Ansell Stock

Good day, and welcome to the Ansell Limited FY '26 Full Year Results Briefing. [Operator Instructions] And finally, I would like to advise all participants this call is being recorded. Thank you.

I'd now like to welcome Nathalie Ahlstrom, Managing Director and Chief Executive Officer, to begin the conference. Nathalie, over to you.

Thank you, operator, and welcome, everybody. It's a privilege to be here today together with Fred and walk you through our fantastic strong year, financial year '26, equally also then talking about the outlook and then having the Q&A together with you. So we'll start with looking at the performance and then as I said, coming to the Q&A.

Starting with the purpose. We have a really strong purpose. It's an emotional purpose. It's a powerful purpose and this leading the world to a safer future. This is who we are. This is our business. This is what it's all about. And that's how we translated it then also to our financial year '26, and that's how we are bridging then the strong momentum to financial year '27.

But let's start with the highlights of the year. As I said, the highlights is a very strong delivery in quite dynamic market conditions. The world is pretty, a lot is happening. But as I said, it's a strong delivery, and we grew the net sales by 5.7% adjusted in this environment. And where I'm especially proud is that our second half growth momentum, 9.2% growth really showed that we're also growing with volumes. So good strong momentum here.

On the sales growth, we also see that it's -- the momentum is in strategic areas. And areas to call out is our Cleanroom, our scientific business grew by 10% for the full year. And also U.S., by far, the largest market, grew by 10%. So improving the mix, growing in the future strategic areas has really helped us deliver a strong financial year '26 and also a very strong second half where also volumes came back.

So strong net sales growth, of course, translates into a strong EBIT delivery, an EBIT margin of 15%, and we grew by 90 basic points versus last year. The star is, of course, Healthcare, and I'll come to that soon. But you also see that our GPADE grew by 70 basic points. And that's, again, thanks to this that we are growing in the more strategic areas where we are having higher gross margins and our value addition to customers is higher.

Also this financial year '26, as I said, it was a dynamic market, and our really decisive actions when it comes to U.S. tariffs and Middle East crisis, things that are in our own hand on sourcing actions and then also price increases helped to offset the impacts of both U.S. tariffs and Middle East crisis.

So strong net sales growth, good EBIT margin, and that then also supported by a very strong cash conversion. Cash conversion of 113%. So we have a strong balance sheet in place compared to the financial year '25 when our cash conversion was 91%. Why this really mattered was in the Middle East crisis, and I'll talk about that a bit later. When Middle East crisis started, our focus was on enabling our customers to continue to serve, continue to ensure that we have availability. And that's where the strong balance sheet and strong cash conversion really supported us.

And then finally, adjusted EPS at the top range of $1.486. That's a growth of 18.5% compared to last year. So we are very proud of it. And that also then translates into a higher dividend. We increased the dividend by 35.7%. So the full year dividend is $0.681. So strong top line, EBIT, cash conversion, EPS. And this all is thanks to our strong team that we are having globally and the strong partnerships we are having with our customers and our partners. So that's the highlight of financial year '26.

Then going to Industrial. Industrial continued to perform on a high level. EBIT again grew, and we see that the EBIT margin grew to 9.7%, going from 17.3% to now to 18% EBIT margin. What we really see is that, of course, the net sales growth, especially Mechanical, where you see the Mechanical also grew much faster in the second half, 7%. That supported the net sales growth, supported, and then the overall higher growth in the second half.

Moreover, what supported the continued improvement on EBIT is, again, what I'm talking about is moving the portfolio upwards, focusing on the strategic verticals, focusing on the strategic markets. And especially here in Industrial, it was, again, U.S., the strong performance in the U.S. and also the verticals, aerospace and defense that helped us to move the portfolio upwards.

Then going to Healthcare. And I must say I'm so proud of the team to deliver this improvement in Healthcare, where you see a step change in the EBIT margin from 12.8% to 14.3% EBIT margin improvement over 1 year. Of course, what helps is, again, the volumes. Volumes is always helping. And here, you see the exceptionally strong growth in second half, and especially the star performer is Cleanroom again.

So it shows that where we have strong positions, where we have very strong brands, we also can grow. And of course, the Cleanroom that turbocharged the growth, majority of that was from the U.S. So -- and as I said, in Healthcare, the second half growth of 12.3% really helped us.

So both Industrial, Healthcare delivering Healthcare at a total new level. Then the dynamic world we are living in, looking at the U.S. tariffs. We have really offset the U.S. tariffs by sourcing optimization, where do we source, how are we serving the U.S. market and then price adjustments. We also saw then in the second half that our U.S. growth momentum continues despite the price adjustments we've done to the market and accelerated the growth in Industrial and scientific, the Cleanroom, as I've mentioned before.

So this success in the U.S. tariff really has been enabled by the strong customer partnerships we are having in the U.S. I just came myself with Fred a few days ago from the U.S., and it's wonderful to see the good strong partnerships we're having with our customers. And at the same time, we are ready to respond to any further changes in the tariffs as we go forward.

U.S. tariffs not the only thing. We also have Middle East crisis. And here, I'm really proud about the team. We went really decisive. We went quickly out to the market to offset the impact of the Middle East crisis. First, as I said, we focused on supply chain resilience. We wanted to ensure that we ensure availability to our customers. We have no disruptions in our production and serving the supply chain.

As with the U.S. tariffs, we also saw that the branding price -- the brand pricing power is significant with Ansell. And I'm going to talk more about our brands because this really shows that we have the power of the brands, and we are really delivering added value services. So thanks to our brands, we were able to do the price adjustments and could offset one-to-one the cost of the Middle East crisis, and we will continue to be flexible with the pricing as the Middle East crisis evolves.

And then finally, on balance sheet strength, as I mentioned, this was important because as prices were going up and down in March, April, May, we wanted to ensure that we have a strong balance sheet that we can serve our customers no matter what. And we are the trusted partner now and in the future to our customers that they can serve then going forward. So that's U.S., Middle East. It's in our hands. We reacted decisively to this.

And finally, on sustainability, I'm really proud how we are improving on many fronts in sustainability. As a few examples, our safety, we reduced our accidents by 32% during the year. Another example is that today of the sourced energy, 58% is renewable energy. And that's, of course, a huge asset for us that we have 58% of our energy is renewable.

So that also, of course, translates then into a financial impact that we, especially during the Middle East crisis, saw a benefit from. Then a more customer/consumer-facing area is that today, more than 90% of all our packaging is recyclable, reusable or compostable. So proud to be here to talk about the strong financial year '26 and what all the team and together with our customer partners, we've been able to accomplish.

Now I'll hand over to Fred to talk more about the financial performance in detail. Over to you, Fred.

Thanks, Nathalie, and good morning, everyone. It's great to be speaking with you today. I'll spend the next few minutes talking through our financial performance for fiscal year '26, expanding on Nathalie's earlier comments.

Firstly, on sales, we were pleased with the adjusted sales growth of 5.7%, which excludes the effects of foreign exchange and some minor product exits as well as the benefits we received from temporary order pattern favorability in both F '25 and F '26. In the second half of this year, we had $15 million in extra sales of Exam/Single Use products as customers increased purchases in response to the Middle East crisis.

These sales will unwind in F '27, so we have excluded them from the adjusted sales growth calculation. Pricing was a key driver of sales growth for the year, particularly in the U.S., where we successfully offset the effects of higher tariffs. We also increased prices in the final months of the year to offset higher costs resulting from the Middle East crisis.

Pleasingly, as Nathalie had mentioned before, we saw sales really accelerate in the second half of the year, supported by improved volume trends. Our GPADE margin improved by 70 basis points versus F '25, a great effort given the significant cost headwinds we faced throughout the year.

We spoke at the half year results about margins being supported by sourcing productivity efforts and lower freight costs. We also saw benefits across the year from improved sales mix, particularly in Healthcare with accelerated sales growth in our higher-margin Cleanroom products. The net price and cost effects of U.S. tariffs and the Middle East conflict were moderately dilutive to our overall GPADE margin percentage.

Moving down the P&L to SG&A. This was well controlled with growth of 2.7% on an organic basis. Higher employee costs from both wage inflation and strategic hires were partially offset by improved SG&A productivity and the KBU cost synergies we mentioned before, which are tracking in line with our business case.

On FX, while exchange rates were favorable on an underlying basis, we had a loss of $13.8 million on our hedge book, which meant that the currency was a headwind to EBIT of $4.3 million this year. So when you put all this together, we achieved organic EBIT growth of 14.9% versus F '25 and a 90 basis point improvement in EBIT margin growing to 15%, which is really great to see.

Below EBIT, we booked $1.4 million in significant items. This includes the APIP costs related to the upcoming ERP upgrades, largely offset by an initial refund of tariffs paid in the U.S. prior to the February Supreme Court ruling. The interest line was broadly the same as F '25, and our effective tax rate came in as guided at 24.1%. This all contributed to adjusted earnings per share of $1.486, an 18.5% increase versus last year on an organic basis and a result we're very happy with given the external challenges we had managed over the course of the year.

Included in the adjusted EPS was a nonrecurring benefit of $0.033, which was largely due to the timing difference throughout the year between the cost that we've seen coming in through the P&L and the timing of when prices were adjusted in relation to the U.S. tariffs and the cost inflation from the Middle East.

Now let's move to the balance sheet, which is in great shape. Working capital was lower than June 2025, largely driven by a reduction in inventory in the second half as sales accelerated, and we also made targeted reductions in safety stocks in response to the Middle East crisis. Debtors were higher largely due to the higher sales and payables fell with purchases from outsourced finished goods suppliers lower than at the same time last year.

Looking at returns, we delivered return on capital employed or ROCE of 12.7% and return of equity of 10.6%. As we pointed out in the half year results, the nominal reduction in ROCE versus F '25 is due to the partial inclusion of KBU capital employed in the denominator in the F '25 calculation, noting that we calculate ROCE based on the average capital employed on a trailing 12-month basis. If you normalize for this KBU in the denominator, the F '25 ROCE would have been 11.2%, translating to a 150 basis point improvement in F '26 on a like-for-like basis.

Turning next to cash flow, which was really strong in F '26. The biggest increase you see in statutory EBITDA was driven by our double-digit earnings growth, helped further by a large reduction in significant items, noting that we were booking KBU transactions and integration costs last year. Net receipts were significantly higher than F '25, driven by statutory earnings growth and the improvement in working capital I outlined on the previous page.

With growth in net receipts outpacing EBITDA, our cash conversion came in at 113% compared to 91% in F '25, as Nathalie noted before. Net CapEx was $48.6 million, lower than F '25 following the completion of construction of our greenfield India surgical facility. We also took the decision to prioritize only our most strategic capital projects while we were navigating through the effects of the Middle East crisis in the latter part of the year. So with the strong growth in net receipts and a reduction in CapEx, we were able to deliver a substantial year-on-year increase in our operating cash flow. This gave us the ability to fund the on-market share buyback program to the tune of $118.4 million, while also reducing net interest-bearing debt by $52.3 million as well.

So let me wrap up by saying a few words on our funding profile. Our net debt to EBITDA was 1.3x at the end of this year compared to 1.6x this time 12 months ago. And we have significant liquidity with $752 million of cash and undrawn bank facilities. Furthermore, the maturities of our debt are relatively long-dated, and we have approximately 2/3 of our facilities at fixed rates. So you could see that our funding position is healthy. Our maturity profile is well balanced, which gives us flexibility to continue to pursue value-accretive growth opportunities in addition to capital management initiatives.

With that, I'll hand it back to Nathalie to talk about our strategic priorities and our outlook for F '27.

Thank you, Fred. So now talking about the strategic priorities, and this is really important for us, how do we drive higher growth, how do we drive higher profitability and then also what's the capital allocation to it? When we look at our strategic priorities, our focus is really how do we increase customer centricity and accelerate profitable growth. To this, we have 3 levers. Two of them are growth levers and the final one is funding the growth lever.

We're starting with commercial excellence. Commercial excellence, how can we enhance the value we are driving to customers? And I will on all these levers also come back to you and show an example and a proof point what we delivered in financial year '26. So commercial excellence. Secondly, the growth lever, really looking at focus on our strategic markets. So which are the key markets and verticals where we have higher margins, we have higher profitability, and we see the verticals are also having organically better growth, and we are focusing on these and also the capital allocation on these. So better returns.

And finally, funding the growth lever where we talk about operational excellence, and I'll give a few examples about that. But how can we increase our return on capital employed and at the same time, ensure that we are closer to customers, we are serving our customers much better because we are a true believer that the better we have a supply, the more intimate we are to customers, the more our demand and growth will be.

Good. Then going to the commercial excellence. And it's an area where we have a lot of opportunities going forward and a few proof points already from financial year '26. When we look at our top 5, only 5 brands that we are having in the company, they account for 58% of the net sales. So we really are a brand-driven safety company where our brands do deliver value. And we also see that, of course, thanks to the pricing adjustments we have had to make in U.S. tariffs and also in Middle East that the brands do count.

So these 5 brands, in total, they grew 1.2x faster than the whole company. So they are really delivering value. Secondly, the top 5 brands, the gross margin is 220 basic points higher than Ansell average. So growing faster and accretive to our profitability as we go forward. And of course, as we go forward, we will focus on how can we generate more value to our customers and how can we also make the big brands bigger because that's where we get the scale benefit of our large portfolio.

So it's not only about the brands. We're also having our Guardian tool that we've spoken about in the past. And with the Guardian tool, that's our main global sales tool where we can show the safety benefits, the safety impact our products are having on our customer and customer sites. And we see that when we use the Guardian, we have 50% higher sales on newly converted accounts.

Not only Guardian, then, of course, innovation. Innovation is hugely important for us and will continue to be so. And now when we talk about the strategic verticals and strategic markets, it's easier also to target the focus on the innovation. And as an example, we see that in Mechanical, in our gloves and products in Mechanical, we had 18% of the sales last year came from new products launched only in the last 5 years. So innovation does matter. So commercial excellence continue to drive value for the customers.

Then secondly, focus on strategic markets. And I mentioned U.S. many times during this call, and I will continue to do that in the years to come. Today, U.S. is 43% of our total net sales. It's, of course, the most dynamic booming market in the world if you look at the totality. And by focusing on the U.S. and also our other in total, top 5 countries, we see that we are going to be able to allocate capital and drive growth much better and being closer to customers.

So in total, U.S. grew 1.8x faster than the whole company, Ansell. And that's really driven by our strong brand presence and our strong end user partnerships like I spoke about that we are having in the U.S. And of course, the prime example is Amazon, a huge end-use customers for us. We are very proud of the innovation and the very close cooperation we are having with Amazon to continuously develop new solutions, not only product solutions, but many other solutions to ensure that we have a structurally made partnership with Amazon going forward.

And with this, in the last year, we -- thanks to the good cooperation, we helped to reduce 65%, 65% of all hand injuries that Amazon had in their warehouses, in their sites. So this is a true example of where we double down on customers, we focus on the strategic markets, we focus on strategic verticals, we grow faster than the company, and we deliver value to our end customers.

So commercial excellence, focus on end use selected strategic markets and finally, operational excellence. This is the funding the growth lever that I was talking about earlier. So the funding the growth lever, we are looking at 3 building blocks. And these 3 building blocks, how can we simplify Ansell and that way, serve our customers faster and be more agile and also, of course, always be competitive. And these 3 building blocks in operational excellence are, how can we simplify our product portfolio and brands? I spoke earlier about make the big brands bigger. How can we simplify our supply chain and how can we simplify ways of working? And these are areas we're going to continue to work on, and I'll continue to talk about this to you as we go forward in the months and years to come.

Then look at a few examples on the next slide. We had APIP that we have delivered and that's -- and delivered the $50 million recurring savings that are already achieved. Now with these 3 building blocks on operational excellence to fund the future growth, with a simplified product portfolio and brands, with a supply chain and ways of working. We will continue this really good work.

And I'll give just a few examples that we already executed now in the second half of the year. As an example, our TouchNTuff product, we've reduced the areas of touch points between our sites and also how we produce it and make it in a more streamlined, simplified way, and that has led to a 66% reduction in lead time to our customers. Another area is HyFlex. Doing a bit opposite instead of simplifying to one place, HyFlex, we have instead of only producing in one place, we're now producing in 3 places to be closer to the customers, and that has reduced our lead times by more than 90%. So again, customer centricity is at the key of everything we do.

Then another one where we talk not only about lead times, but of course, also on cost competitiveness is in Kimtech in our Cleanroom space where our goggles, we used to have 4 suppliers, and we are moving to 1 supplier. And that, again, with the scale, reduces our lead time by more than 68%. So we'll continue to work on this to ensure that we are able to serve and able to be close to our customers. And as I said, in this dynamic world, it's really about supply and availability and supply creates demand.

So on the strategic priorities, really to sum up, we have 3 levers, 2 are growth, commercial excellence, selected markets and verticals that we are focused on and then the funding the growth lever, operational excellence. And we'll continue to talk about this. We'll continue to bring you up to speed and bring you examples of how we are advancing so that you can see the impact that we are driving through the strategic priorities. And of course, there's a capital allocation element to it as well.

So with the strong financial year '26, I think it's a good segue to go to the outlook. So our outlook adjusted EPS for the year, financial year '27 is in the range of $1.58 to $1.70. And this outlook, really, the assumptions behind it is as we are seeing that our sales, the sales momentum will continue both from a volume and value point of view, the strong momentum we had in the second half.

Secondly, our strategic priorities, where we're focusing on the more higher value-added products, the faster-growing verticals and markets will also support the sales growth going forward. On the negative side, of course, we can't ignore the very dynamic macroeconomic market we have around us, the macroeconomic uncertainty. So that's always a downside that we will have to navigate as we go forward.

Assumptions then on earnings is that the commercial excellence will continue to drive profitable sales growth. And as I said also, this how do we focus on moving the portfolio upwards towards higher gross margin product. Operational excellence will enhance productivity. And as I said, we'll bring more examples as we go forward. And then in addition, we assume a $9 million FX benefit versus financial year '25.

Then on capital allocation, as Fred was saying, we came down in financial year '26, and we are continuing on this level, this much lower level in financial year '27. We are continuing to invest in growth. However, what we have now layered in is a strategic capital allocation in the areas that matter to drive growth in the selected markets, the selected verticals and also in the innovation related to this. And then we'll continue to do the existing share buy (sic) [ buyback ] program. So very excited of financial year '26, and at the same time, we have to be realistic. We live in a very dynamic world, and we'll continue to tackle it as we go forward.

With that, I hand over to Q&A. Thank you.

[Operator Instructions] And your first question comes from the line of Dan Hurren from MST.

Look, if we sort of look at the sales outside of the U.S. and sort of adjust that a little bit, it looks like you've done low single digit ex U.S. So I was just hoping you could talk about your experience in markets that may have seen some competitor product directed away from the U.S. and into those other countries and what the experience has been.

Thanks, Dan. And I would say U.S., as we mentioned so many times on this call, has been the highlight of the second half and the whole financial year. And I would say that also comes back not only our focus on the products and our customer relationships there, but it's also the underlying economy.

And we also see a strong growth in Cleanroom in other markets and in Europe, in our selected focus areas. And when I talk about these top 5 countries, the ones that really move the needle, the rest of the countries are in Europe. But at the same time, we know that the Industrial or macroeconomic situation in Europe and the Rest of the World is not as booming as it is in the U.S. So that's why the U.S. really stands out.

The good news about that is, of course, that we continue to see strong macroeconomic momentum in the U.S., and we are well positioned to be there and benefit from our scale of 43% of our net sales in U.S. already today. Fred, anything you want to add?

No, I think you summed it up really well. The only thing I would add to that is that there's -- competition is clearly intensified through the Middle East crisis. However, our strong brands have really come through loud and clear, and our differentiation of those stronger brands have come through loud and clear in this pricing power, not only that, but also in the volume growth we're seeing in the second half.

Perhaps a question for Fred. We're still getting to the bottom of it, but it looks like in the accounts, there's a $25 million impairment that is associated with the Indian plant. Can you give us any details on that and if this is within underlying earnings? And of course, I'm only asking because the impairments were excluded from underlying earnings in '25. I'm just trying to understand if that's been a consistent treatment.

Yes. Good question, Dan. So we did have selected lines that we impaired as we look to optimize our supply chain and optimize the supply in our network to drive our cost down, especially with the Middle East crisis, having a better cost position is really, really important here. And so we did take a noncash write-off of some selected manufacturing lines and the Indian plant had one as well.

But just the treatment of that, I mean you pulled impairments out from last year, but they appear to be included this year. Is that correct?

No. So the impairment -- so I talked about the $0.033 of onetime nonrecurring EPS in F '26. Those noncash impairments were sitting in that $0.033 of EPS.

Your next question comes from the line of Saul Hadassin from Barrenjoey.

I was wondering about the second half growth within the Cleanroom Gloves segment and that 17% growth. I wonder if you could talk to how much of that was volume versus price? And then as a follow-up, clearly, there's been some timing -- favorable timing as it relates to price increases in the back end of fiscal '26. As we look into FY '27, do you still get favorable pricing coming through relative to what's happening in the Middle East? Or will you temper some of that pricing based on what's happened to, say, input costs in the last month or so?

Thank you. I can start and then hand over to Fred. Thanks for the question. I would start with the Middle East pricing question. What we promised to the customers, and we speak about this a lot, is that the cost inflation we saw in the Middle East crisis, we passed on to customers. But when cost inflation is coming down, we're also going to adjust our prices. So we are going to be very flexible here and just reflect the cost inflation that we are having.

Then your question about the Cleanroom growth. And as I said -- and as you said, it was very strong in second half. And that kind of very strong growth, you don't only get by pricing and value, this volume as well. And this total financial year growth of 10%, majority of that came from the U.S. Fred, do you want to add?

Yes. Just to expand on the Middle East pricing. So we did start to price into the market in that May, June time frame. So you will see the impacts as we move into F '27 of that full year effect of pricing in the Middle East. And on the Cleanroom, Nathalie is exactly right. There were strong volumes being seen. And I think this speaks volumes to the KBU acquisition we had done over 2 years -- almost 2 years ago now, where we're seeing the power of that brand, the power of the Ansell brand together, really unlocking a lot of opportunities in the marketplace.

And sorry, can I just follow up with that 10% Cleanroom growth, are you willing to split out what was volume versus price?

Yes. We won't talk to exact numbers, but I can tell you that there were strong volumes probably to the tune of almost half of that being volume impacts.

Your next question comes from the line of David Bailey from Morgan Stanley.

Yes. I was sort of interested in that the top 5 accounting for 58% of revenues. Just strategically, how you think about growing that going forward? Obviously, there's a gross margin benefit associated with that. But in terms of thinking about growing those brands further, what's the strategy here? And do you think that will continue to grow over the next -- over the coming years?

Thank you. Very good question, and that ties to the strategic priorities with the top 5 being 58% of our net sales. And as we continue in the, what I said, the operational excellence to simplify our product portfolio and brand portfolio, that means that we are focusing on these big brands and making them bigger, because then we are just much more efficient, and we also make our life much easier to our customers when we have certain big brands that matter and support our customers.

Now I talk about the distributor customers as they go and represent us forward. Also, the innovation investments will be into these big brands. So again, focus on scale, make the big brands bigger and also enhance the value they are delivering to the customers. So yes, we will see that they are going to drive growth faster than the rest of the company. And that is the key of being very strict on strategic priorities and capital allocation to really drive the growth -- profitable growth momentum. And as I promised, I'm going to come back to these kind of examples every time we meet.

Yes. Understood. Just in terms of the guidance, I mean, it looks relatively clean. There's a $9 million of FX benefit coming through. Is there anything else to sort of call out in relation to the guidance range of $1.58 to $1.70 in terms of movements within particular lines to think about?

No. No, it's just execution.

Your next question comes from the line of [ David Philip Nathan ] from Goldman Sachs.

Just wanted to touch on your guidance. If we sort of think about the FX movements and also the share buyback into '27, I think my numbers would suggest the NPAT grows about mid-single digits at the midpoint that is. If I then think about the composition between sales and margin, also considering that, I guess, the FY '26 period had a sort of a one-off benefit that you're calling that's timing related. So if you think about the FY '27 split between sales and margin, like could you give us a sense then on what's happening? You sort of expect margins to stay flat? Does it grow? That will be pretty helpful to think about your sales performance.

Yes. Thanks, Dave. I'll start and then hand over to Dave -- not Dave, Fred. Sorry, Dave. Yes, of course, a healthy growth and the momentum we've had in second half of this year supports it. At the same time, we have to be realistic. I think that it's a very uncertain dynamic world around us. But with our focus on the strategic markets, the strategic verticals where we see underlying faster growth and where we also see that our brands are having a stronger power, by focusing on that, we will see a continued growth momentum.

Then, of course, that translates into continued margin enhancement. And like I said on that assumption slide, it's really the commercial excellence that how do we make the big brands bigger, how do we translate the value we're driving to the customers and talk about that and then the operational efficiencies that we're going to get in, in our focus on the funding the growth lever, on simplifying the portfolio, supply chain simplifications and ways of working. Fred?

Yes. And maybe I can add on the SG&A line, we're continuing to look at productivity initiatives within that line. We grew 2.7% year-on-year in F '26. We're looking to even be around that same level in F '27 because we know that it's really going to be important to leverage the scale that we're seeing on the top line, both in SG&A.

And then we also have on the GPADE line, a lot of productivity initiatives, both in the supply chain and also in the commercial networks that are going to help drive that GPADE percentage faster up.

Yes. Okay. That's useful. And then on the Healthcare segment, I would say the Exam and Single Use sort of part of the portfolio did really well in that second half period, even if you exclude the stocking that you called out. Could you give us a sense of what's been driving that? Is it largely just price increases? Or is there any volume dynamics or market share implications we should be considering as well, please?

Yes. Thanks. That's a really good question. I have myself been intimately involved in the customer meetings when we did the Middle East price adjustments. And I would say what really resonates with our customers, our distributor and end users is that in this kind of global disturbances, when you are a strong player, you have a strong balance sheet and you say we are here to focus to serve you, and we are here to ensure availability, that goes a long way.

And I would say that's behind the faster volume growth in Exam and Single Use as we could -- we had the financial strength to buy the raw materials even when they were higher cost and ensure that our customers all the time had their products. So again, supply equals demand.

Great. Can I just follow up on a point on that? Do you feel the share gains that you made in that part of the business is sustainable into '27?

I would say it's too early to say. Too early to say, and we are very focused on looking at the point of sales data that how are they moving both in Industrial and in Healthcare to see how we are doing. And at times of crisis, customers tend to lean to the ones who can deliver security like we did with availability. But I think it's too early to tell if what is the stickiness and then also what is the next crisis around the corner.

Your next question comes from the line of Laura Sutcliffe from Citi.

Could you talk a little bit about the significance of your biggest customers? I know you probably can't give us a lot of detail about the Amazon contract specifically, but maybe if you could just talk in general about those big contracts? And you talked about your biggest brands, but how much overlap is there between your biggest customers and your biggest brands?

Yes. Amazon is a huge customer for us. And where we are focused -- I actually just came out of Amazon working meeting last week in the U.S. Where we are focused in on is not just selling a product, selling an innovation. We're really looking at how can we systematically in a partnership tie ourselves together for the long term. And it's not only about, as I said, just moving the product forward.

It's about much bigger solutions that we are looking to ensure that Amazon can drive their safety culture and their needs going forward. So as you said, I can't tell too much about it, but maybe in the future, I can also continue to give examples about the Amazon partnership, which is fantastic.

So as I said, it's not only product-based, it's not only innovation-based, it's really about looking at the total go-to-market, looking at the total solutions, how we can partner together and make that into a structural setup that we have together. When you asked about the brands, they only buy one brand from us.

And then second question, I'm sorry if this was mentioned earlier and I missed it, but did you have to buy in much product over the course of the year just gone to smooth the effect of raw material cost availability, inventory bouncing around?

You mean in the Middle East crisis?

Just in general, but yes, I suppose I was thinking about it being rooted in the Middle East, yes.

Yes. As it's been such a dynamic world, our operations team have done a fantastic job actually being daily in meetings with our biggest suppliers to ensure that we get the right quality product, not only that we get the right raw materials, but we get the right quality product and also that financially, we have the balance sheet strength to get it. But Fred, do you want to build?

Yes. Over the last few years, we've really invested behind a much stronger supply chain. And part of that is the partnerships that we built with our vendors, particularly on the NBR side, which is obviously the most volatile right now in terms of not only cost but supply. And that partnership has really given us the opportunity to make sure that we can supply the market with no disruptions, and it's worked out brilliantly at this point.

Maybe I can add in what you said about the operational excellence, where I also said that we are going to simplify the supply chain. That, of course, means that not only like we are doing with the brand, let's make the big brands bigger, also how can we in the supply chain, ensure that we partner with the big ones and we make the partnerships bigger, so that when we have these disruptions, global disruptions that we are there, and we have the joint muscles to breeze through it.

Your next question comes from the line of Craig Wong-Pan from RBC.

Just wanted to ask about the Industrial margin. So for the full year, there was improvement year-on-year. But if we look kind of from first half to second half, there wasn't much expansion like we've traditionally seen. And I guess if you look for the second half '26 on second half '25, it did decline. So I just wanted to understand if you could explain what happened there and how we should think about that margin going forward, if there is typically going to be kind of the usual seasonality or not?

Yes. So great question. On the Industrial margins, you're right, we did have a dip in the second half. But if you looked at the full year, we did see the margins improve year-on-year. So there is a little bit of seasonality and timing within those margins first half to second. But to really answer the question going into F '27, we will be sustaining the full year margins that we saw in F '26 going forward and looking to expand them as well.

Okay. Next question, just on the portfolio. So Nathalie, you talked about making the big brands bigger and you kind of alluded to simplifying the portfolio. So if there are product lines shrunk or kind of exited from, I guess my question is, does that lead to kind of impairments around the brands there or kind of manufacturing lines or equipment?

Yes. That's a good question. When we are talking about the operational excellence and the simplification we are doing, we're still working on the details. And I would say we are now focused on the areas that will really quickly deliver value to the business. But of course, we need to work out the details.

Okay. And then my last question, just on the ERP investments. Have you come to any estimate around the size or quantum of that?

Yes. So we have not come to the dollar amount of what the savings would be. We want to make sure that we can implement across the globe, and that's when you'll start to unlock the savings benefit when the full systems are in place globally. And so that will be in about 2 years from now, and that's when we'll have a better estimate of what that savings unlock will be.

On one ERP, I can also add...

Okay.

On one ERP, I can also add that our priority has been to be flexible on the Middle East cost inflation and the pricing needs, and that's been our #1 priority. We wanted to do that well. And therefore, one ERP has been delayed.

Your next question comes from the line of Andrew Paine from CLSA.

Yes. Congrats on the result. Just one on the liquidity. You've obviously highlighted the liquidity available here. Just good to know what your medium-term outlook for this. Just really wanting to get an understanding around the mix of priorities around internal investments, M&A and capital management that you called out and also just to get an understanding of where your net debt to adjusted EBITDA target is over the long term.

Yes. So let me answer that. A couple of things. One is on the latter part of your question, we are still targeting 1.5x to 2.5x net debt to EBITDA as our target range. We're slightly below that at this point, but that gives us a tremendous amount of agility, especially in these tough times with Middle East crisis. We do have the agility to really react. And more importantly, it also gives us the ability to look for the highest growing, highest returning type initiatives that we can put capital against. In terms of that liquidity, obviously, we're always looking at M&A opportunities, but they come as often as they come. And so we're constantly looking at those opportunities, but there's nothing at this point that we would like to disclose at this time.

And on M&A, I would just add that a healthy company needs to deliver sustainable organic top line growth. So full focus on the strategic priorities, full focus on delivering the organic top line growth. Only then do we deserve to do the next M&A. So focus priority organic growth at the moment.

Okay. That's great. And then just coming back, I know you've mentioned the foreign exchange benefit of $9 million in FY '27, but you're also just talking about the expected reduction in hedge book losses there. Can you just run us through what that is and how to look at that?

Yes. So as you had mentioned, we had $13.8 million of hedge losses in F '26. We expect $9 million of that to unwind into F '27. And we expect that the currencies, which were bouncing around, if you remember in the first half, they've typically stabilized in the second half. We expect that stabilization to continue from a translation standpoint.

Your next question comes from the line of Vanessa Thomson from Jefferies.

I wanted to ask, you mentioned just then that you were aiming to keep flexible pricing given the Middle East disruption. I just wondered what that meant, and is price neutrality the goal or just a bit more color there?

Yes. So as we had said before, we were looking to offset any kind of tariff and in this case, Middle East increased cost through pricing, and we've accomplished that at this point. There was a timing difference between the actual cost increases and the timing of when we brought the pricing into the marketplace. And it was a net benefit to us, and that was built into that nonrecurring $0.033 of EPS. So we basically, at the end of the day, covered outside of that timing difference, the cost with price.

Also, there was a discussion of organic top line growth being the primary focus for now. Is that -- in the past, that's been flagged as 3% to 5% organic growth. Is that still what we should be thinking?

I think we have to come back to that, that what is our financial targets as we go forward. But as I said, we have the financial strategic priorities to look at the commercial excellence and then the selected markets that we know are structurally growing faster and also the selected verticals that we know are structurally growing faster. But down the line, we owe you as we look at the financial targets.

Okay. And then my last question was just around -- you mentioned that HyFlex now is being manufactured in 3 locations to improve speed to market. Are there other products that that's under consideration for? And dare we ask, would that ever lead to onshoring production within the U.S.?

Thank you. When there's so much happening in the world all the time, we have to be very agile and from a customer centricity point of view, I think how do we serve our customers the best. And I've spoken a lot about this, ensuring availability at the right time and reducing lead times. So yes, we are looking at different options and also how to ensure for the U.S. market that we are TAA compliant. Today, we have 2 factories that are TAA compliant, but what are the other needs as we go forward. So yes, we are always looking at different solutions.

Your next question comes from the line of David Low from UBS.

Could we just come back to the price issue? There's been a lot of price movement with tariffs and then the Middle East. Can I get you to break down roughly what the split is between price and volume for the business in '26 and what the likely benefit is as we move into '27, please?

Yes. So David, good question. So as I mentioned in F '26, the sales growth of the 5.7%, you can look at as predominantly pricing. If you remember in the first half, we had much lower volumes.

We did see that turn around very nicely in the second half. But when you combine the 2 halves together, we're slightly down in volume for the year. But the key message here is the second half, that acceleration of volume growth was seen, and it was really important for us to see that as we move into F '27 as well. So it's predominantly pricing with volumes being slightly down.

And as we think about FY '27, how much price benefit is -- given where your starting point is and what the plans are is likely to come through in '27, assuming input prices don't move from here?

Yes. So we believe there will be a healthy mix, both of volume and pricing as we move into F '27. We won't obviously tell a specific number, but we do believe the volume growth will continue. Obviously, with this, the markets the way they're reacting and the dynamic and volatile markets we're in, that could change on the volume side, but we do see a path to a healthy mix.

And I would add also with the strategic priorities when we're looking at the attractive verticals, the key markets, we will also see that all volume is not good volume. And that's a key of commercial excellence, that where do we allocate our focus. And it might be that from a commercial excellence, there's business that is not so attractive. And that's part also of the -- simplifying the portfolio and the brands. So again, moving with the portfolio, moving -- working on the portfolio roles as we go forward.

Great. And look, my other question, it's not been lost on anyone that data centers are a huge level of area of investment in the U.S. and even back here in Australia. But how much exposure does Ansell have to that dynamic?

We do have exposure to data centers in U.S. and globally. However, once they are built, you don't need a lot of PPE in the factories or in the centers. But while you build them, there's massive investments going into a lot of different areas in the supply chain. So yes, this is something where we are really focused on what are the hazards, what are the safety hazards and how can we serve it the best going forward, not only in the U.S. but globally.

[Operator Instructions] And your next question comes from the line of Christine Trinh from Macquarie Capital.

Just changing tact a little bit on raw materials. We saw that inflation up about 100% earlier this calendar year and the oil price is just continuing to bounce around, but still pretty high. How are you seeing kind of raw materials trending now? And what are you assuming into the FY '27 outlook, please?

Christine, good question. So let me step back and kind of talk a little bit about what we saw in the second half. So if you remember in the first half, we saw our biggest commodities are most volatile on the latex side. They actually were coming down in the first half. Then we started the second half, and we started to see them increase.

And then in around the May, June -- April, May, June time frame, they started to accelerate with the Middle East crisis. They've now come down a little bit over that next period of time. And we've seen a stabilization at this point. So we believe as we move into F '27, those costs will have stabilized. And those are the ones that are mostly tied to the oil types of products.

Now the caveat to that is, is that, obviously, Middle East crisis is dynamic and these things can turn on a dime. So we're going to be prepared, and we're monitoring this almost daily. As these commodity costs shift, we're prepared to do the appropriate pricing actions in the marketplace to offset those costs dollar for dollar as we've been doing all along, not only with tariffs 2 years ago and into this year, but also on the commodity cost side on Middle East.

There are no further questions at this time, so I'd like to hand back.

Thank you. Thank you, everybody, and thank you for the good questions. Just as a summary, we had a strong financial year '26. We are really proud of what the team delivered and in this dynamic market environment with the U.S. tariffs, Middle East crisis and at the same time, being able to grow the top line and the profitability and a strong cash conversion in the year.

Now with the strategic priorities being started to be outlined, it will make us -- make it much easier for us to focus on where it really matters, focus on innovation, focus on our talent, focus capital investments in these areas to continue to deliver strong performance. And that, of course, first translate then into our guidance for financial year '26 -- sorry, financial year '27 with the outlook of delivering $1.58 to $1.70 EPS as we go forward. This is a team effort, and I really want to thank all of our team internally and all our strong customers. I mean it's heavy lifting in this kind of changing world and a lot of customer intimacy here and also all our supply partners. Thank you.

Ansell Limited Fiscal Year 2026 Half Year Results Briefing. [Operator Instructions]

I would now like to hand the conference over to Neil Salmon, Chief Executive Officer. Please go ahead.

Thank you, and good day to you all. It's a pleasure to join you this morning from Melbourne on what is my last day as Ansell's Chief Executive Officer. And I hope you will agree that we're reporting to you a pretty good result to go out on. But more important than that, I also hope you'll hear through this presentation that I believe we have very solid foundations in place that should drive long-term shareholder value creation.

So here, the matters we'll cover today. I'll give you the highlights of our performance overview. You'll see another half of double-digit earnings growth. And then against that critical goal, we are on track to offset the effect of tariff costs. I'll then dig a little deeper into the drivers of our growth and give you our usual sustainability update.

I'll then hand over to Brian Montgomery, who will highlight the continued improvement in Ansell margins and a strong cash result. And then it will be my great pleasure to introduce Nathalie Ahlstrom, who is succeeding me today as Ansell's Chief Executive Officer and Managing Director. Although today is her first day as CEO, she's been with us the last 3 weeks, starting to get up to speed on the Ansell business. She'll talk to our decision to maintain guidance and continue our buyback program. And then Nathalie, Brian and myself will be available to take your questions at the end of the call.

So let's move forward to the results summary. And we continue with our usual practice here of restating at the side of the slide, the goals that we outlined to you at our last reporting period, so August, as we began this fiscal year in the middle is my assessment of our progress against those goals and summary P&L on the right. Talking to organic constant currency sales growth, here, we committed to revenue growth. The reported organic constant currency was a moderate sales decline of 0.6%, but remember that we called out in this period last year, $27 million of sales, which at the time, we said would not be recurring sales. So when you adjust for those, we see a 2% overall organic growth on an adjusted basis versus the first half of last year.

Critical, as you're well aware, was that we offset tariff costs through pricing. I'll comment on this in more detail in a moment. But for now, let me assure you that all price increases are in the market, and we see generally good customer acceptance. Strong results on earnings, improvement in GPADE margin.

And even though the net tariff effects are slightly dilutive to GPADE margin percent, we still grew GPADE margin through continued strong performance by the KBU delivery of the synergies associated with that acquisition and a broad improvement in productivity arising from the final piece of APIP product savings but extending into what was generally a good result in terms of productivity improvement in operations. And then later, Brian will summarize a strong cash result and an overall good EPS delivery.

And so to the right hand of the page, almost 20% adjusted EPS growth. In a world around us that didn't give us a lot of tailwinds, I think is a very creditable result. So let me now talk a little more detail to the effect of U.S. tariffs. On an annualized basis, a 12-month basis, we now estimate the additional cost to our U.S. business of $80 million. And we're on track to offset that in full through a combination of price increases and some other mitigating measures, too. Price increases are now in market, as I mentioned, the first wave was put in around June, July, and the second wave was completed by the end of calendar year 2025. Our intelligence at this point is there's generally good acceptance of those price increases. And so we feel we're well on track against this very important goal.

And if I look overall at the equation of price increase, cost increase and volume effects, the net EBIT effect of all of those is in line with or even slightly ahead of where I thought we would be at this stage, which is very satisfying as clearly, that was a very ambitious goal that we set ourselves that we're on track to deliver. Outside of the U.S., we have seen some negative demand impacts from the second order consequences of tariffs, particularly in economies that are heavily dependent on exports to the U.S.

So most notably, Mexico, where Ansell has a large market share, a large market presence. It's one of our top three or four countries. And there, we have seen negative demand effects. So some emerging market performance, a little weaker than expected in the half, but our mature markets performance tracking very well and very satisfied with where we are there.

So now let me give you the breakout by the segments. So -- and for both Industrial and Healthcare, I'll talk to those adjusted year-over-year growth numbers adjusted for the figures we called out a year ago. So a good result for mechanical, almost 6% adjusted growth and new products continue to be a very strong contributor to our mechanical success, and I'll highlight some upcoming new release examples in a moment.

Chemical, we did see a moderate sales decline in chemical. And this is coming more in the less differentiated products, particularly products that are sold into the food industry, where we see a general reduction in activity by our end-use customers and lower reductions in workforce employed in that sector as well. Our more differentiated product ranges within chemical continue to perform well.

Once again, in industrial, really the standout result was the margin here. And I still see opportunity for us to continue to grow EBIT margin in this business. And it's a number of factors coming together. So the KBU business that's been -- the part of it that's been consolidated into industrial performed well. We saw lower freight costs than the prior period and generally a good result in terms of manufacturing productivity all contributing to almost 18% EBIT to sales in the half.

Turning to Healthcare. And here, we saw on an adjusted basis, again, a good result for Surgical on the back of strong prior period growth as well. In the cleanroom business, it's now apparent that prior to the acquisition of Kimberly-Clark and prior to the completion of the transition period, transition services period, customers had been running at a higher than typical level of inventory. And so for those KBU products, we've seen some destocking come through in the last 6 months as we're now able to track that as following integration, we can see the sell-out data from our distributors and measure that against our sell-in.

And for the Ansell products, equivalent products in clean room, we don't see that effect, and those continue to show good growth in the half. So overall, underlying, I'm very satisfied with the clean room growth. Within Exam/Single Use, as you're well aware, at the less differentiated end, that's where we do see some more price sensitivity. It's also lower margin for Ansell. So important that the more differentiated products with high margin, we saw continued growth within Exam/Single Use, and we did see some decline in the lower-margin segments within Exam/Single Use.

Overall, also nice to see this improvement in EBIT sales ratio, EBIT margin for health care and certainly some further work to do to get this segment to where we want it to be, but on track to the improvement plan. And again, as for industrial, similar drivers. So the benefit of the KBU acquisition, consolidation, synergy delivery, lower freight costs and generally good productivity coming through in operations.

So let me dive into a little more detail on the drivers behind this result. And if I step back a little bit on this day, to me, these are four key reasons why I believe you, as investors in Ansell should have confidence in our ability to deliver long-term consistent shareholder value creation. And I want to begin with the success of our digital transformation. We haven't talked about that too much on these calls, but I don't think it's fundamental to any business.

And while there's a lot of talk about the ability of AI and advanced IT capability to drive productivity, if you don't have the foundation, then really you can't unlock the potential. So we've done substantial work over the last 4, 5 years, upgrading the underpinning systems on which Ansell operates, but also really improving our ability to manage data effectively. Data is the fuel of AI. And what's great about Ansell is that our data is proprietary, both the data that enables us to run our business more efficiently, but also the data that is critical to customer bank. We continue on this journey, but we have a strong track record of success here.

So turning now to more productive and customer-focused organization. And just to clarify on the accomplishments of the last 4 years slide here. So as when we announced the APIP program back in 2 years ago, of course, the headlines were about the cost savings anticipated to come from this program. And we've delivered on those actually slightly higher than the original numbers we promised. But as I announced the APIP program, I did say that I felt the more important and longer-term benefits was that it would be a more efficient organization structure, also better aligned to customer interests.

And that, in turn, would be supportive to our ability to deliver growth. And I think we have clear evidence of that coming through now. And most importantly, I see that the growth strategies we're developing that Nathalie will look to implement are better grounded in those customer insights. And that allows us to give better focus to the product innovations that really resonate with customers.

The third aspect here is the strength of our business processes and our overall operating effectiveness. Perhaps during my 13 years at Ansell, this hasn't always been a characteristic that you would first think of when thinking of Ansell. But I think this has fundamentally changed. And we see this in a couple of ways. Firstly, our customers are very appreciative of the improvement we've made in service levels. In the past, they loved Ansell, they loved our products. They love innovation, and frankly, we're a bit frustrated at the inefficiencies of our supply chain.

Now those good things are retained and still valued and our customers are recognizing us as one of the best for quality and reliability of supply chain. We see that in the service metrics we track. We see that in the awards that many customers have given us recently. And that operational effectiveness, that ability to deliver complex business processes also comes through in our ability to deliver on the key goals that we set for ourselves and that we commit to you. And the most prominent example of that, of course, is the delivery of the Kimberly-Clark acquisition, but especially the integration of that business within a record time for us and doing so in a way that was seamless to the customer experience.

And then finally, I also believe Ansell is better positioned today, obviously, growth markets that often offer long-term sources of growth and also differentiation. The biggest move we've made is the move into the scientific business, where we see elevated growth potential and also elevated customer demand for differentiation. And I'll also talk on the next couple of slides about our ability to continue bringing new products and driving growth and the importance of our service differentiation.

So let me now talk to sales supported by new product launches. And here on the right are a few examples. Let me summarize the message that these are illustrating. So already today, in our result, we see very strong growth from our HyFlex high-cap range from our Ringers impact range. What you see on the slide today are only just launching to the market now. So we're not resting on our laurels, where we can. We're continuing to improve on products that are already successful in the market. We're particularly excited by the technology AEROFIT that's behind the HyFlex range here. and then extending our Light Duty impact range, one of the biggest contributors to our recent growth to a range of products with also cup protection in belts.

And then on the right, you see a couple of products that are new to the industry that are solving very important unmet needs that customers are eagerly anticipating as we ready them for launch. The 93-800 we talked to you about a few months ago, and this is the first disposable glove that's able to offer meaningful protection against acetone and other key tones, one of the most prominent hazardous chemicals used in workplaces worldwide and there is no disposable product today that offers any meaningful protection against those widely used solvents.

And then I also believe we are the first to launch to market a PPAS-Free bioprotection suit for first responders that meets NFPA standards. And this, again, as you can imagine, is an item that is attracting a lot of customer interest and a very important launch. So examples of how we continue to grow against existing successful value propositions and also create new opportunities to the market.

And if I summarize these innovation focus areas, the protection piece in the middle there is actually often the easier part of innovation. What's difficult is to combine protection with comfort with a product that enables workers to be productive and then also without asking customers to pay for a premium, but as we innovate products, we also make them more sustainable and better for the environment. When you do those four things together, that's both hard to do and also a long-term source of competitive advantage.

But the next area on the next slide of competitive advantage, which I think is just as important as the product differentiation is our service differentiation. And here, we're investing significantly in improving the breadth and reach of these tools because it remains a complex environment for safety managers there eager for expert advice to simplify for them, the complex problem of what is the optimal PPE in a wide variety of manufacturing settings.

So our core Guardian Platform is undergoing significant investment. That's about improving that underpinning data sets, unique proprietary to Ansell, as I mentioned, and also using AI and other methods to speed up report preparation so that our sales teams in future can do even more Guardian reports and potentially also broadening the reach of that tool to reach more end users than it has in the past. And you can see a very strong increase in orders completed in the first half.

The chemical module within AnsellGUARDIAN, we continue to invest in. This is also unique Ansell data. It arises from our own testing at Ansell in-house labs and it's the most extensive database informing customers how particular materials protect against particular chemicals or combinations of chemicals. And we see very -- we saw very strong growth in the use of this tool, particularly in North America, and EMEA in the first half.

And then we see a significant increase in the use of our right cycle waste management program. This came to us through the KBU acquisition. We saw something like a 30% increase in the tonnes recycled through the program. We're also able to substantially reduce the cost of that recycling process.

Today, Ansell covers that subsidizes the cost of the program and we are through improved recycling and sorting techniques. We've been able to deliver that increase in volume and actually a lower cost and so, and that allows us to start thinking about broadening the number of customers that we introduce the program to, into industrial markets and also expanding its use in Europe. So these service differentiations are actually, in some ways, harder for competitors to match and offer very important long-term differentiation.

So to my final slide, as usual, I'll give you an update on our sustainability goals as well. And certainly, I'm proud of our financial success over the last few years, but I'm equally proud of our progress against sustainability. And fundamentally, I've always believed that our sustainability program has to be aligned also to your financial objectives. They can't be in conflict with each other. And what we see here is both we have reduced Ansell's impact on the environment through measures that have also contributed to our financial success. And if we keep that formula going forward, then we will be able to do both bring benefit under both drivers for the long term.

Beginning with our impact on people, of course, our top priority always at Ansell is our own internal injury rate. As you'll know, it's already low by international standards, and we were able to reduce again the number of injuries occurring within Ansell's operations. You're also aware we take very seriously our responsibility to ensure the employees of all our suppliers also operate in safe conditions that their rights are respected. We are extending further the number of suppliers who are covered by our supplier management framework to ensure that our due diligence methods go beyond and reach further into the market, and we know we're driving beneficial change to workforces across our supply base, and that remains a focus.

For our impact on the planet, these are our long-standing goals on the left. On the right, you can see we did reduce our emissions. We also reduced our water withdrawals and we maintained our zero waste to landfill certification.

So with that, with success against both financial goals and sustainability objectives, I'd now like to hand over to Brian Montgomery, who will give you a bit more detail on our financial results. Brian?

Thanks, Neil, and good morning, everyone. Great to be speaking with you today. Neil provided a few comments on the half year result already. But let me get into it in a bit more detail.

Overall, we were pleased with the adjusted EPS coming in at $0.663. Sales were down 0.6% on an organic constant currency basis, which excludes the effect of foreign exchange and some minor product exits. We noted in our first half year results a year ago, and we benefited from $27 million of sales due to temporary order favorability and backorder clearance. So once you back these out, we delivered adjusted sales growth of 2.1%.

Tariff-related pricing in the U.S. was the primary driver of adjusted sales growth in the half with the major offset being reduced volumes of medical examination gloves, which we report in the Exam/Single Use business unit within our Healthcare segment. Our first half GPADE margin improved by 220 basis points versus the first half of '25. We noted at this time last year that freight costs were elevated as we're choosing to air freight customer deliveries to clear surgical back orders and fast track shipments of new industrial products. With airfreight usage having returned back to normal, this gives us a good margin boost, which is further aided by sourcing savings that we're able to achieve across key raw materials and some outsourced finished goods.

As Neil mentioned earlier, we successfully offset the effects of higher tariffs in the U.S. with price increases and to a lesser extent, sourcing actions. The net effect of incremental tariff-related pricing and cost increases was moderately dilutive to our GPADE margin rate at the half.

Turning to SG&A. This is up 0.4% on an organic constant currency basis, with higher employee costs from both wage inflation and strategic hires, partially offset by improved SG&A productivity and approximately $6 million of KBU cost synergies in the half. If we look at foreign exchange, this was a headwind to EBIT of $1.6 million. Underlying currency changes were favorable to EBIT by 4.4%, with our hedge book offsetting some of this positive movement. We've seen quite some sharp currency moves in the past few months with the USD weakening against some of our key cost currencies, which will drive a greater hedge book loss for the full year than we previously anticipated.

Now let me touch on this further in the outlook section. So wrapping up on EBIT. We finished the half with organic constant currency growth of 15.4% against the first half '25, as well as a 180 basis point improvement in our EBIT margin, which came in at 14.3%, a really positive outcome. If I move further down the P&L, we booked $7.3 million in significant items in this half, primarily APIP costs relating to our upcoming ERP system upgrades. As you will note, significant items are down materially versus the prior year. The interest line was broadly in line with the first half of '25, and our effective tax rate came in as guided at 24.1%. So on the whole, a solid result in some pretty subdued market conditions, and we look forward to building on this year in the second half.

So I move on to the balance sheet. Things are looking in pretty good shape here. Working capital was lower than June '25 by approximately $23 million. Inventory decreased modestly despite the effect of capitalizing higher tariff costs in the U.S. and receivables were down largely due to the timing of collections in North America with a small decrease in payables acting as a partial offset. If you look down at returns, we delivered return on capital employed, or ROCE, of 11.9% and return on equity of 10.1%.

The volatility you can see in ROCE over the past 12 months is due to the partial inclusion of KBU Capital employed in the denominator in December '24 and June '25 calculations noting that we calculate ROCE based on average capital employed over this trailing 12 months. If you normalize for KBU and the denominator, June '25, ROCE would have been 11.2% and translating to a 70 basis point improvement through to December 2025 on a like-for-like basis.

So we turn over the cash flow here next. Net receipts were significantly higher in the first half -- than the first half of '25, driven by higher earnings and an improvement in working capital. The large increase in statutory EBITDA was driven by our double-digit organic earnings growth helped further by a reduction in cash significant items, noting that last year, we were booking KBU transaction and integration costs at this time.

As I mentioned in my balance sheet comments, working capital was lower on improved collections and reduced inventory. This working capital cash inflow helped contribute to normalized cash conversion of 112%, which adjusts for the timing of insurance and incentive payments, which we make in the first half of the year, all in, a really strong result. Net CapEx was $28 million, in line with last year. This included the cost of installing dipping lines on our new surgical manufacturing facility in India with commercial manufacturing now underway there. And finally, we purchased $47 million of shares as part of our on-market buyback program, which was the key driver of the approximately $20 million increase in net interest-bearing debt over the past 6 months.

So I move over to the funding profile here. Let me close by saying a couple of words on this slide. The strong growth we achieved in earnings translated to a reduction in net debt to EBITDA to 1.5x, even allowing for the $47 million we spent on the share buyback. The maturities on our debt are relatively long dated, and we have approximately 1/3 of our facilities at floating rates today.

So all in all, our balance sheet is healthy and our maturity profile is well balanced, which gives us flexibility to continue to pursue high returning CapEx and further address M&A opportunities as and when we see them, along with continued capital management.

So with that, I'll now pass it over to Nathalie to introduce yourself and talk about the outlook for the rest of the year. Nathalie?

Thank you, Brian, and good morning, everybody. It's -- I'm really exciting to be here in Melbourne today and talking to you as the first time CEO now for Ansell. But first of all, I want to thank Neil. I would say today's half year's result shows that Ansell is today a much more focused, efficient and really well positioned company to deliver long-term shareholder value.

And at the same time, as you have seen today, and Neil and Brian has spoken about that. We are at all-time high net sales, absolute EBIT and also extremely strong cash flow. So really a big thank you to Neil and the whole team globally for making Ansell such a strong company. It's a privilege to be here taking over today. I'm really honored to be here with Ansell today.

I spent my career a leading global industrial companies, and I have long admired Ansell. I have been a supplier to Ansell and also customer. So I have seen the global scale and also Ansell's commitment with its vision to leading the world to a safer future. And there's really this passion and this vision of leading the world to a safer future that excites me. What excites me with Ansell is it's a well-run company. We are extremely well positioned globally with our balanced portfolio and also with this strong financial results that we are talking about today. We have globally a very talented team. I met most of the teams around the world already in the last 3 weeks. And I must say, I'm really impressed by the talented team.

And like Neil was talking about our differentiated value proposition, we really have a strong brand to continue to grow and to build out the company. And of course, like Brian was saying, a strong balance sheet for future growth in the future. So what I'm looking forward with this fantastic products, this fantastic brand, it's really to accelerate the profitable growth to continue to enable innovation that is close to the end user needs and really helps our end users to be safer in the future. I'm also passionate about our sustainability commitment and together with the team, together with Brian and the global team, we are continuing to deliver as we go forward.

So it's all about winning with our customers, our end users with our talent and winning for the shareholders. Then if I look at the priorities for the remainder of the second half. Sales growth, as Neil was already talking, we are going to continue with a highly differentiated product launches, and we'll see that coming to the market. So it's all about the innovations. And like Neil was talking about, the Guardian tool also helping us to win and close businesses. And at the same time, it's a very dynamic market environment globally as we all know, and we'll continue to be very close with any changes there might be in tariffs, if anything comes. So we will swiftly react on them.

We will continue our strong focus on productivity. And you can see that -- and Neil was talking to that, you can see that with a strong EBIT margin in first half and then continue to deliver on the KBU synergies and then the upcoming one ERP project that will also then drive efficiency as we go forward.

On sustainability, we are the global leader in our business. So we have to be at the forefront. We always have to lead the business forward. And this is really our passion, like I said, leading the word to a safer future. This is so important for us. And we're going to continue to broaden the scope of supplier management framework to ensure that we are ahead of the game. Finally, we're going to maintain our track record of strong cash flow conversion. And as Brian mentioned, with the share buyback program also helping that. So those are the key priorities for the second half to deliver second half.

Then talking about our guidance and the assumptions behind the guidance. Market conditions in the second half are going to continue to be fairly subdued and the market is dynamic. We are going to continue to drive opportunities on organic growth, the ones related to innovation being closer to customers, close with Guardian and the innovations. We've seen strong earnings in the first half, and we will continue that strong momentum and our track record of delivering in the company.

At the same time, on the more negative side, we have -- since the AGM in October, we have seen some foreign exchange FX headwinds to our EBIT. So the FX headwinds on cost currencies is roughly $5 million for the full year. So therefore, with these assumptions, we are maintaining our guidance of adjusted earnings per share of $1.37 to $1.49. And I really look forward talk through the performance and in our results call in August when we talk about the full year together with Brian.

And this concludes this presentation, and I open up now the conference line for questions. Over to you, [ Shery ]?

[Operator Instructions] Your first question is from David Low with UBS.

Neil, thanks very much for everything you've done. It's been -- you've certainly -- since you took over as CEO, the business went through some pretty challenging periods, but you certainly we've come out the other side of it with the business which does seem a lot more reliable. So really impressed and disappointed to see you leaving. So that's not my question.

My question relates to tariffs. Can I get you to talk a little bit more about what you think the implications are for demand and particularly with how the competitors are reacting because it strikes me that price increases of this magnitude surely will see volumes come back a bit and perhaps provide opportunities for lower-priced competitors to at least push their efforts to gain share.

Yes. So well, thank you for the comments, and thank you also for the question. I think actually the instance of customers refusing to accept a price increase is very limited. And it's only come in some of the more ancillary parts of the portfolio and also parts of the business that were anyway quite low margin. So it's a very small factor to this result.

What we have seen is generally some more price competitiveness, not really directly related to tariff consequences, but in the more commoditized as the portfolio where, as you know, price is a bigger factor to customer decision making and we have seen some volume effects and Brian called that out earlier, particularly noteworthy within the remainder -- this is a small part of our business, but the remainder of our Exam/Single Use products that go to medical applications, we saw that.

So generally, yes, certainly, Ansell has been at the forefront of communicating consistently and clearly with customers about the need to raise practices. I think the fact that we were well ahead of and gave customers plenty of notice and has actually been well appreciated by customers, we've been working this through with them on a phased approach. We stuck to our time lines and that's enabled our distributor customers to also manage the tariff impact to them.

So certainly, you need a few more months of trading to see the full impact of higher prices in the market. But all the data points that I can see at this stage are very favorable to suggesting we have secured these increases. And of course, that goes back to the reason why 6 months ago, I said that this would be possible. I talked to the differentiation of our products, that those products themselves are a relatively low-cost item within the manufacturing health care settings in which they're used, that there are other far more prominent items of cost inflation that customers are managing.

And then as we also wrap up solution around with the service offerings and particularly the waste management program at the chemical Guardian data just further cements the reason why continuing to work with Ansell is something that customers appreciate.

So overall, as I said earlier, if I look at the total effect of price, cost and volume and translate that through to EBIT, it's tracking even ahead of what was an ambitious goal that we set out 6 months ago. So I hope that gives you a bit more color to that, David.

And just to clarify, all price increases are now in the market. And so it's a question of maintaining those and then overall delivering what we expect to be a better volume year-over-year outcome in the second half as well, which I think is very much within our growth.

Great. And maybe just one follow-on then. Just on the guidance. So effectively, there's a $5 million headwind from FX. And I guess one of you to remind us how seasonality is likely to play out? I mean, it's typically been a bit second half weighted. What should we expect this year?

Yes. So I'll let Nathalie comment in a moment on that. But yes, at the AGM, we said FX would be favorable. Now it's turned out to be slightly negative. So you could interpret maintaining guidance as an operational upgrade after you adjust for that FX movement. Yes, first half, second half phasing is not challenging to us at this stage.

But Nathalie, anything else you'd like to say about second half, yes.

Yes. Just on the headwinds on the FX, this is to the cost currencies. And as I said, it's roughly $5 million for the full year. So that's a change from the AGM and that's why we are maintaining our guidance as it is today.

Our next question is from Vanessa Thomson with Jefferies.

I also wanted to say thank you to Neil. It's been great working having you there. And also congratulations to Nathalie. I just wanted to follow through on the question around growth, subdued end markets this half. And you said that you feel that tariffs are broadly accepted. I wonder if we could get some more color around that subdued growth and how the start of 2026 has panned out.

Yes. So I think if I separate mature markets in EMEA and emerging or developing markets, mature markets were really right where I thought they would be. If you look at PMIs or other forward indicators of demand, they're all indicating at best flat or even a slightly negative demand environment. And we see that borne out through a number of publicly available data sets, but also some of the market talk we hear about how others are doing in the industry.

I mean, particularly in Europe, you see automotive production pressure, do you see chemical production pressured. Those are important markets for Ansell. The fact we've been able to achieve growth in those markets, talks to our ability to pivot to other more differentiated and higher growth verticals. So the energy transition, the defense industry and the aerospace industry, of course, contributing to defense, those are all opportunities that we've been able to tap into of offsetting growth that's contributed to what I believe is meaningfully outperforming the market in EMEA.

North America, of course, also affected by automotive. But again, in North America, we're finding other areas to win and that very strong contribution of new products. So it's emerging markets where demand was in some emerging markets was a little bit softer than anticipated. I call that Mexico. That's the most prominent example. But in other markets, India, Brazil, China, and you'll be pleased to hear me talk about the largest of all, we still see double-digit growth in those markets.

So plenty of opportunity that our value proposition works still in emerging markets, India, particularly encouraging because, of course, in the next few months, we're now bringing up to commercial production, our India surgical facility, and it remains the surgical business that is really the overall driver of Ansell growth in India. So I think second half versus first half, I wouldn't say we see any major change in those underlying demand trends at this stage. So it remains on Ansell to overperform versus those subdued market conditions. We've shown we can do that and that we need to continue doing that.

And then just to follow on then from that. You've long spoken to medium-term organic growth of 3% to 5% per annum. You've now increased your scientific exposure, U.S. brand recognition. Do we stay with the 3% or 5%?

Well, I'm sure this is a question that Nathalie is going to be considering, and it's also unfair to ask it to give you an answer on day 21 or whatever it is. Yes, I think as I highlighted earlier, foundations are in place that would allow us to be confident at least in that goal.

And I think it's fair to allow Nathalie some time to assess the business before she comes back to you with her view as to what the growth potential is of the company. But it's a very relevant question and certainly see no reason why we can't consistently deliver on that previous range. And I'm sure Nathalie will be considering ways that we can do even better, but early at this stage, yes.

Your next question is from Dan Hurren with MST Marquee.

Did you just say that the markets ex U.S. were double-digit growth? Or are you saying that's the potential?

No, I just called out three specific countries where we saw double-digit growth. But the market demand was not double digits in those countries. So Brazil, India, China, where the markets I called out.

Other emerging markets, we saw double-digit declines. So it's been much more of a mix picture in emerging markets. And really, I would say, the performance that I'm most proud of in this half is our mature markets performance. And perhaps if you go back again in several years, Ansell was heavily reliant on emerging markets for our total company growth. And I think emerging markets continue to offer that promise long term, but we needed to get mature markets performing consistently as well clearly.

And so that, to me, is the standout of this result and the last period of time is the improvement we've made in our ability to deliver continued growth and positive margin in our mature markets. So hopefully, that clarifies that point for you, Dan.

Understood. We have seen at least some of the product that's been pushed out of the U.S. market by tariffs arriving into various other markets. Is that meaningful for any of your markets? If so, is it going to get better or worse?

I'd say we see it in some spots, but I wouldn't go so far as to call it meaningful. And it tends to happen, as I was saying earlier, on the more price-sensitive parts of the portfolio. So certainly, at the commodity end of Exam/Single Use, as you know, we're a very small player in what's a very large market.

Yes, we have seen some business outside the U.S. I'm talking now. We have seen some increased volume moves based on specific pricing. But that's quite a limited effect overall for Ansell. And I'd say, more generally, the effect of volume moving from China to other markets has been less perhaps than some would have expected. And so I don't see it as a meaningful contribution to our performance in the half and nor do I expect it to change into the second half going forward.

Your next question is from Craig Wong-Pan with RBC.

My question is about some of the mature markets, Neil, that you talked about pivoting into like energy transition and defense. I just wanted to understand if you were not in those markets or if it's more that you're underrepresented and what has enabled you to kind of grow into those newer markets?

Yes. So certainly, we've always been in those markets. And I would say, in the past, we had a few good products that sold well into, for example, aerospace. But this links back to that change in organization structure that I talked to. When you set your teams back from the market, you encourage them to think not about how do I sell this product portfolio and where can I find customers for it, but instead, what's the total solution that an aerospace, defense and energy company is looking for and how can we at Ansell provide that total solution.

So -- and that means our customer-facing teams pulled together across the full Ansell portfolio is -- and then are able to benchmark from similar manufacturing sites across the world. So we can go in and we can say, we understand your workplace. Here's the complete answer solution that you need. Here's how it's backed by research that we've done, showing that our products perform better. So as I mentioned, it's not the collection piece. It's the overall performance piece. Here's our products benchmark against some competitive solutions that you may also be looking at.

And here's -- and now we'll also offer other benefits to you we'll offer training, we'll offer webinar, we'll offer waste management solutions. So it's more bringing a tailored solution, portfolio solution to energy, to aerospace, to defense that we see a lot of problems behind. And we have a significant increase in the pipeline of -- in these verticals. I would say though, the decision cycles along funding is sometimes uncertain in terms of timing.

And so it's always hard to predict exactly when that pipeline translates to sales revenue, but encouraging at this stage. And certainly, that has to be the name of the game at this stage is finding those verticals that still offer opportunities for growth at a time when other markets are subdued in demand as we have discussed. So lots of potential for the future there.

Your next question is from Saul Hadassin with Barrenjoey.

Neil, just the first one, you called out in cleanroom sales within the health care GBU that there was destocking on the Kimberly-Clark product, but that the Ansell brand did well. And you mentioned good growth. I'm wondering, can you tell us what that growth was? And do you still expect growth in that category once we normalize for the destocking, do you still expect an upper single-digit rate of revenue growth for cleanroom gles within the Healthcare segment?

Yes. So high single digits is what we've guided to for Scientific more broadly. And yes, that is consistent with what we saw for the products that were not affected by those destocking trends. Some of those destocking trends are now behind us, some I think, still have some months to run. It's also paradoxically the case that as Ansell service metrics improve, when customers run their algorithms of how much inventory they need to hold, they suggest, well, Ansell is such a reliable supplier.

I don't need to hold quite as much inventory. So that's the sort of slightly broader effect, I would say, in the half of destocking, not big enough for me to call out and certainly nothing like destocking effects we've had. Our ability to see that is much improved versus where it was, and this is critical. We couldn't weren't able to quantify it for the Kimberly-Clark products because we didn't -- before we integrated, we didn't have that same visibility for those products.

So -- but now we can see it, and therefore, we have the confidence that I'm able to describe. But yes, fundamentally, I view that scientific portfolio as having a higher than the Ansell average growth rate and potentially plenty of potential for the future. And that broader differentiation we're able to bring in challenging clean room manufacturing environments stands up very well with customers based on what they're looking to achieve, yes.

Just a follow-up. You also mentioned on the call that EBIT and EBIT margin, there's still work to be done. I mean, just cognizant of the benefits you got through the half distribution in terms of freight and also sourcing. Where do you expect those additional improvements to come from as it relates to that EBIT margin? I guess the question will be is in fiscal '27, and once you have the sort of fully embedded benefits from KC and also the APIP, there's going to be an expectation of ongoing operating leverage. So I'm keen to understand where do you see that leverage coming from into second half '26 and potentially to '27?

Yes. So I think, again, in the shorter term, it's a continuation of the programs that we've already announced to you. So we still have another piece of synergies to deliver against our existing target and the APIP program is favorable this year against next year.

I think longer term, Nathalie mentioned it already, but key to longer-term drivers of productivity are enhancing the ability that our stronger systems underpinning gives us and then also success with more step change automation projects within manufacturing. We're in the test and learn phase, building out new-to-industry capability in terms of automation. And if those concept lines prove successful, then we'll give you more details about those in the future. But Nathalie, would you add anything to productivity objectives here?

Well, then I would actually add the growth aspect that you Neil spoke to that we have some areas that are structurally higher growth areas and also higher margin. So moving the portfolio. But early for me to say. I'll come back more in then in August with the full year reporting.

Your next question is from Andrew Paine with CLSA.

On the result and reiterating the other comments, Neil. Congrats on what you've done and good luck for the future and to you, Nathalie as well.

Look, just a question around the 1 half, 2 half weighting and I guess, your upgrade at the AGM. Can you provide a bit of information around the FX? Obviously, you're saying there's an FX headwind of $5 million to be included here. What were you including as a tailwind at the AGM? Just trying to understand the driver of more of an underlying upgrade here.

Brian, do you want to take that one?

Sure. Yes. Thanks for the question. So as we started the year, we were assuming about a flat FX impact on EBIT. As we went to AGM, we saw that benefit somewhere in the neighborhood of $2 million to $3 million. That was factored in some of the upgrade that we had talked about at that time.

And now for the year back down to minus 5%. Really, what we saw was the strengthening Malaysian ringgit and the Thai baht getting stronger versus the dollar and euro has kind of flatlined a little bit. It ran up earlier in '25. And so that's the dynamic now that we see going forward.

Now from a first half, second half, I think the second part of that question, we saw about 1.5 million, give or take, of pressure in the first half of the year. And the balance of that 3.5 million will be in the back half based on what we know now, knowing that FX does move around a little bit. So hopefully, that answers your question. That's how we're seeing it at the moment.

Yes. Okay. So just to clarify, so $3.5 million of that $5 million is in the second half and $1.5 million is in the first half of the headwind.

That's right. Yes.

Yes. And so like if I run those numbers, it looks pretty similar to the upgrade that you pulled through in at the AGM. So you pull through a $0.04 upgrade at that AGM. So it sounds like you're giving that back in FX, but implying a $0.04 to $0.05 upgrade of the underlying.

Yes, I think you can look at it that way in the sense that we've been able to hold guidance despite FX going against us a bit.

Yes. Okay. That's great. And then just any insights that you could provide around the -- where you push price increases through over the half? And if possible, the magnitude of these price increases?

Yes. So I'll take that. We're not giving specific percentage amounts and they vary according to the specific tariff cost impacts that we're seeing and the nature of the products. But generally, I'd say it's been harder to get price increases through in the medical setting versus the industrial setting and it's in the medical space, where, as I mentioned earlier, some relatively ancillary parts of the portfolio, and these are not adding up to anything close to double-digit million.

So a limited effect where we've not being successful in getting price through, and we've accepted to walk away from that business. And that's always what you have to do. I mean, you can never manage price for discipline without accepting that you have to be able to take some loaded volume risk as you were doing so. Otherwise, you won't achieve that overall pricing goal.

But as I mentioned before, when I look at the net effect of the limit -- quite limited volume effect, what we've achieved in terms of price increase, over the cost increase and translate that through to the EBIT line, we're tracking slightly ahead of what was an ambitious goal when we set it out to in August. So hopefully, that gives you a little bit more color without giving you the exact percentages that perhaps you would have liked.

Your next question is from Laura Sutcliffe with Citi.

First question is on Exam/Single Use. I think you called out in your materials some decline in volume. Is there any risk that there's a permanent pattern of declining use in those products?

So I think the -- we called out decline in volume in the medical exam space. And this has long been a part of the market of lesser focus for us. It's where the product -- there's very limited product differentiation, and we see much larger players who have the benefits of economies of scale in the medical exam product, and it's generally a very standard product.

So everyone -- many producers have it. There's limited product differentiation. In the past, Ansell was able to carry or offer to customers a limited portion of medical exam product where it was part of a broader package of other more differentiated products, most notably the surgical portfolio. And now in current conditions wherever -- where there are some savings to be had, customers will take those, then we've seen customers disaggregate.

So maintain with Ansell on the more differentiated parts and accept some lower price points on the medical exam piece. Whether that comes back or not, Laura, it has done in the past. It's also not a focus of ours. It's not business that is -- it's certainly not a business that's going to be a long-term source of value creation.

So what's encouraging is even with these higher areas of price competition in some parts of the portfolio, we continue to grow the differentiated portfolio. And that's -- this is the contrast we've always tried to draw in Exam/Single Use for our business versus other more commodity-oriented single-use businesses.

And we continue to innovate in this space. So that product that I mentioned earlier, 93-800 goes into this and is a great example of how Ansell is the only company able to offer a level of protection and comfort and performance that just doesn't exist from other suppliers. So I see significant potential to continue growing more differentiated portfolio. And the areas where we're a little bit down on volume does not really concern me within Exam/Single Use.

Great. And then secondly, you mentioned the potential for elevated growth in the Scientific segment, some of the pieces you just mentioned. We've seen share prices of CROs in the U.S. suffer as the market takes a bit of a view that AI could mean less lab work in the future. I know it maybe feels like a bit of a stretch, but I was wondering if you'd ever contemplated that scenario from the perspective of a supplier to that segment.

So I think, well, the lab industry generally right now actually is not seeing a lot of growth because government funding has also been affected as you're aware. So the lab market is not really where we place our confidence and can call out that opportunity for high growth. It's more the manufacturing environment. So this is where cleanrooms are used in the production of pharmaceuticals and production of medical devices, and increasingly, cleanrooms are being adopted in other settings as well.

So the electrification of supply chains introduces cleanrooms into manufacturing settings where they weren't there before most battery assembly facilities use a cleanroom facility at some point. And these -- certainly, where possible, these facilities are already highly automated, as you would expect, but there's still a very important role for workers in these facilities. And the quality standards are critical, and I don't see this as a scenario where AI is going to make a difference.

Yes, automation will be a factor, always has been, has been since my day 1, 13 years ago at Ansell and will be, I'm sure, throughout Nathalie's time. And what we've shown through my 13 years is for every site that reduces workforce through automation, there's another site that's growing. There's another site that's expanding.

And so the number of hands needing protection in those clean room manufacturing environments, I would expect to grow. And certainly, when you consider the broader adoption of clean room facilities, including in emerging markets. So that to me is the more important space for us versus the more routine lab work. And that's where I have the confidence in the growth rates that I was talking about.

Bailey with Morgan Stanley.

Neil, adjusted sales growth of 2.1%, I'm sort of getting volume growth of minus 1% if you strip out the price increases coming through. Just wondering if you can just help us understand the phasing of those volume or volume growth trends over the half. I just sort of -- you sort of flagged that there were some price increases on a staggered basis. Was there any impact of inventory build in the September quarter or anything like that? Or is there any sort of nuances in terms of the volume growth pattern as we exit first half '26 into the second half of '26?

I wouldn't call out any major phasing differences first quarter, second quarter in this period. There were some in the prior period because of the timing of that $27 million, which you've adjusted for renewal figures. So we haven't seen at any stage in our price increase, any major buying ahead of those price increases.

And of course, then you want to track to make sure that the point of sale continues post price increase, and that's generally what we've seen and also as we start this year. So that's what gives us the underlying confidence in those statements. So I think generally, I do expect a bit more favorable volume trends into the second half, partly because of easier comparisons, but then also the continuing momentum of the growth drivers that we've talked about here today. So -- but no, to your original question, not a big difference, I would say, in first quarter, second quarter phasing other than the prior year effects that we talked about.

Yes. Understood. And maybe one for Brian. Just SG&A was a pretty significant beat relative to our expectations. It looks like KBU synergies plus a bit of other internal initiatives doing quite well there. How should we think about that number into the second half, either as a percentage of revenue or absolute numbers, that would be useful.

Yes. We don't got anything specific on SG&A, but I would think about the trends being similar. Incentive, as we talked about incentives were paid out at a higher level in year-ending '25 payable and '26. This year, they're a little more normalized. So that's also an aspect of what you're seeing here in this particular half, and we'll have to see how that plays out here in the second half.

And our final question is a follow-up from Vanessa Thomson with Jefferies.

I just wanted to ask, you said that sales was supported by new products. I wondered on that Slide 11, I think they're all industrial products. I wondered if there was anything in health care or if there is anything coming?

Well, the nitrile disposable glove, the 3800 on the right is actually reported under health care. It's one of those that goes into industrial. Yes, I know that's confusing.

So I think within Surgical, it's generally not a market that wants a lot of new products. So we do see the products that we launched 4 or 5 years ago, continuing to perform very well, particularly our hybrid combinations of different polymers. The focus within Surgical more recently has been to manage through the supply chain disruptions of the pre- and post-COVID period and its consistency of quality that is the overwhelming requirement for customers.

We are looking at again at whether we can achieve breakthrough polymer performance in the surgical business, there could be a meaningful differentiation of customers, but very much at the early stages. Again, within the scientific portfolio at this time, the priority has been consolidating the two -- the acquired and the existing Ansell range, communicating very clearly to customers what that -- how we tell that total range now that we have almost a complete head-to-toe solution.

You can call all the KBU products, new products to Ansell, even though they're not new to the market. I think it's very encouraging how some of those products that we didn't previously have are also showing very strong growth. So eyewear is a range that Ansell didn't have historically. We acquired a strong North American market presence. Not one of the particular focuses, and we haven't talked about it much with you before, but we saw good double-digit growth in the eyewear range in the half as well. So that's an example of how we can rejuvenate a product that has been in the market some time. When you bring it under the Ansell brands, when you add to it that service offering, we can generate significant growth.

So I think within the scientific space, it's not necessarily about brand new products to market. It is about simplifying that portfolio helping clean room environments, meet their quality and regulatory standards and then consistent delivery, and that's as much -- that's as important to share growth in that environment as new products. So yes, it is more of a focus in industrial than in health care. -- but it's innovation in different ways in health care that's leading to differentiation.

There are no further questions at this time. I'll now hand the conference back to Nathalie for closing remarks.

Thank you. And thank you for the lively discussion and questions that you had today for both Neil and Brian. And just to close this session today. I really want to sincerely thank you, Neil. It's a privilege to take a company that's this well run and finishing at all-time higher net sales, absolutely EBITDA and strong cash flow and also with our fantastic teams globally.

As said, we're maintaining our guidance with adjusted EPS of $1.37 to $1.49. So that's key. And I and Brian are really looking forward to seeing you all then in August when we are talking about the full year performance. And now we are focused on delivering our guidance. So thank you, everybody, and see you soon.

Good morning, ladies and gentlemen. My name is Nigel Garrard, and I'm your Chairman for today's meeting of Ansell Limited. It's my great pleasure to welcome you to the 2025 Ansell AGM.

Before I open the meeting, I would like to take you through the procedural aspects of today's meeting. The meeting is being held in person as well as virtually by the Computershare platform, where shareholders, proxy holders and guests can watch the live webcast of the meeting, and shareholders and proxies can ask questions and submit their votes online. A significant number of shareholders have already voted. Appointed proxies and submitted questions ahead of this meeting, and I thank them for doing so. Every effort has been made to ensure the meeting runs smoothly, let's hope technology works well for the next hour or so.

A full recording of this meeting will be provided on our website. For those of you who might be interested in watching out twice, I'm not sure who would want to do that.

I will start today by walking you through the guidelines for asking questions and for submission of votes for those person both here, those people in the meeting today and online. It is my duty as Chair to ensure that shareholders have the opportunity to ask questions and discuss the items of business during the meeting. I ask that all questions and comments be concise, be confined to the relevant matters and shareholders as a whole be informative and respectful. I'll take questions from those physically present at the meeting first followed by written and audio questions from participants who have joined online. Depending on the questions asked, I'll decide whether I answer or if it's appropriate that I ask a member of management or the auditor to respond.

I'll now move to the formal proceedings of the meeting. The Company Secretary has confirmed that a quorum is present, and I declare this Annual General Meeting open. Voting is now open on all items of business. Please submit your votes at any time. And I will give you a warning before I move to close voting today. The notice of meeting was released on the 25th of September. And with your approval, I will take the notice as read. This is a shareholders meeting and only shareholders, their attorneys, proxies and authorized company representatives are entitled to vote and ask questions at this meeting. If you're attending as a proxy and have been instructed how to vote, I ask that you ensure that any vote you cast is in accordance with those instructions. Voting today will be conducted by way of poll on all items of business, and we have appointed Michael Hutchison, a Manager of Computershare Investor Services as a returning officer for this meeting.

For those of you attending the meeting online and who are eligible to vote, as the poll is open, a voting icon is now available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you are free to submit your votes at any time. To cast your vote, simply select one of the options. There is no need to hit submit as the vote is then automatically recorded. Please ensure that you cast a vote for all resolutions. You will receive a vote confirmation notification on your screen. To change or cancel your vote, click the link at any time until the poll is closed. Votes can be changed up until the time where I declare that voting is closed.

For shareholders, proxies and corporate representatives attending in person today, I will ask that you vote once we have gone through all items of business by completing the voting card. This one that was provided to you upon admission. So to be clear, white cards are for visitors only who cannot vote nor ask any questions today. Shareholders with a yellow card are not entitled to total to vote on the items of business. I will provide a warning to the room before I move to close voting at the end of the meeting.

Thank you to those shareholders who submitted questions in advance of the meeting today. Where appropriate, we have already replied directly to those shareholders. And we have also tried to cover those items in either my address or the address from the CEO. For those attending today's meeting in person who have a question, when I call for questions during each relevant item of business, please make your way to the nearest microphone, which we will move down when it comes time. And when it's your term, please state your full name before asking your question. There is or will be an attendant at each microphone. And I will now ask for the attendance to stand and identify themselves so you can see where they are. So we have one down the front and one microphone.

Only shareholders, validly appointed proxies and corporate representatives who are given a blue or yellow voting card upon entry are entitled to ask questions. For those attending the meeting online who wish to submit a question, you may do so at any time during the meeting via the speech bubble icon on your screen. Please type your question in the chat box on the right-hand side of the screen and then select send. Confirmation that your message has been received will then appear above.

Please note that while you can submit written questions from now on, I will not address them until the relevant time in the meeting. So while time constraints may prevent us from answering all questions, we will do our best to address all your questions as far as possible during today's meeting. Today, Michael Evans, Ansell's Head of Investor Relations, will be helping to moderate any questions via the Computershare platform. Instructions on how to ask a verbal question are shown below the broadcast window on the online platform. If you're asking a verbal question, please state your full name before asking your question. Lastly, please limit your questions to only 1 or 2 at a time and then rejoin the queue to allow others to ask questions. So that's the end of the instructions.

Joining me today is my fellow Melbourne-based Non-Executive Debbie Goodin, on the right; and our Company Secretary, Catherine Stribley. Joining us by video link today is Ansell's Managing Director and CEO, Neil Salmon and other Board members, William Reilly, Christine Yan, Leslie Desjardins, Randy Stone and Christina Stercken. Chris Sargent, who is sitting in the front here, who was KPMG's audit engagement partner on the Ansell account for fiscal year 2025. And is present with us today and available to answer any questions during the meeting regarding the conduct of the audit and the content and the preparation of the audit report.

Now for my address. It's my pleasure to address you today as we reflect on the 2025 financial year, which was a successful year for us here at Ansell. Our results for FY '25 we're towards the top end of guidance we provided to the market at the start of the year with adjusted earnings per share coming in at $126.1 per share, a significant step-up to the $105.5 delivered in FY '24. Our performance in FY '25 was enhanced by strong returns from recent investments we have made in new products, changes we have made to our organizational structure and manufacturing footprint, through what we call the accelerated productivity investment program and the acquisition of Kimberly-Clark Personal Protective Equipment business, or KBU for short. Our CEO, Neil Salmon will provide more detail on the financial results and the outlook for FY '26 shortly.

I would like to make a few comments on a couple of our key sustainability objectives. Firstly, our net zero commitment, and secondly, delivering improved labor rights in our supply chain. In 2022, we declared a target to achieve net zero Scope 1 and Scope 2 greenhouse gas admissions with a goal to expanding this commitment to include Scope 3 emissions. Last year, we submitted our targets for net zero emissions, including Scope 3 to the science-based targets initiative, and I'm very pleased to report that these have been formally validated. Our commitment now is to reach net zero greenhouse gas emissions across our entire value chain by FY '45, reflecting our long-term ambition to lead in climate action and deliver more sustainable solutions for our customers and for our employees and for our other stakeholders.

Recognizing that Scope 3 emissions represent a significant share of our total carbon footprint. Ansell has set a target for 90% of our suppliers by spend to have Science Based emissions reduction targets in place by 2030. This forms a key part of our broader climate strategy as we work to drive meaningful emissions reductions, not only within our operations but across our entire value chain.

Moving next to the topic of labor rights. Our Supply Management Framework or SMF has been in place since 2021, helping us to continuously evaluate and monitor supplier compliance with our code of conduct. At present, the SMF covers suppliers representing more than 85% of Ansell's finished goods and raw material supplier spend with improved labor standards evident amongst this supplier cohort. However, there remains work to be done to achieve the same progress amongst our smaller suppliers. Earlier this year, we became aware of labor rights allegations at MediCeram, a small labor -- Malaysian supplier of ceramic formers used in the production of our single-use cloves.

Like all Ansell suppliers, the company subject to the allegations had signed our supplier code of conduct. However, as both a very small supplier to Ansell, to give you an idea, representing less than 0.1% of our total global supplier spend and an indirect supplier providing materials or equipment used in the manufacturing process, the company fell outside the scope of our audits under our SMF. While working through the allegations raised in this case, we initiated a broader review of all of our ceramic former suppliers. We have chosen not to walk away from these suppliers and to continue to engage with them closely to ensure remediation plans are effectively implemented.

Regarding MediCeram, I'm very pleased to report that all, I repeat all recruitment fees for current workers have been fully reimbursed. Following these findings, we have initiated a review of our supply management framework, scoping criteria and our thresholds. As part of this process, we will expand coverage to include all ceramic former suppliers. We're also addressing our broader network of over 1,600 small indirect suppliers to determine those who should be included in our due diligence program. We are also aware that a civil society representative has filed a complaint against Ansell. With the Australian OECD national contact point for responsible business conduct, which is [ OSNCP ] regarding the allegation of workers' rights being adversely impacted at MediCeram, who I'll reinforce is a supplier of ours. The OECD national contact point provides a mechanism through which stakeholders can raise concerns in relation to human rights and other issues in modi-national companies' operations and value chains. And so we'll continue to engage with that process in good faith.

I want to reiterate though that Ansell remains steadfast in our commitment to upholding human rights and driving change across the PPE and glove industry across the world. We, at Ansell are focused on transparency, and continuous improvement in identifying and addressing modern slavery risk throughout our supply chain. Further details on our sustainability priorities and efforts outlined in our 2025 sustainability report and labor rights report, which I encourage all shareholders to read.

I would also like to address a recent cybersecurity matter. On the 14th of October, the company disclosed that we had identified unauthorized access to certain sets of company data. Importantly, there was no disruption to our operations. The incident was limited in scope and originated from vulnerabilities in licensed third-party software. Upon detection, we acted swiftly to contain the issue. Initial findings indicate that the majority of the access data consisted of nonsensitive business information. However, our portion did include confidential transactional data and personally identifiable information. The security and privacy of all information entrusted to us remains our highest priority. We are working closely with leading cybersecurity experts and are coordinating our response with relevant government agencies and regulators, including here in Australia, the Australian National Office of Cybersecurity and the National Cybersecurity coordinator.

Ansell remains committed to transparency and continuous improvement in our cyber resilience, and we will continue to take all necessary steps to protect our data, our systems and our stakeholders.

Before I hand it over to Neil, I would like to touch briefly on the topic of tariffs in the United States. The United States is our largest market. And like the rest of the industry, our products are imported into the U.S., principally from Asia. Our teams have responded to the higher tariffs through price increases while also reducing our sourcing exposure to China, where imports are tariffed at a comparatively higher rate. While this process is still ongoing, and the broader economic effects of higher tariffs remain unclear. We believe that Ansell's industry leadership and competitive advantage position us to succeed through this period of change. We also retain flexibility within our manufacturing and supply network to respond to any changes in the relative attractiveness of our production or sourcing locations that might be triggered by trade policy shifts.

In closing, I would like to thank and acknowledge the efforts of the many Ansell employees over the past year. I would also like to take the opportunity to welcome Randy Stone to the Ansell Board of Directors, and Randy is due for standing for election today. Randy has extensive international experience, including whether Avantor and DuPont in industries that are closely aligned with Ansell and his insights and expertise will be valuable moving forward. Randy replaces Morten Falkenberg, who retired at the end of May. And I would like to thank Morten for his contributions during his time on the Board.

I would like to now invite Neil to provide some further comments. Neil?

Thank you, Nigel, and good day to my fellow shareholders. I'm talking to you today from Ansell's office in Tokyo, Japan, I appreciate the flexibility that this hybrid format allows me. I regret not being with those of you in the room today in person, but I show you that the time I have saved in not traveling to Australia on this occasion, I'm reinvesting in meetings with our customer base here in North Asia, a very important and growing part of the Ansell Global business.

So today, my goal is to provide you with a review of the company's performance and key milestones in the 2025 financial year. And then I will also give you an update on our outlook for the current financial year. A recap first of all, as we entered fiscal year '25, I outlined 3 clear objectives. Return the company to organic sales and earnings growth, build on productivity gains, commenced and achieved in the year before fiscal year '25, fiscal year '24 as we entered the second year of our accelerated productivity investment program or [ APEC ] for short. And thirdly, take the very important first steps to unlock value from Kimberly-Clark Personal Protective Equipment business, [ Richard Ansell ] renamed on our acquisition, which took place on the first day of fiscal financial year '25.

So today, I'm very pleased to report to you that we achieved all 3 of those objectives. Let me start by describing our financial performance in financial year '25. Group sales exceeded USD 2 billion, up almost 8% on an organic constant currency basis, supported by good growth in both our industrial and health care segments. Industrial sales grew almost 6% on an organic basis, a highly creditable results in what were subdued manufacturing and market conditions. This growth was enabled by strong sales of new products particularly within our mechanical business, where we saw increased demand for [indiscernible] impact protection products and [indiscernible] ultra lightweight [ cat ] protection styles.

In Healthcare, we delivered over 9% organic sales growth, helped by a return to normalized demand following the long period of the post-pandemic destocking. And this drove double-digit growth in our Surgical and Clean Room businesses. The KBU business also contributed to this strong momentum with double-digit growth in the [ Kintec ] portfolio of Clean Room Solutions in comparison to the prior year -- prior to Ansell's partnership.

Our fiscal year '25 earnings before interest and tax was $282 million before significant items, and that was up over 40% on the prior year or a 10% improvement versus '24 on an organic constant currency basis. EBIT growth was driven by higher sales, improved manufacturing utilization and increased savings from the APIP program, while also supported by a strong first year contribution from the KBU. This improvement in earnings translated to adjusted earnings per share of USD 126.1, which was near the top of the guidance range I provided to the market at the beginning of the financial year.

Turning to KBU now. On the first of July 2024, we completed the acquisition of the KBU, and this is Ansell's largest ever acquisition. Also a highly complex acquisition as we needed to carve this business out from the Kimberly-Clark previous owner, and that in turn demanded an intense upfront focus to ensure a smooth and timely integration into Ansell Systems. I'm proud to say that not only were we able to execute this transition to Ansell Systems seamlessly but also ahead of schedule and with no disruption to our customers. And we also achieved sales and earnings that were ahead of our businesses. The true credit to the targets, efforts and dedication of many and so, including our new KBU employees over the course of the year.

The KBU business is now fully integrated into Ansell and with its critical value-enabling step behind us, we can now sharpen our focus on maximizing the potential of our enhanced Clean Room, Laboratory and Industrial Safety Solutions, some of which are behind me in this room in Tokyo. Earlier-than-expected completion of integration meant that we were able to achieve $5 million in net pretax cost synergies in financial year '25 and our greater confidence in the value creation potential of our now combined businesses means I am now upgrading our fiscal year '27 net pretax cost synergies target from $10 million to $15 million.

Next, let me say a few words about our Accelerated Productivity Investment Program, or APIP. We launched APIP midway through 2023. And as we described it at the time, this is a multiyear program, focused on optimizing the productivity of our manufacturing resources and supply chain, also improving demand and supply [indiscernible]. And finally, unifying our ERP systems and repositioning our organization for growth. The program's organizational and manufacturing changes have now all been completed. And these changes successfully implemented helped realize savings of $47 million in financial year '25 and we are firmly on track to achieve our savings target in this current financial year of $50 million.

The focus of the program has now shifted to upgrading our commercial enterprise resource planning systems with implementations commencing in the second half of financial year '26. Once completed, Ansell will operate for the first time on a single modern ERP system. And I expect this to deliver a significant step-up in our digital capabilities, further improve the experience of our customers and also unlock additional productivity opportunities.

Let me now turn to our progress against our safety and sustainability commitments. Nigel has already covered the status of key environmental goals and the continued progress ensuring our social compliance standards are adopted across our supply chain and with the role of our supplier management framework and achieving this.

During my comments, I'll focus on 2 additional topics: our safety record and our innovation in sustainable products. After recording an increase in our Total Recordable Injury Frequency Rate or TRIFR in financial year '24, we were determined to get back on our long-standing improvement track in financial year '25. We were successful in this endeavor, finishing the year with a reduced TRIFR rate down 16% on the prior year, and that puts the TRIFR rate trending below our fiscal year '30 target. I assure you, we won't compromise in our efforts to ensure consistently strong safety outcomes right across Ansell's operating footprint.

With regards to sustainable products, we see customer demand for these increasing. And therefore, a key focus of our innovation program is in is enhancing additional product differentiation through sustainability differentiation. Remains such as reducing the environmental impact of our products. And in fiscal year, financial year '25, 80% of the new and updated products we brought to market featured reduce environmental impacts. For example, including incorporation of low energy consumption materials and the construction of the products while less packaging materials, enhanced product reusability, durability and recyclability.

In addition, further initiatives are also underway to bring our RightCycle product recycling program to more end customers. With our financial year '26 goal being to achieve a 20% increase in customer landfill waste diversion through RightCycle as we expand the program's capability and capacity. It was pleasing to see that our overall sustainability efforts were recognized in the second year running by leading sustainability rating agencies. For example, with Morningstar, Sustainalytics, including us in its ESG top-rated companies list. This is satisfying external acknowledgment of our industry leadership in providing safe, respectful and inclusive workplaces and through protecting the rights of our employees and workers in our supply chain.

Now let me provide a brief update on trading so far in this current financial year '26. I'm pleased to say we are demonstrating good early progress against our goals for the year. End market demand conditions have been largely as expected, while foreign exchange trends are proving more favorable than originally assumed due to the ongoing strength of key revenue currencies when compared to our reporting currency of the U.S. dollar.

Therefore, our first quarter results tracked well versus our expected piece on solid sales, including in our U.S. business. And improved margins, partly arising from those favorable foreign exchange rates but also lower freight costs in comparison to a high freight cost expense as we disclosed in the prior period. In addition, we see continued good KBU synergy delivery and further improvements in manufacturing productivity.

In August, I outlined our plans to offset in full the cost of higher tariffs on imports into the U.S. market. And I'm pleased to say we are on track to execute the phase plan of price increases necessary to achieve this. There remains speculation on the potential for further changes to U.S. tariff policy. And while we have drove visibility on what may come next, we will continue to seek to respond to any further changes with the same goal of offsetting in full impact and sort of higher tariff costs.

So based on these factors, I'm pleased to be able to increase our guidance range for financial year '26 with our guidance range for adjusted earnings per share originally USD 133 to USD 145 and now increased to USD 137 to USD 149.

So in closing, I'd like to add my thanks to those of Nigel. The contributions of our more than 15,000 employees are very significant. They be key to our success in our financial year '25. We always knew, I certainly always knew. I hope you also had confidence that once the post-pandemic effects in our end markets had past, the underlying quality of the Ansell business would become more clearly apparent again. The strong results in the financial year '25 are evidence of this, and I look forward to building on this momentum in collaboration with my colleagues at Ansell to ensure that in financial year 26, we continue to see Ansell move ahead and deliver on our goals.

Thank you for your time and continued interest in our company. And I'd now like to hand back to Nigel.

Thank you, Neil. That work pretty well from Japan. So the technology is -- hasn't let us down. Ladies and gentlemen, we will now move to the formal items of business as set out in the Notice of Meeting. As I mentioned earlier, the poll is open on all items. The results of the proxy votes already received for each resolution will be displayed prior to inviting any questions in respect of that resolution. And the final results of each resolution will not be displayed at the meeting, but we will lodge those with the Australian Stock Exchange following the meeting.

So the first item is to receive and consider the financial report and the reports of the directors and auditor of the company for the 2025 financial year. This item gives shareholders the opportunity to ask questions or make any comments in relation to the financial statements, the directors or auditors' reports or the operations of the company. I ask that questions relating to the remuneration report be held until we get to that item later in the meeting.

I will now take questions from the floor. For those attending in person, if you have a question on this item, please make your way to the microphone.

Thank you, Chairman, introducing Peter Ed from the Australian Shareholders Association.

Good morning. Today, I hold proxies from 138 shareholders with 269,000 shares. Does the U.S. Department of Commerce's Section 232 investigation into national security impacts of imports of PPE and medical consumables and equipment impact Ansell? And secondly, given that the U.S. provides 46% of your revenue and the current political environment, how are you positioning to lobby and communicate with the U.S. government?

Thanks, Peter. We'll start with a good run. So for those that aren't aware, the administration in the U.S. put tariffs on products from Asia into the United States, had a review period and changed some of those tariffs, and they were, in effect, a few months ago. And as Neil said, and I also outlined, we are endeavoring to pass all of the cost of the tariffs on to our customers as is appropriate.

Since that time, the administration has announced a Section 232 investigation into PPE equipment. That is a 9-month process, where we, as an industry, will be making a submission to the investigation, and there will be an outcome sometime next year once the 9-month period is up. Our view is that there are no national security issues with gloves or gowns that we supply and the tariffs are already being applied to the products that we supply and import into the U.S. So we don't expect there to be any material change, but we, as an industry, will make a submission to that effect.

The second part of your question was how are we influencing and lobbying the administration? To the extent that you can do that, it's important that I think we as an industry do that as an industry rather than as a specific company to avoid any potential downsides and to ensure that there is a consistent approach across the industry. So we, as an industry, making the appropriate submissions to the administration to prosecute our position that there are no further tariffs that should be applied to the products in which we import into the United States.

Thank you. Just one other. We've previously talked to you about further appointments to the board, including Mr. [ Bevan's ] replacement. With the objective of improving your lower skill on the current board industry experience and digital. Noting that you've appointed Mr. Stone on the retirement of Mr. Falkenberg, do you still intend further board appointments?

Look, I think that we as a Board have a detailed succession plan. And the most important things from a Board when it comes to directors are appropriate skills and mix of skills, appropriate experience and mix of experience and also mix of tenure. So what I mean by that is we don't want to have half the Board needing to retire or choosing to retire at one period. So we've got a breadth of 10 years. You should expect there to be some board changes over the next 12 or 18 months as a couple of directors retire, and we will be looking to have appropriately skilled and experienced replacements for those. And frankly, that's just a normal process for any board. So yes, there will be some changes over the next 12 or 18 months. Thanks, Peter.

Are there any other questions? Yes, sir.

Thank you, Chairman. Introducing [ Ronald Guy ].

Regional trade unions, Human Rights shareholder group. It's fantastic the work that you're doing on human rights issues and modern day slavery. But I think last year, there was a dimension of former Malaysian plant workers that were had a case in court. I was just wondering for an update on anything that's been happening there? And if there's been a cost to lawyers, et cetera.

So that relates to a [ Brightway ], the [ Brightway ] case, which was a finished good supplier of ours. That case was dismissed in the U.S. court during the last 6 months. the appellant has appealed that decision. So there's a process going forward. It does not involve us in any legal costs. But the U.S. court dismissed the case and there's been an appeal and that appeal is still underway.

While you here, and I appreciate your interest. This is not -- I just want to reinforce, this is not an easy situation, labor rights in Asia. And unfortunately, I think sometimes Ansell is unfairly positioned. If you look at the history of what this company has done, in 2019, we were one of the first companies in our industry to decide to ensure that all recruitment fees were repaid and implement our supply management framework. Since that time, over 20,000, 20,000 people have had their fees repaid as a result of the initiatives that we've taken and subsequently our industry taken to ensure that appropriate provisions are implemented. We're not happy with what happened at MediCeram. We are absolutely determined that, that 20,000 will continue until everybody has been has been replaced.

But just -- I wanted to make the point, 20,000 is a lot. So it shows it's not an isolated incident. I think for you as shareholders, I want to reinforce that our job is not done. We remain committed to ensuring that everybody has the fair right to be employed and not pay these recruitment fees.

Are there any other questions from the floor? Michael, are there any questions online or any audio questions?

Chair, we have a written question from Ms. Jillian King, question is, thank you for showing leadership with Ansell's new commitments to reducing climate damaging emissions. Would you please explain your rationale for choosing 2045 as the target date for net zero emissions. Please provide more detail than just saying science-based.

Well, I think there are 2 things. The Science Based Target initiative is a global initiative, which means that there's an independent body that validates the targets that companies set. So for us, it's an external validation of what we're doing. And it's important, there are 3 sort of scopes in emissions, Scope 1, Scope 2, which are things related to your own operations, which we can largely control or influence. And so we have more aggressive targets on those. Scope 3 relates to your -- the supply chain more broadly and that's -- that means we've got to influence third parties who are not under our control. So -- and that will take some time to do.

So we've set 2045, by the way, is 5 years earlier than many other companies. We're sitting at 2050, we've made really good progress, and I hope we can get there earlier than 2025. And we're quite unrelenting in our focus of that. So the way we look at it is look at the things directly in our control and deal with those first, which is what we're doing. We're just Scope 1 and Scope 2, and then influence and persuade others for Scope 3.

Are there any other questions, Michael?

Chair, there are no further written or audio questions.

Okay. And no more in the room? So as -- yes, sir. Sure.

Yes, sorry, just one more question. And this is from another group that is with us. And it's based around the concern of I suppose, downstream waste. But the burning of plastics in Victoria, there's -- they're going to have an energy to waste plastic burning facility which has been -- those incineration has been banned in New South Wales and in the ACT, and it's there's Australia signed international treaties, their signatures to the [ Minamata ] Convention and the Stockholm Hold Convention and the Vessel Convention. And I suppose downstream waste of Ansell products.

I guess the concern is that some of that might end up in that incineration if that goes -- eventually gets built in Victoria and that's the concern of the plastics being burnt and one chemicals are in the plastics. So maybe your expertise, you have an opinion.

Sure. Thanks. And I understand the issue I think the holy grail for us from a product point of view is can we -- okay. So the question -- the question is largely in Victoria, they are looking at establishing a facility which will burn plastics as a means of disposing them what's our position in relation to that. Is that a fair summary?

So not all of our gloves are recyclable, and we are continuing to work to produce more recyclable gloves, which will avoid that. Unfortunately, some of our products are, for the time being, that is the only solution. And I particularly talk to, say, surgical gloves, gloves that are used in surgery, which will have blood potential infection and those type of things. The only disposable options are bearing them or burning them. And I'm not sure we've got a solution to surgical gloves, but the other is the long-term solution as much as we can is to make them recyclable or biodegradable. And that's -- we've certainly got quite a bit of R&D work going in that regard.

Okay. So as there are no further questions, and there's no formal requirement for a vote of this matter, I'll move to the next item being the election of directors. The first director seeking election today is Randy Stone. Randy resides in the United States of America and joined the Board as a Nonexecutive Director in August 2025. Randy retires in accordance with Rule 33(b) of the company's constitution and being eligible, offers himself for reelection or for election. Actually, this is the first time he's been elected by shareholders. Randy's experience and Board committee memberships are detailed in the notice of meeting, and I went through those a little earlier. And the Board considers Randy to be an independent director.

Randy, would you like to say a few words?

Dear shareholders, my name is Randy Stone and I am honored to stand for reelection to the Ansell Board of Directors. My career has provided opportunities to work at industry-leading companies where I have consistently delivered strong business results and shareholder value. As President of [ DuPont's Mobility ] Materials division, I led a $5 billion global materials leader, serving advanced mobility, and diversified industrial markets.

During my tenure, we achieved record earnings and free cash flow while doubling the enterprise value. Before joining Ansell's Board, I served as Executive Vice President of Avantor's Lab Solutions business. A $4.7 billion segment serving many of the same markets as Ansell, including life sciences, health care and diversified industrials. As a Board member, I also bring critical global and business investor experience. I served over 5 years as Managing Director for DuPont in Shanghai, China, gaining deep insight into the complexities and the opportunities that Ansell is successfully navigating today.

I also understand the dynamics of publicly traded companies, having worked extensively with institutional investors, analysts and advisory firms as part of DuPont's Investor Relations and senior leadership team. This gave me a valuable perspective on shareholder priorities and corporate governance.

Finally, my global P&L experience, combined with my commercial and operational acumen positions me well to help Ansell continue its growth journey. I'm honored by the opportunity to serve Ansell's shareholders and work alongside my all board members. Ansell has a strong team and a bright future, and I look forward to contributing my experience and energy to its continued success. Thank you for your trust and support.

Thanks, Randy. I now move that Randy be elected as a Director of the company and proxy results in respect of the election of Randy as a director are now displayed on the screen.

I'll now take questions from the floor. Peter? Sorry.

Peter Ed from the Australian Shareholders Association. I'm not sure what your technology is like, but would Mr. Stone like to clarify the significance of his industry experience to Ansell? And if he has a particular skills and experience in the digital area.

So let's see how we go with this, Peter. Randy, that's new. Can we get Randy there?

I can answer on behalf of Randy, but better if we have him on screen.

We have lots of activity at the back. There's Randy, do you want?

Yes, happy to do that. Thanks for the question, too. First, let me just say I'm honored to be invited to join the Board. As an executive at DuPont and Avantor, Ansell's a company that I've long admired. PPE in these types of industries, whether it's industrial or medical or life sciences, plays a really critical role not just in the safety of employees, but also when operational excellence continuity. So investment in PPE is a great investment in your people and in productivity and Ansell is the world leader in that space.

So regarding my background, I've got broad executive experience as Nigel outlined, and you saw in a video working in relevant markets at DuPont and at Avantor as well, too. I'm bringing deep commercial experience, financial experience, having worked with investors for 3 years on Wall Street and around the world. Regarding the digital, it's a space where digital productivity and the use of digital assets whether it's emerging technologies like we see with AI today or other digital productivity assets and SAP and other [ S&OP ] systems are part of the everyday fabric of major corporations. I see great opportunities. We've got a good leadership team at Ansell.

So I'm looking forward. I think the company, as you've seen from the financial results has done really well. We've got a very strong Board and a strong management team, and I'm really looking forward to having an opportunity to contribute.

Thanks, Randy. And I think from my point of view, in the short 3 months, Randy has been on the board. He's already made a material contribution and the benefit of his experience across DuPont and others is clearly evident.

So Michael, are there any online or audio questions?

Chair, there are no written or audio questions.

Okay. As there are no -- as there are no further questions, I'll move on to the next item of business, which is the election -- reelection of Leslie Desjardins. Leslie also resides in the United States and joined the Board as a Nonexecutive Director in November 2015. We've got 3 U.S. based directors today. So Leslie is a second one of them. Leslie retires in accordance with Rule 33(c) of the company's constitution and being eligible offers herself for reelection.

Leslie's experience and Board committee memberships are also detailed in the notice of meeting. And the Board considers Leslie to be an independent director. Leslie, would you like to say a few words?

Good morning, shareholders. My name is Leslie Desjardins, and I'm seeking reelection to the Board for what will be my fourth and final term. While the reelected term is 3 years, I'll be stepping down after the first year as I near the end of the allowable tenure as a director. During this final year, I'm committed to supporting the Board's succession planning and ensuring a smooth transition and an effective transfer of knowledge to incoming directors.

So with that in mind, I'd like to briefly comment on my background and how these relate to my role as a director in your company. I consider myself a finance professional with a strong sense of commercial pragmatism. My passion for numbers led me into finance. As I grew my career within General Motors and Amcor, the one thing I valued about being in finance was that it enabled me to see all parts of the company and how they fit together, such as the company's strategy, operating model culture, talent and of course, the commercial aspects of how money is made.

At General Motors, I gained deep financial governance and manufacturing operating experience, while living and working in Canada, the United States and Australia. Like Ansell, both General Motors and Amcor operate across global markets and have all the complexities of multinational businesses, such as Matrix organizational structures, global manufacturing footprints, and from a financial risk perspective, exposure related to multi-currencies and taxes.

When my core experience lies in finance, I also held P&L and operational responsibility, managing General Motors international export program from North America. This kind of operating experience strengthened me as a financial professional and gave me an appreciation for end customer needs and other key drivers for long-term sustainable growth. Throughout my career, I've worked across all facets of finance, including internal control, financial performance, accounting, treasury tax, M&A, debt and equity funding. My roles in Australia as Chief Financial Officer for Amcor and GM Holden giving a strong understanding of Australian regulatory bodies and listing rules, all of which are critical to ensure robust corporate governance for shareholders. These skills have served me well as the Audit Committee Chair both Ansell and ALS Limited. I value my time's Chair of Ansell's Audit and Compliance Committee over the past 8 years, and I'm confident that the new committee chair, Debbie Goodin, will continue that work with excellence.

I look forward to contributing to Ansell's future. I believe my business philosophy grounded in hard work, customer focus and bottom line results, aligns well with Ansell's cultural and shareholder value creation. Thank you for your continued support, both to me personally and to the company.

Thank you, Leslie. Peter, to your earlier question, I didn't want to preempt what Leslie was going to say. But clearly, Leslie stepping down this time next year, so there'll be a replacement announced in the coming months to replace Leslie, who would have served 10 years as a director by then.

I now move that Leslie be reelected as a Director of the company and proxy results in respect of the reelection of Leslie as a Director are displayed on the screen.

Are there any questions from the floor? No? Michael, are there any written or audio questions?

Chair, we have a written question or comment from Ms. Jillian King, which is thanks to the directors who are attending the meeting via VideoLink instead of flying in. This is another way of showing leadership in reducing climate damaging emissions.

Thank you. That's true. And the other -- yes, it's -- yes, it reduces the climate emissions. It saves the company money. All of these directors are based overseas. And it's flights and accommodations are a costly thing and the technology is -- it works well once we once we can find Randy on the screen. But so thank you.

As there are no further questions, I'll now move on to the next item of business. and that is seeking the reelection of Christine Yan. Christine also resides in the United States of America and joined the Board as a Nonexecutive Director in April 2019. Christine retires in accordance with Rule 33(c) of the company's constitution and being eligible, she offers herself for reelection. Christine's experience and Board committee memberships are detailed in the notice of meeting. And the Board considers Christine to be an independent director.

Christine, would you like to say a few words?

Thank you, Mr. Chairman. Dear shareholders, it's an honor to stand for reelection as a Non-Executive Director of Ansell Limited. Over the past 6 years on the Ansell Board I've developed a deep understanding of the company's businesses, operations, strategy, markets and people. The more I learn, the more impressed I am by Ansell's brand, culture, value and purpose and by the dedication and capabilities of his global team. In today's challenging and uncertain environment, the Ansell team has responded with agility and commitment.

My experience is as a global executive at Stanley Black & Decker remained highly relevant to helping Ansell further grow as a global business. In today's fast-changing business environment, I believe a continuous learning mindset is a central to being an effective NED. My portfolio career serving as Non-Executive Director on 3 U.S.-listed companies and as a strategic adviser to a private equity portfolio company gives me the valuable insights into emerging technologies, innovation trends, high-growth markets, cross industry best practices and evolving governance standards around the globe.

In addition, each year, I invest over 50 hours in professional development covering topics from AI, to geopolitics, to boardroom dynamics, to committee effectiveness. These engagements help me stay current of the latest business opportunities and challenges and how they are captured and dealt with. I'd also like to address a question that sometimes arises. Do I have the bandwidth to effectively serve in multiple NED roles? And my answer is a resounding, yes. Without the day-to-day demand of an executive role, I'm fully able to dedicate the time and attention required to fulfill my responsibilities across all boards [indiscernible]. Ansell's Board is highly engaged and we take our fiduciary responsibility seriously. Shareholder interests are at the heart of every decision we make. I've greatly valued the collaboration with my fellow directors and management over the past 3 years, and I remain deeply committed to contributing to Ansell's long-term sustainable value creation. Thank you for your trust and support.

Thank you, Christine. I now move that Christine be reelected as a Director of the company. Our proxy results in respect of the reelection of Christine as a Director of display on the screen.

I'll now take any questions from the floor. No? Michael, are there any written or audio questions.

Chair, there are no written or audio questions.

Okay. As there are no further questions, I'll now move on to the next item of business. which relates to the Grant of Performance Share Rights to the Chief Executive Officer, Neil Salmon under the terms of the company's long-term incentive plan. This award is subject to the satisfaction of various performance conditions as explained in the explanatory notes to the meeting, and entitled Neil to the grant of 1 ordinary share in Ansell Limited per performance right.

Accordingly, shareholder approval is sought for the issue of 135,406 performance share rights to Neil Salmon and his management company under the plan in accordance with ASX Listing Rule 10.14. I now move that approval be given to the grant of these performance share rights on the terms summarized in the explanatory notes to the meeting.

As set out in the notice of meeting and in accordance with the Corporations Act, any votes cast in favor of this resolution by Neil Salmon or his associates will be disregarded. Proxy results are now displayed on the screen.

I'll now take any questions from the floor. Peter?

Peter Ed from the Australian Shareholders' Association. This is a little bit left feel. But I note that your -- all your long-term incentive goals are financial while ESG goals only impact executive short-term incentives. Does this place some pressure on achieving medium-term ESG goals? And should there perhaps be in a ESG gateway in your LTIs?

Well, I think from all incentive programs have a safety overlay Peter. Let me start with that. So I think that's really important and is consistent with what you see elsewhere. And the ESG goals more broadly, sustainability and others in the STIs are not just short term related to 1 year. They may well be progression against a 3- or a 5-year goal. So we're comfortable that we cover that in the balance we have there.

And from an LTI point of view, I think it's important as much as we can, we have quantifiable goals that are able to be calculated on a on a longer-term basis. But certainly, from the Board's point of view and management, the goals included within the STIs and not just short term, they're about achievement of our medium-term plan. Good question. Thank you.

Are there any other questions from the room? Michael, are there any written or audio questions?

Chair, there are no written or audio questions.

Okay. As there are no further questions, I will now move on to the next item of business. The final item on the agenda is a nonbinding advisory vote for the adoption of the remuneration report which is set out on Pages 47 to 70 of the company's 2025 annual report. Your Board commends the remuneration report to you, and I now move that the remuneration report for the year ended 30th of June '25 be adopted.

As set out in the notice of meeting the company's key management personnel, including directors and senior management may not vote in relation to this matter, except as a proxy for a shareholder who is not prohibited from voting or if the proxy is the chair and the appointment expressly authorizes the Chair to exercise their proxy.

Proxy results in respect to the approval of the remuneration report are now displayed on the screen. I'll now take questions from the floor. Keep going, Peter.

Thanks. I note that you've changed your mandatory shareholder policy for directors and executives and in fact, reduced the requirement. Would you clarify the reason for this change?

Yes. I think we did a benchmark against other companies and what was reasonable and reflected that what we were asking for was unnecessary and unreasonable. So from the director's point of view, for example, our requirement is that we have 1 year of our directors' fees held as a minimum shareholding in the company and for executives, it's 2 years. And we believe that, that ensures that us as directors and management are aligned with the shareholders.

So if you look at it from a director's point of view, you've probably got to work for 2.5 years to put your after tax money into shares to meet that requirement. So to do that over a 5-year period, we think is reasonable, any more than that is frankly unreasonable.

Are there any other questions from the floor? Michael, are there any written or audio questions?

Chair, there are no written or audio questions.

Okay. Are there any general questions that you wish to ask unrelated to any of the items of business? If you do have any of those, I invite you to do so now. Are there any questions from the floor on unrelated matters? No? Michael, are there any online?

Chair, there are no written and audio questions.

The good news is that means we're not far from coffee and morning tea. There appear to be no further questions. So that concludes our discussion on the items of business. The poll will close shortly. If you are ready for those of you here in the room, Computershare with their lovely what I call that purple box, and now circulating the room to collect your ballot cards. And as I said earlier, the final outcome of the polls will be announced by notice to the ASX later today. There will be a 5-minute period at the closure of this meeting, during which you can finalize your voting.

Ladies and gentlemen, that brings us to the conclusion of the business today. Thank you very much for attending. Thank you for your interest in Ansell, and good morning.

Thank you for standing by, and welcome to the Ansell Limited FY '25 Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Neil Salmon, Chief Executive Officer. Please go ahead.

Thank you, and good morning, all. It's a pleasure to be back in Melbourne today and in a position to comment on a successful fiscal year '25 and give you a look ahead to fiscal '26. Let me start with the contents page on Page 3. This both gives you an overview of what we will cover today, the team who will present what I'll introduce in a moment, but also your key takeaways that I hope you gained from this presentation. With regards to our performance overview that I will cover, we've seen successful delivery against all the FY '25 performance objectives we set out, including EPS of $1.26 at the upper end of our guidance range.

I'll then give a bit more color to the drivers behind that result, including the performance of our recently acquired KBU business and our successful integration of that business. I'm joined by Deanna Johnston, who's our CIO, who successfully led the KBU integration. But she is here, in fact, to talk about the next phase of our accelerated productivity investment program, APIP, that phase being the rollout of a modern ERP system across Ansell. And then Brian Montgomery will join us. Brian is our new Chief Financial Officer, 4 months now with Ansell, and he'll give you more color on the strong financial results and also talk to our on-market share buyback, which we have announced with this result.

And then finally, I'll look ahead to fiscal year '26, our strategy to adapt to higher tariffs and our EPS guidance range, which you can see we have announced in the $1.33 to $1.45 range. So let's proceed with the performance overview. And this slide shows the similar format to the one we've had over the last few reporting periods. On the left-hand side are the goals that we set out at the beginning of the year. And down the middle, you can see those green checks indicate we believe we've delivered on pretty much every goal that we set out. We'll provide more details on those as we go through this presentation. But there's also a nice summary synergy symmetry to our financial results. 8% organic growth translated to 10% EBIT growth, adjusted EPS growth approaching 20%, and we were able to reward shareholders with a 30% increase in the dividend and that's a satisfying set of financial outcomes to report to you today.

So let's continue with the story behind these numbers. And if I begin with the Industrial segment, we can go to the next page, please. So overall, a record result for Industrial, record sales, record EBIT margin. And of course, that also means record profitability. And I'm very pleased with that organic growth approaching 6% and the 10% EBIT growth. Breaking it out by business unit, we saw a very strong first half in mechanical. We did indicate at the time that some of that was safety stock build by distributors and end users of our top-selling R-840 style. And therefore, we did expect it to moderate some in the second half. I still believe 3% growth in the second half is very creditable in an environment in which many of our core industrial verticals saw softer demand and an overall 7% growth for the year for mechanical is a strong result.

Chemicals saw more consistent first half, second half growth. And what's pleasing in chemical is that we're seeing that growth come across the full portfolio of both hand and body protection and again, supported by some very promising success from pretty important new product launches in that space. Turning to EBIT performance. So sales clearly benefited. We saw improved manufacturing utilization and also productivity in part from the APIP savings. A reminder that first half margins were lower. We saw these trends in both industrial and health care from elevated air freight that was needed to support that strong growth but margins improved in the second half as freight costs returned more to normal, and we got some price increases through in the business.

So let me now turn to the Healthcare segment. So here, encouraging to see Healthcare back to a solid performance. Industrial has been very consistent the last 2 years. Healthcare now showing strong growth again as the destocking effects that have affected this segment for the last couple of years are clearly now in the rearview mirror. Almost 10% organic growth and a slightly higher level of EBIT growth meant we also improved EBIT margins in this space. The reported EBIT margin improved much more than organic because of the benefit of the consolidation of the KBU business. Again, by business unit, strong first half in Exam, but some of that 9% growth was the pull forward of orders that otherwise would have been invoiced in the second half as customers began to position for the first round of tariff increases that went into effect in January. The organic growth rate improved again through the half for Exam/Single Use. And overall, that business is well positioned to grow again into this coming fiscal year. Very strong and very satisfying results for our Surgical and our cleanroom business.

Surgical, again, as we said at the half, was benefited in the first half by $17 million of orders that were delayed out of the fiscal '24 time period by shipping delays related to the Red Sea disruption. And so that 14% growth in the second half is very encouraging and 20% overall for the year, a great result. Cleanroom is where we've doubled down with investment. Again, very strong first half, second half at 8%, continuing to grow above our estimate of market rate and that through that period of KBU integration, which we navigated successfully, but we always expected to have a somewhat lower sales outcome with customers positioning ahead of the [ cutover ]. Again, EBIT growth benefiting from the same trends as industrial, the consolidation of KBU, improved manufacturing utilization and APIP savings. First half had the headwind from higher freight and raw material costs, second half improved as those moderated and we got some initial pricing through.

So overall, pleased with both segments' performance in the year. So let's move forward now to some further detail in the drivers behind that growth. And this page summarizes the 4 dimensions, which I hope you as shareholders will think are the long-term source of shareholder value creation. And for each of these 4 boxes, I'm just going to call out one specific element and others will talk to in other parts of the presentation. So differentiated customer solutions. And I think perhaps our differentiation is still not fully understood by the market. I've mentioned already the success we've had with new products. Here, I want to highlight how important our range of service offerings is to the customer. For example, under the Ansell Guardian brand, we have the world's leading database to inform customers on what the right PPE is to use depending on the chemicals that workers may be exposed to in that environment.

The use of the Ansell Guardian chemical system increased 30% year-on-year with more than 50,000 queries recorded either by customers directly for a limited version of the system or in partnership with our sales teams for more complex queries. And we're seeing it lead to share gain in markets in which Ansell has previously struggled to gain share. For example, in Japan, where regulations around protecting workers from chemical hazard have been tightened. As a result, we've seen a significant increase in Japanese customers coming to Ansell Guardian for advice, and that in turn has led to increased share gains and growth in Japan. Our diverse vertical and geographic presence is another core feature of Ansell. And while some of our verticals are seeing reduced demand or limited growth, we have plenty of places in which we can still grow. We doubled down in the pharmaceuticals and biotechnology area, but I want to mention here the success of emerging markets.

Emerging markets, it's a mixed picture. Some of our reliable multiyear growth markets have not grown in the year, for example, Mexico. But in other places, Brazil, China, India, we saw solid growth in the year. So again, within the broad universe of emerging markets, we can find places to grow. The right-hand side talks more to productivity and capital allocation. And here, with the success of APIP behind us, ERP will talk about, but I want to highlight our increasing confidence in being able to generate returns from automation investments. We have a number of pilots running this year, particularly looking at more automated packaging solutions where a lot of our people are employed today. With success with those pilots this year, we should see another path forward to improve productivity. Brian will cover more on our capital allocation, but I want to highlight our internal capital expenditure, which is always our priority where we have good return projects. The most important project this year is our India Surgical Greenfield Facility, which is on track to begin dipping of gloves in the second half of fiscal '26.

So let's move forward now to the next page. And here, I summarize the performance of the acquired Kimberly-Clark PPE business or KBU, as it's known within Ansell. So firstly, the performance of that business itself was ahead of business case. Secondly, the integration is complete. And Ansell CEO has never been able to say that before, just 1 year after an acquisition, and this was by far the most complex integration task that we've taken on. And with success under those 2 headings, I'm able to now increase our synergies target from $10 million to $15 million. So let me go through a few more details under each of those headings. Sales were ahead of business case also strong double-digit growth in our cleanroom products, which is really what we bought this business for. You're aware that when we bought the business, we did anticipate some decline in the industrial safety products, particularly in the period in which they were still being supported by the Kimberly-Clark sales team.

In recent months, they have now been transitioned to the Ansell sales team, and we want to get those products back to growth as well. So overall moderate sales growth of 1%, but double-digit growth in Cleanroom, very satisfying and overall ahead of business case. EBIT also ahead of business case on those sales, better product margin and the early exit of transition services means we started to record SG&A synergies ahead of our original business case assumption. So the integration was the most important job we had to do, and we had to do it well this year. Customers in the Cleanroom area do not forgive you if you disrupt their operations with supply chain, lack of reliability. And the real test of our success is our customers. They were nervous about this. It's a complex integration. They've seen issues with other companies before, and they've reported to me that they viewed this as a seamless experience for them, and that's very satisfying to hear. As a result, all our transition service arrangements from Kimberly-Clark were exited ahead of schedule. And now we can focus on our motto that we always apply to every acquisition. Where is the opportunity to leverage the best of both of the base Ansell business and the acquired business.

Two highlights here. KBUs right cycle post-customer use end-of-life recycling service really resonates, and it resonates all over the world. Today, we're looking to scale that up to improve the economics of the service, which is subsidized by Ansell so that we can bring it to many more customers. And then as we dug into the quality of the business that we bought and done research on the strength of the KBU brands, we've made a decision that we need to double down on those acquired brands, and we also need to simplify the overall Ansell brand portfolio. And that means today, we're announcing that some older Ansell brands, which have equity have value in the market, but they will be superseded by the key KBU brands, Kimtech and KleenGuard. So we'll transition products today under an older Ansell brand to either KleenGuard or Kimtech. That this to me is a value-creating step, but accounting rules require us to record an impairment because we will not be continuing with some of those other brands that have a current balance sheet value.

And then an upgrade to synergies target. So remember, our net figure of $10 million was a balance of gross cost savings with some offset for some revenue risk. 12 months in, we're seeing less of that revenue risk than we had anticipated. We have secured the SG&A savings, which is the biggest piece of the gross cost synergy with the success of the integration. And the opportunity I see is an increased supply chain savings opportunities. We're still working through that, but I'm confident that we should have at least a $5 million upside to our original $10 million target. Of that $15 million, we realized $5 million in fiscal '25. We won't be all the way to $15 million in the next 12 months, but we'll get close to that $50 million figure.

So now if I turn to our brand portfolio, I won't cover this page in detail. But really, I think this is by far the strongest set of brands of any player in the PPE world. Each one of these represent revenues in the range of $80 million to $90 million to $300 million. Each of these brands are known globally. Each of these have a clear role within the Ansell portfolio, and you can see how well KleenGuard and Kimtech fit into this portfolio. But the most important brand on this page is the Ansell brand in the top corner here. And so what we also want to make sure is that people buying HyFlex know very clearly they're buying Ansell as Ansell recent research confirms is the best known brand in our industry. But I'd also highlight the strength of our service brands, Ansell Guardian, the RightCycle recycling and the Apex program, which goes more to the use versus the adoption of PPE.

So now let's turn to the APIP program. And this is the last time that we will present the 3 strands of APIP here because the organization work stream, the manufacturing work stream are substantially complete. And we have delivered to our upgraded savings target of $50 million, which you will see in full in the next fiscal year. So from here on, we will focus on the IT stream. We've had success to date, but the big work is still to come. And I'd now like to hand over to Deanna Johnston to give you further details on this.

Thank you, Neil. By way of further introduction, I've now been with Ansell over 5 years. And during that time, my role has evolved significantly. In addition to leading our global IT function, my responsibilities have expanded to include overseeing Ansell's broader portfolio of change initiatives. Most recently, this included leading the integration of KBU into our business ahead of schedule. There's 3 factors that really resulted in the success of that integration. First, we developed a tightly interconnected dependency plan, carefully mapped how all the complex parts fit together. Second, we really maintained a constant steering and rapid issue escalation, catching potential problems early and addressing them quickly. Lastly and most importantly, we followed strict cutover readiness criteria, ensuring all of our stakeholders were aligned and confident in our preparedness. These criteria were defined in advance, measurable and never compromised.

We plan to apply those same principles to our upcoming digital transformation work stream within APIP. Before diving into that, let's just quickly review what we've accomplished in this space, though, over the past 6 years. In 2019, Ansell was operating with 16 different ERP systems, a legacy from our many acquisitions. This created significant inefficiencies across our systems and processes. We made a strategic decision to consolidate all of our manufacturing plants onto a single cloud-based ERP platform. Over the last 6 years, we've been executing this transformation plant by plant. As of today, our 9 largest facilities have successfully migrated, including our Thailand plant, which just went live earlier this month without an issue. The confidence we've gained from these transformations and from our successful KBU integration has positioned us to take the next challenge, which is migrating our customer-facing entities onto that same ERP platform. From here on, this becomes the core focus of APIP.

These migrations are going to take place over the next 3 years, beginning with North America later this fiscal year. Once complete, Ansell will operate on a unified ERP system, unlocking benefits across cost efficiencies, process optimizations and customer experience. Our customers will see an improved service and stronger partnerships and we'll be better equipped to deliver value in areas like pricing, inventory management and integration of future acquisitions. We're genuinely excited about the potential of this initiative. We're working really closely with our customers to ensure a seamless transition and look forward to sharing updates with you guys on our progress in the years ahead. With that, I'll hand it back to Neil.

Thank you, Deanna. So a few words on our sustainability progress before I then hand over to Brian for more details on our financial results. And 2 aspects of this I would highlight. Firstly, our net zero emissions goal has now been extended to include our Scope 3 emissions with our net zero target, including Scope 3 remaining at the FY '45 date. And I'm pleased to say that the science-based targets initiative has validated our targets as well grounded and meeting their criteria for science-based targets. On the left-hand side of the page, I'd highlight our progress in reducing injuries. You may remember that in fiscal year '24, that was 1 year -- we seldom see this, but 1 year in which we did see an increase in injuries and so important to get back on track. I'm satisfied with the 16% reduction and the overall level of total recordable injury frequency rate, but I also think there's further progress that we can make. And so we're very focused on the leading indicators and the proactive risk reduction steps that we can take to get to the lowest possible injury occurrence in our company.

And then finally, it continues to be very satisfying to see the recognition we gained from authorities around the world consistently rating Ansell as a leading company in our delivery of sustainability objectives. So now let me hand over to Brian Montgomery to go through our financial performance. Brian?

Thanks, Neil, and good morning, everyone. Great to be here speaking with you today. I've been at Ansell now for a few months, and I'm really impressed with the quality of the company we've got here and looking forward to working with Neil and the team to drive the business forward in the coming years. Neil has provided a few comments on the full year results already, but let me get into it in a little bit more detail. Overall, we were pleased with EPS coming in at [ $1.261 ] on an adjusted basis, which excludes significant items. As Neil mentioned, this was in the upper end of our upgraded guidance range that we provided alongside our half year results in February.

Starting at the top, sales were up 7.7% on an organic basis, which excludes the effects of foreign exchange, the acquisition of KBU and the exit of our chemical household gloves business in fiscal '24. This is the best rate of organic growth we have delivered in over a decade, excluding fiscal year '21, which was distorted by pandemic-related pricing and demand. GPADE margin improved by 280 basis points versus fiscal year '24, helped by improved manufacturing utilization, growing APIP savings and the mix benefits from KBU. We did experience some margin headwinds from higher freight costs and raw material costs, which we spoke about in the half year results. However, we saw improvements in both items in the second half with the use of air freight reducing and key raw material prices softening moderately. Second half margins also benefited from pricing put in place in January to offset increases we saw in raw material costs in the first half. So overall, a solid result on GPADE margins, but with opportunities for further improvement as we move into fiscal year '26.

Turning to SG&A. This was up 12.2% on an organic basis. The main driver was increased accruals to fund higher incentive outcomes versus fiscal year '24 as well as annual merit increases, partially offset by higher APIP savings across the year. Foreign exchange was a headwind to EBIT by about $1.5 million. Underlying currency changes were unfavorable to EBIT by $11.5 million, but our hedge book did its job and neutralized the majority of this negative movement. We did see an FX swing in the last quarter with the U.S. dollar depreciating against key revenue currencies, including the Euro. This sets us up for an underlying FX tailwind in fiscal year '26, though this will be blunted in the short term by the expected losses on our hedge book, but a positive development for earnings in the longer term, all else being equal. So all this translated to organic EBIT increase of 10.4% versus fiscal year '24 as well as a 200 basis point improvement in our EBIT margin, which now is at 14.1%.

Moving further down the P&L, we booked $98 million in significant items in fiscal year '25. This is higher than the guidance we gave at the first half due to the decision that Neil outlined to leverage the market-leading KBU brands across other parts of our product portfolio. And this required us to book a noncash charge of $41 million against the value of these retire brands, which had all come to Ansell as part of earlier acquisitions. Bridging down to net profit, interest was also higher due to the incremental borrowings required to fund the KBU acquisition, and our effective tax rate came in as guided at 23.5%. So on the whole, a solid '25 result in some challenging market conditions, and we look forward to carrying this momentum forward into fiscal year '26. So now on to the balance sheet, which I'm pleased to say is in a very healthy condition. Working capital was higher than fiscal year '24, most notably in inventory. There are 4 key drivers there, including incremental inventory from the KBU acquisition, natural investment in stock to support higher sales, increased safety stock levels in the U.S. to get ahead of higher tariff rates and then the translation effect of a weaker U.S. dollar at year-end, which also inflated stock levels in the second half.

Looking at inventory turns more operationally. These were higher than fiscal year '24, helped by a mix benefit from KBU products where manufacturing is outsourced. But pleasingly, inventory health also improved over the course of the year with lower customer back orders and improved in-stock percentages. This has supported revenue growth in fiscal year '25 and continues to help support growth here in fiscal year '26. Receivables and payables both inflated in the second half as we rolled off transition services with Kimberly-Clark and those order to cash processes transferred to Ansell. Both receivables and payables were not included in the KBU transaction perimeter

Operationally, debtor and creditor days were relatively stable throughout the year. Finally, it was great to see a step-up in return on capital employed. This business is -- this improvement on the back of our earnings growth, which included strong initial returns from the KBU business. It's not often that an acquisition is accretive to ROCE in year 1, but that's what we've been able to achieve with KBU. So next, turning to cash flow. While both sales and earnings were significantly higher than fiscal year '24, net receipts and operating cash flow were both lower. It's important to remember that in fiscal '24, we benefited from a significant one-off working capital release of over $100 million when production was slowed to reduce inventory, which drove an abnormally high cash flow result. Working capital increased in fiscal year '25 as sales picked up and we built inventory where we needed it, for example, in the U.S. towards the end of the year.

It's this significant year-on-year swing, which explains the year-on-year reduction in operating cash flow. Cash conversion, which we define as the percentage of net receipts to EBITDA, excluding significant items, was 91% for the year. This decreased somewhat from the 104% that we showed at the half year, mainly due to the second half inventory moves and those TSA exits that I talked about earlier. We had $45 million in one-off cash costs associated with APIP and the KBU transaction and integration that were included both in EBITDA and net receipts. The majority of the significant items in the P&L were noncash, including the $41 million noncash charge against retired brands I mentioned earlier and incentive accruals, which were significantly higher than fiscal year '24. These make up a large piece of the $115 million other balancing items you see between EBITDA, working capital movements and net receipts.

Net CapEx was $68 million in the year, which includes the continued construction of our new surgical plant in India. And of course, the large increase in net interest-bearing debt was due to the payment for the KBU acquisition made at the start of the year. Turning to the next slide, just a couple of words on our funding profile. If we adjust for the timing of payment for the KBU acquisition at the start of the year, net interest-bearing debt reduced by $29 million in the year. Net debt to EBITDA at the start of the year was 1.6x, down from 1.8x at the beginning of the financial year. Maturities of our debt are relatively long dated with approximately 1/3 of our facilities at floating rates. So there is scope for some improved interest outcomes if rates decrease throughout fiscal year '26. So all in all, we're in good shape with a healthy balance sheet and well-balanced maturity profile, meaning we can continue to underwrite value-accretive internal and inorganic investments as and when we see them.

We could also turn to further capital management to ensure our balance sheet remains efficient. And to this end, we will be resuming our on-market share buyback program here in fiscal year '26, aiming to make up to $200 million of repurchases. Finally, I want to take the chance to say a few words about the opportunities I see for improved financial performance over time. I'm a few months in my tenure here, and what has struck me is really the strength of the IP in our business, clear our material science and manufacturing technology, our services offerings and, of course, our market-leading brands. I see good opportunities to leverage these strengths to accelerate revenue growth through the work we're doing to optimize our brand positioning, which includes greater use of the acquired KBU brands and through stepped-up product and service innovation. There's also potential to drive better revenue management and pricing practices to ensure the value of our products is reflected in the prices paid by our customers. Looking at margins, our team have done a great job in the past couple of years of driving improvement, particularly in the Industrial segment. But I see a lot of potential for further gains through a continuous focus on driving variable production costs down by deploying lean tools and automation in our plants, by improving our sourcing capabilities and through more efficient distribution.

The upgrades we are doing to our ERP systems will be a key enabler, and there are also opportunities to be smarter around our use of shared services. On cash flow, we want to build on the improvements that we've made in our supply chain planning over the past few years to turn inventory faster and look to tighten up our receivable and payable terms where we can. These improvements will further enhance our ability to invest for continued growth and return capital to shareholders. I want to say a few quick words about how we're thinking about this. First, we know that the best returns are from internal investments, and we've invested significantly in manufacturing capacity over the last few years, which enables us to meet the growing demand for our most differentiated products.

Now we're turning our focus to productivity investments, specifically opportunities to introduce greater automation to key manufacturing processes. Secondly, M&A is a key part of our strategy, and we're continuing to look for acquisitions that will enhance our differentiation and growth potential, building on the success that we've had with KBU. And finally, if we're sitting on excess capital, we won't hesitate to return it to shareholders via our on-market buyback program, which we're now resuming. So with that, I'll hand it back over to Neil to talk through our outlook for fiscal year '26.

Thank you, Brian. Well, clearly, when talking about fiscal '26, I have to begin with the impact of tariffs. So this page highlights across the top, the 4 reasons that I think will give you confidence that we are in a position to offset tariff cost increases without a negative value outcome. Firstly, remember that PPE products in general are essential. Customers do not have the option whether or not to use them, they are required and often regulatory -- required for regulatory reasons in the workplace. The specific Ansell PPE solutions are differentiated. In addition to protection, they provide comfort, they generally are more durable than competitive offerings and often they protect against multiple risks in a single product. So that means workers and they keep workers and production processes safe, and it also means customers buy Ansell products because of that broader value proposition, which through Guardian, we can demonstrate creates value in use.

The second point to make is the entire glove manufacturing industry and clothing manufacturing industry is in a very similar position. In the end, the way tariffs are currently, there isn't a big advantage in any particular manufacturing country. But I would say that the economics of onshore production in mature markets, for example, the U.S., remain challenged, and we don't think what has happened to date shifts that materially. The third point to make is that Ansell, more than anyone else in our industry has a diverse manufacturing and sourcing network. And in a time when it's very difficult to be confident about any particular future scenario, the only way to be prepared is to have options. And our 40 manufacturing facilities in 9 countries, supported by a well-developed supplier network means Ansell has more options than any other participant in our industry to navigate whatever the future throws at us.

And finally, I feel in my 12 years at Ansell that I've been here several times saying to you, we have the pricing power to be able to offset a source of cost inflation, whatever that may be. And at different times, it's been different things. But each time, we have shown that we can offset a step change cost inflation through well-managed price increases and clear communication to our customers. So what are we doing? What have we done so far? What are our plans? Well, in summary, our pricing plans are to offset those higher tariffs in full. We have already begun on this journey based on the initial tariff rates, China, an additional 30% and the rest of world at 10% we communicated in the fourth quarter to customers that we would need to take a first step of price increase. Those went through in the June and July time frame. And generally, we've seen good market acceptance of those.

And now in the more recent weeks with the final -- maybe final is the wrong word, with the next indication of what tariff rates to the U.S. will be, we need to go to the market again with further increases. We have communicated those to customers. We're in the process of implementing them, and they will come into effect for the most part during the first half of fiscal year '26. And I believe that we will see a similar outcome to the price increases already achieved. Meanwhile, we continue to work to mitigate the higher costs. We have many steps in place to reduce our exposure to China sourcing. And even though there's less of a cost benefit now to that than previously some had assumed, our customers still want to be sure that their supply chains do not contain a high level of sole source risk to China. And back to that resilience, we can offer more options than others. And then we're also looking for cost mitigation across our supply chain. So taking all these steps together and the fundamentals of our industry situation, I believe we will be able to navigate tariffs successfully in the U.S. and in other markets.

So with that secured as an assumption, let me go now to the other assumptions that make up our earnings guidance for the year. So a range of $1.33 to $1.45, as you've seen already. And of course, that requires continued good earnings growth versus the $1.26 that we've just reported. We anticipate continued sales growth. Yes, some industrial verticals will see subdued demand. But in other spots, we see the opportunity for growth in industrial, and we expect overall solid health care demand. So we anticipate general volume growth across the business and then tariff-related pricing will clearly also contribute to sales growth. Adjusted EPS, so those sales will support EPS. And as Brian has outlined, we have an ongoing productivity program. Even with APIP coming to an end, there are other initiatives that we have underway that should improve manufacturing and supply chain productivity, and we'll see a further step-up in KBU synergy delivery.

Finally, we remain very focused on cash flow. We remain committed to strong cash conversion, and you've heard our continued balanced approach to capital allocation. So now let me conclude. returning to those 4 dimensions across the bottom here that I believe shareholders should see as long-term sources of value creation. And across the top are the enablers or the pillars of building those dimensions. Let me just highlight a few key priorities for the next 12 months. So firstly, under leading positions in growing markets. Clearly, as vertical conditions change as some markets show opportunities and others less, we need to be adaptable and we need to be effective in pivoting our focus to those favored verticals. The increase we put on really understanding our end users helps us be more agile and quicker in doing that. And the broad portfolio we have means we can present well-rounded solutions into verticals such as defense or energy where there are meaningful growth opportunities.

We continue to round out our comprehensive product portfolio. We've had success with new-to-industry product launches, and there are more that we'll launch in the next 12 months that we think will provide very important solutions to customers that aren't available to them today. I talked about our service solutions, and it's particularly exciting how the development of technology really enables us to envisage a new future for our services, which are much even more powerful than they are today and also much more responsive, enabling us to reach more customers with this very important advice on what the right PPE is to use. And we plan to scale up our RightCycle recycling program, working on the economics and making it available to customers who are asking for it today. We continue to invest behind that resilient supply chain. I continue to believe our sustainability leadership is important also for share growth. So we're expanding our portfolio of low-carbon solutions, and that's resonating very well with customers. But also, let's remember that our investment in renewable energy is also a smart cost move, and we see lower energy costs coming from those renewable investments. Further investments in fiscal '26 will continue to have energy cost benefit.

And finally, all this is made possible by cash flow. So our CapEx mix will continue broadly about the same dollar levels, but shifting from growth investments to productivity investments with automation being a key component. And as you've heard, we're resuming the on-market buyback. So I hope that gives you a good overview of our results in the last 12 months, a good sense of our priorities for the next 12 months. And now we'd be very happy to take your questions.

[Operator Instructions] The first question today comes from Vanessa Thomson from Jefferies.

Great result. I just wanted to ask with the U.S. tariffs and your insourcing strategy, I guess the outsourcing KBU strategy does give you some extra flexibility at this time. Does that change your attitude to sourcing in the near term?

I don't think it changes us structurally and that I don't think we expect a meaningful shift in the percentage of in-sourced outsourced. But it does all come back to those options, as I was describing. In fact, the Kimberly-Clark business when we acquired it, as is true for pretty much everyone else in the industry, had some greater dependency on China for some aspects of its sourcing. And we've quickly been able to come up with alternatives there, which is a combination of leveraging our own sourcing -- outsourced network and then also looking at Sri Lanka, for example, as a location in which we can make in-house products that previously Kimberly-Clark only had the option to outsource. So it's the options that we provide to an already strong KBU sourcing network that give us more dimensions to move. But to answer the question specifically, I don't expect a step change in the in sourcing, outsourcing overall mix for the company.

[Audio Gap] was around -- we've seen commentary about pull forward of purchasing effectively, I guess, into the fourth quarter of FY '25. I wondered how you're seeing purchasing into the start of FY '26?

Yes. So I need to caveat my comments by saying we don't have perfect visibility on this. We do track much more carefully now the distributor sell-out data and match that to our sell-in data to watch for changes in distributor inventory levels. And of course, we're also tracking order patterns as we begin this fiscal year. So overall, we don't see any signs of that, Vanessa. We didn't -- we haven't seen any material prebuy in the fourth quarter of the last fiscal year. And also, as we progress through this year, we're not seeing any meaningful change in order intake that would suggest there was a prebuy. So it's a little early for me to draw a definitive conclusion on this. But so far, so good. So no, I don't -- as I -- the information I have today would suggest that wasn't a big factor, even -- it wasn't a material factor in our fourth quarter result.

The next question comes from David Low from JPMorgan.

Can I start with tariffs, of course. I mean I see for the price increases that have gone through. I was just wondering how much or how much you worry about a volume impact. I also observed that both divisions saw their growth slowed to 3% in the second half. And I know there's a lot of moving parts there, but just kind of worry whether you see any kind of a link between the price increases and what's happened with sales.

Yes. Well, clearly, it's that equation that is at the heart of our success. And we've taken a price strategy, which we don't believe will have a major volume risk effect, and we'll be agile as we work that through. So within -- we have flexibility within the overall commitment I've made to you to adjust if there are specific customer situations that we need to respond to, and we've taken account of that in the targets that we've set here. So -- so yes, I think the volume effects that we're seeing are not so much related to the price that we've taken, but we are seeing already some second and third order consequences of higher tariffs. So for example, Mexico, which for many, many years has been one of our highest growing countries. Activity in Mexico has slowed significantly because of the increased barriers of trade between Mexico and the U.S. So it's -- and then in some sectors in the U.S., we're seeing promising order opportunity. And in other sectors, for example, automotive, similarly, automotive in Europe, we're seeing weaker growth opportunity. So that's -- those are the volume effects we're seeing, not related directly to our price increases, more related to industries around us adjusting to the realities of the new trade world order.

All right. And then I noticed again EBIT margins have a strong uplift there and KBU is obviously part of that. But what is the potential margins that you see out of this business? I mean we've seen a bit of movement in EBIT margins across both divisions over the years. What do you think the sensible sort of medium-term targets are?

Yes. So I think we need to do some more work on resetting our medium-term targets. We currently have work underway looking further ahead again, and we'll look to update you on those as we reach conclusion. Clearly, industrial right now is, in fact, trading quite a bit ahead of what I said 2 or 3 years ago was my target margin for that business. But there's nothing in that margin performance that I would say is unusual or temporary in nature. It's really coming about through consistent delivery of those priorities we've outlined to you for a while. And encouragingly, and you've challenged us on this in the past, David, we've been able to retain the margin improvements that we're making internally by overall ensuring that we price our products to value rather than to any particular cost equation. And that price to value is the theme of the revenue management that Brian was talking about, which we want to become more sophisticated in. So I don't have a new midyear target for Industrial for you, but I do expect continued margin improvement in that business as we've got a long way to go with those strategies that I've outlined.

Healthcare is still trading below its historic margin level. I'm pleased that we saw some improvement in the last 12 months. But we've got longer to go to really get the Healthcare business back to an acceptable level of margin. Again, I expect margins to improve in the next 12 months. But really key to healthcare is -- are those productivity and automation investments. So with success in those pilot lines that will materially reduce the labor required, particularly in the packaging processes, for example, of our surgical portfolio, then we should see a step-up in Healthcare EBIT margins as well as the other strategies that are consistent between industrial and healthcare. So let's stop short of directly answering your question, David, but that gives you a directional sense, I hope.

I appreciate you guys have delivered on the targets so far. So well done.

The next question comes from Dan Hurren from MST Marquee.

Again, sorry to carry on with the tariff question, but it's sort of the topic of the day. Look, the market is really trying to understand the risk of downgrading either within your own portfolio or downgrading to cheaper brands. As you sort of go through the second wave of price negotiations with customers, can you just characterize what -- how you're seeing that play out? Is there a tendency for customers to go for cheaper price within your range or within -- or to alternate customers -- alternate providers, I should say?

So I think the first comment to make with regards to that is pretty much the whole industry is moving up. And you've seen our customers also who are managing both brands within their portfolio, our distributor customers, I mean, and also managing their own private label portfolios also saying that they expect to offset the EBIT impact of tariffs with high price increases. So this is a classic question of tide lifting all boats. And so the relative price difference may not move that much, in fact, between the Ansell premium position and other lower price, but perhaps also lower value products. The second point I would make is the one I was making on the call, which is that Guardian value sell methodology allows us to really demonstrate to customers that even if the Ansell price point per glove is higher, the overall cost in use is often lower. And when your products last 2 or 3x as cheaper alternatives, that's not a very difficult case to make.

But the third statement is, indeed, we do have options within our portfolio. We have mid-tier products that are still very good, but don't quite offer the full value of our premium products. And we've always -- this is not different to our strategy over many years. We're always flexible with customers if for different reasons, they need to have some flexibility within the portfolio. And to say again, all of those factors have been considered as we tried to give you our best view of our outcome from our strategies over the next 12 months.

The next question comes from Craig Wong-Pan from RBC.

Just wanted to touch on the margins in the divisions again. We saw a good uplift in those second half margins. So I just wanted to understand if there were any kind of one-off benefits or seasonal benefits in those second half margins to understand how sustainable that level is?

Yes. So maybe I can bring in Brian to comment on this. So we have called out the main factors there, but I think worth reiterating some of those. So Brian?

Yes, it's a very good question. So as we shift from the first half to the second half, a couple of dynamics helped us out. One was in the first half, we were responding to demand that were, in some cases, backordered and needed to be accelerated. We responded to that with higher air freight, which a rate base is obviously much higher than what you'd see on the ocean. So as we shifted to the second half, that got back to more normal patterns. That's one of the reasons why we think that's a sustainable position to be in over time. The other side of it is that we did see some higher raw material costs in the first half of the year. And either we price for those as we got in the second half of the year or some of those abated a bit as expected in the second half as well. So some of the adjustments we made for the first half and the second half, again, we believe are sustainable as we look forward.

Over time, the other thing that we see as benefit is those productivity investments coming online. And we're very focused now on moving our capital from just capacity and growth, which has been more of our focus to more of this productivity piece, and that should be added as we go over time, helping to offset the increased inflation we see in things like wages throughout our supply chain.

And just to add one comment. So we -- while the second half margin result was fairly clean for the reasons that Brian described, Remember, there's always some seasonality in our EBIT margin. So generally, the second half dynamics lead to a higher margin in the second half. So you can't take the second half margin and roll it forward. You need to take the full year adjusted for some of the first half factors that Brian described. And that creates that potential for year-on-year growth as opposed to necessarily growing on the second half rate into next year.

And just a follow-up on that seasonal part. Are you able to specify how much that kind of benefit normally is in the second half versus the first half?

Sorry, I missed the second half benefit of what? Can you repeat the question?

Just -- you kind of talked about the seasonal benefit there that you get that sort of skew. Can you kind of quantify how much that is?

I don't remember offhand. So I think we've been -- we disclosed the half-on-half mix fairly consistently over time, but it's generally a couple of hundred basis points difference between first half margins and second half margins, sometimes more, sometimes less, depending on specific patterns within the year, yes.

Okay. And then just the second question on the ERP upgrade, thanks for sort of giving more details around that. Could you put any numbers around the kind of benefits that we might see? And just to clarify with the timing there that kind of it seems like the benefits might flow through more towards sort of that kind of FY '28, that kind of back end of that period. Would that be correct there?

Yes. So I'm going to duck your question, but then bring in Deanna to provide some color to those benefits. So internally, we have a business case right now. Frankly, I think there's more opportunity than the numbers that have been presented to me internally, and Brian also is challenging this. So our goal is to work on that further in the next 12 months, but we also want to see the results of the first go-live. So rather than give you a number, Craig, let me bring in Deanna, who will say where we see the opportunity and what should lead to those benefits. And then we expect to give you a more specific answer 12 months from now. Deanna?

The majority of the benefits that we've modeled and hope to achieve, and again, to Neil's point, we'll track those through after the first go-lives, but they center around -- there's some, obviously, SG&A and labor efficiencies that we expect to get over time. But there's also a set of pricing optimization tools that we're delivering alongside the core ERP system. And so we do see benefits in that area and then in our overall inventory management and logistics efficiencies and things that -- around those areas that could also deliver. So that's where we see a majority of the benefits. We hope to continue to monitor that closely as we cut over. And -- but it's -- I think the organization has been sort of stifled with the legacy type of systems that we've been sort of saddled with for years. And I think that the employee engagement will also increase, which also has an immeasurable value.

The next question comes from Saul Hadassin from Barrenjoey.

Yes. First question for me. Neil, just on tariff, obviously, a lot of questions around potential impact of volume and demand. Is there a way to think about the price increases that you effectively need to put through, you've talked to total cost of around $80 million on an annualized basis. If we take that cost and just divide it simply by your U.S. revenues, you get to about 7%. Is that the magnitude of price increases that you will effectively be looking to put through? Or does it vary by product? Could it be more than that? Could it be less than that?

Yes. I mean the average, that's good math. We -- there's some variation that we've decided to take -- within getting to that overall goal. It's not -- there isn't -- we don't actually see a big variation now by product because the drivers of that cost increase are fairly consistent. It's not -- yes, each product is largely tariffed at the same rate, and there's not a big variation in sourcing anymore in tariff rates as the picture that it is today. But that being said, we, of course, take account of market situations. And so there is -- we have adopted some flex within our plans in order to improve that overall equation we've been discussing of price achievement and volume retention. So -- but it's -- but yes, you're still broadly right in your math as to the average increase needed to offset the cost.

That's very clear, Neil. And second question for me relates to the slide where you talk about the ERP system upgrades. And I'm interested in your comments around we talked to those manufacturing systems being extended to customer-facing entities. I know in the past, the difficulty with Ansell has been seeing forward orders from customers and then balancing inventory and hence, implications for cash flow. As you look through to now '27 and particularly '28, I'm keen to get a sense of to what extent across the whole business you will have line of sight on forward orders, both in Healthcare and Industrial to the extent that you'll be managing this business far more effectively from a working capital position once we get the systems implemented, assuming they are implemented on time and that they are effective.

Yes. So the ERP itself will not actually create further connections into our distributor systems, which is where that information sits. And yes, this is one of the first issues that I tackled with on becoming CEO, and we couldn't wait for one ERP to get that insight that, as you rightly say, is so critical to our business. So in parallel and another project that Deanna successfully led was to put in place an end-to-end demand and supply planning system. And not only is it a system, but it's also a very structured process with customers where we do collaborative forecasting. Only a few customers are willing to give us full transparency on the levels of inventory that they hold, but you can triangulate over time based on various trends that you see to give you a reasonably good view of distributor inventory levels. So that's already in place and further improving it is not so much a systems issue as that customer collaboration issue but also improving our ability to gather data. It's a classic big data problem, getting insights from multiple areas and then extract transform and load is the jargon to get that data then clean so that you can really use it for decision-making purposes. And the overall data lake and BI strategy that Deanna has adopted has also been effective there. But Deanna, would you add anything to that question around that customer visibility question?

Yes, I'd say to complement what you said, Neil, it's really about the ecosystem of, like you said, our global planning systems, our BI tools and the ERP. And we focus today on giving you guys an update on the ERP piece, but really what makes it all work together to that benefit level is the collaborative forecasting process with our customers with the global planning system and with the improvements that we've made with the global data lake where we pull all this information together and have that visibility in those analytics. And so we're in a much better position than we were 4 years ago, but it's still subject to getting some of those insights from our customers. But I'd say 4 years ago, we didn't have the visibility we had on point-of-sale trends and being able to use those to kind of articulate future direction and forecasting. So agreed.

The next question comes from Andrew Paine from CLSA.

Just looking at your net debt to EBITDA, you've got 1.6x and strong performance versus your target of 2x. But just looking at your FY '26 target of 1.5 to 2.5. Just wondering, is that the upper end of the indication of M&A capacity that you have baked into that target, whereas the other capital allocation priorities may be putting you towards more of the middle or lower end of that range?

So let me hand over to Brian to comment on that.

Yes, I think we think about the 1.5 to 2.5 range has really been our target leverage. I think as demonstrated with the KBU acquisition, we were able to raise debt as well as equity to stay within that range and then, of course, bring that back down as we go forward over time. And as we look to be below that range, 1.5, we have the opportunity to resume our on-market buyback as we've discussed today. So I think we think about that really as kind of our target leverage that we'll work within to be most effective in that range. Does that answer your question?

Yes, yes. But probably just to tack on to that, I guess, in terms of M&A, what type of opportunities or gaps are you seeing that you could kind of pull the trigger on at some stage?

I would say that this is something you have to be in the markets all the time and looking at the opportunities as they come. But I would say as well that we've got a strong strategic lens that we apply to all of our acquisitions and things that you saw in KBU, such as exposure to faster-growing end markets, exposure to deeper profit pools are things that we think about as being in that strategic lens for us as we go forward. And then we apply, of course, the financial criteria to that, driving strong returns on capital over time with those acquisitions as we've been able to demonstrate with KBU. And so as we're evaluating those, that's kind of the frame in which we put within it.

I think the other side of this is being opportunistic and being able to respond if and when those situations arrive. And I think staying within our target leverage allows us that flexibility to be able to respond as and when those opportunities occur. And I think it is a key part of our strategy, as discussed that we have a strong platform for M&A. I think we have demonstrated strength in terms of integrating that M&A successfully. And so this is one that we're excited to continue to pursue. Neil, anything you'd add?

No, I think a good summary. It's always -- I mean, the availability is the other question, and it's always hard to predict that. It generally is subject to decision-making by other companies or financial sponsors. And so we just don't know, to Brian's point, we don't know when attractive targets will become available. We don't know if pricing will be reasonable, but we will be ready to act should both those conditions be met.

That's great. I don't know if that, I might just throw one else in. Just backing out the APIP savings, just looking at your EBIT margin. So if I take that out, the benefit you got year-over-year, it's about 13.1% EBIT margin, if I'm correct. So about half of the 200 basis point EBIT margin uplift in '25. So you're obviously doing a great job there pulling through those APIP savings. But just looking forward, that 100 basis points kind of underlying ex-APIP, is that what we're still expecting as a growth target in terms of EBIT margin uplift in the near or medium term?

I think the other big factor to note is -- so we went from a below target incentive outcome last year and also the last 2 or 3 years, in fact, -- and now with the results we've reported to you today, I hope you would expect that indeed, our incentive plans have delivered above target outcomes. So the incentive cost in F '25 was up. We gave the number quite a bit on F '24, but also above -- so if you assume the future at a target rate, then we had more expense in F '25 than an ongoing target assumption for incentive outcomes would deliver for you about halfway in between those 2-year numbers that we've given you a directional sense of. So that's perhaps the other factor to consider as you look at that, yes.

The next question comes from David Bailey from Morgan Stanley.

Just one from me. Just in terms of guidance, just on the sales piece, I suppose I'm just wondering what you're assuming top end and bottom there from a revenue and sales perspective and whether it's more response to pricing changes to offset the tariff impacts or if there's macro considerations factored in there as well. So just kind of what you're factoring in top and bottom end would be great.

Yes. So we don't guide with quantification to top line growth. We remain directional in our comments. I think we've covered the tariff pricing piece already sufficiently. As I consider macro trends. So first of all, let's be clear, it's only the U.S. that is directly affected by the tariff consequences. And then we do see some second order consequences. Mexico, the most prominent where there's a reduction in activity because of lower exports to the U.S. But really, I'd say Mexico is the only country that we see that meaningfully at this stage. So commenting more on macro. So I think it's -- I mean, many of the leading indicators of activity actually improved through the fourth quarter, if you look at forward indicators of orders, industrial production activity. And from most of the half, they were indicating declines and now they're indicating neutral or positive. So if that's sustained, then that's actually quite a positive macro environment to be in. But you've heard our comments are a little more cautious than that because it's hard to predict exactly what the economic consequences will be of changes in trade policy. But I think what I -- stepping back from macro, that point of focus on verticals is key.

There are major parts of the world economy that are attracting significant investments. And I talked about energy and defense. And our portfolio is readily suited and unique in many aspects in being able to provide a portfolio solution to both those in the production of defense or energy, but also the supply chains behind them that need to ramp up quickly in support of that. And then similarly, in the U.S., so some sectors will be affected by tariff rates, but other sectors may be stimulated. And of course, that's the overall strategy here. And so we're looking to be in the right spots in the U.S. to grow. And then, as I said, also, emerging markets, we still see offering plenty of opportunities. So less perhaps about the general macro and more about our ability to pick the spots in which we can grow. And that's a key focus for us as a team to repeat some of my comments from the presentation.

Just a follow-up. I mean what would be the biggest swing factor then? I just -- I'm guessing the EPS range is going to be a function of the top line. So stripping out some of those factors, what's going to be the one thing that's going to move you most substantially top and the bottom end?

Well, certainly, always the broader economic environment is one. The extent to which there's -- we've given you our central target for price versus volume outcomes and tariff. Clearly, there's some range -- potential range of outcomes there. And then overall delivery of cost savings always is a piece there. So we're assuming no disruption from our ERP go-live. We've got a pretty good track record there that gives me confidence in that statement. But any sensible CEO, CFO would always allow a little bit of contingency there just in case. So I think those are some of the other factors. But yes, the principal ones are related to those top line drivers that we've discussed here and in answering your question, yes.

At this time, we're showing no further questions. I'll hand the conference back to Neil for any closing remarks.

Well, thank you all for your continued interest in Ansell, and thank you, especially to the Ansell team. It's a year of very strong delivery. I believe these results were made at Ansell. Not a lot of external factors supported our delivery, and we had to get it done ourselves. And I'm very proud of our ability to execute consistently against ambitious goals that we set as an organization. And clearly, that puts us in great stead for the future. And we look forward to commenting on our F '26 success as we go through the year. Bye for now.