yes, very much so. Unknown Attendee: Can you confirm the royalty rate on the high-level disinfection sales in the U.S. for the Parker relationship? Matthew Sassone: So the relationship we have with Parker Labs in the U.S. is twofold. 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 ultrasound. 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 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 2 products, the ultrasound product, Tristel 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 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 Tristel ULT, the ultrasound product. For Tristel OPH, this is where Parker are manufacturing it. We pay them sort of 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 distributor partner as the customer services and our logistics house and achieving those revenues that we're making there or we're selling to them as a distributor and then they're selling it to the customer. So you can see that we are 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. Unknown Attendee: Fantastic. Accepting the scale of the opportunity ahead, do you have the right capital structure, investments, dividend policies and the working capital capacity to pursue the growth at sufficient pace? Matthew Sassone: Yes, I think we do. I think we are sort of getting the right balance. We want to invest more internally and be more sort of 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. Unknown Attendee: Fantastic. So maybe turning to the U.S. Previous presentations have indicated an ultrasound market opportunity in the U.S. of approximately 50 million ultrasound procedures each year. Does that figure include surface ultrasound procedures as well as intracavity? Matthew Sassone: So the simple answer to that is no. So we've publicly stated that we think that in the U.S., 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 products. So it's 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 to people joining the call, the skin surface probes would be the probes that you would see used on sort of a pregnant lady's belly to visualize the child there. And what we're seeing is a real expansion in the use of those probes for other means, like clinical procedures. And some of these clinical procedures, if you think of placing like lines, these can be sort of central lines or even more peripheral, then you're piercing the skin, that probe is a much higher risk of becoming into contact with body fluids and therefore, must be cleaned sort of like pre and post those procedures being done. So that is not included in our sort of market sizing at the moment. We definitely see that as sort of like future growth. Why right now is it sort of like front of mind and say that we include in our numbers? Well, simply because the need for high-level decontamination on the invasive probes is well established. The guidelines are there. It's all being written there and is very established. The clinical guidelines are catching up with it is the expansion of ultrasound use with the skin surface probes. But as those guidelines catch up, we feel that we are really well paced to benefit from that. And why do I say that? Well, these probes are 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 sort of like a skin surface probe that's very portable, 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 Tristel Duo and Trio products are all about, being able to perform high-level decontamination at the point of care. And therefore, we think that, that is a real sort of avenue or runway for future growth as the market recognizes that these point-of-care ultrasound probes need to be high level disinfected. Unknown Attendee: Just a clarity, would you mind defining hospital systems? Are they individual hospitals or hospital groups within multiple hospitals? Matthew Sassone: Yes. We do use the word quite interchangeably, but hospital systems tend to refer to a network of different hospitals. In the U.K., you can think of these as trusts where you've got your individual sites. In the U.S., they refer to them as systems. Sometimes these systems can be 3 or 4 hospitals, and sometimes the systems can become hundreds of hospitals together. So some of the largest health care systems in the U.S. are a couple of hundred hospitals. I suppose for clarity, I should say that in the U.S. off the top of my head, we are currently actively engaged with some 362 hospital sites. But obviously, that's across multiple different systems. Unknown Attendee: Do your marketing and distribution arrangements with Parker cover all related products, specifically Tristel VISICLEAN? Matthew Sassone: So basically, we would be saying any products which are focused on the ultrasound segment, where we would be willing to work with Parker so they can commercialize those for us. Unknown Attendee: And with regards to the U.S., are you able to split between your initial orders and repeat customers? Matthew Sassone: Yes. We have a very good relationship with Parker, and we work very closely with them. So 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. Tristel and Parker work incredibly closely together. Our teams are in communication on a daily basis, and Parker respect us enough to really provide us with a lot of information, and we have a very good dialogue. So we 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 1 or 2 departments, and we're building more traction. So as we look to grow the ultrasound business with Parker, we know that they're sort of 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. Unknown Attendee: With regards to competition, kind of what 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? Matthew Sassone: So we've built this market. And 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 because it's an area that they can see 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 coming in. So these typically tend to be low-level disinfection companies that like 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 sort of basically put them back in the right camp and not come into our market. And then you have those other products which have been regulatory approved for high-level disinfection. And they're typically the two products -- two groups of companies really, they are the automated. And so within that, you have Nanosonics, which is the vaporized hydrogen peroxide. 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, it sounds 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. So we see them as a threat. They're quite noisy in the market. But in reality, we see that sort of like our customers are very loyal towards us. And those that have temporarily shifted to UVC, their experience hasn't been what they thought it would be. Unknown Attendee: Around the world, how about your plans aiming for Japan? Matthew Sassone: 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 health care 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 sort of go in and enjoy some good incremental growth in the future. So progress is being made, but we haven't commercially launched the product yet. Unknown Attendee: Getting a culture right for building global transformative businesses is generally poorly understood in the U.K. How does Tristel deal with its culture? Matthew Sassone: I'd say, first of all, I've been with the business for sort of 12 months now, just over 12 months. And I really have been incredibly energized and proud of what I've seen across the globe and from all of the team. We have sort of a deep pool of very talented people, very focused on sort of 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 business is the highest rate it's 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 right balance, recognizing sort of the different cultures around the globe. But I feel from the feedback we received, we're on the right path and we're doing the right things. Unknown Attendee: Finally given time, could you explain where inorganic opportunities would come from? Matthew Sassone: Yes. I'd try to sort of like -- I knew this is going to bring up people's attention. I try to sort of explain it during on one of the slide. What we mean there is, as we try to break through and achieve GBP 100 million sort of like aspirational goal, we always have our ears to the ground 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 there must be around being able to utilize our initial existing, sorry, commercial network. They must be niche, novel, highly differentiated products where the customer sees value because it's solving currently unmet needs or addressing problems that can't be addressed with solutions today and 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 sort of spending a lot of time and energy on. We're focused on driving the results of the business with what we've got with sort of our current product portfolio. But should one come along, we're not going to rule out. But what I can say to investors is that, 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 reserve we've got, and we feel that any such of these acquisitions could be executed upon with that cash that we have in hand right now. Operator: 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 Investor Meet 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? Matthew Sassone: Yes. So thank you so much for attending today. And what I'd just like to say in closing is, 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 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 so much, and I wish you a great rest of your week. Operator: Matt, 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 is going to take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of Tristel plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.
Operator: Good morning, and welcome to the Tristel plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Matt Sassone, CEO. Good morning, sir. Matthew Sassone: Good morning, and thank you to everyone joining us online. This is Tristel plc's preliminary results presentation. And I'm delighted to say that I'm joined by our new CFO, Anna Wasyl. And what I'll quickly do is ask Anna to introduce herself and to say a few words on the first impressions of the company. Anna Wasyl: Thank you, Matt. Yes, I just completed my 6 weeks at Tristel. 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 CMR Surgical, where I held positions of both CFO and Chief Commercial Officer for some time. And yes, I'm really excited to join Tristel. I think it's a really critical time because of our increased traction in the U.S. and all the opportunities that the U.S. market is giving us. I'm the type of CFO, who is quite interested in commercial models, in looking at different market entry strategies. So I'm really keen to support Matt in that growth journey. Matthew Sassone: Excellent. Wonderful. Well, let's crack on with the presentation. I appreciate the vast majority of you online are very aware about the Tristel story, but hopefully, we have 1 or 2 new people. We are a global infection prevention company, focused on sort of like addressing the transmission of microbes between people, objects, et cetera. 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 Tristel 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. It was another year of double-digit revenue growth. It was 11%. And on a constant currency basis, it was 12.4% to GBP 46.5 million. Gross margins ticked up a little bit to 81%, which contributed to adjusted PBT reaching GBP 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 dividend will be 14.2p 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 on to the slide. 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 U.S., Tristel OPH, which is the first-ever high-level disinfectant dedicated to the use of ophthalmology devices. We brought in some of our manufacturing, which 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 the U.S. and the focus on the U.S. So we got updated. We're in the updated guidelines, and that was a fantastic achievement and just shows the impact we're making. Normally, getting written into sort of by national or local guidelines can take many years. We were able to achieve this in the first year of commercial launch. We have published a study with Mayo Clinic, 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 a later slide, but I also want to take the time now just to mention in a bit more detail is, we speak about a strategic lever 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 is a study from Italy with regards to HPV that demonstrated that we think about ensuring there's not a transmission between patients, but this study really highlighted the need to really worry about the health care 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, really highlighting the fact that microbes like HPV, which can be a leading cause of ovarian cancer, is also a danger to health care 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 health care segment at the moment. So moving forward, let's talk a bit more about the market opportunity. You see 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 GBP 1 billion and GBP 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, today, our sales are GBP 40 million, but we believe that near-term serviceable obtainable market is closer to GBP 400 million. So we're only 10% done yet on the job ahead of us. How do we sort of 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 offer in or all the different specialties that we work in, but just a few of note. So ultrasound 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 mucus membrane and they need to be high-level disinfected. We estimate globally there's 200 million procedures annually, of which we know from our data, we are 15 million of those are using our chemistry. And the ultrasound opportunity represents 22% -- sorry, GBP 22 million of our revenue. So we can calculate or estimate that we currently have an 8% market share in that specialty. ENT is another specialty that we've been tremendously successful over the years. These are single and non-lumened flexible endoscopes. The number of procedures is far less. It's only 24 million. And with us sort of 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, 2 million of those procedures were carried out with Tristel 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 circa 1% market share. All we're trying to demonstrate here on this slide is the growth runway we have ahead of ourselves and the opportunities are large and multiple. The market trends are also in our favor. 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 health care 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. 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 health care 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 as I mentioned right at the beginning with our operational highlights, 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 sort of a headwind to mention when it comes to the global market trends. We are coming off the back of an explosion in spend within infection prevention caused by the COVID outbreak. We're now entering a cycle where hospitals recognize that they need to tighten the purse strings a little when it comes to the spend on infection prevention. So there's a lot more focus on sort of the costs in this area. So those sort of heydays post-COVID, I think we're now coming back to sort of more normal, but the market is obviously significantly larger than it was pre-COVID. So moving on to our products, and I'll just whip 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 health care. 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 so far really Tristel has done because chlorine dioxide is not a unique chemistry. But our power of 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 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 focused on the health care market. But at the core of it, 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 wide spread across the health care setting, which really plays to 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, why Tristel? Well, 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 infection prevention today, and we're sort of uniquely positioned as a 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. Anna Wasyl: 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 region, 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 Americas, we have registered high growth that come from low numbers, but the trend is what we want to see. And U.K. 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 decontamination product, so the Tristel portfolio, that grew healthy 11%. The Cache Surface Disinfection grew by 9%, and the success that Cache had in the U.K. 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 high user -- 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 of our 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 Tristel 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 the reduced downtime from 7 minutes for pure disinfection step to 2 minutes for the full decontamination cycle. And I think here, again, what 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 stand, probe holders, et cetera. One more progress area that I would like to comment on that I was very happy to inherit joining Tristel is the experience of in-sourcing of our Trio wipes manufacturing. As you can see here, last year, we produced 21 million wipes. 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 GBP 750,000 and creation of 5 new positions for operators of the line. But we do see a huge cost saving. So on an annual basis, we expect about GBP 800,000 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. Matthew Sassone: Thank you, Anna. Yes, so the future opportunities and how we're going to drive success moving forward. Well, this remains the 5 strategic levers 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 price. 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 product and the ultrasound. 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 16 million procedures, a slightly lower price point than the ultrasound, but this is where we are going direct and via distributors ourselves. So on the ultrasound, 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 the mid -- well, 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 ultrasound, we are making good progress and continued success. You can see with the chart a sort of quarter-by-quarter success, but also a really strong Q1 of this financial year, FY '26. And in fact, Q1 of this year, the sales were greater than the first 7 months of last year. So very encouraging. For those of you that were able to come to the Capital Markets Day, were able to watch the video online, you would have seen the U.S. customer, Tiffany Woolwine, talk about the experience. And 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 there's always that lag between that coming through and actually seeing on sales and making an impact on our business. So 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 it's great to see that we're 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've 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, we're pushing, in many cases, against a bit of an open door. We still got to go through that change in the clinical workflow, the education of staff, but it's incredibly pleasing to see that 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 sort of 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 3 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 onboard soon. As well as all of this commercial activity, the team has been working with a few sites to get a multicenter 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, working with all the ophthalmology equipment manufacturers. 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 early days on ophthalmology, but incredibly encouraging and are off to a very strong start. 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 are best suited in order to sort of get success. We are a company that's about delivering high value, but also a high price. So the way that we view the surface disinfection market is very much around sort of 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 it still represents a very significant large market opportunity for us, and one where we feel that our chemistry is well suited to deliver and address the needs of the customers there. And 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 key opinion leaders, driving the national guidelines, being sort of in published papers, and that's why so much activity. And as I mentioned, we're so proud of the studies that are coming out of Italy with regards to HPV, the studies we've done on biofilm and others, which we have mentioned, which are all driving us forward that way. And we really have a focus throughout the business on expanding our clinical reach and our influence. Another way we're going to be driving growth is through innovation. And we sort of announced the launch of a new product post period end, which is our VISICLEAN product. I'm going to try saying quite brave now. I'm going to try and demonstrate the products live on -- during the call. So hopefully, you can see me. I don't know whether the organizer can maybe reduce the slides, so I can just go big, so you can see me a little bit better than on the screen. I see if they're paying attention, that would be interesting, there you go. So what I have here is, I have an ultrasound probe that the user be and just I've got the combination pack, which includes everything that the user would need to perform a high-level decontamination. 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. I'm doing sort of like an illustration. So I just put 2 squirts of our VISICLEAN product. So what is this product? This is a foam, a cleaning foam that we put into a die, which enables the user to sort of 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 die also works with the chlorine dioxide. So it provides a validation of the fact that it's high-level disinfected. 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, the die is clearly there. What I'm going to do now is just take our Tristel Duo ULT product. So this is our chlorine dioxide. I just going to put 2 squirts of the foam, 2 aliquots of the foam into the actual wipe itself, trying to see if I can demonstrate, there you go, so it's in the wipe. 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 nooks 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 demonstrate that not only 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 clear. And so what that's demonstrating is not that the wipe has just taken off the die from the actual probe, but actually it's the chlorine dioxide that has worked on the actual die and that reaction is taking place. And therefore, you can see confidence that you 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 sort of 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 are 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 upsold 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 bring to the market, which just completely falls into what Tristel is all about. And then finally, our final sort of strategic lever that we're looking to invest more in and recognize it's important and is a platform that we want to grow from is our digital leadership. Today, we go to market with our 3 key products, which is our train, track and trace offering. And this is all part of our sort of augmented product that we bring to the customer. And we 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 -- well, 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 sort of 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 sort of our IT solutions to date and some of the 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 we've entered the sort of a period where we finished our sort of 3-year financial targets, and we're looking to set new targets as we move forward. During sort of the last decade or so, we've had tremendously strong growth. 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 on growing at that rate. But what is realistic for us? Well, we certainly believe double-digit growth is attainable and achievable in the next 5-year period. And if we were to grow at that kind of 10% CAGR, what would that mean? Where will we be as a company? Well, we'd be somewhere mid GBP 70 million of revenues. Well, as an organization, that'd be great, but we want to stretch ourselves. We want to drive for more and aspire to a greater target. And let's be honest, GBP 100 million is a great threshold for a business like ours to breakthrough. So we're setting that as a goal for ourselves internally and say 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 between sort of the mid-70s to GBP 100 million. So how are we going to achieve it? Well, we believe that we can close that gap with more aggressive growth and more aggressive growth in our geographic expansion and especially from the U.S. with 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 health care. And also, we will be open to some inorganic opportunities should they arise. But those inorganic opportunities must be complementary to what Tristel is all about. And what do I mean? Well, I mean Tristel 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 had a very novel that could really benefit from our commercial footprint and our reach, then that will be something that we'll be looking to execute upon and use our cash reserves that we have today in order to do that. But that's saying 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? Anna Wasyl: Sure. I can walk you through the illustration of our go-to-market model and how it contributes to Tristel's financials. So these sales projections are based on Tristel reaching 4% market share of ULT and 8% of OPH by 2030. And the objective of this slide to show you how these 2 different go-to-market strategies influence Tristel. 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 Tristel 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 Tristel's revenue and then also there is a bit of cost associated to that and then it flows through to 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 U.S. market to Tristel's financials. I'll pass back to you, Matt. Matthew Sassone: Thank you. So as I said, we've come to the end of the sort of the 3-year cycle of our financial goals. That was a time where we committed to 10% to 15% revenue growth. During that 3-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 PBT. 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 time frame, maintaining that sort of EBITDA margin of 25% annually and then a 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 development 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 5 strategic levers that we're looking to execute upon and deliver that growth. We remain confident in our opportunities in the U.S. and 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. Operator: [Operator Instructions] And Leanna, if I could just hand over to you to read out the questions, and I'll pick up from you at the end. Unknown Attendee: Thanks, Lily. We'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? Matthew Sassone: Yes, very much so. Unknown Attendee: Can you confirm the royalty rate on the high-level disinfection sales in the U.S. for the Parker relationship? Matthew Sassone: So the relationship we have with Parker Labs in the U.S. is twofold. 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 ultrasound. 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 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 2 products, the ultrasound product, Tristel 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 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 Tristel ULT, the ultrasound product. For Tristel OPH, this is where Parker are manufacturing it. We pay them sort of 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 distributor partner as the customer services and our logistics house and achieving those revenues that we're making there or we're selling to them as a distributor and then they're selling it to the customer. So you can see that we are 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. Unknown Attendee: Fantastic. Accepting the scale of the opportunity ahead, do you have the right capital structure, investments, dividend policies and the working capital capacity to pursue the growth at sufficient pace? Matthew Sassone: Yes, I think we do. I think we are sort of getting the right balance. We want to invest more internally and be more sort of 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. Unknown Attendee: Fantastic. So maybe turning to the U.S. Previous presentations have indicated an ultrasound market opportunity in the U.S. of approximately 50 million ultrasound procedures each year. Does that figure include surface ultrasound procedures as well as intracavity? Matthew Sassone: So the simple answer to that is no. So we've publicly stated that we think that in the U.S., 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 products. So it's 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 to people joining the call, the skin surface probes would be the probes that you would see used on sort of a pregnant lady's belly to visualize the child there. And what we're seeing is a real expansion in the use of those probes for other means, like clinical procedures. And some of these clinical procedures, if you think of placing like lines, these can be sort of central lines or even more peripheral, then you're piercing the skin, that probe is a much higher risk of becoming into contact with body fluids and therefore, must be cleaned sort of like pre and post those procedures being done. So that is not included in our sort of market sizing at the moment. We definitely see that as sort of like future growth. Why right now is it sort of like front of mind and say that we include in our numbers? Well, simply because the need for high-level decontamination on the invasive probes is well established. The guidelines are there. It's all being written there and is very established. The clinical guidelines are catching up with it is the expansion of ultrasound use with the skin surface probes. But as those guidelines catch up, we feel that we are really well paced to benefit from that. And why do I say that? Well, these probes are 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 sort of like a skin surface probe that's very portable, 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 Tristel Duo and Trio products are all about, being able to perform high-level decontamination at the point of care. And therefore, we think that, that is a real sort of avenue or runway for future growth as the market recognizes that these point-of-care ultrasound probes need to be high level disinfected. Unknown Attendee: Just a clarity, would you mind defining hospital systems? Are they individual hospitals or hospital groups within multiple hospitals? Matthew Sassone: Yes. We do use the word quite interchangeably, but hospital systems tend to refer to a network of different hospitals. In the U.K., you can think of these as trusts where you've got your individual sites. In the U.S., they refer to them as systems. Sometimes these systems can be 3 or 4 hospitals, and sometimes the systems can become hundreds of hospitals together. So some of the largest health care systems in the U.S. are a couple of hundred hospitals. I suppose for clarity, I should say that in the U.S. off the top of my head, we are currently actively engaged with some 362 hospital sites. But obviously, that's across multiple different systems. Unknown Attendee: Do your marketing and distribution arrangements with Parker cover all related products, specifically Tristel VISICLEAN? Matthew Sassone: So basically, we would be saying any products which are focused on the ultrasound segment, where we would be willing to work with Parker so they can commercialize those for us. Unknown Attendee: And with regards to the U.S., are you able to split between your initial orders and repeat customers? Matthew Sassone: Yes. We have a very good relationship with Parker, and we work very closely with them. So 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. Tristel and Parker work incredibly closely together. Our teams are in communication on a daily basis, and Parker respect us enough to really provide us with a lot of information, and we have a very good dialogue. So we 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 1 or 2 departments, and we're building more traction. So as we look to grow the ultrasound business with Parker, we know that they're sort of 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. Unknown Attendee: With regards to competition, kind of what 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? Matthew Sassone: So we've built this market. And 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 because it's an area that they can see 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 coming in. So these typically tend to be low-level disinfection companies that like 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 sort of basically put them back in the right camp and not come into our market. And then you have those other products which have been regulatory approved for high-level disinfection. And they're typically the two products -- two groups of companies really, they are the automated. And so within that, you have Nanosonics, which is the vaporized hydrogen peroxide. 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, it sounds 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. So we see them as a threat. They're quite noisy in the market. But in reality, we see that sort of like our customers are very loyal towards us. And those that have temporarily shifted to UVC, their experience hasn't been what they thought it would be. Unknown Attendee: Around the world, how about your plans aiming for Japan? Matthew Sassone: 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 health care 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 sort of go in and enjoy some good incremental growth in the future. So progress is being made, but we haven't commercially launched the product yet. Unknown Attendee: Getting a culture right for building global transformative businesses is generally poorly understood in the U.K. How does Tristel deal with its culture? Matthew Sassone: I'd say, first of all, I've been with the business for sort of 12 months now, just over 12 months. And I really have been incredibly energized and proud of what I've seen across the globe and from all of the team. We have sort of a deep pool of very talented people, very focused on sort of 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 business is the highest rate it's 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 right balance, recognizing sort of the different cultures around the globe. But I feel from the feedback we received, we're on the right path and we're doing the right things. Unknown Attendee: Finally given time, could you explain where inorganic opportunities would come from? Matthew Sassone: Yes. I'd try to sort of like -- I knew this is going to bring up people's attention. I try to sort of explain it during on one of the slide. What we mean there is, as we try to break through and achieve GBP 100 million sort of like aspirational goal, we always have our ears to the ground 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 there must be around being able to utilize our initial existing, sorry, commercial network. They must be niche, novel, highly differentiated products where the customer sees value because it's solving currently unmet needs or addressing problems that can't be addressed with solutions today and 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 sort of spending a lot of time and energy on. We're focused on driving the results of the business with what we've got with sort of our current product portfolio. But should one come along, we're not going to rule out. But what I can say to investors is that, 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 reserve we've got, and we feel that any such of these acquisitions could be executed upon with that cash that we have in hand right now. Operator: 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 Investor Meet 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? Matthew Sassone: Yes. So thank you so much for attending today. And what I'd just like to say in closing is, 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 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 so much, and I wish you a great rest of your week. Operator: Matt, 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 is going to take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of Tristel plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.
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