Welcome to Ansell's Financial Year 2022 Results webcast for the half year ended 31st of December 2021. I'm Anita Chow, Head of Investor Relations at Ansell. Joining us on the webcast today, we have Neil Salmon, our Managing Director and Chief Executive Officer, and Zubair Javeed, our Chief Financial Officer. The materials we'll be discussing today have been lodged with the Australian Stock Exchange and can also be found on the investor relations section of our website. Before we start, I have 2 additional housekeeping points. Firstly, could you take a minute to read the disclaimer on slide 2? Secondly, if you would like to ask any questions, can you please type them in the Q&A box in the webcast. For those on the telephone line, please press star one. We will be addressing questions at the end of the session. Thank you. With that, I will now hand over to Neil Salmon to start the session. Thanks, Anita, and thanks to you all for your interest in Ansell today. I'll begin with a business update, then I'll hand over to Zubair, who will go into more detail on our financials. I'll conclude with a look ahead, and then we'll take your questions. At Ansell, everything we do can be summed up under our mission, Ansell Protects. We create customer value through the protection we provide to the wearers of our products. Ansell Protects begins with the safety of the workers involved in our manufacturing and administrative tasks. You've seen on this slide before stats we shared with you benchmarking our injury performance against global peers, and that continues to show a very good record. On this slide, I wanted to go a little deeper and show how we're particularly focused now on addressing unsafe conditions, unsafe acts before they lead to an injury occurrence. Our focus is on increasing the reporting of those acts and conditions and addressing them so that we eliminate the risk of injury rather than just focus on that lagging injury indicator. Good progress here, but further work to be done. Of course, continuing is a key focus of safety on COVID-19 protocols, and I'm very proud of our teams here. Consistently, we've been seen as setting the benchmark in the countries in which we operate, establishing new best practices which others have then also adopted. Now let me turn to the next stage and a further aspect of our Ansell Protects mission. Can you go ahead in the slides, Anita? Thank you. Ansell Protects is also about ensuring that the workers across our supply chain have their rights protected and work in appropriate and safe conditions. Ansell Protects also means protecting the environment and delivering protection solutions to our customers at no cost to the environment. Significant focus for us on these activities which shape our group under social compliance. As we announced earlier in the year, we've increased our resourcing in this area. We have established a new supplier management framework that we've developed with reference to international benchmarks. Having completed a risk assessment, we are now onboarding Wave 1 suppliers covering areas such as finished goods, cotton, and some of the agencies that we use. The increased resource in this area gives us increased insight into the activities of these suppliers and ensuring that they are acting in accordance with Ansell's code of conduct. We continue supplier auditing according to the SMETA framework that focuses on those indicators of forced labor. What I'm encouraged about is the increased rate of closeout of previously identified non-conformances. In our previous reporting, we said that the rate of closeout had been slowed by COVID restrictions on visiting sites, and that pace of closeout is now improving and supports my view that the industry overall is making important progress against these benchmarks. Internal awareness is key too. We've launched significant company-wide training under the headings of sustainability, including a focus on ensuring all Ansell employees understand that what gives rise to conditions of modern slavery, what the risks are, and how we mitigate them. Ensuring we know what's on the minds of our workers is fundamental. We've enhanced our global grievance policy, and we're complementing this with a series of approaches that make it easier for employees to get feedback to us confidentially without fear of retaliation, and also understanding that any issues they raise will be investigated, and will be addressed appropriately. With regards to the environment, we've talked before about our significant investment program, reducing Ansell's Scope 1 and Scope 2 emissions. I feel we're already moving into a leadership position in our industry on the steps we're taking to reduce Scope 1 and Scope 2. Over the last few months, we've spent quite a bit of work understanding our Scope 3. So those are the emissions outside of the Ansell footprint related to the raw materials we consume, and what happens to our products after we produce them and sell them to customers. As with many manufacturers and industries similar to ours, Scope 3 emissions are by far the majority of our carbon footprint. We now understand the causes of those emissions, and we're beginning to develop strategies for abatement across the major categories giving rise to these emissions. We make good progress against our zero waste to landfill objective. As a reminder, our goal by the end of calendar 2023 is that all our sites, all our manufacturing sites, will be certified with zero waste to landfill. In the recent period, two more sites achieved that certification, and by the end of this fiscal year, we expect two other sites will have achieved zero waste and will then enter the certification process. We continue to invest against our carbon and water efficiency initiatives. Solar panel installation is now complete in Portugal and Malaysia, other installations in the planning stage. Lastly, but perhaps most significantly, we're really stepping up our product stewardship activities, looking at innovating using more sustainable materials with lower carbon footprint than the products available in the market today. Also have a series of initiatives advancing our packaging pledge that by 2026, 100% of packaging material will be recyclable, reusable or compostable. Let's turn to the next page now, and I'll now focus more in on our business and financial performance. Before I dive into the year-on-year comparison, though, I wanted to start with a broader perspective and looking at our progress over two years. Yes, I'm about to describe to you the reasons why EBIT is lower on the previous half. Over 2 years, we see 23% EBIT and EPS growth and 34% sales growth. What's very important about that 2-year story is that it's come across our businesses, those that have had a pandemic benefit, those that haven't. That consistent and solid base of improvement over this time period is what gives me confidence that Ansell has come a long way over this time and has the foundation to continue growth into the future. Focusing now on the half-on-half comparison. Sales growth was 7.5%, all arose within the healthcare business. We saw higher demand in surgical and life science. Exam and single-use also reported higher revenue. In the case of that business though, it was on higher pricing. Pricing is down versus the peak levels at the end of last year, but still higher on average in the half versus the prior half. The industrial business saw growth in mechanical, but that was more than offset by lower sales in chemical. The decline in EBIT margins arose entirely in the healthcare business, and here the major contributor was softer demand. How does softer demand contribute to lower margins? Well, it's because we have had a greater proportion of our sales met from inventory purchased some months ago, when market prices were quite a bit higher than the selling prices we are achieving today. This is a temporary inventory lag effect, and we'll give you some more color on that in a moment. Now let me dive into the SBUs in a little more detail. Further comments on exam, first of all. As I mentioned, the revenue growth here is a function of price. Within volume, I want to split out internally manufactured from outsourced. You'll remember we've invested significantly behind our internally manufactured range with TouchNTuff technology oriented to industrial end markets, where chemical protection is key to the workers and where we think we have significant differentiation. Even in these very challenging market conditions, we saw healthy volume growth on these styles that's generating good returns on the capacity investments we've made. It was the outsourced products where we saw volumes decline. How has this arisen? We have to take you back to last year. End users and distributors were anxious about securing sufficient supply in still a very tight market. Around the middle of the calendar year, the beginning of our fiscal year, additional supply came onto the market. At the same time that consumption stepped down a little as COVID protocols were adjusted and the early waves of the pandemic passed. Quite suddenly, therefore, end users and distributors found themselves in an overstock position, at least as reported to us. With now an expectation that prices would fall from here, of course, it's in the interest of end users and distributors to work away that excess inventory, and they no longer are under such pressure to reorder. We predicted this curve, but the step down in demand has been quite a bit steeper than we predicted, and that's a significant factor to the outcome of the half versus our earlier expectation. Turning to other SBUs. Surgical continued strong performance, great track record over the two years that I'm showing here. Indeed, demand was not the limiting factor. Supply was the limiting factor for revenue growth in this business in the half. Well, I'll talk later to the disruption in manufacturing that has curtailed our growth. The demand environment remains very encouraging for this business. We see that in both emerging markets, where the Ansell premium brand is clearly of relevance and also share gains on higher margin synthetic products to mature markets. Of course, this is only possible because of our long-term capacity investment strategy with investments in Sri Lanka and Malaysia generating very strong returns. Life science also a business where demand exceeds currently our ability to supply. We also see customers becoming more demanding. They want higher value, they want greater protection, and they also want to work with partners who can give them confidence across the supply chain, and Ansell is in a very strong competitive position to be able to do that. We continue to increase capacity in this business as well, clean room packaging, sterilization, and also the production of the underlying gloves and clothing that are key to a life science environment. Our mechanical business recorded solid growth in the half, and improving over the last couple of years where they've seen challenging industrial end markets. That growth also supported by investments in differentiated platforms. I'm encouraged by where we're winning new business, particularly in verticals such as EV manufacturing, which of course we expect to be significant drivers of growth for the future. Mature markets overall were lower. The automotive sector, as you're well aware, was affected by chip shortages, and manufacturing overall was also affected by logistics delays. The growth came from emerging markets, particularly in Latin America, where we saw very strong market progress in this business. Chemical, the only business with sales lower year-over-year, like Exam single use, that's on lower demand in the products that were most in demand during the peak COVID period. Chemical does not have that same year-over-year pricing benefit that Exam has, as prices are already back to their pre-COVID levels. We do see encouraging consumer interest, particularly in our higher end chemical solutions, and I'll comment on one of those in a moment. Now let me give you a few more details of the work that we're doing that will be important to our future growth. Not many of the words on this page were material to our first half result, but I think all of them are material to our future growth. Back to Ansell Protects. What's key is that we're bringing new protection solutions against important unmet safety challenges in the workplace. Ergonomic injury, a particularly challenging cause of injury that there aren't good solutions for. Inteliforz brings sensors to the glove that allows health and safety operators to understand what are the motions that give risk to ergonomic injury, how can they anticipate and address them. We're in the customer pilot phase with many leading players in the space. These are complex solutions to get right. If we can, the financial benefit to our customers is very significant. The two middle products are about combining multiple protection in one solution. That makes the challenge of safety easier, and it also means in areas of the manufacturing environment where previously the requirement to protect was too cumbersome, wouldn't work for the workers, now we're bringing solutions that do work. For example, the R-840 there, it's a lightweight impact glove. It's a product that doesn't exist in the market today, and it allows an additional level of protection in areas where it's needed, but there just haven't been solutions before. Protection is also about reaching end users. In the middle column here, we're doing some pretty important work to extend our reach. At the bottom, I talk about emerging markets, a long-standing success of Ansell strategy, and I call out particular India. A couple of years ago, we weren't sure how big the market was for a premium branded player such as us. We've over-delivered consistently since that increased focus, and I'm now very confident that there is a premium brand position for us in India. As you've seen, we continue to invest behind that very large market. At the top of the page, I talk about extending our reach through online marketplaces. Pretty much every Ansell employee has a story about handing a pair of Ansell gloves to a contractor or a pair man doing work on our houses. The experience is always the same. "These are so much better than any I can get myself. Where do I buy them?" Well, now we're developing solutions to that answer by extending our presence on online marketplaces, but also facilitating our distributors with their own digital strategies. I believe this is a key area for future growth. Then to the right, and we've talked about this before, I won't go into details here, but we do believe that extending our manufacturing leadership on differentiated technology, but also productive scale lines, is key to our future and is of increased value to our customers, than it was in the past. Now let me talk a little bit more about the supply chain challenges that we have experienced over the last six months. A very dynamic, operating environment. Credit to our teams, they've been working incredibly hard for you, over these last six months and for our customers to ensure the best possible outcome in a very, very difficult and, surprising external environment. You'll be aware that at the beginning of this year, we talked about intermittent shutdowns that we were experiencing at our manufacturing facilities in Southeast Asia as countries responded to what at that time was the Delta wave of COVID-19. We managed to restore production at those facilities fairly soon after our FY 2021 results announcement. Our plans to catch up on that lost production were subsequently made more difficult by difficulty recruiting sufficient workers. Of course, availability of workers is also compounded by COVID-19 isolation requirements. We've experienced staffing shortages, mainly in Malaysia and Thailand, and that particularly constrains packaging, which is the highest labor activity in our manufacturing processes. Although we had hopes that logistic conditions would stabilize, in fact, we've seen continued extended delays resulting in shipping delays but also higher freight costs. In just the last two months of the half, we saw $20 million of sales that should have booked in the half, slip over into the second half because of these delays. How are conditions now as we begin the second half of our fiscal year? Well, as you're aware, the Omicron wave is still in its early stages across South and Southeast Asia. What we see governments and regions is adopting varied responses. In some cases, still pretty tough lockdown responses. In other cases, seeking to manage the hospitalization rates as opposed to manage the case counts. It continues to be hard to predict how different parts of our operating universe will react. You heard a couple of weeks ago when we early announced our results that one of our Malaysian facilities had been forced to close as we reported an increase in case rates. I'm pleased to say production has now recommenced. The site is operating well again, but further disruption to production clearly remains possible, as the Omicron wave has not yet worked its way through most of the countries in which we operate. Logistics delays continue. Lack of container availability remains a problem, and although spot freight rates are no longer rising, overall logistics I expect will continue to be a constraint on growth over the next six months. As I also announced a couple of weeks ago, the most recent announcement of a Withhold Release Order by the U.S. Customs and Border Protection will prevent one of our products from one of our top five suppliers being imported to the U.S. This is still relatively recent news. We are evaluating alternative options for our customers, but we do expect this to be a negative impact on sales in the second half, and we've considered that in our updated views on the half. Let me now give you some comments on performance by our different geographies. North America first. Good organic growth in North America, and in particular, we see success with our surgical business and life science, where we believe we have gained share. Very strong performance in Latin America, and this in particular is a result of us being agile and able to help customers work through what's a dynamic and complex regulatory environment. We believe our relevance to customers has increased as a result of our ability to help them with those challenges. The EMEIA region, perhaps the region most affected relative to the total business by those manufacturing conditions in mechanical, automotive slowdown and so forth, but still achieving respectable growth. A mixed picture in the Asia Pacific region. Strong results in India, as I mentioned, but in other parts, including China, sales were lower year- on- year against the prior year period, which saw important one-off sales to government agencies and other bodies in response to the pandemic. That's the overview I wanted to give you on business performance. Now let me hand over to Zubair Javeed, who will dive into some more detail on our financial performance. Thank you, Neil. Since we've already pre-announced results for this financial update, as promised, I'll try and parse out some of the factors considered as temporary, and then Neil will cover how we're thinking about the outlook for the second half and beyond. Now, for the avoidance of doubt, these temporary factors I will be calling out are our management estimates, and I hope they aid you in better understanding of underlying performance rather than them being relied on as IFRS measures. With that said, beginning with the sales line, we grew 7.5% on an organic basis, and the difference between that number and the reported growth number here of 7.6% is explained by the small acquisition we announced back in January 2021, and that was of the Primus brand and its related assets in the life science and surgical space. Foreign exchange, curiously, had very little impact on the top line in this half, and movement in our revenue currencies pretty much balanced each other out. Constant currency revenue growth was equivalent to the reported numbers. Now, however, in terms of the gross profit after distribution expenses line, the U.S. dollar did strengthen against our cost currencies, and that's namely the Malaysian ringgit and Thai baht. That, combined with a weakening euro, drove over $10 million year-over-year foreign exchange benefit. Now you can see more details behind that in slide 26 in the appendix to this release. Offsetting this foreign exchange favorability in the gross profit numbers were the factors I'm enumerating here on the right of the slide. We've already explained the largest driver of the 860 basis points GPADE compression was the drag of selling that high-costed single-use inventory, and I'll share what we consider temporary within that in the next slide when we review the HGBU results. At the same time, I think the government-mandated shutdowns of some of our factories, coupled with labor shortages and higher freight costs, added further softness to this GPADE result. Unfortunately, our joint venture, Careplus, wasn't immune to these same challenges. As you can see, that entity also printed a loss, of which our share was $2.7 million in the half. The final point, I'd say from a gross profit perspective, we wrote down nearly $7 million of inventory, and that was mainly driven by the slowdown of the sales volume, particularly in single use and chemical body protection. Now, clearly, with this type of GPADE performance, we've been tightly controlling discretionary expense, and that in combination with lower variable employee costs, we have been able to cushion some of the adverse impact at EBIT. Turning to the next slide, Anita, to the HGBU highlights. We remain here very pleased, as Neil said, with the continued momentum in the surgical and life science business units. Although single-use did have softer volumes, you've already heard pricing remained above pre-COVID levels, and also the prior comparable period. After normalizing for the effect of the Primus acquisition, the HGBU sees top line organic growth at just under 15% in the half. Now in terms of margins, of course, with the benefit of hindsight, the slow reaction in lowering our purchases of single-use products from outsourced suppliers as that demand started to decline faster than we anticipated, led to a higher proportion of inventory costs flushing through the COGS line in the half than otherwise would have been the case. The temporary impact from this, I'm estimating diluted margins by about AUD 20 million. I also call out here about AUD 5 million of adverse factory costs driven by the shutdowns we've mentioned earlier. Offsetting these items were lower SG&A costs, but that wasn't enough to prevent a depressed EBIT of just under AUD 64 million and a margin of 10.1%. Now, clearly our goal is to get these margins lifted back to what we're used to seeing in this business unit and with an enhanced mix of advanced protection products in single-use and a higher weighting towards surgical and life sciences. In terms of the industrial business unit, next slide please. Here, the narrative is quite a little bit simpler. Strong organic growth of just over 3% in mechanical, offset by negative 11% in chemical, is driving that overall decline of just under 3% for the IGBU on the top line compared to the prior period. Now, again, in terms of EBIT, I'm calling out AUD 5 million in impact from the factory shutdowns. On the favorable side, you can read here that we have lower SG&A expense, keeping overall EBIT margin points and dollars pretty flat to the prior comparable period. The next slide please, Anita. This is our customary review of raw material costs. I think through the height of the pandemic, clearly this slide on raw material costs became somewhat dislocated from the pass-through pricing dynamics. As the single-use space reverts to previous competitiveness, I think this slide becomes much more relevant again. In this regard, we are seeing natural rubber latex costs remain pretty stable, perhaps even trending downwards in the second half. Nitrile costs remain elevated, and premiums to quoted market prices are stubbornly persisting. The other point of note here is that like many companies around the world, we are seeing inflationary pressures, up to double digits in some instances against some of our key raw materials such as chemicals and packaging. Practice from the pandemic, we have well-versed pricing behaviors in place, which we're executing to offset as much as the headwinds as we can. Now, however, there is always a judgment call to be made with the frequency of these price increases, given the significant distraction this does cause both to our commercial teams from focusing on growth opportunities and also to our customers. Moving through to the cash flow slide. Operating cash flow dilution here you can see of AUD 22 million is driven by the lower earnings, the further working capital investment, and the timing of variable employee expenses. Now from a cash conversion perspective, if I normalize for the timing of those short-term incentives and the insurance costs, we paid in the half, we will get back to just under 60% of cash conversion, and that's clearly lower than our 90% + goal. Now despite the lower temporary cash generation, we remain confident in the outlook of the business and we therefore have not pulled back any CapEx investment plans. However, there is complexity in traveling in COVID times. Our engineering and operations teams therefore are somewhat delayed sometimes installing this equipment and therefore the cadence of this spend has not always been so predictable. Then as always, wrapping up with a quick look at the balance sheet on the next slide. Even against all that softer backdrop I've just been through, the key takeaway here is that we still have a very resilient balance sheet at Ansell, and with a net debt to EBITDA ratio of one, it gives us plenty of room for continued reinvestment into the business and clearly other capital deployment options. Of note for this half, also, we've recently upsized and extended our syndicated borrowing facility, and then finally, we have very healthy cash balances on hand and no significant upcoming debt maturities. I'll conclude the financial section there and hand back to Neil for the outlook and Q&A. Thank you, Zubair Javeed. Let's bring up the guidance page, Anita Chow. Let me start by summarizing the evolution of our view on the year since I last spoke to the market at the time of our AGM. Clearly, we have now lower profit expectations today than we did back in November. The first and important point to note is that with those initial lost production events, we had assumed that we would be able to recover that lost production with what I thought at that time was somewhat calmer waters with regards to the impact of COVID on our operating ability and also more stable logistics conditions. That assumption turned out to be over-optimistic. Instead, as I mentioned earlier, we saw worsening labor availability and similar or extending supply chain delays over the last couple of months of the half. That means that the upside that we were relying on to offset what we already saw at that time was risk within the exam single-use business we are now no longer depending on. In addition, the trading of the last two or three months in exam single-use has confirmed that the demand dip will be greater and more extended than we had previously assumed. We've already talked about the impact of that on H1 margins, and we've also had to lower our expectation for volume and price in the second half as well. We had those two recent events that I've already covered, which will affect cost and sales revenue in the second half. Taking those factors together, we arrived at our new guidance range as announced to you on the thirty-first of January, and which I'm maintaining today of 125-145 cents. Clearly, that requires a stronger second half than first half. What are we assuming that delivers that outcome? Well, sales growth in the second half versus the first, for both industrial businesses and for surgical and life science, where demand conditions are supportive of that. We do anticipate somewhat higher production output in the second half, although that pick up less than previously assumed. We almost always see stronger sales in the second half due to normal seasonal patterns in the business, and we expect that to be a feature of this year, too. For the exam single-use business, we expect continued decline in pricing, and so revenue should be lower in the second half than the first half. However, the benefit that we'll see come through and be more apparent in our cost of goods sold of the success we've had reducing our supplier costs should partly offset that. In addition, our ability to rotate that higher cost inventory will reduce the effect of selling higher cost inventory versus that seen in the half. Taking all those factors together for exam and single-use, we're targeting flat gross profit dollars even on a lower revenue base in the second half. There will be some impact from COVID-19 related manufacturing disruption in the half, given the news I've already announced of the shutdown for a few days at one of our Malaysian manufacturing facilities. Our best view at this stage is that it will be less than the AUD 10 million adverse cost impact seen in half one. Of course, in that case, if we were to see further major multiple days or weeks loss of manufacturing output across any of our manufacturing facilities, that would create downside risk to this guidance range. At this point, I don't see an elevated risk of that happening, as of today. Now, we wouldn't typically look ahead to fiscal 2023 at this point, but I do want to be transparent with you about what we see, particularly in the exam and single-use business. I need to caveat those comments by saying forecasting visibility remains limited, so I'm giving you my best view at this point, but it's a dynamic environment. Our current estimate is that exam and single-use prices will continue to decline really over the next 12 months period. Many commentators in the industry have suggested that they will ultimately reach their pre-COVID levels. That seems a good assumption to me, and our view is that for us, that will be some time into fiscal 2023. I want to remind you of this consequence that in a falling demand period and where we have normal or slightly higher than normal inventory levels, we'll continue to see this inventory lag effect, where the sales in any particular month are at the current market selling price, but the cost of goods sold are 3 months or perhaps 4 months earlier. At the point that we stabilize, there will be one final piece of that inventory lag effect. My estimate at this point into FY 2023 is around $10 million-$20 million unfavorability from that. That will go away then once we stabilize and pricing and costs are back in alignment. Of course, we plan to offset those effects. Single-use volume growth, continued encouraging results in our in-source manufactured sales, and we do expect the demand to return on the outsourced products once end user and distributor inventories normalize. We expect longer term margins in this business to benefit from that greater contribution of in-source manufacturing and our continued differentiation strategy across this business. Perhaps the most important bullet on this page is the last one on the bottom right. We do anticipate continued favorable demand conditions for the surgical and life science business, and I'm encouraged by the strategic growth initiatives and the success we're seeing within industrial. Of course there too, we need to show you growth in FY 2023 and beyond, and that's key to our value creation for you as our shareholders. That concludes our formal comments now, and I'd like to hand back to Anita to facilitate the Q&A session. Thank you, Neil. We will commence with some questions for those on the conference call, and then I'll switch over to the questions that have come through so far on the webcast. Firstly, Sean Laaman from Morgan Stanley, please go ahead. Thank you, Anita, and good morning. Good morning. Thank you, Neil. Neil, just to start off with exam and single use, you know, are you able to disclose whether you're making positive EBIT margin on those outsourced products or no? Yes. I think importantly, if you look at the selling price versus our purchase price, and if you bring those back into alignment, I'm pretty happy with that spread at this point. It's entirely this lag effect in this half anyway, that's depressed margins. Even with that, it still remains a profitable business, yeah. Great. Thank you, Neil. Just to clarify, so it seems that you've still got some excess inventory purchased at elevated cost and expect that to run through and normalize by the end of the first half fiscal 2023, if I got your last comments correct? Yes. Yes. Yes. Yes. Okay. As at that point, you expect potentially a rebound in margin in the second half of fiscal 2023, once you've worked your way through that? Correct. Great. Do you tease out, Neil, growth in the internally manufactured products? Were they within the 3%-5% range? Not giving you an exact number, but they were well ahead of that. Of course, that's very supportive to the capacity investments we've made there. Yes. Great. Thank you, Neil. That's all the questions I had. Thank you. Thanks, Sean. Thanks, Sean. Next up we have Dan Hurren from MST Marquee. Dan, please go ahead. Oh, good morning. Thanks, everyone. Obviously, operating conditions are quite tricky to predict at the moment, demonstrated by the big gap between the original guidance and the update from two weeks ago. I'm just wondering, how do we get confidence that we now have a better handle on operating conditions and the outlook, and we're not walking into a further downgrade? I guess, has anything changed in your visibility to give you more confidence that the numbers we have today are better than what we gave at the original guidance? I think we've certainly taken a greater risk factor into our view that we've given you now. For sure, the next course of the pandemic remains difficult to predict. We had not heard of the Omicron wave at the time that I updated you to the market in November. I don't want to portray myself as a pandemic expert and predict the future course of the pandemic. Today, there are encouraging signs, again, that conditions have stabilized, that we're not seeing them worsen further. It would be on beyond my ability to give you an accurate prediction of what will happen in, let's say, April or May with regards to the external operating environment. I think fundamental though is, you know, these are short and, you know, we are not seeing them affect fundamental demand for those key businesses that have growth prospects. That's encouraging, and that suggests that as we work through these, we will be able to get back to meeting that demand that exists in the market. Great. Thanks very much, Neil. Thanks. Next up we have David Low from J.P. Morgan. Hi, David. Thanks very much. Neil, if we could just start with the commentary on FY 2023 and the first half. That $10 million-$20 million impact, that's what you expect in the first half or is that what we're expecting over the 12 months to the end of the first half? Well, it's over the final period of pricing adjustments. It will be either first half or full year FY 2023. More likely first half. Yeah, my visibility to the exact date in which prices stabilizes is of course limited. No, no, sure. I mean, I understand it's difficult to forecast. I was just trying to understand what you're actually saying. Right. There will be an impact in the period we're in now, generally. Will that be equivalent to what was seen in the first half? Well, the second half will be lower than the first half because this feature of higher cost inventory is most pronounced in the half that we've just had, and that's the AUD 20 million. That's what we commented on. We expect that to be improved in the second half, but it's still to be a negative drag on margins versus the stable margin rate in this coming six months and into the first period of next year as well. Okay. Thank you for that. The other one is the Customs and Border Protection issue. I mean, you haven't quantified that at all. I mean, I understand that you're trying to source other gloves, et cetera, but how big a drag will that be? Yeah. The teams are still working hard to assess this. We expect to lose around a quarter of revenue from that supplier. That would be the best view. I'm not going to give you that number, unfortunately, because the precise revenue that we do with each supplier is confidential. We are working on alternative sourcing options, and we do have some available to customers. We also have a number of avenues available to us that are a result of our increased focus on both in-source manufacturing and through our Careplus JV that create alternative options for manufacturing those styles. There's likely to be a lag between when customers need additional products and when we can produce them at these new sources. We need to bridge that gap and tide customers through. This is always a challenge, but what I can say is we've been faced with similar challenges for different reasons throughout the course of the pandemic, and our teams have a good track record of finding solutions. That's the current focus here, as we work through the import restriction on this particular supplier. Okay, just the last one from me. I mean, the inventory write-down was hardly a shock, but can we talk a little bit about how much allowance has been made? I mean, I would have thought in this environment, the risk of having inventory carrying at an inappropriate value is pretty significant. Do you think there'll be more to come? Have you been conservative on that adjustment? Zubair Javeed, would you like to take that? David, we've taken a view of current market prices of the inventory that we're purchasing, and then with that view, we've projected into the second half the cadence of our sales, and of course, we've factored into the guidance what we believe is the further revaluation of that inventory towards market prices. That's already factored into the guidance. Then Neil points to this $10 million-$20 million, which is the residual piece that's left that perhaps won't turn in the second half of this fiscal and will move into fiscal 2023. That's how we're looking at it. It will be a lot less than the first half drag that we had. As Neil said, that 4 or 5-month lag we had coming into the first half was a lot slower than what we originally anticipated. We don't expect that same slowness in the second half. Okay, great. Thanks very much. Thanks, David Low. Next up we have Gretel Janu from Credit Suisse. Hi, Gretel. Thanks very much. Hi, Gretel. Good morning, all. Just going back to the inventory position, it's still very elevated versus pre-COVID levels. So I guess how much of this is higher supply costs that we've talked about quite a lot versus just holding greater volume on hand? Yeah, Gretel, it's a combination of both. We're holding higher cost, which has revalued down to about halfway, down the curve versus what it increased by. There is also increased volume that we have to work through, in the second half and beyond as well. It's a combination of both. Is the higher volume due to lower demand? Just trying to get a greater understanding as to- Yes. Why you're holding greater volume here? Yeah, we ended up And so- We couldn't predict the course of the pandemic, of course, on a 3 to 5-month lead time. We had to make a prediction. We made that prediction. Clearly demand slowed. You end up with higher inventory than what you would have otherwise planned for. In terms of the optimal inventory position going forward, are you aiming to get back towards those pre-COVID levels, or will it remain slightly elevated into the medium term? Yeah. Into the medium term, we would expect definitely to get back to pre-pandemic levels. Now, to give you a sense, we were turning inventory 2.7 turns in fiscal 2021. I would expect to at least as a minimum get back to that type of turn. We also are cognizant of wanting to keep decent safety stocks because this is a feature that we've explained to you before. At Ansell, we like to have high service levels with our customers. If that means carrying a little bit more safety stock, then we were willing to do that, so. I think 2.7 and above would be a good turn number for us to be thinking about. Okay. Makes sense. Thanks. Just in terms of the guidance, a big FX benefit in first half to EBIT. What is factored into the guidance for the second half from an FX perspective? In the first half, of course, as I said in my comments, we had very little impact on revenue, but substantial benefit in EBIT. My prediction, you will see this in the appendix, our assumptions on FX, my prediction in the second half is the opposite of the first half. In fact, I would imagine we would have, if rates in the second half come in line with our projections, I'd anticipate we'll have a larger revenue impact, smaller EBIT impact, but it's not gonna be so large, maybe a couple of cents of EPS. Of course, that's driven by predominantly the weaker euro and there's a weaker sterling that's gonna impact the revenue line. Of course, we offset this year-over-year with the foreign exchange benefit from our hedge book. At this stage of the year, we're kind of 80% covered on the hedge book. Great. That's all I had. Thanks very much. Thank you. Next up we have Saul Hadassin from Barrenjoey. Hi, good morning, guys. Hi. Neil, maybe first question for you. Just wondering about the longer term demand for exam single use. I think historically there's been some discussion that, you know, there's an expectation that demand will remain elevated, you know, above pre-pandemic levels. Can you just give us some sense of where you see that demand falling in FY 2023? Are you able to say it's still likely to be 5%, 10%, 20% above, you know, those volumes that were selling through in FY 2019? Yeah. Longer term, I do expect demand to stabilize at a higher level. This is an industry which has seen consistent growth over a long period of time. Even without a pandemic adjustment effect, just getting back to that volume CAGR, we'll see growth of around that level that you characterize. Yes, I do think that enhanced safety protocols will continue in many aspects of manufacturing facilities, and of course in the healthcare space as well. I think what's also important though is that the standards that customers expect of both their supply chain and also their product performance are increasing. That plays to our advantage because as you know, we tend to focus on the differentiated products here. The importance of our end-to-end supply chain is more important than ever to key customers. That's opening doors to markets that in the past our value proposition wouldn't have been as strong. Today it's limited, but already we see the benefit of that as we're gaining access to markets that previously we didn't have a strong value proposition in. Thank you for that. Then just one for Zubair, just on the cash flow, Zubair, and cash conversion, you know, soft due to working capital headwinds. Just can you give us some more color around so that the other items that was close to a $50 million hit as well in the half, and then just some comments on what do you see as cash conversion in second half 2022? Thanks. The other sizable outflow was the variable compensation that we typically pay on a lag. That would've been the majority of that you call out. In terms of the second half, I'm expecting a substantially higher cash conversion number, of course. That's because predominantly we would expect an anticipated working capital to improve in the second half. I'm gonna be seeing declining pricing for the exam single-use business. We've substantially reduced our purchases also in that segment to outsource suppliers in the second half. We should see the impact of that positively on working capital. Then, of course, we always have this seasonality in June with our accounts payable days, which are typically higher compared to December. Finally, as I've just said, I don't expect large cash payments in terms of variable employee expenses in the second half like they were in the first half. I would be seeing, and our goal would be to be north of that 90% cash conversion in the second half. Again, of course, it all comes down to the working capital, and the earnings we will see in the second half. Hopefully that answers the question, Saul. Yeah, it does. Thank you very much, Zubair. That's all I had. Thank you. Thanks. Next up we have John Deakin-Bell from Citi. Hi, John. Good morning. Thank you. I just sorry to harp on this exam glove issue here, but I'm still just a bit confused about, you know, the guidance being reaffirmed in on the 11th of November and then changed. You know, from my colleagues in Malaysia, we've been seeing exam glove prices fall 30% a quarter for the, you know, certainly since the middle of last year. Can you just explain to us, you know, within the organization how, you know, you must have known that that was happening and you know what the lag time is from when you buy the product to when you sell it. How did you maintain that guidance in the face of those issues? Yes. Well, I think the key point is that although we saw some risk in exam at that time, in fact it wasn't so much on the pricing side because our pricing trends to that point were pretty much consistent with what we had forecast. It was more a demand function. Subsequent to that view in November, the demand trajectory over the three months between then and now saw further evidence of demand weakness beyond that we assumed. The key point is that back in November, as I mentioned, you know, it's still the case that we have significant demand opportunity on the surgical life science and mechanical businesses. What's very frustrating to our teams is that the long COVID effect of a number of hindrances to our ability to meet that demand was more collectively than we anticipated. It's that labor shortage issue that I mentioned. It's the fact that rather than being able to catch up on the back orders that we have and that are at high levels, instead, we've seen back orders increase because of further supply delays. We were relying on an offset based on known market demand in other parts of our business, and our ability to deliver on that offset, we now realize is much reduced on what we thought in November. It's those events that I detailed over the last three months that have led us to that conclusion. Therefore the lower guidance that we're talking to you about today. Okay. Thank you. Just on the SG&A, I'm a bit confused by that. If I look back over the last few years, SG&A as a percent of sales was kind of pre-pandemic 22%-23%, and then within the pandemic, 18.5%-20.5%, and now it's 16%. I mean, can you just explain to us how, particularly given that you didn't know till after November that there was going to be an issue with the earnings, how you managed to cut it in the last six months of the year so much, and then what should we expect that it's going to be as a percent of sales going forward? Well, I think I'll hand over to Zubair for a little more detail. Yes, I mean, I said at the November AGM that we were concerned about conditions in the exam single-use market, and that we had plans to offset that, one of those including SG&A. We did not start pulling the SG&A lever only after November, and we were relying on it previously as an offset to exam single use. We are continuing to manage SG&A very tightly. Partly of course, that's a natural function of continued limitation to travel. Also it's a reflection of our latest views on incentive outcomes. But what we have not chosen to do is go for significant cuts to the longer term growth initiatives that we have underway, and that I've talked about here, because I do believe those will create the long-term shareholder value creation that you and I are looking for. We do want to continue our activities regarding the sensor-enabled PPE, regarding innovation related to sustainability. We've been pretty selective and mindful. On SG&A, there are a number of open positions that we have not filled, but in other areas we are continuing to target that one-time activity that I think is of value to shareholders. Going forward, Zubair, should we say, back to normal at some point? Yeah, I would say. I mean, I think we were something like you said in the 16% range in the first half. It's a feature also of the revenue line, which is highly elevated pricing from the exam single-use business in there with highly elevated costs. When you look at it from that perspective, as that pricing dissipates, you're gonna get a natural just the math is gonna drive a higher percentage of revenue. Over the midterm to the long term, as I've always said, we feel about comfortable in the 20% as a percentage of sales range, 20, 21% as we start reinvesting back into the business. Again, it's the feature, the revenue line that's making it a little bit confusing at the moment. It's just pure math. That's it. Thanks very much. Okay. Thanks. Next up we have Vanessa Thomson from Jefferies. Vanessa, go ahead. Hi, Vanessa. Morning, thank you for taking my questions. I know in FY 2021 you estimated the EPS impact of freight disruption and shipping delays of $0.10-$0.15. I wonder if you would have an estimate for FY 2022, noting freight rates are no longer rising but still complicated. Thanks. Can you give a direct answer to that, Zubair, perhaps? I think, Vanessa, the freight prediction that we did back in FY 2021 is fairly similar to the outturn that we've actually had in the fiscal. What's somewhat complicated is the fact that we also priced some of that, impact out to our customers. The way it's impacting the P&L is not so clean. However, I would say, that the numbers you're quoting are not too far away from where we're seeing charges in this fiscal. Okay. Thank you. Just one more question. You spoke about innovation, and you commented on a R840 new glove and all that. You know, I know that's a very important part of the Ansell business. Is it could you talk to the future of innovation and anything that's coming online in the near term? Thanks. No, thank you for asking that question. It is indeed very important to us, and we've stepped up our R&D investment this year, even with the headwinds we're experiencing, and we plan to do so in future years as well. Yeah, R840 is a great example. In light manufacturing environments, there are often minor crush risks to hands, but in the past, your only option was to wear a pretty heavy oil and gas glove, which is very cumbersome, so you're protected, but you can't do your job. This is always the trade-off with safety. The protection bit is easy. The practicality and comfort of safety are hard. Working with some very big end users, we've identified this need for a lightweight impact glove. This is brand new to the industry, and it combines the Ansell technology of very super comfortable, super durable liners with the Ringers technology, which adds to the bumper. I think the key point is that the safety challenges out there are not met. Yes, there's been substantial progress over the years, but still today, our customers are experiencing costs in the millions for injuries, such as the one I've mentioned, ergonomic injury and the ongoing issue of compliance, workers just not wearing the right product at the right time, in the right manufacturing environment. This is where we think that connected solution comes in. If we can create a feedback loop with employees, so that they're warned if they're protected or not protected, and employees can also feedback on unsafe conditions, then that brings the humble glove into the world of the digitally connected workplace, and we see an exciting future there. The last piece I will mention is around sustainability. I'm very conscious that today pretty much all of our products are made from virgin raw materials. We process those, and then at their end of life, they're thrown away or incinerated. We're doing a lot of work in the middle of that stream, reducing our goal will be to zero the carbon cost of the past steps in the middle there, but the biggest steps are front and back. By working with new materials, we create a whole new value proposition to customers. Customers are very interested in what we have to say here, and we will be launching the first products against that, benefiting from those new materials within the next few months. I look forward to updating you on that, with our full year results. Thank you. That was all I had. Yeah. Next up is Andrew Paine from CLSA. Yeah, hi. Morning, and thanks for taking my question. Just a bit of a longer term one. You note that longer term margins should benefit from in-house differentiated exam and single-use products. Are you able to quantify the margin benefit here and when this will flow through and essentially help de-risk the impact of outsourced products? Yeah, we're not quantifying it for you today. That would be quite valuable competitive information on the relative margins of insourced versus outsourced. It is important, though. It comes from the fact that these styles are more differentiated and not available to other players. As you're aware, the lines that we built in Thailand are the largest lines that Ansell has ever built. When they operate at full rates, we achieve productivity savings. Of course, we also have an ongoing program of productivity across all our manufacturing facilities. Now, a good chunk of that is needed to offset inflation. As you're all aware, we are operating in a higher inflation environment than previously. We do see room for our automation programs to get ahead of inflation and benefit margins going forward. Okay, thanks. Just one other thing, risk factors relating to the U.S. border issue, how are you managing that in your channel at the moment? Just, you know, obviously with the issue with YTY and, you know, U.S. borders looks to be going through a lot of glove manufacturers. So do you see any other risks associated with that? I have no particular insight into the strategies of the U.S. CBP. Indeed, I don't think they are finished in their examination of the industry that they are focused on. On the other hand, I would note pretty positive comments that they made recently talking about improvement in the Malaysian industry, and saying generally they see significant progress. I want to say that that progress is important. Yes, we were surprised by their actions with regards to YTY. In the short term, that causes difficulties for us in continuity of supply to customers. Long term, it requires all stakeholders in this industry to be similarly determined to ensure that standards are raised to the level that they must be at. That's vital to our long-term success. We need to ensure that all players are operating to the same standards. It can't be the case that one operator can secure a cost or competitive advantage by operating to rules that the others would see as unacceptable. The U.S. and the CBP is a very powerful body in driving home the message of the importance of compliance. Overall, some bumps and some uncertainties in the short term, but fundamentally, that of course is our objective too, of raising standards consistently across the industry, ensuring that workers' rights are protected, that they work in safe conditions, that is key. It's vital for the future of our industry that all players in the industry get to that point. Overall, you know, we support the objectives of the CBP, and we're also encouraged by change in the industry, even if there is more still to be done. That's great. Thanks. Thanks. Next up, we have David Bailey from Macquarie. Yeah, thanks, Anita. Morning, everyone. So there, just in relation to the 7.5% organic revenue growth, last year you gave us volume and then price and mix. I was wondering if you'd be able to disaggregate that organic revenue growth for the first half 2022 in the same manner. Yeah. I mean, again, we haven't disclosed the price and volume dynamics because it can be very misleading. Now, of course, on the single-use and exam business, we've mentioned there's a decline in volume. I would leave it at that. The rest of the businesses, we saw good volume growth in mechanical in certain segments of that business, especially in Latin America. We've seen really good volume growth in surgical, for instance, in the polyisoprene, polychloroprene area, continued really strong growth there. Of course, if we gave you a headline volume growth versus price growth number, you would miss those sort of dynamics, and we would be saying it would mislead the results. You'll have to take from that answer what you can. Okay. No problem. Then just trying to get into the GPADE number, I mean, just some of the one-off items, FX was a $10 million benefit. The high cost inventory and exam single-use was a $20 million drag, manufacturing $10 million, write-down of about $7 million. Is there anything else I've missed in terms of that GPADE for the first half? No, that's. I think they're a good summary. Obviously, there was one item that Neil mentioned. If you were looking to try and normalize here, and of course, that's your own choice, there is headwinds to offset that as you normalize, but there's that feature of AUD 20 million of revenue moving from H1 into H2. That could, of course, impact GPAD margins as well. Okay. Those items I've called out, just so I'm clear, the FX is potentially gonna be lower, the manufacturing impact a bit lower, write-down a bit lower, and then maybe the AUD 20 million of your high inventory cost is probably relatively similar. Is that right for the second half? Yeah, I think that's a good way of summarizing it. Just with relation to the YTY stuff, just what's the course of action here? Is it you looking to work with them in partnership, or is it potentially you moving to a different outsourced supplier, going forward? We don't know at this point. I think, you know, YTY was the supplier that the information that we'd identified through our own audit. Through what's been an ongoing program of sharing by them to us was that they'd actually made a lot of progress addressing issues. Wind back the clock 18 months ago and they, like pretty much all players in the industry, had some important issues to address. What our audit follow-ups and also their own public statements indicated before the U.S. CBP took action was that they'd substantially addressed all the business critical items. What I'm not aware of is what information the CBP has acted on. It's possible that the CBP has new information that's not currently available to us that indicates that progress was not as complete or new problems had emerged. To say again, I'm not aware currently, and I don't believe YTY is aware currently of any new information that's come to light with the CBP. Alternatively, the CBP is looking over a longer time period and saying, "You know, we note that there were concerns in the past during this period of the Withhold Release Order," which I would note is not a finding, but a statement of concern. "We want you, YTY, to demonstrate to us that indeed you have addressed these conditions as you say you have." So my best view is it's one of those two. I can't tell you which one it is. I certainly hope that it's the case that our previous view of YTY is borne out through the in-depth examination that the CBP will undertake during this WRO process. Thanks, Neil. That's all I have for now. Perhaps I would add one more point, which is, you know, we do have alternative sourcing options. And those options are available to us because of the work we've done over a couple of years building out our insourced supply partnership as well as the JV that I mentioned in Malaysia. We have more ability to respond now than we would have done a year or two ago, and we're looking to use that to create alternative sourcing options for our customers now. Okay, thanks. Last up on the conference call, we have Joshua Ting from Bank of America. Josh, please go ahead. Thanks, Anita, and good morning, all. I was just hoping we could just turn to the results in surgical and the market share gains there, and if you could give us a bit of an idea of how much the headline growth in the half has come from the recovery volumes in that market versus market share gains. Well, it's hard to disaggregate those. In fact, the market data that we used to have on surgical business is currently not available to market participants. I'll be cautious about that. There are certainly clear cases where we're sure that we've gained share. One of the drivers of that is the partnerships we've developed with U.S. GPOs, where we now have a co-branding approach, and we've seen good market response to that product range. Then I think we're also seeing the benefit of staying focused on surgical during this time period. Some other players in the industry reduced their focus on surgical and went in search of what were temporarily higher profits available in the exam single-use business. At Ansell, we've always viewed surgical as key to our long-term success, you know, we've continued to put surgical right at the top of our priority list, and customers certainly appreciate that consistency in application. No, we have not managed to execute perfectly, and we have high back orders in that business. I think we have shown more consistent focus and application and success bringing new capacity to the market than most other players in surgical. The surgical market has long memories, so being a reliable supplier, being there for customers in tough times versus not, you get many years' benefit from that approach. Of course I hope that will be Ansell's case as well over the next few years. Okay, thanks, Neil. I suppose the follow on from that then is, given that you are having some supply shortfalls where you can't meet the demand at the moment in that segment, is there any risk to share loss or customer loss over the next sort of short to medium term on the back of that? Well, I think the key point is we are bringing new volume to market, so we're not able to meet all the demand that would be available to us if we have additional supply. But by staying close to customers, by setting expectations clearly, then I hope we can substantially mitigate that concern that you mentioned. Yes. Great. Thanks. That's all I had. Okay, thanks. We'll now switch over to some of the questions on the webcast. There was a question from Jens and Petra in relation to YTY, but I think that's been addressed by the conference call question. If it hasn't been addressed adequately, please feel free to reach out. There was also a question from Tom in relation to inventory. It has also, I think, been addressed. Next one is a question from Zara. What is the range of GPAD margin implied in your guidance range, and where do you expect GPAD margin to normalize as COVID impacts recede, please? Of course, we haven't broken that range out. You can do the math on the EPS range in terms of dilution versus prior year. I'm not going to sit breaking out the GPAD assumptions because of course, depending where our sales land, we will manage SG&A accordingly. Overall, EPS guidance will remain intact that way. It's not something I can give, Anita. It's not something I work with breaking out. Okay. Thanks, Zubair. Thanks, Neil. That takes us to the end of the questions. I'll hand it over back to you for some closing remarks, Neil. Thank you. Thank you to you all for your continued interest in Ansell. Clearly, lower earnings expectations weren't in our plans for this year. We know that we have to now deliver on the new guidance range. The fundamentals of the business, I believe, are strong. Our strategic objectives are sound. While we are working our way through a number of short-term issues, none of these give me cause for concern about the long-term growth prospects of our business. It's my objective to work through these well and then to ensure that the underlying strength, growth, opportunity and value creation for all stakeholders emerges at Ansell. That is, should be, I hope, a greater topic of conversation with you all as we go through into future reporting periods. I appreciate your time and attention on what is undoubtedly a complex half. I look forward to updating you as we make progress over the next few months. Thank you and goodbye.