Jefferies Financial : 2025 Statutory Financial Statements (11/30/2025)

About this update from Jefferies Financial Group Inc.

JEFFERIES INTERNATIONAL LIMITED Annual Report and Financial Statements For the year ended 30 November 2025 Company Registration No. 1978621 Annual report and financial statements Jefferies International Limited TABLE OF CONTENTS Page Strategic report 1 Directors' report 15 Directors' responsibilities statement 18 Independent auditor's report 19 Income statement 21 Statement of comprehensive income 22 Statement of financial position 23 Statement of changes in equity 24 Notes to the financial statements 25 Other information 49 ‌The directors present their strategic report on Jefferies International Limited (the "Company" or "JIL") for the year ended 30 November 2025. 1. Review of the business The Company is the principal European operating subsidiary of Jefferies Financial Group Inc. ("Jefferies"), a U.S. headquartered global investment banking and capital markets firm listed on the New York Stock Exchange. Investment Banking The Company's investment banking services include a range of financial advisory, equity underwriting and debt underwriting services across a number of industry sectors including consumer; energy and power; financial institutions; healthcare; industrials; real estate, gaming and lodging; and technology, media and telecom. Advisory Services The Company provides mergers and acquisition, debt advisory and restructuring and private capital advisory services to companies, financial sponsors and government entities. In the mergers and acquisitions area, the Company advises business owners, private equity firms and public and private corporations on mergers, sales, acquisitions, leveraged buyouts, joint ventures, corporate defence, spin-offs, and divestitures. In the debt advisory and restructuring areas, the Company provides companies, bondholders, creditors and lenders a full range of both in-court and out-of-court advisory capabilities to help clients enhance their financial position by obtaining the best available capital and by implementing complex restructuring transactions. As part of its private capital advisory business, the Company offers a range of liquidity and fundraising solutions to sponsors and limited partners advising on both primary and secondary capital raising. Equity Underwriting The Company provides a broad range of equity financing capabilities and equity capital solutions to businesses and their owners. These capabilities include initial public offerings, follow-on offerings, rights issues, block trades, accelerated book buildings, equity-linked products and corporate derivative solutions. Debt Underwriting The Company provides a wide range of debt capital raising and acquisition financing capabilities to businesses, financial markets in Europe, the Middle East, Africa and Asia. Our global structured solutions business provides customised products in interest rates to investors as well as providing interest rate and hedging solutions to corporates. Our securitised markets group trades, structures and provides warehousing solutions for collateralised loan obligations ("CLOs") and asset-backed securities covering residential mortgage-backed securities as well as other non-traditional collateral. Financial Performance The Company recorded a profit before taxation of £121,874,160 (2024: £85,332,315). The Company has recorded a positive result for the year ended 30 November 2025. The results in the year build on a trend of good performances with the Company generating strong profits in each of the past six financial years. All three of the Company's core businesses, Investment Banking, Equities and Fixed Income, delivered strong performances during the year. Overall the businesses have continued to increase their relative market share, driving growth in the revenue base. The Equities' businesses continue to grow the franchise's market share thus generating increased commissions as well as incremental revenues on the Options desk. The Investment Banking business has made significant investment in its teams' capabilities over the past five years which is now resulting in more mandates secured, greater client coverage and increased revenues, particularly within the Advisory sector. The performance of the Fixed Income business remained consistent with the prior year, supported continued strong results for European credit and structured finance desks. The 2025 performance indicators, as detailed in the table below, are consistent with the Company's positive performance in the year. The Company achieved an operating profit margin of 12.2% and return on shareholders' funds employed of 9.5%, both of which demonstrate an upward trend in performance on prior years. The table below sets out the key results and performance indicators for the year. Year ended Year ended sponsors and government entities. The Company helps clients raise capital, carry out refinancings, issue bonds, and access 30 November 2025 30 November 2024 alternative and structured finance solutions that optimise terms and minimise risk. These offerings include both public and private debt, such as investment grade debt, high yield bonds, leveraged loans, emerging market debt, global structured notes, preferred stock and mortgage-backed and other asset-backed debt. Capital Markets Equities The Company provides equities research and sales and trading across the global equities markets. These services are delivered with key capabilities in cash equities, electronic trading, equity derivatives, convertibles and prime services. Fixed Income The Company's capabilities across sales, trading and capital markets cover credit products including loans, high yield and distressed debt securities, investment grade securities and structured finance transactions. The sales and trading team actively participates in sovereign and corporate fixed income £000 £000 Net revenues 1,002,186 902,330 Profit after taxation 92,194 65,257 Total shareholders' funds 1,279,023 1,187,133 Operating profit margin 12.2 % 9.5 % Return on shareholders' funds employed 9.5 % 7.2 % The operating profit margin is calculated by dividing the profit before taxation by net revenues and the return on shareholders' funds employed is calculated by dividing the profit before taxation by total equity. The statutory income statement for the year is on page 21. Future developments and prospects The Company's Board (the "Board") believes that the Company has the capability, in terms of staff resources, capital and client base, to continue building on the strong performances in the prior years and the year ended 30 November 2025. The Board continually assesses the individual businesses, market conditions and macroeconomic forecasts in determining the Company's Strategic Plan. As part of that planning, on 4 February 2026, the Board approved a three-year Strategic Plan which sets out the "road map" to achieving steady growth across the Company's businesses. In undertaking its strategic planning the Board considers a number of macroeconomic and geopolitical issues, some of which are outlined below. Unforeseen or catastrophic global events The Company's Risk Management team continues to both monitor and report to senior management on the Company's risk exposure to various unforeseen or catastrophic global events. The occurrence of such events, including cybersecurity incidents and events, terrorist attacks, war, trade policies, military conflict, the emergence of a pandemic, such as COVID-19, or other widespread health emergency, extreme climate-related incidents or events or other natural disasters, could create economic and financial disruptions, and could lead to operational difficulties that could impair the Company's ability to manage its businesses. The Company continues to have minimal financial risk exposure to the Russia / Ukraine war and has not incurred any material financial loss in relation to that conflict. The Company has recognised an Expected Credit Loss ("ECL") in relation to a pending trade claim against a counterparty that entered bankruptcy as a direct result of the conflict (see note 15). Similarly, the Company is not materially exposed to risks associated with the various conflicts in the Middle East. While the Israel branch, established in 2022 to support investment banking activities, has experienced a slower pace of development in expanding the Company's regional presence due to the ongoing conflicts, there has been no material impact on the Company's overall existing business. The Company will continue to closely monitor these ongoing situations and assess the wider implications for international financial markets in order to take the necessary action to mitigate any potential impact on the Company's financial resources. The Company utilises a suite of severe but plausible scenarios to assess potential impacts; these scenarios feed directly into the capital adequacy assessment process. Impact of new regulation The Markets in Financial Instruments Regulation and a revision of the Market in Financial Instruments Directive in 2018 (collectively referred to as "MiFID II") imposes certain restrictions as to the trading of shares and derivatives including market structure-related, reporting, investor protection-related and organisational requirements, pre- and post-trade transparency requirements, requirements to use certain venues when trading financial instruments (which includes shares and certain derivative instruments), requirements affecting the way investment managers can obtain research, powers of regulators to impose position limits and provisions on regulatory sanctions. The European regulators continue to refine aspects of MiFID and these changes are now being rolled out separately in both the UK and Europe. New prudential regimes for investment firms have been implemented in both the UK and the EU for MiFID authorised investment firms. The Investment Firms Regulation ("IFR") and the Investment Firms Directive ("IFD"), applicable in the EU, and the MIFIDPRU regime, applicable in the UK, while applying a more appropriate capital treatment for investment firms such as the Company and its subsidiary, Jefferies GmbH, include a requirement that a certain amount of variable remuneration for material risk takers be paid in non-cash instruments and have a deferral element. Consequently, the Company has adapted its remuneration structures for employees identified as material risk takers. Significant new legislation and regulation affecting the financial services industry is regularly proposed and sometimes adopted. Accordingly, the Board continues to both monitor the regulatory landscape and engage with regulators to ensure that the Company is able to comply and adapt to any future developments. Climate change Climate change may cause extreme weather events that disrupt operations at one or more of Jefferies', its customers' or clients' locations, which may negatively affect the Company's ability to service and interact with clients and also may adversely affect the value of certain of our investments. Climate change, as well as uncertainties related to the transition to a lower carbon dependent economy, may also have a negative impact on the financial position of the Company's clients, which may decrease income as well as increase credit risk associated with loans and other credit exposures to those clients. Additionally, the Company's reputation and client relationships may be damaged as a result of involvement, by the Company or its clients, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. New regulations or guidance relating to climate change and the transition to a lower carbon dependent economy, as well as the perspectives of shareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions the Company engages in certain activities or offers certain products, as well as impact the Company's reputation and efforts to recruit and retain employees and customers. The Board and the Jefferies' Board are committed to taking positive action in response to the climate change risks outlined above. See the Climate Related Disclosure section on page 7 for more detail. Cybersecurity and operational resilience The Company's operations rely heavily on the secure processing, storage and transmission of financial, personal and other information in our computer systems and networks. In recent years, there have been several highly publicised incidents involving financial services companies reporting the unauthorised disclosure of client or other confidential information, as well as cyber attacks involving theft, dissemination and destruction of corporate information or other assets, which in some cases occurred as a result of failure to follow procedures by employees or contractors or as a result of actions by third-parties. Like other financial services firms, Jefferies and its third-party service providers have been the target of cyber attacks. The Jefferies Board is not aware of any material losses that Jefferies has incurred relating to cyber attacks or other information security breaches. The techniques and malware used in these cyber attacks and cybersecurity incidents are increasingly sophisticated, change frequently and are often not recognised until launched because they are novel. The Board is acutely aware of the risks presented by cybercrime and the fact that those risks are growing exponentially. The Company monitors the changing cybersecurity risk environment and seeks to maintain robust security measures, including a suite of authentication and layered information security controls. All staff within Jefferies are required to undergo extensive training on cybercrime and the mitigation actions required from each individual. The Board and the Jefferies' Board will continue to invest in the organisation's defences against cybercrime. A key focus of the regulators over the last couple of years has been emerging regulation in relation to operational resilience, with regulators expecting investment firms like Jefferies to be able to assess (on an ongoing basis) their resilience (measured by impact to Jefferies' clients and the market) on identified critical business services. This has brought the Company's management of third party risk, business continuity and the mitigation of cyber risk more firmly into focus with the regulators. Data Protection Act 2018 ("UK GDPR") The Data Protection Act 2018 is the UK's implementation of the General Data Protection Regulation (GDPR). The UK GDPR imposes a number of obligations on companies, including, without limitation: accountability and transparency requirements; compliance with the data protection rights of data subjects; and the prompt reporting of certain data breaches to both the relevant data supervisory authority and impacted individuals. The UK GDPR also includes restrictions on the transfer of personal data from the UK to jurisdictions that are not recognised as having an adequate level of protection with regards to data protection laws. The UK GDPR is closely aligned to the EU GDPR which applies in all EU member states. Similarly to the EU's GDPR, a breach under the UK GDPR could result in significant fines for any company found not to have complied with the legislation, such fines can be up to the higher of 4% of an organisation's worldwide revenues or £17.5 million. Risk management Risk is an inherent part of the Company's business and activities. The extent to which risk is properly and effectively managed is critical to the Company's profitability, financial soundness, and long-term viability and helps protect its reputation and franchise, as well as its standing within the market. The Board believes that risks and uncertainties faced by the Company are satisfactorily mitigated through the comprehensive system of controls and senior management oversight that has been implemented throughout the Company. Risk management is a multifaceted process that requires communication, judgement and knowledge of financial products and markets. It encompasses the active involvement, oversight and control from executive and senior management, as well as departments independent of the revenue-producing business units, including Risk Management, Operations, Information Technology, Compliance, Legal and Finance. Risk management policies, methodologies and procedures are flexible in nature and are subject to ongoing review and modification. The Board has developed and implemented a Risk Management Framework (the "Framework") to identify, assess, monitor and manage each risk type attributable to the Company's business model. The Framework includes strategies, methods, tools and governance structures to manage risk, including escalation processes. The Company has implemented a "Three Lines of Defence" risk management model which establishes segregation of duties by defining the roles, responsibilities and accountabilities of different functions with respect to risk, controls and decision making. The Framework segregates the roles of primary risk takers from the independent risk managers, thus helping to ensure the integrity and effectiveness of the Company's risk management process. To achieve the Company's strategic priorities, we ensure that all applicable laws, rules and regulations are followed, while applying the highest ethical standards, and having clients' interests as our top priority. Risk-taking is carried out prudently in order to protect the Company's capital base and franchise. This is supported through risk limits and tolerances that avoid outsized risk positions. Moreover, the Company maintains a diversified business strategy and avoids significant concentrations in any sector, product, geographic region, or activity, by setting appropriate quantitative concentration limits. In addition, the Company's management consider contagion risks, second order effects and correlations in the risk assessment process. There is limited appetite for illiquid assets and financial products. The quality of assets on the Company's balance sheet is maintained by conducting trading activity in liquid markets and ensuring high inventory turnover. Less liquid positions and derivative financial instruments are subject to closer oversight via a range of monitoring metrics, limits, and constraints. All new products, businesses or activities which introduce materially distinctive risk characteristics are subject to the Company's New Business Approval process. As part of this process the risk management function is engaged to assess the proposed new products, businesses or activities prior to their initiation, to ensure that this is done in a controlled manner and after consideration of the impact of the activity on the Company's risk profile. The Company defines principal risks as those which are foreseeable, continuous, and material enough to merit establishing specific control frameworks. The Board approves their determination and requires that risk appetite statements are established for each principal risk. The Framework identifies the following principal risks: Strategic risk Strategic Risk is the risk that results from adverse business decisions, inappropriate business plans, ineffective business strategy execution, or failure to respond in a timely manner to changes in the regulatory, macroeconomic and competitive environments. Strategic risk exists across the Company's businesses and cuts across all the Company's other principal risks. It can stem from a variety of idiosyncratic and systemic events, including the effect of and the Company's response to macroeconomic and geopolitical shocks; markets disruptions, for example rapid asset revaluations and credit market sell-off; regional crises, such as in emerging markets or within the EU; regulatory and legal requirements as well as societal and investor trends, including sustainability and governance; and the feedback loops among these. With respect to sustainability and governance, we consider the negative potential impact on our operations, clients, counterparties, exposures and profitability from: environmental risks, like climate change, pollution and lack of biodiversity, and disruption caused by the transition towards sustainability; social risks, namely the impacts from non-compliance with requirements around diversity and inclusion, human rights, labour standards, health and safety protection; and governance risks, namely the impacts from noncompliance with requirements around board composition, executive compensation and business ethics. The primary management tool for strategic risk is through the Board's comprehensive annual business planning process, as well as continuous evaluation of the impact of changing market and business conditions on meeting the Firm's strategic objectives. Strategic risk is assessed and monitored

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