Byotrol : Preliminary Result

Byotrol plc

FINAL AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2022

Byotrol plc (AIM: BYOT), ("Byotrol" or "the Company") the specialist infection prevention and control company is pleased to present its audited results for the year ended 31 March 2022.

Our results for the year to 31 March 2022 reflect the return to some degree of normality in our markets following the Covid pandemic. Our sales are ahead of the partially covid-driven FY 2020, but behind the fully covid-driven FY2021, and reflect an increased investment across the business from extra resources generated during the pandemic. Byotrol has exited the Covid pandemic as a significantly stronger business than it entered.

Financial Highlights

• Sales £6.3m (versus £11.2m in 12m to 31 March 2021, and £6.0m in 12m to 31 March 2020)
• Gross profit pre-exceptional charges £3.0m (versus £4.9m and £2.9m respectively)
• Operating costs from continued business: £3.3m (versus £3.5m and £2.7m respectively)
• Adjusted EBITDA: £0.04m (versus £1.78m and £0.47m respectively)
• Debt free with cash at year end of £1.1m (versus £1.6m and £1.7m respectively)
• Post year end issue of £1m convertible loan notes, subscribed for by Directors, Senior Management and certain shareholders

Operational Highlights

• Restructuring of team and concentration of activities and reporting in Chester, including hires of a full time CFO and full time CGO, both with blue-chip backgrounds and experience. Consolidation of the Byotrol and Medimark sales and marketing functions, under the new CGO
• Reorganised our technical team to concentrate on innovation rather than testing, under a new CTO
• Increased investment in systems, including upgraded reporting and accounting, IT and HR systems and processes
• Launched a programme to reduce inefficiencies in the business, including reducing skus from over 200 to 170, and substantially concentrating our proactively-served customer base.

IP/Licencing Highlights

• First commission now generated from Solvay SA on its sales of Actizone 24 hours surface sanitiser. Solvay continues with its global launches of Actizone - both in its own right and via global FMCGs - boosted by receiving full approval from the US EPA for long-lasting sanitisers
• Sale of our own proprietary EPA registered, long-lasting germ kill product (Byotrol24) in the US to Integrated
  Resources Inc ("IRI") for gross cash of $1.4m over four years, plus ongoing royalty payments and a share of upside if the formulation is sold on.
• Post year-end two new IP agreements reached

1. in conjunction with IRI, an exclusive sub-licence over Byotrol24 to an internationally-recognised brand in US institutional markets

1. a 7 year license with Rentokil Initial Plc in alcohol-free hand sanitisers for serviced washrooms

Commenting on the results, John Langlands, Chairman of Byotrol plc, said:

"Our confidence in Byotrol's strategy remains undiminished and as expected we are seeing many examples of competitors withdrawing from some of our markets as biocide regulations bite in the UK and EU. Additionally stability is starting to return to the marketplace with ordering patterns returning to more regular levels which we expect to settle further in the second half of this new financial year.

We now need to focus on the markets and technologies that offer the greatest, sustainable long-term returns and then invest carefully to maximise profits for the lowest risk profile. Our markets do continue to offer significant opportunities and we remain highly confident that we are on the right path to taking advantage of them. We remain optimistic about future growth and profitability. "

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

For further information, visit www.byotrolplc.com, follow on twitter @byotrol, or contact

Notes to Editors:

Byotrol plc (BYOT.L), quoted on AIM, is a leading infection prevention and control company, operating globally in the animal health, human health, facilities management, and consumer sectors.

Byotrol develops unique antimicrobial technologies for use on surfaces, skin and instruments, which it then commercialises through market-leading distribution partners in each sector.

Byotrol's antimicrobial technologies can be licensed for use in leading brands, to significantly improve their product claims, while reassuring consumers and end-users of their efficacy and quality.

Founded in 2005, the Company develops technologies and products with the aim of providing easier, safer and cleaner lives for everyone.

CHAIRMAN'S STATEMENT

Dear Shareholder

Our markets continue to grow from pre-pandemic levels, although growth does remain uneven and exposed to external shocks. Our results this year reflect that profile, with increased sales, gross profit and gross margin compared to pre-covid, but obviously some way below that achieved during the covid-inflated previous year.

Our confidence in Byotrol's strategy remains undiminished and as expected we are seeing many examples of competitors withdrawing from some of our markets as biocide regulations bite in the UK and EU. We continue to invest in technical performance and regulatory approvals to secure our competitive position.

Results

Revenue for the year was £6.3m, compared to £11.2m in the previous year and £6.0m in the prior year, itself inflated by 3 months of covid demand. Product sales fell to £5.2m, compared to £10.2m and IP sales were unchanged at £1.1m. This resulted in Adjusted EBITDA of £39k compared to £1.78m in 2021.

We continued to invest judiciously in upgrading systems and our team over the year, with operating costs up by around 20% compared to pre-covid, but down 5% compared to the previous financial year.

We completed an internal restructuring during the year related to the long-overdue integration of Medimark Scientific, resulting in an exceptional charge of £225k. We have also made exceptional provisions of £214k for stock taken on during the pandemic that is now slow moving and £147k relating to a historic IP agreement. After making these charges and non-cash provisions the loss before tax was £1.25m compared to a profit of £1.0m in the previous year.

Financing

At the year end we had no borrowings (2021 nil) and cash of £1.1m (2021 £1.6m). In order to ensure that we could continue to invest in the business to deliver growth, and as equity markets remained very difficult for new issuance, the Board decided to issue convertible loan notes. This raised £1m in July with £0.5m coming from Directors, demonstrating their confidence in the long-term outlook for the business.

Strategy

We continue with our strategy of satisfying increasingly complex needs for infection control products by developing and commercialising a variety of high performance biocidal technologies, grounded in excellent science, supported by strong data and structured to receive regulatory approval in the relevant markets.

During the pandemic the team was necessarily active in multiple business segments across both B2B and B2C. This was profitable activity and certainly provided us with a lot of extra resources. As the pandemic has tailed- off the team has been working hard to focus on fewer technologies and fewer products in a smaller number of market segments, which should in turn lead to improved profitability and stronger market shares. This process will carry on into the new financial year.

One key change that shareholders will note in future is that we will increasingly target product claims outside of our historic "long-lasting" positioning. This is because we have now formalised agreements with a number of partners to commercialise our long-lasting technologies in the US (Integrated Resources and its customers), globally in B2B and B2C (Solvay SA and its customers), UK hospitals (Tristel plc) and a number of smaller partners elsewhere in the world. We will of course be supporting those partners where we can - as we will only make money if they do - but we are now freeing up resources to pursue other technical niches such as natural and sustainable products, of which our seaweed technologies is one exciting prospect.

Board and employees

During the year we were pleased to welcome two key new employees to the leadership team. Chris Sedwell FCA joined the Board in December 2021 as an Executive Director and our first full-time CFO. Chris joined us from a consulting role in SMEs and prior to that a Finance Director at ConvaTec. We were also very pleased to hire Vivan Pinto in Janaury 2022 from Johnson & Johnson as Chief Growth Officer (CGO), taking over much of the revenue-generating side of the business. Both have made strong starts within the Company.

Those senior changes, plus the covid-delayed integration of the Medimark team into the Company have in turn led to a relatively high staff turnover in the last year, which the core team have born with a great deal of professionalism and good humour. The team now numbers 40, compared to 39 a year ago, and I thank the team for their professionalism and committment during the transition.

AGM

The Company's AGM is expected to be held on or around 22nd September in London. We held our first post- covid AGM in public last year in London and found the Q&A section informative and enjoyable. We do value the participation of smaller and retail shareholders in these meetings and we continue to encourage your attendance - please do join us if you can.

Prospects

Our prospects remain excellent. We performed very well during the pandemic and have used the extra resources and skills generated then to improve the Company at all levels.

We now need to focus on the markets and technologies that offer the greatest, sustainable long-term returns and then invest carefully to maximise profits for the lowest risk profile. Your Board remains highly confident that we are on the right path to doing that and remain optimistic about future growth and profitability.

John Langlands

Chairman

CHIEF EXECUTIVE OFFICER'S STATEMENT

Dear Shareholder

Now that the world is returning to a degree of normality following the covid pandemic, Byotrol has returned to its steady pre-covid progress, but with added excitement about the many increased opportunities in our markets and our positioning within them.

Our sales for the year were below that of the covid-inflated years but were still solid (albeit stop-start) across product sales and intellectual property. We are seeing underlying longer term demand in our markets steadily increasing and we subscribe to market analyst projections of 10% future market growth, double that of pre-covid.

That underlying growth is obscured in our results by the vestiges of oversupply as covid-related demand dissipates, and as international supply chain challenges persist. There remains an element of excess stock in the system with overstocked competitors cost-cutting but these pressures are now beginning to subside.

Having run a very lean business pre-covid, we have utilised the extra resources generated during the pandemic to upgrade the quality of our systems and teams and will now gradually return to our lean approach, but with increased investment in sales and marketing, and team.

Financial highlights of the year, compared to the fully covid-driven FY 2021 and partially covid-driven FY 2020 are;

• Sales £6.3m (versus £11.2m in 12m to 31 March 2021, and £6.0m in 12m to 31 March 2020)
• Gross profit pre-exceptional charges £3.0m (versus £4.9m and £2.9m respectively)
• Operating costs from continued business: £3.3m (versus £3.5m and £2.7m respectively)
• Adjusted EBITDA: £0.04m (versus £1.78m and £0.47m respectively)
• Cash at year end; £1.1m (versus £1.6m and £1.7m respectively)
• Debt free

Operational highlights:

• Restructuring of team and concentration of activities in Chester, including

1. Recruited our first full time CFO and our first full time CGO, both with blue-chip backgrounds and

experience

• 1. Reorganised our technical team to concentrate on innovation rather than testing, under a new CTO o Consolidated the Byotrol and Medimark sales and marketing functions, under the new CGO
     o Post year end, closed the Sevenoaks office, previously the HQ of Medimark, with staff now based at Byotrol's head offices in Chester and trading activity similarly transferring across to Byotrol.
• Increased investment in systems, including upgraded reporting and accounting, IT and HR systems and processes
• Launched a programme to reduce inefficiencies in the business, including reducing skus from over 200 to 170, and substantially concentrating our proactively-served customer base.

We are currently projecting costs for the new financial year to increase by around 4% but we expect payback on this through increased gross margin and other operational gains.