Nanosonics Limited (NAN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Maurie Stang, and I'm the Non-Executive Chairman of Nanosonics Limited. I would like to acknowledge the traditional owners of the various lands in which we meet virtually today and pay respects to the -- all aboriginal elders, past and present, and acknowledge today's aboriginal communities who are the custodians of these lands. We'd like to extend a warm welcome to all shareholders who have joined virtually. And I'm joined by the Nanosonics Board of Directors, Company Secretary and representatives of the company's statutory auditors, Ernst & Young. I've been advised by the Company Secretary that we have a quorum for this meeting. And I, therefore, declare the meeting open. The number of valid proxies received by 11:00 a.m. on Sunday, the 22nd of November, 2020, were 647 proxies, representing 192 million shares or 63.94% of the company's approximately 301 million shares on issue. In accordance with the Corporations Act, the minutes of this meeting will record, for each resolution, the total number of proxies exercisable by all proxies validly appointed, the directions in the proxy forms and the results of the polling. I would like to take this opportunity to introduce our Board, Company Secretary and the auditors of Nanosonics: Steve Sargent, Lead Independent Director and Deputy Chairman; Michael Kavanagh, Managing Director, CEO and President; Lisa McIntyre, Non-Executive Director; David Fisher, Non-Executive Director; Marie McDonald, Non-Executive Director; Geoff Wilson; Non-Executive Director; McGregor Grant, Chief Financial Officer and Company Secretary. As required by the Corporations Act, the company's auditors, Ernst & Young, are also in attendance today, represented by [ Mr. Martinez ]. The Board, Company Secretary and the company's auditors are available to respond to any questions you may have during the course of this meeting. Today's meeting will commence with my Chairman's Address. Our CEO, Mr. Michael Kavanagh, will then deliver his address. This will be followed by the formal business of the meeting. When the formal business of the meeting is concluded, there'll be an opportunity for further questions. As this AGM is being conducted virtually, I will now provide some housekeeping instructions, in respect of how to ask questions and how to vote. Shareholders can ask questions, which must be typed. If you logged on as a shareholder, the question icon will be available to you at the top of the screen. [Operator Instructions] We will set aside time after I've introduced all the resolutions to answer any questions on the resolutions. In accordance with our usual practice, we'll also invite general questions after the formal business has closed. It would be appreciated if any general questions could be submitted after the formal business is closed to avoid them getting mixed in with any questions received from shareholders on the resolutions during the formal business. While there'll be time for voting after I've introduced each resolution, you may submit your votes at any time until I've declared the poll closed. There will also be some time to complete your voting when we've addressed the questions that are raised in relation to these resolutions. The voting page is accessible by selecting the voting icon at the top of the screen. To vote, simply select the direction in which you would like to cast your vote and the selected option will change color. There is no submit or send button. Your selection will be automatically recorded. Voting will be conducted on each of the resolutions by poll. For this purpose, I now declare the poll open. Ladies and gentlemen, it is now my pleasure to deliver the Chairman's Address. Whilst this is our first virtual AGM, I can assure you, in reality, your company continues to make outstanding progress during some of the most challenging times that we have known. Foremost in our priorities has been ensuring the well-being and safety of our global team, whilst delivering to our customers and partners, products, service and support seamlessly. As we progress into financial year '21, notwithstanding our customers facing challenges in various markets, we are now seeing some very encouraging indicators that underscore our belief in the fundamentals of the business. During this unprecedented year, Nanosonics has continued to grow its installed base of trophon, whilst significantly expanding our investment in research and development. These programs directed at addressing new and innovative solutions aimed at multiple vectors of infection prevention, consistent with our commitment to infection prevention for life. Nanosonics is leveraging its proven success, expertise and resources in positioning itself as the trusted emerging leader in infection prevention globally. Every dimension of our activities is consistent with our core mission to improve the safety of patients, staff and health care facilities, all in the context of enhanced occupational health and safety and a positive environmental impact. Nanosonics' growth and success continues to be driven by our people, our culture, our leadership and supported by our Board. On behalf of all of our stakeholders, I wish to recognize the outstanding efforts of the Nanosonics team who responded to the challenges of COVID-19 pandemic, not only implementing programs to protect the safety of our own people, but via innovation and determination, ensuring uninterrupted support and continuity of supply to our customers. I'm proud to see the company's values that are driving our ongoing success through collaboration, innovation, discipline, agility and above all else, the will to win. I'm confident of a bright future and the Nanosonics team is already pioneering new standards of infection prevention and enhanced clinical workflow. People and culture are critical to our success, and Nanosonics continues to attract people of outstanding capabilities and indeed, commitment. To that end, I'm pleased to welcome during the year, our new Chief People and Culture Officer, Jodi Sampson. Jodi brings a wealth of experience to this core function. We now have a global presence in 27 countries, either through direct operations or via distribution partners. Nanosonics has its own offices throughout the world in countries including: Australia, United States, the United Kingdom, France, Japan and Germany, with OEM and trade distributors selling our products in many more countries. I'm pleased to report we're additionally focusing on a number of new markets, particularly in Southeast Asia as part of our ongoing geographical expansion. There are a number of drivers, including COVID-19, creating accelerating demand for infection prevention solutions globally, and your company is strongly aligned with these customers, thought leaders and infection control societies around the world in identifying the new infection prevention solutions as part of our product expansion strategy. As we've consistently outlined, we anticipate ongoing growth in the trophon ecosystem. We firmly believe that leveraging our skills into the broader infection prevention market will be our growth engine, and significant investment is being made in our R&D program as well as our new initiatives under a dedicated group to identify and assess strategic acquisition opportunities across all vectors of infection. The first half of FY '20 demonstrated real momentum across the spectrum of our commercial and technical activities. The second half saw a significant impact on our customers and indeed, their priorities. However, the Nanosonics team responded in a highly focused manner by moving to online support, working with our customers in a variety of innovative models and models that suit their needs and adapting to any lockdown cycles that our customers may be experiencing at the time. We're pleased to report that this effort has demonstrated that sales of consumables by Nanosonics have now increased to levels similar to pre-COVID levels. Nanosonics has seen demand grow and the variety of models under which our capital equipment can be accessed is also demonstrating improved trend lines. In the U.S., our largest market, we're in over 5,000 hospitals and health care facilities, including all of the top 100 hospitals. Globally in FY '20, the trophon installed base grew 13%. And by the end of June, there were 23,720 units, performing approximately 78,000 daily cycles. This means 78,000 people are protected from the risk of cross-contamination every day by the trophon ecosystem. During the year, despite the pandemic, sales increased 19% to $100.1 million, and the company returned another positive profit before tax of $12.4 million, whilst making a significant increase in our investment in our strategic growth agenda. Recently, Nanosonics received a landmark upgrade order for supplying the I-MED Group, one of the world's largest radiology networks, for well over 200 trophon2 systems, representing not only a powerful endorsement of our road map and new traceability technology, but also ensuring an ongoing strategic relationship well into the future. I'm pleased to report that Nanosonics is accelerating its investment in its product expansion agenda with over $15 million invested in FY '20, with programs covering a number of vectors of infection. Nanosonics Investment is a new subsidiary of the business and represents a highly disciplined new dimension of the company, firmly aligned with our core businesses but recognizing that innovation can literally occur anywhere. It is in the interest of our shareholders to combine rapid organic growth with world-class R&D, yet with an openness to access disruptive technology wherever it may be. NAN Investments is not a VC, but rather an internally targeted sourcing of transformational and disruptive technologies, which may be either acquired, in-licensed or indeed out-licensed. It has already identified and assessed a number of opportunities and aims to continue to build the pipeline of opportunities for ongoing assessment. The identification of these opportunities provides a window into the broader global activities within our sector and all are assessed in strict alignment with our internal priorities. Nanosonics was founded on a belief that environmental, social and governance were core to our mission and our future success. This year, I'm pleased to see ESG being highlighted in a stand-alone report, which showcases our approach to caring for our employees, our customers, the broader community and the environment. I'm particularly proud to note that the strong diversity outcomes across the company, and we recognize the value and creativity that brings to our forward-looking businesses. Nanosonics has successfully delivered on its diversity program whilst focusing on capability, merit and experience without compromise. In terms of gender diversity, at June 30, women represented 41% of the Nanosonics workforce, with 32% in senior management positions and 29% at Board level. We're actively driving our diversity program by recognizing the benefits of proactively achieving gender representation across all levels of the organization. We continue to recognize and respect our social license and have an active program of community contributions. Nanosonics has successfully generated increased capital reserves and accelerating investment in people, R&D and our global footprint. Your company intends to pursue an active growth agenda and believes that the opportunities are both significant and addressable. Whilst we're mindful of the uncertain times, they reinforce more than ever the need for the role of infection prevention in every aspect of health care delivery. Our Board and management are actively engaged in reviewing our priorities and indeed, setting stretch objectives. Our capital reserves and free cash flow provide both an increased capability for strategic investment, together with a meaningful risk mitigation in the case of challenges like the world is now experiencing. As a growth company, we believe this is not only consistent with building shareholder value, but in fact, is a strong competitive advantage. The Board continually reviews our capital management strategy, and our cash reserves at the end of June were $91.8 million, and we believe are best applied to supporting our growth agenda. I'm truly appreciative of not only the outstanding caliber and contribution of our Board, but also the fact that each of our members brings unique and valuable skills to not only the Board activities but indeed, contribute through a series of subcommittees. The directors enjoy a productive and seamless relationship with our executive team in virtually every aspect of the Nanosonics agenda. Each of our Board members shares a passion for the future of the company, which is core to our culture. In December, we appointed a new director, Dr. Lisa McIntyre, to further enhance the Board's capability. Dr. McIntyre brings significant health care and commercial experience, together with a commendable scientific insight and has already contributed significantly to the Board and its business. It is no coincidence that Nanosonics as a company is highly regarded in the capital markets, the health care industry and by our employees and partners. This reflects not only our DNA, but also our senior leadership team led by our CEO, Michael Kavanagh. The business has shown commendable resilience and agility when responding to the impacts of the pandemic, and our team have excelled in spite of the most uncertain conditions we have seen in our lifetime. Importantly, Nanosonics has its eyes firmly on the future, with an outstanding team, proven capability in every dimension of the business and a deep and enduring partnership with its customers, distributors and OEMs worldwide. This is firmly supported by annuity revenue, a strong installed base and market share, and without doubt, a commitment to win. All this would be impossible without the supportive relationship of our investors, brokers, analysts, board members, and above all, team Nanosonics. Nanosonics is firmly committed to the principles of ESG. And in fact, our commitment to the environment, society and governance are the beginnings rather than the end of the Nanosonics journey. We firmly believe that making money for our shareholders will continue to be a direct consequence of prioritizing exceptional technologies and a focus on improved health care outcomes for our customers and their patients worldwide. I would now like to invite the company's CEO and President, Mr. Michael Kavanagh, to deliver his presentation. Michael has been a Non-Executive Board member and has now overseen a period of outstanding expansion for 7 years. Michael Kavanagh.

Thank you very much, Maurie, and a very good morning, ladies and gentlemen. Before I provide a review and update on the business, I would, first of all, like to acknowledge all the infection preventionists and frontline workers globally for their tireless efforts in managing the COVID-19 situation. I would also like to acknowledge every Nanosonics employee around the world for their resilience, their flexibility, their dedication and their customer focus during what has definitely been an unprecedented year. As I explained in our 2020 annual report, the 2020 financial year was another year of significant achievement and progress, with many important milestones achieved against our strategic growth agenda. And what I'll cover this morning is a review of our FY '20 performance and a brief update based on the first 4 months of trading for this financial year. Before doing that, however, it's worth highlighting the core elements of our strategic growth agenda, so the progress of the business can be reviewed in the context of our growth strategy. First thing I would like to note is that despite the impacts of COVID-19, our growth strategy has not changed. Indeed, now more than ever, infection prevention is of paramount importance, not just within the medical community but the community generally. And indeed, the COVID-19 pandemic has just increased our resolve, really, as a business to execute on our strategy. On the screen, you will see that there are 4 key strategic priorities that we -- your organization continues to execute on. The first one is to establish trophon technology as standard of care for ultrasound reprocessing. And this includes active sales in countries where the fundamentals for adoption for trophon are strong through mandates and guidelines for high-level disinfection as well as supporting the establishment of international guidelines in those countries where the fundamentals for adoption are weak but beginning to strengthen. What is very encouraging is that more and more countries are now releasing guidelines as awareness grows about the risk of cross-contamination through ultrasound probes. The second aspect of our growth strategy is all about expanding our geographical footprint. And the major focus, as Maurie outlined for this expansion, is really across the EMEA region, the European, Middle East and Africa region as well as Asia Pacific. The third part of our growth strategy is product expansion and continuing to invest in our internal R&D capability and efforts as well as separate business development activities that can assess potential strategic acquisitions or investments in early-stage technologies in infection prevention. And finally, to enable the first 3 priorities, our fourth focus is investing in that growth across all aspects of the business whilst, of course, maintaining a strong financial position to enable us to continue to invest as well as ensuring the organization delivers operational efficiencies and the ability to scale and gain leverage. So taking each one of those priorities in turn. First of all, establishing trophon as standard of care. Well, the quick reminder, first of all, of the trophon technology itself and the image that you see on the screen shows a trophon in the clinical setting, which in and of itself is an important aspect of its value proposition, that is it can be used at point-of-care seamlessly in the clinical setting as the system is an enclosed system. Importantly, the trophon2, which now makes up approximately almost now 100% of trophon sales, it delivers an advanced user experience through automation, greater workflow efficiencies and advanced traceability functions, all of which are very, very important to the end user. And in addition, the technology is also very environmentally friendly, where the only by-product of the disinfection is actually water and oxygen. So the strong value proposition of trophon in FY '20 resulted in the overall installed base growing by 13%. That's up to 23,720 units, with growth experienced across all regions. However, when reviewing the performance of the business for the FY '20 financial year, it is important to actually look at the performance across 2 periods, namely: the first 3 quarters of the year, which were really the pre-COVID period; and then the fourth quarter of the financial year, where COVID had its biggest impact across the business as well as the market in general. And the performance of the business in the first 3 quarters of FY '20 demonstrated really excellent underlying growth momentum across the business in general. In North America, based on the performance in the first 3 quarters and of course, our forecast for the last quarter, the business was definitely on track to deliver close to 3,000 units. So a similar number of units as we had delivered in the prior year which was the plan for the year, the business was definitely on track to deliver that. In our EMEA region, the number of new units installed was actually up 37% on the prior corresponding period, showing excellent growth momentum on the back of the expansion investments that we made into that region. And the number of new units in Asia Pacific were up 56%, primarily looking across the Australia, New Zealand as well as some units going into Japan, again, versus prior corresponding periods. So overall, when you look at the business in the first 3 quarters of the year, so the pre-COVID period, the business was performing very, very well. In the fourth quarter, however, due to COVID-19-related lockdowns, limited access to hospitals together with various hospital departments themselves having to shut down, the actual number of new units installed in that quarter were 46% lower than the prior corresponding period. So it certainly did have an impact. We certainly do not believe that COVID-19 has, in any way, negatively impacted the underlying fundamentals for the business. And indeed, the COVID-19 impacts experienced in the fourth quarter of FY '20 have significantly reversed now in the first 4 months of FY '21, and I'll cover that off in more detail. But cognizant of the fact that acknowledging there are still significant uncertainties out in the marketplace. From a standard of care perspective, globally, there is still a very large opportunity for trophon, with current market penetration of the global addressable market being at approximately 20% based on our current internal estimates, and those internal estimates are likely a conservative estimate. But the penetration, when you're looking across the different regions, the penetration profile by region is quite different. And that difference is highly correlated to the strength of the fundamentals for adoption for each region or country, in particular, the stage that they are all at with respect to the implementation and adoption of guidelines and mandates for high-level disinfection. In North America, the fundamentals for adoption remain strong. And by the end of FY '20, trophon had reached 52% of the market potential based on our current internal estimates. And indeed, it is telling now that trophon can be found in over 5,000 different institutions and hospitals across the United States, with every luminary hospital system adopting the technology. And this really is an outstanding achievement and rate of growth in the largest market in the world. In the European region, well, different countries are at different stages in terms of the strength of the fundamentals for adoption with the U.K. being the most advanced. Overall, the penetration in the EMEA region is only at 3%, which really highlights the great opportunity for that region. If we look at the U.K., however, where guidelines supporting high-level disinfection of ultrasound probes already exist, the penetration is now approximately 16% and continuing to grow. And as the fundamentals for adoption continue to strengthen and new guidelines get released across the European region, we expect to experience ongoing positive growth momentum. And this was the case in the first 3 quarters of FY '20, where the number of new installed base, as I mentioned, was up 37% in those first 3 quarters on the prior corresponding period. And that included installed base going into many countries, new countries across the actual region. And in Asia Pacific, our sales currently are primarily in Australia and New Zealand. And in both these countries, the fundamentals of adoption are strong. And really trophon now can be considered a standard of care with approximately 70% penetration rate in those markets. And our focus now on that region is for geographical expansion, especially into Japan and ultimately into China and Southeast Asia. With that expansion is a good segue into our second strategic priority, and that is to expand our geographical footprint. Nanosonics, as Maurie mentioned it, now distributes trophon in 27 different countries, either through direct operations or distributor partners. In FY '20, there was a major focus on expanding our footprint and increasing our infrastructure across the EMEA region or European region. As already mentioned, this resulted in very good and positive growth momentum in the first 3 quarters with new IB up 37% prior to the major implications of COVID-19. And I will say, for the first 4 months of FY '21, growth has now resumed in the EMEA region with new installed base up 19% on prior corresponding period. So despite the difficulties that still are out there in the marketplace, we are demonstrating growth now in that region. In Asia Pacific, our main expansion focus has been on Japan. Counterintuitively, Japan does not have requirements in place for the high-level disinfection of ultrasound transducers, even intracavity transducers. We are working with the various societies and authorities as a major focus for the business. And we also have conducted local trials that demonstrated that over 90% of the probes that we studied were indeed contaminated, and 50% of that contamination being pathogenic, that is it can actually cause disease. And that study has now been published in Japan, and we continue to work with the authorities for the development and implementation of local guidelines. It was very encouraging in the main June period to see one of the main societies, the Japanese Society of Ultrasound in Medicine. They did publish a Japanese translated version of the World Federation in Ultrasound and Medicine guidelines. That's a document that recommends high-level disinfection of ultrasound probes. So at least, we are definitely making progress. They are not a standard guideline for Japan now, but it's certainly a good indication that things are being considered. In Japan, we now have 5 distributor partners, which is quite common for companies to have quite a number of different distributor partners across different prefectures as well as we have established a local Nanosonics sales and clinical infrastructure to support those distributors. Our current focus is on education and awareness building with a number of clinics now commencing adoption. More broadly, in Asia Pacific, we have recently received regulatory approval for trophon2 in both Indonesia and Thailand. And we are currently working through the process for seeking regulatory approval in Japan (sic) [ China ]. So before moving on to the third growth topic and that is product expansion, I'll provide a quick overview of the FY '20 financial performance in the context of the installed base growth and geographical expansion. Overall, for the 2020 financial year, our total revenue was up 19% to just over $100 million. Again, the first 3 quarters showed excellent results, with total revenue was actually up 26% compared with the prior corresponding period. But in the COVID-19 fourth quarter period, as you can see on the chart there, our revenue was essentially flat compared to the prior corresponding period. And if I break that revenue down by region, as was the case with the installed base growth, there was very strong revenue growth across the 3 regions in the first 3 quarters, with North America up 25%, with the European region actually up 43% and Asia Pacific up 27%. And this, again, it really did demonstrate very positive growth momentum pre COVID-19. And of course then in Q4, this momentum was impacted where North America revenue was essentially flat compared to prior corresponding period. The European region still had some growth off a low base, up 20% and Asia Pacific down 10%, albeit off a low base. And as we normally do, we split that revenue down into -- by capital and consumables. So starting with capital. And while the unit sales of capital to end customers actually increased during the year as demonstrated through the installed base growth, our overall capital revenue decreased 9% to $30 million. But this reduction can be explained, and it's due to 2 primary reasons. The first is a reduction in the number of units purchased by GE Healthcare in North America compared to the prior corresponding period. This reduction itself, however, can be explained by significant destocking of the trophon EPR, so the first generation trophon by GE in the second half of FY '18. And that destocking, that was a result of an earlier-than-anticipated FDA approval of trophon2 during the second half and the fact that we did not launch until early FY '19, which of course, then after they destocked in the first half of FY '19, GE replenished their stock and their inventory. So that's one of the key reasons why we saw the GE numbers go down overall. And of course, there was an impact in the fourth quarter due to the COVID-19 on the overall capital revenue. On the consumables side of the business, the business did perform very well in FY '20. Revenue was up 36% for the year to $70 million, with the first 3 quarters up 39%. In the last quarter of FY '20, a reduction in the volume of ultrasound procedures was experienced due to a range of COVID-19 restrictions. But despite that reduction in procedural volumes, consumable and service revenue was still up 29% on the prior corresponding period, primarily due to the increase in consumable price to GE Healthcare as part of the new contract that we executed over 2 years ago as well as overall growth in the installed base throughout that year. And while reduction in procedural volumes was experienced in that last quarter, especially in the April and May period, this commenced to recover to approximately 80% of the pre-COVID levels by the end of June as hospital departments resumed their clinical procedures. And this recovery has continued into FY '21. So moving on to the third component of our growth strategy and that is on product expansion. Your organization continues to invest in research and development, with $15.6 million actually invested in FY '20 and plans for further growth in investment in FY '21. Our R&D team, led by Dr. Steven Farrugia, is now more than 70-people strong, spanning capabilities across microbiology, chemistry, mechanical, electrical, systems and software engineering as well as advanced prototyping capability. And our areas of R&D interest span 5 core areas being instrument cleaning, instrument disinfection, storage solutions, environmental decontamination and compliance and traceability. With respect to our lead product currently in development, a significant component of our R&D investment together with regulatory, clinical and commercialization resources are focused on that product. And we remain confident in the opportunity for this product as the unmet need is unchanged and continues to remain significant. As Maurie mentioned, as part of our product expansion strategy, we need to recognize that innovation can occur anywhere, and it's in all our interest to be open to access disruptive technology externally in addition to growing our internal R&D efforts. As such, as capabilities within the business have expanded, in addition to our internal R&D efforts, a new business development function was established in the year. And under the umbrella of a new investment subsidiary, this new function is dedicated to identifying and assessing local and international opportunities for strategic acquisitions, product licensing and a range of potential collaboration opportunities to accelerate the growth of our infection prevention portfolio. The scope of activities in this group spread across the Technology Readiness Level, or TRL spectrum, from early-stage technology right through to products ready for or already commercialized where an appropriate screening process is applied. And importantly, the activities within this group, they are separate and therefore, non-dilutive in terms of effort and focus to our underlying trophon business or our internal R&D efforts. And there is oversight of all these activities by this group by a separate management committee led by myself internally as well as by the Board of Directors and the R&D subcommittee of the Board. So our final growth priority focuses on our overall investment strategy. And now more than ever, infection prevention is critically important and has gained prominence. And we believe there is significant opportunities in the infection prevention space in general, especially across the 5 core focus areas that I've already identified. Nanosonics is in a strong position, both from a capability perspective as well as a financial perspective, to continue to invest strongly in our growth. The business has positive free cash flow and, at the end of June, had a very strong balance sheet, allowing us to make ongoing investments. In FY '20, the business operating expenses increased 28% to $63.2 million. And that reflected increased investments in our European operations, geographical expansion activities as well as over $15 million in R&D. And for FY '21, we do expect our total operating expenses to be in the range of $75 million to $78 million as we continue to make investments in our overall growth strategy across the business. So before I provide a brief trading update on the first 4 months for this financial year, a few comments on the upgrade opportunity with trophon2. And significant upgrade opportunity continues to emerge as the existing installed base ages and, importantly, as trophon2 and the benefits that this brings to customers becomes more established. Currently, over 18% of the global installed base is 7 years plus of age, so that's over 4,000 units or so. And whilst our primary focus is definitely on continuing to grow the new installed base, we are now seeing upgrades coming through. And as announced last Friday, the I-MED Radiology Network has signed an agreement to upgrade their entire fleet of over 200 trophon EPRs to the new trophon2 technology. And I-MED is Australia's largest and one of the world's most respected imaging specialist groups, and this really is a great testament to the benefits trophon2 brings to existing customers through enhanced clinical workflow as well as full traceability for ultrasound probe decontamination. So moving on to an update as to how the business has been performing over the first 4 months of FY '21. And while the business world continues to operate with considerable uncertainty due to the impacts of COVID-19, the first 4 months for FY '21 have definitely been encouraging for Nanosonics. During the second wave of COVID-19 in North America, what we've observed is that the hospitals in that region appear better equipped to manage the impact of the pandemic. Accordingly, ultrasound procedure volumes that require high-level disinfection were not impacted to the same degree as what we experienced in the first wave. However, I caution that this does not guarantee that future waves will follow the same pattern in North America or other regions for that matter, but the trend at the moment is looking quite positive. On the consumables side, purchase of consumables by end customers, it did continue to recover in our first 4 months of FY '21 as these hospital departments reopened, ultrasound procedure volumes increased towards pre-Q4 FY '20 levels. Unit purchases of consumables via end customers in the first 4 months of FY '21 were up 4% compared to prior corresponding period. So we're actually seeing growth in consumables over the prior corresponding period. And in fact, purchases of consumables by end customers were actually up 25% compared with the last 4 months of FY '20 which was, of course, the peak period associated with the first wave of COVID-19. So what that indicates for us is that these hospital departments have reopened, procedures are taking place and we're definitely seeing that in our shipments. Improvements in access to hospitals, together with remote customer engagement, has also resulted in a positive recovery in the number of trophon units installed in the first 4 months of the year compared with the last 4 months of FY '20. The number of new trophon units installed globally was actually up 16% in the first 4 months of FY '21 compared with the last 4 months of FY '20. And this recovery was experienced in both North America, which was actually up 14% and in the European region, which was up 64%. Very importantly, in the first 4 months of FY '21, the number of new units installed globally reached 91% of prior corresponding period, with North America, which is our largest market, has returned to approximately 90% of the pre-COVID levels, and EMEA is up 19%. And what I can report today is that in light of the recovery of this new installed base growth in the first 4 months, GE Healthcare in North America will resume the purchasing of capital equipment by the end of the first half, given their inventory levels have now reduced. And despite ongoing periods of uncertainty, I will say that at Nanosonics, we do remain optimistic about the future, and investments in our growth strategy and our growth agenda continue and we plan to continue across the business. We also remain committed to doing everything we can as an infection prevention company to support all of our customers during these unprecedented times. Finally, and importantly, I would like to thank you all, our shareholders. Over the last 5 years, shareholder value has grown at a compound annual growth rate of 32%. In the 12 months to the 30th of June, the share price of Nanosonics increased 21%. And we very much appreciate the trust and the confidence that our shareholders continue to have in the company to deliver on our long-term strategic growth agenda. So thank you very much. And I will now hand back to our Chairman, Maurie Stang.

Thanks, Michael. I will now move to the formal business of the meeting. The notice of this meeting was circulated to shareholders, and copies are available on the Nanosonics website. I propose that the notice be taken as read. I will now outline the procedure for this part of the meeting. The resolution and proxy votes will be shown on the screen. As I mentioned, voting on each resolution will be by poll using the voting functionality described. You may either cast your vote at the time that the resolution is read or complete voting on all resolutions after I've read all the resolutions and we've concluded answering questions on those resolutions. I'll then provide a warning that the poll is about to close. As Chairman, I've been given a number of undirected proxies and I'll vote these in favor of each resolution in the poll. Questions may be submitted at any time whilst the resolutions are read, using the functionality previously described. Questions will be considered and answered at the end after all the resolutions have been read. I will now turn to the first item of ordinary business, which is to receive and consider the company's report for the year ended 30th of June, 2020. No formal vote is required on this item of business. If there are any questions, I'll address these after the resolutions have been read. In relation to resolutions 1 and 2, being the reelection of Mr. Sargent and Ms. McDonald, who have previously submitted themselves for reelection, I'll say a few words about each of Mr. Sargent and Ms. McDonald, in support of the resolution for their reelection. When we're up to resolution 3, being the election of Dr. McIntyre for the first time, I'll invite her to briefly address the meeting and introduce herself to shareholders. Resolution 1 concerns the reelection of a Director, Mr. Steve Sargent. Steve was first appointed to the Board in July 2016. And this resolution seeks shareholder approval of his reappointment. I'll now say a few words on Steve's behalf in respect of resolution 1. Steve joined the Nanosonics Board in July 2016 and is the Lead Independent Director and Deputy Chairman. Steve is also the Chair of the Remuneration and People's Committee and a member of the R&D and Innovation Committee. Steve brings experience gained from 36 years of extensive global business operating experience in both Sydney and New York. This includes 22 years of General Electric, leading businesses across the United States, Europe, Asia Pacific, Australia and New Zealand. The skills Steve brings to Nanosonics of strong business operational leadership, understanding how to drive a customer-centered organization effectively and efficiently. He brings strong technology and innovation skills and experience in the global supply chain management. And I would add he is one of the most committed people I've come across. Steve's leadership skills and his knowledge as to how to ensure our people are engaged, aligned and inspired, worked tremendously well at Nanosonics. He brings a deeper understanding of international markets and their interplay with Nanosonics' operations. Finally, his work as a public company director have provided him very strong insight into the effective governance practices, which are put into effect at Nanosonics. I would really like to recognize Steve for his leading recent enhancements to our remuneration framework, which I'm sure many would appreciate is no easy task. Steve remains an integral part of the Nanosonics Board, and it is my honor to read the resolution proposing his reelection. The resolution and the proxies received for resolution 1 are shown on the screen. Steve, thank you. And we will now move on to the next resolution. Resolution 2 concerns the reelection of another director, Ms. Marie McDonald. Marie was first appointed to the Board in October 2016, and this resolution seeks shareholder approval of her reappointment. I'll now say a few words on Marie's behalf. Marie joined the Nanosonics Board in October 2016. She sits on the Audit and Risk and Remuneration and People Committees. She is an important voice on these committees and indeed the wider Board. Before her career as a director, Marie has had a strong experience in corporate and commercial law, having practiced for many years as a partner at Ashurst. During that period, Marie was the Chair of the Corporations Committee of the Business Law Section of the Law Council of Australia. She was also a member of the Takeovers Panel for a number of years. Marie draws on her commercial and corporate law background to make an important contribution to the commercial aspects of the business, our people and culture and indeed, the governance that the Board practices. Marie also has a background in science and significant experience in health care field. She is currently a Non-Executive Director of the CSL Corporation, Nufarm Limited and the Walter and Eliza Hall Institute of Medical Research. Marie is an integral part of the Nanosonics Board, and it's my honor to read out the resolution proposing her reelection. The resolution and the proxies received for resolution 2 are shown on the screen. We will now move on to the next resolution. Resolution 3 relates to the election of a new director, Dr. Lisa McIntyre. Dr. McIntyre was appointed to the Board in December 2019, and this resolution seeks shareholder approval of her appointment. I'll now invite Lisa to the lectern to say a few words, and I warmly welcome her to the Nanosonics Board.

Thank you, Chairman, and good morning, ladies and gentlemen. This morning, I'm seeking your support for election as an Independent Non-Executive Director of our company. I joined the Nanosonics Board in December last year. Since then, I've joined the Audit and Risk Committee and the R&D and Innovation Committee. I also serve on the Board of the HCF Group, the University of Sydney, Insurance for NSW and Studiosity Pty Ltd. The experience I bring to Nanosonics is drawn from many years of executive leadership and director experience. After completing my PhD in Physical Chemistry, I never practiced as a research scientist, but rather I joined L.E.K. Consulting and then spent 20 very enjoyable years in the U.S. and then Australia, working with a range of biotech and med tech companies from L.E.K.'s Boston office. I then returned to Australia and spent the last decade in the L.E.K. Leadership Committee. I was invited to join for Asia Pacific, where I ran our health care practice. And I believe that my experience in health care and medical technology will help me assist the company to leverage its research and development efforts in new and innovative infection prevention technologies. I also find that my prior board work with a variety of health care companies and health insurance provides me with a lens of a concerned customer, when we see the consequences of unintended infections on our patients, in our clinics and in our hospitals. It's been my privilege to contribute to the Board and the committees that I'm on through the past 11 months. Some highlights for me have been working with my colleagues on the Audit and Risk Committee to further enhance the risk lens, the risk management frameworks. And it's important that we view all of our operational and strategic plans through this risk lens. And I've also enjoyed working with the R&D and Innovation Committee as we continue to assess organic and inorganic growth opportunities for the business. The company is at a very exciting stage in its development. There are many opportunities across the markets in which Nanosonics operates. And further innovation will continue to improve the effectiveness, the efficiency and the sustainability of infection prevention technologies. So thank you for affording me this occasion to address you for my election. I'm delighted to have this opportunity to work alongside capable and committed Board colleagues and also with a deeply experienced management team. It truly is an amazing team that we've assembled at this company, and -- both the team in Australia and our regional leaders are truly world class. If elected, I look forward to serving the shareholders, the customers, employers and the communities in which we operate to deliver great health outcomes through transformative technology. Thank you.

Lisa, I'm delighted to report that you have been reelected at a very high level. Thank you. Resolution 4, the Remuneration Report is required to be considered for the adoption in accordance with the Corporations Act. The Remuneration Report forms a part of the Director's Report and appears on pages 34 to 55 of the 2020 Annual Report. The vote on this resolution is advisory only and nonbinding. The resolution gives the members the opportunity to ask questions, make comments concerning the Remuneration Report during the meeting. The Chairman of the meeting, others, directors, other key management personnel or any other closely related parties will not be included in the votes for the resolution. Where, in my capacity as Chairman, I'm holding undirected proxies and the appointor has authorized the Chair to vote undirected proxies on this resolution, I will be voting in favor. The resolution of the proxies received for resolution 4 are on the screen. We'll now move on to the next resolution. Resolutions 5 and 6 concern the proposed issue of performance rights and share appreciation rights to Executive Director, Michael Kavanagh, as part of his remuneration package. Any votes cast in favor of these resolutions by Michael Kavanagh and his associates will be disregarded. In addition were the Chairman of the meeting, other directors, other key management personnel or any of their closely related parties hold undirected proxies, these proxies will not be included in the votes for the resolutions. Where in my capacity as Chairman, I'm holding undirected proxies and the appointor has authorized the Chair to vote undirected proxies on these resolutions, I will be voting in favor. Resolution 5 concerns the issue of 19,112 performance rights to the Chief Executive Officer and President, Mr. Michael Kavanagh, under the 2020 Short Term Incentive. The resolution and the proxies received for resolution 5 are shown on the screen. We will now move on to the next resolution. Resolution 6 concerns the issue of 208,884 share appreciation rights and 143,298 performance rights to the Chief Executive Officer and President, Mr. Michael Kavanagh, under the 2020 Long Term Incentive. The resolution and the proxies received for resolution 6 are shown on the screen. We'll now move on to the next resolution. Resolution 7 concerns the reinsertion of proportional takeover provisions in the constitution. The special resolution and the proxies received for resolution 7 are shown on the screen. I'll now pause for a few moments to provide shareholders with an opportunity to ask any questions in respect of any of the 7 resolutions and finalize their voting. [Voting]

As there are no further questions on this section, the poll will be closing shortly. Before it does, I'll now provide shareholders with a few moments to finalize their voting. [Voting]

The formal business is now completed, and I declare the poll closed. Results of the poll will be announced to the ASX in due course.