Thank you for standing by, and welcome to the SDI Ltd Annual General Meeting 2024. I would now like to hand the conference over to Mr. Jeffery Cheetham, Chairman. Please go ahead.
Thank you very much. Good morning. I'm Jeffery Cheetham, Chairman of the Board of Directors of SDI Ltd. Ladies and gentlemen, it's now 10:30 A.M., and there being a quorum present at this virtual meeting, I declare the 2024 AGM of SDI Ltd open. As this meeting is being conducted entirely online this year, I want to cover some important procedural and technical matters. Details about how shareholders can participate have been set out in the Notice of Meeting and Online Virtual Meeting Guide, which has been made available to you. Both documents are now available to view and download at the bottom of your screen. If you haven't already done so, you may find it helpful to download the online guide and keep it handy. Voting. Voting in today's virtual meeting will be conducted by a poll by virtue of the virtual voting platform.
All polls will remain open until the conclusion of today's meeting. As we move through the items of business, I'll respond to questions from shareholders. To register to vote and get a voting card, click on the Get Voting Card box at the top of your screen and enter your shareholder number and postcode or country if you're outside Australia. To vote, click for the For, Against, or Abstain voting buttons for the relevant items. Once you have completed your click on the Submit Vote button, you may edit your voting card as many times as you like during the course of the meeting. Questions. Shareholders can submit written questions anytime from now by clicking on Ask a Question box, which is also at the top of your screen. Shareholders, if you do have questions, I encourage you to submit them as soon as possible.
If we experience any technology issues during the meeting, we may need to take a short break. If there's a significant technological issue, then we'll need to adjourn the meeting to another time or date. Please keep an eye on your email box and our AGM website for updates and further details. We'll also lodge details with the ASX. Next slide. I'd now like to introduce my fellow directors, Ms. Samantha Cheetham, our Managing Director and CEO, Mr. John Slaviero, Director of Finance, COO, and Company Secretary, and our non-executive directors, Dr. Jeffery Knight, Mr. Gerald Bullon, Mr. Cameron Allen, and Mr. Gerard Kennedy. Also present today is Ms. Rachel Smith from the Company's auditors, Deloitte. Ms. Smith will be available to answer questions you may have about the conduct of the audit. The Chairman and CEO's speeches have been released to the market this morning.
You'll be able to follow the presentation on the webcast as the presenters speak. I will now present my Chairman's address. The 2024 financial year has been a challenging one, particularly given the changes to the European product registration requirements. Despite the sales grew, product margins increased, and operating expenses were well managed, giving a record after-tax profit of AUD 10.4 million. Our record sales of AUD 111.2 million, led by aesthetic products and strong growth in the European market, are wonderful team achievements. The ongoing focus on aesthetics and whitening products is a solid strategy for the future direction of our product portfolio. We continue to see declining sales in amalgam products, which will be offset by other products, and in particular, our newest product, Stela. Stela, which is an exciting new amalgam replacement, was released in some key markets during the year.
It's also released in Europe this year in July this year. Initial sales and feedback from the market are positive. The product margin was up 530 basis points to 62.1%, driven by logistic cost normalization, product mix, and price increases. EBITDA was up 35.5% to AUD 21.9 million, and net profit after-tax was up 47.7% to AUD 10.4 million, driven by product margin improvements and well-managed operating expenses. The new European Union Medical Device Regulation has been a major emphasis for our teams, and they have secured this registration. In addition, the transition timeline for key legacy products has qualified for the EU MDR extension. Hence, many of our resources, such as research and development projects, were postponed over the 12 months. Globally, product registration is becoming more difficult to achieve. SDI is well equipped to sell all products in all major markets around the world.
Our new 24,000 sq m property in Montrose is an exciting project which will ensure production and warehousing is far more efficient than at the current location. The established warehouse on the site was refurbished to meet medical device standards and became operational in September 2023. A new manufacturing plant is planned to commence building in 2025, followed by all manufacturing in Bayswater moving in 2027. The project is currently in its final design stage. The 2025 financial year will be focused on changing our amalgam customers to Stela, the building of our new manufacturing plant, and ensuring our MDR registration is fully complied with. These are great goals for the year and ensure the company is well placed to achieve increased market share for the future. Additionally, we believe in managing our environmental, social, and governance risks position for sustainable growth at both a corporate and product level.
While these factors have always been a focus for SDI, we'll continue to follow our ESG roadmap, which is in line with our overarching corporate strategy. I'd like to thank the board, the management, and staff of SDI, and our distributors, both in Australia and all over the world, for their hard work and total dedication to SDI's global success. Lastly, we'd like to thank our shareholders for their ongoing support and investment in SDI. I'll now hand over to the CEO, Samantha Cheetham.
Thank you very much, Jeff, and good morning, everyone. I too would like to thank all attendees for joining us today at the Annual General Meeting for 2024. I'm very pleased with the progress we have made, delivering world-class products into a highly competitive market and gaining market share. Our winning strategy is underpinned by the reliable supply of high-quality dental products to our customers. In the last financial year, it was record sales with AUD 111.2 million of sales, or up 3.1% on FY 2023. Continued sales growth, along with improved product margins and well-managed operating expenses, have resulted in a record profit for the year. I'd like to thank the entire SDI team and our customers and suppliers, both in Australia and all over the world, for their hard work throughout the year, delivering a fantastic result and continuing to maintain a high level of energy for FY 2025.
We've delivered on our financial year 2024 objectives and continue to focus on our winning strategy. I'd also like to thank our loyal shareholders for your ongoing support and investment in SDI. Before I take you through the FY 2024 financial and operational highlights, I'd like to start by highlighting the two awards that SDI recently won. They were the 2024 Governor of Victoria Export Award and the Australian Export Award. SDI won the award under the International Health category, the third year running. This was a fantastic achievement, with the award recognizing SDI as the state's most innovative, resilient, and successful exporter in its category. Not only is this an outstanding level of recognition for our company and our people, but validates that our strategy and progress are amongst Australia's most progressive businesses. The company has achieved many milestones this year.
FY 2024 was another record sales for the group, with total sales of AUD 111.2 million, up 3.1% on FY 2023. Gross profit margin increased by 530 basis points to 62.1%. This was driven by strong performance in our high-margin aesthetic product categories and continued improvement in logistical costs and improved operational efficiencies. EBITDA increased 35.5% to AUD 21.9 million, with strong growth in the year, largely due to improved gross margin performance. A final dividend of AUD 0.09 per share was declared, up 8.6% on the prior corresponding period. In terms of business updates, we have upgraded the warehouse at the new Montrose site and successfully relocated our warehousing. We are proud to have finally secured European registration, with tougher barriers to entry, giving SDI a competitive advantage and reiterating the high quality of our products.
We were also proud to launch Stela last financial year, hitting AUD 1 million in sales and continuing to grow strongly. As I mentioned, FY 2024 was another year of record sales. The strong business unit sales performance reflects good European growth and favorable currency movement. The Australian unit sales, which also captures the Australian direct export markets, was down 1.3% in FY 2024, with Australian exports decreasing 2.4% when adjusted for currency movement, reflecting a reduction in contract manufacturing due to production capacity constraints. The North American market was down 5.7% in local currency, primarily due to a 5.9% decline in amalgam sales, representing 30% of the region's total sales. Additionally, sales were affected by lower private label composite sales due to overstocking by a customer in the previous financial year. The European unit sales were up 6.2% in local currencies, driven by strong demand in most European markets.
Brazilian sales decreased 7.2% in local currencies due to a major distributor reducing its inventory for the first half of FY 2024. In local currencies, aesthetic sales continued to show solid growth, 4.5% for the full year, with growth in aesthetics largely driven by market share gains, supported by the release of new products in prior periods gaining momentum. We saw a decline in whitening products of 4.2%, with declines in most regions apart from Europe, which saw a modest increase of 0.7%. This decline is a result of weaknesses in discretionary spending. Equipment, which is largely a complementary product and represents our smallest product category, declined 2.1% in local currency across all markets apart from Brazil, which increased 20.5%. Finally, amalgam decreased 6.5%, declining in most markets after an abnormally strong period in the prior year and a decline of amalgam use by dentists.
Most recently, we have relocated our warehouse to the new Montrose site. During FY 2024, we invested approximately AUD 3 million, upgrading the 4,000 m warehouse to medical-grade standards. This is the first step in the complete relocation and provides additional warehousing space, allowing us to continue to grow while we carefully plan and execute on the longer-term project of transitioning our manufacturing to Montrose. As previously mentioned, Stela continues to receive great feedback from key industry opinion leaders, with Stela achieving over AUD 1 million in sales. Stela has now been launched across Australia, North America, and Brazil, with repeat orders coming through. In July 2024, we launched Stela into the European market, which is showing good results. We know with time and education that the prospects of Stela are promising. We have continued to invest in automation to improve manufacturing efficiencies and capacity.
The table on this slide details the machines we have invested in and their current progress stages. All machines have a remarkably short estimated payback period. The automation of the nozzle and tip packing machine located at Bayswater due to the space vacated by moving the warehouse to Montrose is one of the many efficiencies by having additional space that Montrose has provided us with. Recently, most teams spent much of their time and effort in securing European registration, which the team was able to secure in late last financial year. This means that SDI will be able to continue selling existing products in all European markets as planned. We understand the strict requirements that must be undertaken, and the team embraced these challenges. This has SDI at the forefront in Europe, with tougher barriers to entry, putting SDI at a competitive advantage.
Our new aesthetic product, Stela, is among the registered products now available in Europe, with the opportunities to further penetrate the European market and grow Stela into the largest composite category. Here we see an approximate updated timeline of Project Montrose. The overall cost has reduced by AUD 4 million from previous estimates due to revising the plan. The current warehouse will stay at its current location, and the new construction will now incorporate manufacturing, research and development, and related functions. We are excited about the project, including the capacity it will add and the efficiencies it will generate for the business. Now, an update on our ESG roadmap I've shared with you previously. We believe in managing our environmental, social, and governance risk positions for sustainable growth at both a corporate and product level.
While these factors have always been a focus for SDI, we are continuing to follow our ESG roadmap, which is in line with our overarching corporate strategy. With a number of items ticked off in FY 2024, this is a topic that is of increasing interest and important to our stakeholders and, in many respects, considered a minimum operating standard for today's organizations. We look forward to continuing to share our journey and progress with you. The company's strategic priorities remain unchanged. Aesthetics and whitening continue to be our focus for new product development. Stela and Riva Cem Automix were the latest product launches, and I look forward to updating you all throughout the year of the positive progress of these products, particularly Stela, given its unique characteristics.
We continue to focus on improving operational manufacturing efficiencies via automation and Project Montrose expanding our sales capacity to over AUD 200 million.
The R&D team will continue to focus on product development with the aim to have two to three products released to the market in the next 12 months. Thank you for your participation today, and I'll now turn to questions. That concludes my presentation. Back to you, Chairman.
Thank you, Sam. We'll now turn to the formal business of the meeting. The notice of meeting dated the 25th of October, 2024, was circulated to members, and I'll take the notice of meeting as being read. The 2024 annual report contains a financial report, director's report, and an independent auditor's report. A copy of the annual report was available on the company's website and was sent to those shareholders who requested it. The financial statements have been approved by the directors and audited by Deloitte. Please ask any questions that you may have of our auditor on the virtual meeting platform. Excuse me. Voting is not required. This is a discussion item only. I'll ask a question. Are there any written questions on SDI's financial statements?
Yes, we have one question. Why was there no business update provided within the AGM presentation as shown in previous years for the four-month sales?
I'll pass that question to COO, Mr. John Slaviero.
We decided not to because the first four months of sales doesn't fully reflect how our six months is going to end up. In our past, our strong months of sales in the first half have been November and December. So we will be giving an update on sales in early January.
Are there any further written questions?
I have a question regarding the Rem report. Do any of the proxy advisors cover us? Have there been a material protest vote against the Rem report? And if so, what was the issue?
I can answer that. No, there's been no coverage, and there's been no, I don't think any issues on the Rem report, let alone material.
I have a further question on general business regarding financials. Deloitte has been our external auditor for more than 20 years. How many full tenders for the audit have we run over the past 20 years, and when are we next planning to tender the audit work?
That's a board question, and it has not come up with the board lately. So we'd have to take that question on notice, I think.
No further questions.
No further questions. I'll move to the next item of business, the election of the directors. Are there any phone questions?
There are no questions on the phone line at this time.
Thank you. No further questions. I'll move to the next item of business, the election of directors. Resolution One, the re-election of Mr. Gerard Kennedy as a director. This resolution is for the re-election of Mr. Gerard Kennedy as a director of the company. The directors, with Mr. Kennedy abstaining, unanimously recommend shareholders vote in favor of the re-election of , Mr. Kennedy, as a director of SDI Ltd. Are there any further questions on this item?
There are no questions.
Any phone questions?
There are no questions on the phone line at this time.
I will be casting. With no further questions, the details of the total valid proxies for this item are displayed. I'll be casting the undirected proxies given to me as chair of the meeting in favor of the resolution. The directors recommend shareholders to vote in favor of this resolution. I will now move to the next item of business, which is for the re-election of Mr. John Slaviero as a director of the company. The directors, with Mr. Slaviero abstaining, unanimously recommend shareholders vote in favor of the re-election of Mr. Slaviero as a director of SDI Ltd. Are there any written questions on this?
There are no questions on this.
Any phone questions?
There are no questions on the phone line at this time.
With no further questions, the display of the details of the total valid proxies for this item are displayed. I will be casting the undirected proxies given to me as chair of the meeting in favor of the resolution. The directors recommend shareholders vote in favor of the resolution. I will now move to the next item of business, the Remuneration Report. Are there any written questions on this item?
There are no questions.
Any phone questions?
There are no questions on the phone line at this time.
With no further questions, the details of the total valid proxies for this item are displayed. I'll be casting the undirected proxies given to me as chair of the meeting in favor of Resolution Four. Sorry, it should read Resolution Three. The directors recommend shareholders to vote in favor of this resolution. Questions? The closure of the meeting?
I have one question on general business. Does the European registration have a term before ongoing hurdles or further compliance? Investment is required?
Yes, there's certainly further investment required. We have the registration overall for all our existing products, but there's a lot of work on the individual products. We're able to sell our existing products for a few years. However, we must get all their technical files up to date, and we're still working through those, but we will be on track, and we're not concerned about that.
No further questions.
Are there any phone questions?
There are no questions on the phone line at this time.
Thank you. As there are no further questions, I declare that the poll for all items will be closed in five minutes. Please note that a five-minute countdown will be displayed at the top of the virtual meeting screen. The results of the poll will be released to the ASX as soon as possible, which is expected to be this afternoon. So thank you, ladies and gentlemen, for your participation in today's meeting. I now declare this annual meeting of SDI Ltd closed. Thank you.