Thank you for standing by, and welcome to the SDI Limited FY 2021 results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Samantha Cheetham, Chief Executive Officer. Officer. With me today is John Slaviero, our Chief Financial Officer and Chief Operating Officer. In recent times, we have seen incredible uncertainty with the pandemic taking hold globally. As we moved through the financial year, we began to see several key regions emerge from the harsh lockdowns that affected the dental industry. We initially saw a catch-up in demand that had been put on hold, and then gradually, we began to ramp up production to meet the return of strong demand in most key regions as we exited the financial year. While not uniform, as you will see when we talk through the regions, we have finished the year with strong momentum and are pleased to report a return to growth and a record full-year profit for the group that is ahead of our guidance provided in May. As I've done previously, I always like to recap on where we have come from, particularly for those that are less familiar with our business. Having been established in 1972, we have built this business into a successful manufacturing company, where today we are exporting to more than 100 countries. Underpinning this success has been our continuing focus on research and development, and through this, we have developed new and innovative products that meet the needs of our customers. Let me now turn to the agenda for today's presentation. I will begin with a summary of the last financial year and then spend some time talking about the product categories and the key geographies we operate in. I will then turn over to John, who will run through the financials before returning to me to talk about our strategy and the outlook for the coming financial year. Let's begin with a summary of financial year 2021. I am now on slide four. As mentioned in my opening remarks, this was a record year for the group, with net profit after tax up 111% to AUD 8.9 million and ahead of our guidance range of AUD 7.5 million-AUD 8.5 million issued in May this year. Total sales of AUD 81.6 million were up 21.2% on last year, driven by strong sales in key product categories, successful new product releases, and the gradual normalizing of most dental markets. Operating expenses increased 1.2% in the year due to careful operating expense management. I will spend some time talking about the product performance on the next slide, but the demand catch-up I spoke about and the impact of new product releases was evident, with whitening and aesthetic category sales up 55.3% and 27.2% respectively in local currency. Pleasingly, the board has rewarded shareholders with a 230% increase in the final ordinary dividend, with a fully franked dividend of AUD 0.0165 per share. Let's now turn to the product categories. I'm now on slide six to talk about the product performance. As mentioned, the category highlight for last year was the whitening category, up 55% in local currency. We saw strong momentum in sales, supported by the release of the new Pola Light and Pola Rapid products and the rebranding of the Pola products. Another highlight, although the smallest product category, was equipment, up 31.1% in local currency, with the ongoing successful traction of the Radii LED curing lights. Aesthetic products sales also rebounded in the second half, with growth of 27.2% in local currency for the full year, assisted by the easing of restrictions on dentistry. In markets where restrictions were progressively eased, Australia, North America, and parts of Europe, growth was strong. Finally, the amalgam product sales were up 3.8% in local currencies, with the North American market offsetting decline seen in other regions. Turning to the geographies. Slide eight breaks down the sales by business unit as disclosed in our accounts. Sales by business unit were consistent with the gradual easing of government restrictions, seeing a return to normal operating conditions in many key markets. The European unit sales were up 39.9% in local currency for the year, driven by strong demand in its key markets and assisted by the U.K., where conditions rapidly improved in the second half of the year. The Australian unit sales, which also captures the Australian direct export markets, was up 9.6%, with the domestic sales up an impressive 44.6%. However, this was offset by direct exports, which were down 3.3% over the year, with many of these regions yet to return to normal conditions. Brazil sales increased in Australian currency movements increased by 33.4%, reflecting the significantly weak Brazilian real. As completed, with the restructure expected to be made at the start of 2021. For more outlook, what is going on with the customer by region, slide nine. This shows the sales were in Australian dollars. Key regions North America, Asia performed well. This performance reflects the return to operating conditions with the gradual easing of restrictions, but also the successful release of new products. In many of our key regions returning to normal operations. I will now hand over to John to talk through the financials. Thanks, Sam. I am now on slide 11, the profit and loss. As Sam mentioned, sales were up 21.2% in the period, underpinned by strong demand in key regions, with gradual easing of restrictions and successful new product launches. On gross product margins, the positive mix effect during the year from strong growth in the higher margin whitening and aesthetic product sales, were offset by regional factors and the increase in freight and production costs driven by the global logistic turmoil. Reflective of this, when adjusted for these movements, the gross margin increased by 1.8% compared to last year. However, in Australian dollars, the gross margin declined by 3.2% to 61.6%, compared to 64.8% for the corresponding period last year. Total operating expenses in Australian dollars increased by 1.2% when compared to the previous corresponding period. After adjusting for currency movements and the government assistance programs, underlying operating expenses increased by 8.8% compared to the 2020 year. When compared to the pre-pandemic levels in the financial year 2019, operating expenses increased by only 1.4%. The result is evidence of the careful financial management of operating expenses over this period. Both EBITDA and NPAT were up strongly to our record levels as we return to growth in financial year 2021. Turning to the balance sheet on slide 12. The company's net cash position increased by AUD 5.9 million to AUD 10.6 million for the 12 months. The remaining net of AUD 1.5 million was paid down. There was further investment in plant and equipment of AUD 2.3 million, and product development expenditure was AUD 1.2 million for the year. We actively increased inventory by 900,000 to mitigate the continued global freighting delays. Finally, the company has unused bank facilities of AUD 10 million. Turning to the cash flow statement on slide 13. The increase in cash was driven by strong operating performance of the business over the period, underpinned by the return of strong trading conditions. We received AUD 3.9 million from government assistant programs in the 12 months ending 30th of June 2021. AUD 1.9 million was allocated to operating expenses and AUD 2 million to the manufacturing departments to supplement the company's commitment to keep its global employees employed while the group recovered from the reduced demand caused by the pandemic. The payment of dividend reflects a stronger cash position and the board's commitment to shareholders. I will now hand back to Sam to run through the strategy and the outlook for the coming financial year. Thanks, John. Turning to our strategy on page 15. The company's strategic priorities remain focused on four things. One, the key product categories of aesthetics and whitening products. Number two, further manufacturing efficiencies and driving sales and marketing teams. Three, the ongoing investment in research and development. Four, the company's amalgam replacement product, which is on schedule for release in 2023. Finally, as mentioned in February this year, we have undertaken a comprehensive review of our footprint, looking to drive efficiencies and to manage future growth, and expect to provide more detail on this in the coming period. Turning to the outlook on page 16. In managing any global business, there are uncertainties, and SDI is no different. I'm encouraged by the strong rebound in our key markets and see genuine momentum in our business underpinned by the opening of markets and new product releases. In the near term, the challenges we face are with the increased cost and delays of freight, the potential for further lockdowns, and the slow opening of the remaining regions we operate in. On balance, we expect another year of growth and look forward to the return of normal operating conditions in most key markets. Thank you for listening to our presentation. I will now turn to the operator to moderate for your questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. We will now wait a moment for questioners to register. Your first question comes from [Peter Storer] private investor. Please go ahead. Hello. Thanks for taking my call, and congratulations on a good result. I've got two questions. One is regarding the amalgam replacement product. At this stage, do you have any feel for what the margins are likely to be on that product? The margins will be in line with our current margins, hopefully a bit more. We haven't really got to the detail on that, but they're usually in line or slightly higher. As we release the aesthetic products, generally they're a little bit higher, but it will be definitely what we've got. Okay. The second question is regarding the strong cash flow and balance sheet. As we get through the COVID period, which hopefully is at the end of this year, are you considering any capital management initiatives given this strong cash balance? Look, we're always looking to the future. We will invest more in plant equipment and a bit more in sales and marketing and definitely more in R&D. That's where our focus is at the moment. Okay, thank you. Thank you. Once again if you wish to ask a question, please press star one on your telephone and wait for your names to be announced. There are no further questions at this time. Pardon me. Your next question comes from [Michael Burn] with Cayman Equity. Please g o ahead. Good morning, Samantha. Good morning, John. I thought that was quite a big statement, the amalgam replacement product statement. Could you expand more on the R&D behind that, what the product looks like, how it's going to replace amalgam? I'd like to obtain more color on that. It sounds like a bigger deal than just one sentence in a slide suggests. Obviously recognizing the commercial sensitivities around it. Sure. Well, it's basically the idea amalgam goes in the back teeth, and this is a product for the back teeth. It's very strong. It looks tooth-colored. This is the product that we have been in collaboration with University of New South Wales, University of Sydney, and University of Wollongong, and it's where we got the AUD 3 million government grant a few years ago. We've been working in conjunction with their teams. It's a new type of product. It's very strong. It looks like a tooth, and it's nearly coming to fruition. We're testing it at the moment, so exciting, Mike. Yes, very exciting. If I'm still online, can I ask a question relating to, it's an accounting question, so I think it's probably meant for John. It relates to the R&D spend that has been accounted for through the P&L. In this result, it was quite a big number, AUD 1.3 million in the half, compared to a half-year run rate normally of around AUD 800. Does that reflect a change in an accounting treatment of R&D expense, or is that project-specific? No. There's no accounting treatment change. We were very conscious throughout the year, and probably the previous year, that our R&D wasn't slowed down, and if anything, we invested a bit more into it. It was purposeful. Okay. Mr. Storer's question, the first question about what's perceived to be a surplus capital in the company. I know that there was some talk, or there seemed to be a pattern of a progressive dividend established before COVID struck, which was obviously very shareholder value accretive. I don't think the board have articulated the dividend strategy as being a progressive dividend. Is that still desirable? To repeat that pattern, is that still in the forefront of mind? Yes, absolutely. We're very committed to increasing the dividend, and we're being conservative at the moment. It's an increase on 2019 by 10%, and the board is pleased with that. I think, Mike, we've talked about this before. The board are very focused on ensuring that the dividend is maintained, and if not maintained, increases every year. We're committed to that. Okay. Thank you. Thank you. Once again to ask a question please press star one. Your next question comes from Mark Topy with Select Equities. Please go ahead. Good morning, Sam and John. Hello. Hello. I suppose my first question is. Can you give us a little more context to the result? This seems a bit of a catch-up in terms of dental activity coming bouncing back. I'm just interested in the comments about the forward momentum. How do you see it? Do you think this is a normal level of activity? Look, some of it sort of seems starting to operate a little, and others still in there, because we're dealing with different markets here and countries, and some are ahead, some are behind. Hopefully by this current financial year, most markets will be back on track. It's easy because we don't know what's happening with the rest of the world. Generally, we're hoping that most markets are back to normal, but we just don't know what their risk is going to do. Yeah. Normalized conditions are happening in the market, whereas some marked down. Yeah. I guess I was thinking also, was this some catch-up, like people had been delaying treatments or things like that. Did you get any of that or? Sorry. Absolutely. For example, this lockdown in Melbourne right now that we're having, or all over Australia, I guess, well, most key regions. Patients can't go to their dentist, therefore dentists don't enter. The minute it opens up, the poor dentists will be in overdrive just to catch up because, most of the time, the dental problems for a patient don't go away. It's not lost business or anything like that. In all the markets, that's sort of what we've been seeing. Cool. I suppose on a positive side, looking at the wobbly Australian dollar, how are you seeing the benefit in this next financial year from that beneficial depreciation? Well, Mark, there's been better men than me that try and predict what's going to happen in the currency because, I think probably around six months ago, many people were forecasting. Oh, yeah. Yeah. Forecasting that the Aussie dollar would be about AUD 0.80. Yeah. Now it's down to about AUD 0.72-AUD 0.73. Look, it's difficult. We just have to ride through it. They're very turbulent times that really, you'd have to be a brave man to try and predict any sort of currency forecast, I would say. Are you getting some net benefit, though? How do you. Oh, absolutely. Yeah, there is. We get benefits on our margin, but we lose a bit on the expenses, on the operating expenses. Most of our sales are invoiced in U.S. dollars, except pretty much the Australian and a few export customers. The overseas offices, they've got the expenses in those currencies. We lose some in margin, and we gain a bit on margin, and we lose some on the expenses. Yep. In terms of selling to the dentists, I suppose this is the other part. Are conferences coming back, or how is this process of expanding, for instance, the whitening sales product going with dentists? How do you see this going to go in this current year? Will you be able to conduct more face-to-face sort of meetings overseas with dentists or build up that? Yes. It seems to be getting more and more face-to-face meetings. Generally, our sales teams, they haven't been going, and this is overseas, they haven't been going door to door to dentists like they would normally. There's a lot more appointments happening, so the dentist is prepared for them, but it's definitely increasing. The businesses overseas seem to be getting back to more normalized levels where the countries are just dealing with COVID and not even talking about it sometimes. They just do business as usual. Whereas here, we talk about it, and with every increased case, it seems to be a big thing. Definitely more face-to-face. Zoom, it's been great with the whole change with Zoom, where it's definitely getting more efficient and there's more Zoom calls happening, so our teams don't always have to go and fly to a customer. Right. Okay, that's good. Just an update, perhaps in terms of the plant move. Anything to add there in terms of your progression of that project, if you like? No, not at this stage. We probably can't update. We're looking at every single function in our footprint here. It's a big job to get to the end of that process. Yeah, no, we don't have anything further update on that at this time, Mark. Fair enough. All right. Well, thanks again, and congratulations on the results, and look forward to more. Okay. Thanks, Mark. Thanks. There are no further questions at this time. I'll now hand back to Ms. Cheetham for closing remarks. Pardon me. We do have a follow-up question from [Michael Burn] with Cayman Equity. Please go ahead. John, the talk of the logistics and supply chain pressures and the cost of getting stuff around, how much of that had the impact on the reduction in the gross margin in the second half specifically? In the second half, I don't have that figure, Mike, in front of me. Overall, yeah. The order of magnitude, are we talking about 100 basis points, 50 basis points? Do you have any feel for it? It's probably closer to 100. Yeah. It was quite significant. The issue we've got was not just the cost of freight, but was the delay in freight. For example, we had a 40-foot container totally full that arrived in the U.S. in February, and that didn't go into our warehouse until June. In the meantime, we had to do air freighting to supplement them. It put enormous pressure on our factory. It's not the efficient way to manufacture goods. We're finding more and more of that. At the moment, what we're seeing on freighting is containers are being delayed. For example, at the moment, we've got three 40-foot containers sitting here that should be picked up this week, and we've been told it could be up to a month's delay. If that happens, then we have to supplement it with air freights. It's a tough environment out there, which doesn't help to our production efficiencies. It's very difficult to plan. It was substantial, and I can take that on notice, Michael, and I just don't have the figures in front of me. All right. Well, you're not alone in that regard. There are a lot of companies around the world are suffering with that. I guess my one question, which I'm sure you'd be very disappointed if no one asked. Brazil. The Brazil result was quite a startling result. It was very strong. I'm assuming, number one, we shouldn't annualize that number. I'm talking about the half year number. Sure. We shouldn't annualize that. What's driving that? Is that an outworking of the restructuring process that's underway? No. The growth over there, it's worked out very well for our team. We have cut down a lot of salespeople and office people there. The sales growth from the growth in the market and also just very good relationships with the distributors. Okay. It's good quality growth. It sounds like it's good quality organic growth. Yes. Of course, our new product releases as well. Okay. To my next question, can I annualize the second half number? No, I wouldn't. Okay. It's very, very hard. Okay. Sorry, again, Michael, to come out of it depends on the experience. Sure. I know you've pulled capital out of that business, or you've rationed capital to that business. If I look at the, and it's hard to know, isn't it? You're just seeing a snapshot of the accounts. If we've got assets of X and liabilities of Y, so there's negative net assets in that business. Has it got enough capital to support its growth? Yes, it does have, Mike, because most of the growth is supported by us here in Australia. What we're seeing with that real growth in their own currency, we're finding their margins are improving, and the cash flow returning back to Australia. Yeah. What's changed there? It's been like crawling over broken glass for many years. Suddenly there seems to be something. Has anything structurally changed? It just seems to be a very good number in the context of history. Yeah. Yes. Look, I think that it's a very buoyant market, for sure. Okay. Our whitening product's doing very well. Our aesthetic products are doing well. We've got a great team over there. A very committed team because it's not been easy for them seeing the results each year. They're very dedicated. As I think we've mentioned before, we've moved our warehouse down to the south. We've closed the office. It's all going very well. Another thing is their dentists are operating pretty much fully. We're attending big trade shows. It's scheduled for February. We've got hands-on happening everywhere. It's almost like business as usual there, except the market growth is all good. Okay. Well, congratulations. Long may it last. Yeah. Yes. We're very happy about it, Michael. Okay. Thank you. Thank you. Thank you. Once again, if you wish to ask a question, please press star one. The next question is another follow-up from [Peter Storer] private investor. Please go ahead. Thank you. Just a follow-up question on the manufacturing, and this is probably something I should know. Is all of the manufacturing carried out in-house in Australia, including the equipment, or is some of it contracted out? No, all of it's done here in Bayswater. Right. Yes. Sorry, there's a little bit in Brazil that's actually we send them raw material semi-finished good and they pack into packages. Right. Okay, thank you. Thank you. Your next question is a follow-up from Mark Topy with Select Equities. Please go ahead. I just want to follow up just on the cash flow and the government assistance payments in the current financial year, showing the cash flow there. Could you just maybe clarify, did any of that go through the P&L or what's the breakdown of it? I think I may have stated in one of the announcements in the commentary that about AUD 2 mil went through operating expenses. Oh, sorry, it might be the other way around. Just let me find it, Mark. That's JobKeeper still? It's more than JobKeeper. It's also some U.S. government assistance. It's more than just JobKeeper. The AUD 1.9 went through to the operating expenses and AUD 2 million went to the manufacturing departments. All mainly around the first half because our manufacturing was not back at full bore. It really started to come online quite strongly in the second half. The way we see that is supplementing people's salaries or wages, which that's what it was there for. Otherwise, they'd be short paid. In the U.S., what that subsidy was about or assistance was about, because the U.S. was not back on track in that first half, and also partway in the second half, under those provisos, to get that subsidy, you had to keep the people employed full time and you couldn't terminate any people. It was basically, it is a difficult one because if we hadn't got it, we probably would've taken a different road in our expenses, both the PPE and, sorry, they call the American one the PPP and JobKeeper. We would've had to take a different course with employees. It probably did what it was meant to do, I would say. Okay. When we think about 2022, how do we think? That's why I've sort of tried to compare to the 2019. I think you'd probably look at a more normalized expenditure level, especially in the second half of this year, of the 2021 year. Yeah, just to be clear on that, so you don't think there'd be any more government assistance, is that what you're saying? No. Definitely, we wouldn't. At this point in time, I very much doubt if we'd qualify for any government assistance anywhere. I guess your salaries and the expenses will increase, but you've got the revenue. Yes. Back closer to normal, if you like. Yeah. Got it. Okay, terrific. Yeah. All right. Thanks, John. No worries. Thank you. There are no further questions at this time. I'll now hand back to Ms. Cheetham for closing remarks. Thank you very much everyone for listening and thank you for your questions. Just in summary, John and I are very pleased with the result. It's thanks to all our sales teams, office, manufacturing teams all around the world. Everyone has contributed to our results. It's been a very, very tough year and it's been a really great outcome. The future is looking rosy. We are very excited about our amalgam replacement, but that's in a couple of years and a very positive outlook for the year. Thank you very much to everyone for listening.