Morgan Advanced Materials : Annual Report & Accounts 2025

About this update from Morgan Advanced Materials Plc

Unlocking our potential Annual Report 2025 Strategic Report Governance Financial Statements We are a global leader in advanced materials Revenue fi1.0bn 2025 Headline * Adj. operating profit * fi99.1m 2025 Headline * Total employees 8,100 * Non-statutory measures are denoted within an asterisk (*) through this report. Refer to page 46 for further details. We combine material science, deep application expertise and process excellence to co-design and manufacture mission critical solutions. These solutions are at the heart of society's most essential systems today and they will enable the breakthroughs of tomorrow. Our products help people move, build and thrive. We help power human progress, where it matters most. We manufacture an extensive range of specialist carbon and ceramic products. Established in 1856, we have a proven track record in delivering for our customers, underpinned by over a century of innovation. We employ approximately 8,100 people worldwide, across 57 operating sites serving a diverse range of customers across a range of end-markets. See more : morganadvancedmaterials.com The Morgan Code ('the Code') governs how we work and it is publicly available in 19 languages: we work safely, we work ethically, we treat our people fairly, we protect our business. See more: morganadvancedmaterials.com Morgan Advanced Materials / Annual Report 2025 01 Strategic Report Chair's statement Introducing our new CEO CEO's review Our strategy Our business model Market environment Key performance indicators ('KPIs') Stakeholder engagement Section 172(1) statement Non-financial and sustainability information statement A responsible business incorporating TCFD Risk management Group financial review Directors' statements 02 04 05 07 08 10 16 20 22 25 26 41 46 53 Governance Chair's letter to shareholders Board of Directors Governance overview Key Board focus areas during the year Board oversight of strategy Monitoring and embedding culture Engaging with our workforce Assessing Board performance UK Corporate Governance Code compliance statement Report of the Audit Committee Report of the Nomination Committee Remuneration Report Other disclosures Independent Auditor's Report 56 57 59 60 62 63 64 66 67 69 75 78 105 110 Financial Statements Consolidated income statement Consolidated statement of comprehensive income Consolidated balance sheet Consolidated statement of changes in equity Consolidated statement of cash flows Notes to the consolidated financial statements Company balance sheet Company statement of changes in equity Notes to the Company financial statements Group statistical information Cautionary statement Glossary Alternative performance measures Shareholder information 119 120 121 122 123 124 178 179 180 198 199 199 200 205 Strategic Report Governance Financial Statements 2025 was a significant year for Morgan Advanced Materials, marked by changes in the Group's executive leadership and an evolution of our strategy, focused on stability, growth and unlocking our potential. Following his appointment as CEO in July 2025, Damien Caby led a comprehensive review of the business. He and the team developed a revised strategy for the Group, with input from the Board. The revised strategy has full Board endorsement and was presented to analysts and institutional investors at a Strategy Update Event in December 2025. The teams are already well underway in their delivery of this strategy. While the year was characterised by continued global economic and geopolitical uncertainty and a difficult end-market environment impacting our performance, we nonetheless made progress across the Group and delivered our business simplification and efficiency initiatives, continuing our track record of self-help. Our investment in semiconductor capacity, scaled back from the original plan to align with short-term cyclical weakness, is now substantially complete. We made good progress across our simplification and efficiency initiatives. The initiatives delivered additional savings of fi16 million in 2025 and are on track to deliver total savings of of fi27 million in 2026, compared to our 2023 baseline. These measures will ensure 02 Chair's statement A history of innovation Ian Marchant Non-executive Chair we are well placed to benefit from rapid margin expansion as markets recover. We also made further advances with our IT systems and infrastructure, continuing the high level of investment in new capabilities, the replacement of older systems and strengthening our cyber security posture. A focus on stability and growth means making choices about the shape of the business. The Board will continue to evaluate opportunities to improve Morgan Advanced Materials' portfolio to deliver faster growth, as we have done most recently, for example, with the disposal of the non-strategic Molten Metal Systems (MMS) business. We have now commenced a formal Strategic review of our Thermal Products division. This is a focus of the executive team and the Board and further updates will be provided in due course. We took the decision to pause our share buyback programme as part of our focus on balance sheet resilience and to prioritise margin-enhancing growth. The Board remains confident in the Group's long-term structural growth opportunities. The importance of our mission critical solutions and the long-term growth driver of providing sustainable solutions to support the energy transition are still the same. Our focus has been on ensuring that we are managing the business appropriately to position ourselves for growth as our end-markets recover and the outcome of our strategy is reflected in our results. As we prepare for the future, I am confident in our prospects and that our team will continue to help deliver on our purpose - to use advanced materials to make the world more sustainable and to improve the quality of life. Performance in 2025 Our first imperative is the safety and wellbeing of our colleagues. During 2025, our safety performance declined, despite the significant focus on employee safety and wellbeing. Supporting the executive team, your Board has spent a significant amount of time reviewing safety performance and challenging the executive team on how safety performance and culture can be improved. My fellow non-executive Directors and I will continue to support the executive team to achieve a position of 'zero harm'. The business delivered a resilient performance against a backdrop of challenging markets. Demand for our products used in silicon carbide (SiC) power semiconductor production reduced during the year, driven by destocking in the electric vehicle (EV) supply chain and the shift of SiC material growth towards China. Reflecting these dynamics, the Group has recognised an impairment charge of fi15.6 million related to certain specialist assets held by Performance Carbon at a UK site which are dedicated to the Semiconductor material growth market. This impairment is consistent with the expectations for our Semiconductor business that the Group set out in its Strategy Update in December. We saw a decrease in sales in our Healthcare markets, driven by tariff-related inventory adjustments and lower demand for certain mature product lines. Market conditions in European industrial and global automotive markets also weakened. This was countered in part by strong performance in our Aerospace markets. Group revenue was 3.3% lower than in 2024 on an organic constant-currency basis*. Margin remained below our financial framework guidance, and is an area of increased focus. Leverage increased during 2025 as a result of reduced earnings and our investment in our digital transformation and simplification initiatives, but will reduce during 2026 as our investment in simplification comes to a close and upon realisation of the proceeds from the disposal of MMS. Your Board has spent a considerable amount of time evaluating operational and commercial effectiveness, reviewing and challenging divisional strategies and overseeing the transformation programmes to improve trading performance. See the CEO's review on pages 5 to 6 and Group financial review on pages 46 to 52 for more information on how the business performed during the year. The Board in 2025 I am pleased to report that your Board is functioning well and focused on supporting management through strategy development and operational delivery. We have focused in particular on trading performance, the CEO succession and revised strategy this year. Damien has settled well into his new role and strengthened his leadership team. He is bringing ever intensifying focus to the many essential aspects of performance delivery that we need to improve to achieve our aspirations for Morgan Advanced Materials, and he has refreshed the operating cadence to enhance the delivery of short-term goals and reinforce the focus and momentum of the strategic initiatives. During the year, we welcomed new perspectives to the Board, further strengthening our strategic, financial and operational oversight and materials science expertise. Two new non-executive Directors - Jane Lodge and Professor Mary Ryan CBE FREng - joined the Board. Jane will take over as Audit Committee Chair after the 2026 AGM, from Jane Aikman who will step down at the AGM after nine years on the Board. Pete Raby stepped down as CEO in July 2025. I and the whole Board would like to thank him for his significant contribution to Morgan Advanced Materials over his 10-year tenure as CEO. Having served nine years on the Board, Helen Bunch stepped down in May 2025. We would also like to thank Helen Bunch and Jane Aikman for their contributions. Morgan Advanced Materials / Annual Report 2025 Responsible business The Board takes its responsibilities to all its stakeholders seriously and we are committed to maintaining direct and productive relationships with our shareholders, colleagues and communities, taking a range of perspectives and feedback into account in our decision-making and stewardship. The wellbeing of our colleagues remained a priority throughout the year. We have listened to their views through regular engagement surveys and employee listening sessions. Information on how we as a Board and business responded to their views, and the actions we took locally and globally to improve their experiences, can be found on pages 64 and 65. I am pleased by the progress we have made this year in reducing the Group's environmental impact. We reduced scope 1 and 2 emissions during the year and are now 58% below our 2015 baseline. We also reduced our overall water usage. We are on track to meet our 2030 goals. Not only are we making our manufacturing processes more efficient, but more importantly our products, which have properties to withstand heat and endure other extreme environments, assist our customers in reducing their environmental impact, either by lasting longer or improving the efficient use of resources. Dividend The Board is recommending a final dividend for 2025 of 6.8 pence (2024: 6.8 pence). Combined with the interim dividend of 5.4 pence (2024: 5.4 pence), the resulting total dividend in respect of 2025 is 12.2 pence (2024: 12.2 pence). The dividend will be payable on 12 May 2026 to shareholders on the register on 10 April 2026, subject to shareholder approval. The Board has committed to maintaining then growing the Ordinary dividend with adjusted earnings cover of circa 2.5 times. Looking forward to 2026 As we enter 2026, we note early signs of stabilisation but remain cautious about the pressures on some of our end-markets and heightened geopolitical risks, and we have positioned the Group prudently as a result. The Board is confident that the revised strategy provides a clear and credible roadmap for delivering sustainable performance improvement and margin growth. With disciplined capital allocation, the Board believes that the operating divisions are well placed to deliver against their strategic mandates and create enduring value for shareholders. We look forward to updating you on progress against our strategy in the coming year. Ian Marchant Non-executive Chair 03 Strategic Report Governance Financial Statements Introducing our new CEO Unlocking our potential Damien Caby CEO I am honoured that the Board selected me to serve as CEO of Morgan Advanced Materials, following two and a half years as president of our Thermal Products division. Morgan is a recognised global leader in advanced materials; our material science, deep application expertise and manufacturing excellence power progress that truly matters. Unlock potential Be the leading force in our chosen markets Clear strategy Will drive higher margin growth Strong foundations Positioned in diverse end-markets Morgan's opportunity: Since my appointment, I have spent time visiting our sites to assess our operations and I have met with our leaders, our employees and our customers. The passion of our employees throughout the organisation is evident. They are proud to be a part of Morgan and they truly believe in the positive impact our products and solutions can have on the world. Our customers value the quality and performance of our products and they trust us to co-design and manufacture mission critical solutions. These are strong foundations upon which to build, but we have work to do to unlock our true potential. With our distinctive capabilities, Morgan can be the leading force in our chosen markets. As I set out at our Strategy Update event in December, we have a clear strategy that is focused on factors within our own control which will create an efficient and high performing group. Our strategy will return the Group to a 12% margin by 2028 and will establish a business that grows faster and delivers more robust margins. Together, we will transform our operational effectiveness, drive stronger growth in selected value chains with deeper collaborations and upgraded positions, and maximise the value of our portfolio. I am excited about the next phase of our journey, and inspired to lead the Morgan team through this new chapter. CEO's review Group results Organic constant-currency* revenue declined by 3.3% compared to 2024, driven by the well-publicised challenging conditions in the Semiconductor market. We saw resilience across our other markets; weakening market conditions in European Industrial and Global Automotive markets and lower revenues in Healthcare markets were largely offset by a strong performance in Aerospace and Defence markets. Group headline* adjusted operating profit* margin, which includes the profit from MMS for our period of ownership, was down 210 bps to 9.6% (2024: 11.7%). Volume decline and mix impacts accounted for a 440 bps decrease in margin, but our continued focus on actions within our control allowed us to offset a significant portion of this decline. Margin gains from above inflation pricing and efficiency offered a 170 bps improvement, further supported by our simplification initiatives which generated an additional 160 bps improvement. The remaining movement in margin relates to foreign exchange and other non-trading items. Operational progress We have now largely completed our business simplification programme which has streamlined our management structures, reduced the number of divisions we operate and consolidated manufacturing plants to provide better support to our customers and to deliver synergies from key operational activities. Since 2016, we have progressively consolidated our smaller sites, reducing the total number of sites from 85 to 60, before the disposal of MMS. We have continued our strategic project to develop and deploy a Global Enterprise Resource Planning (ERP) system which is intended to replace numerous different legacy systems across the Morgan network. The programme, which is expected to complete over the next two years, will create further opportunities to align business processes, and to further strengthen information security and the control environment. Headline* leverage at the balance sheet date of 1.8x (2024: 1.4x) reflects the reduction in Group profit, the completion of our Semiconductor capacity investment and our investment in business simplification. Our ongoing investment in digital transformation is a key strategic enabler to transform the Group's operational effectiveness and leverage its scale. This investment will continue into 2026 and 2027. Leverage will reduce towards our target range during 2026 as our investment in Semiconductor capacity and the business simplification programme come to a close and upon realisation of the full proceeds from the disposal of our MMS business. Sale of MMS In August 2025, we announced that we had reached an agreement to sell the majority of our Molten Metal Systems ('MMS') business and the transaction completed on 12 November 2025. The details of the transaction and consideration mechanisms are set out in the Financial Review on page 50. The disposal of MMS is clearly aligned to our strategy, and it demonstrates our commitment to take decisive action to manage our portfolio. It simplifies the organisation, reducing the Group's operating footprint to 57 sites, and it ensures that our business is focused on the selected markets where we have a clear right to win to accelerate organic growth and generate higher returns. Semiconductor impairment There is a large and growing market for Silicon Carbide, however, the supply chain is experiencing a shift towards China. We remain committed to supplying our customers in the US and Europe and expect to utilise our US-based assets to address this demand. We have assessed the carrying value of our assets in light of these market developments during 2025. As a result of this exercise, the Group has recognised an impairment charge of fi15.6 million related to certain specialist assets which are dedicated to the Semiconductor material growth market held by Performance Carbon at a UK site. This impairment is consistent with the expectations for our Semiconductor business that we set out in December. Refer to page 49 for further details. Moving forwards, our strategy for the Semiconductor market is focused on the wafer fabrication part of the value chain. This market is dominated by American, European and Japanese original equipment manufacturers ('OEMs') and we supply most of these businesses in various parts of the production process. The barriers to entry in this market are high and Morgan is well-positioned to win. Our goal is to deepen our collaboration, working as one enterprise and to expand the scope of our supply. Progress against our strategy As outlined at our Strategy Update event in December 2025, the aim of our strategy is to unlock Morgan's potential and create a highly efficient, faster growing company. We will become the leading force in our chosen markets. The presentation and a recording are available at https://www.morganadvancedmaterials.com Our strategy is focused on three key levers: Transform operational effectiveness, Drive stronger growth, and Maximise our portfolio value. We are focused on executing at pace and we made good early progress in 2025. Transform: We are addressing specific gaps in our supply chain effectiveness which have constrained our growth by holding back our service levels and we are focused on turning around a small number of large underperforming sites. We will make more of the Group's scale by deploying centrally led procurement. In respect of site turnaround, work has already commenced to cross-qualify manufacturing lines, to optimise production and inventory management. In procurement, we have assessed the Group's indirect spend and our new Group Procurement Lead joined the business in February 2026. We deployed our new ERP platform at a pilot site during 2025 and are set to commence deployment across the business in 2026. 04 Morgan Advanced Materials / Annual Report 2025 05 ‌CEO's review continued Drive: We are driving stronger growth by focusing on our right to win to enhance our value proposition and gain market share. We have initiated focused plans to upgrade our position in selected value chains to allow us to grow irrespective of market cycles. Our Performance Carbon division is capitalising on its reputation and innovation in body armour and trade control capabilities by expanding into other defence systems. We are making a targeted investment in incremental capacity during 2026, backed by multi-year contracts. Our Technical Ceramics division is building on its leading position in ceramic cores for engines blades by investing in capacity to meet the increase in aircraft deliveries and progressive ramp-up of new generation engines with higher design complexity. Maximise: We are actively managing our portfolio to maximise its value through partnerships, divestments and bolt-on M&A. We have commenced a formal Strategic review of our Thermal Safety, people, sustainability We have clear 2030 goals for our business, all of which are measured against a 2015 baseline. A 0.10 LTA rate: our LTA rate was 0.18 (2024: 0.13) which is an increase compared to the prior year. Safety of our employees is essential and addressing the root causes of lost time and recordable accidents is a critical focus for the Board and Senior Management team. We have undertaken a detailed root cause analysis of 2025 incidents, and as a result, we have developed a focused plan to reinforce the skills and engagement of our manufacturing leaders across the Group, and to implement more focused actions at selected sites during 2026. Alongside, we will maintain our focus on process safety. We have made significant progress in this area during 2025, with strong engagement and momentum in the implementation of the improvement plans in the first of three waves of deployment. Our strategy Becoming the leading force in our chosen markets Products division. We will assess a full range of strategic options, including options for significant business performance improvement measures and a potential disposal. We will undertake the necessary preparatory work to ensure that we can act at pace once the review reaches a conclusion. No decisions have been made and we will provide further market updates in due course. Our strategy will deliver against a clear medium-term financial framework Above-market organic constant-currency revenue growth: We expect to achieve growth in excess of GDP. Reliable and competitive margins: We expect to achieve an adjusted operating profit* margin of 12% by 2028 with sustainable margins of between 12% and 14% beyond 2028. Sustainable EPS Growth: Achieving sustained growth in adjusted Earnings per Share*, ahead of organic revenue growth, driven by a combination of organic growth, margin accretion, shareholder returns and M&A. Attractive ROIC: 17% - 20% ROIC*. Resilient balance sheet: Leverage range of 1.0x to 1.5x, or up to 2.0x adjusted EBITDA* post-acquisition, utilising our strong balance sheet to fund our organic growth, and then over time deploying excess capital to fund incremental M&A or additional shareholder returns as appropriate. Appropriate dividend cover: Shareholder dividends maintained then growing with adjusted earnings at around 2.5x cover. Share buyback As announced in December 2025, we paused our buyback programme as part of our focus on balance sheet resilience. The second fi10 million tranche of the buyback has now completed and the Group has purchased a total of fi20 million of shares. 40% of female leadership: We continue to improve our gender diversity and 36% of our leadership population are female, a year on year improvement of 2%. We will continue our focus on ensuring that our policies, working conditions, development and support offering, and recruiting approaches deliver a more supportive environment for our female leaders. A top quartile engagement score: our engagement score was 75%, an improvement on the prior year. It is pleasing to see progress on this metric, particularly at the sites where engagement levels are below average. Our leaders remain focused with site specific actions. Reduce scope 1 and 2 CO 2 emissions by 50%: We reduced by 5% in the year and we are now 58% below our baseline, significantly ahead of our glidepath. 80% of our power is from low-carbon sources and going forward, as our business grows, we are focusing on process efficiency and new technologies in order to sustain this performance. Reduce water usage and water use in high-stress areas by 30%: Our overall water usage reduced by 11% and water use in high-stressed areas has decreased by 3%. We are 39% and 23% below our baseline, respectively. Outlook Demand in our end-markets has broadly stabilised and our outlook for 2026 is in-line with current market expectations. Organic constant-currency revenue growth is expected to be 1-2% and, supported by a continued focus on efficiency and the first results of our Transform initiatives, we expect to deliver an adjusted operating profit* margin at or around 10%. As previously reported, our medium-term guidance for overall capital expenditure is for around fi50-fi55 million per annum over the next three years. We remain confident in achieving our medium-term financial framework. Damien Caby CEO Transform We will build a scalable, more efficient and more agile business. We are going beyond site consolidation, we are leveraging the Group's scale, stepping up supply chain effectiveness, and turning around our largest underperforming sites. We will deploy Group-led category management across an indirect spend cost base of fi170 million. We will deliver significant savings and reinforce the efficiency and reliability of our supply chain. We will implement structured and comprehensive multi-year programmes to turn around large underperforming sites that represent more than 20% of Group revenue. We will optimise production cycles and supply chains and simplify the asset base and product portfolio. We are investing in digital transformation to enhance business analytics, make better informed decisions and act with agility Who we are will help us succeed We are a purpose-driven organisation. We are resilient and we thrive when it comes to solving tough problems. We are curious and innovative and we are committed to continuous learning. We are collaborative and open minded and we foster a culture of transparency and humility. As a business, we are focused on recruiting, developing and retaining the high calibre of individuals we need to deliver on the next chapter for Morgan. To learn more about people policies, see page 63. and confidence. We will streamline and standardise our back office processes to focus business teams on delivery and growth. Drive We will systematically upgrade our position in the value chain so that we can grow profitability irrespective of market cycles and increase our market share and addressable market. Our Performance Carbon division will innovate to increase performance and longevity in Rail and Wind. It will capitalise on its reputation, technology and trade control capabilities to expand in defence systems. Our Technical Ceramics division will increase its capacity to meet the increasing aircraft deliveries and the ramp-up of the new generation of engines. Our Thermal Products division will reinforce its outreach in the process industries to enable the decarbonisation of Steel and Chemical processes. Maximise We will make bold choices. We will invest selectively to expand our leading positions, partner where we know we cannot win alone, and exit markets where we cannot improve our market position or right to win. Our Performance Carbon division will pursue opportunities to supply subsystems in Energy and Industrials where the supply chains are fragmented and the decarbonisation and digitalisation trends call for innovation. It will assess partnerships in China for Semiconductor SiC material growth. Our Technical Ceramics division will leverage its expertise in high-value niches to expand into new adjacencies, with priorities in Industrials and Aerospace. Our Thermal Products division will expand its structural partnerships in fire protection. It is a very large market and we are targeting the geographies and applications where the value proposition is compelling. ‌Our business model We combine material science, deep application expertise and process excellence to co-design and manufacture mission critical solutions... Technology leadership We have a deep understanding of how and why materials work, and how to change their properties. This is underpinned by a rich intellectual property estate protected through trade secrets and select patents. Customer intimacy We are trusted by our customers to co-create and drive innovation. With our access to customers and their technical experts, we are able to anticipate their needs. Global network We have a global manufacturing footprint, allowing us to match manufacturing capacity with demand. Accredited business We work with regulatory authorities and customers to become approved suppliers for high barrier to entry and high barrier to change applications. We put quality at the forefront of everything we do. ...our divisions operate in close proximity with our markets and customers to achieve optimal solution performance and effective product delivery... Performance Carbon Value proposition Leverages the versatility of carbon, graphite and silicon carbide materials for mission critical applications. We hold leadership positions and have a large installed base in markets with high barriers to entry. Benefit to our customers Maximised performance, efficiency, reliability and durability of our customers' products in Aerospace & Defence, rail, energy generation, and oil & gas. Technical Ceramics Value proposition Co-designs bespoke ceramic and braze alloy assemblies in high performance, high specification applications. We hold leadership positions and several opportunities to expand our market share in high barrier to entry, attractive markets. Benefit to our customers Enhanced durability, reliability and performance of our customers' products in Healthcare, Aerospace & Defence, Semiconductors and power generation. Thermal Products Value proposition Provides full scale solutions for high-temperature insulation and fire protection. We set the benchmark in insulation standards and benefit from a large installed base. Benefit to our customers Improved safety of people and equipment in demanding environments, reduced emissions and energy costs in energy-intensive processes industries. ...supported by our strategic focus areas... Route to market We sell our solutions directly to OEMs and through assembly suppliers. Revenue is generated through sales into new products and for replacement parts. Route to market We sell our solutions directly to OEMs and through their suppliers. Revenue is generated through sales into new products and for replacement parts. Route to market We sell our solutions through our own global sales force and a network of trusted distributors. Revenue is generated through sales into new build and retrofit projects. Our products and solutions Semiconductor consumables Collector strips and carbon brushes Graphite powders Face seals Sliding bearings Rotary seals Rotary vane pump components Our products and solutions Structural ceramic components Engineered coatings Ceramic cores Ceramic-to-metal assemblies Braze alloys Ceramic tubes and rollers Extruded products Laser products Semiconductor consumables MACOR™ machinable glass ceramic Our products and solutions High-temperature insulating and fire protection fibre products (Low biopersistent fibres, Superwool®) Microporous products (WDS®, Min-K®) Firebricks and mortars Heat shield cladding ...to create value Our customers Our superior product performance and reliability are industry leading and in many cases, unsurpassed. We are a global supplier that can meet the toughest challenges in materials science. We maintain and embed strategic partnerships. Our people We keep our employees safe, aiming for zero harm. We operate as a responsible and ethical business. We attract, develop and retain a diverse and engaged workforce. Our investors Appealing growth drivers and clear strategy. Strong financial framework. Our planet We care about our impact on the environment and are reducing the impact of our own operations. Our products help reduce the environmental impact of our customers' operations. Transform Drive Maximise Strategic Report Governance Financial Statements Industrial Processes Market trends Industrial processes are being reshaped by the need for higher productivity through rapid digitalisation and automation with a lower impact to the environment. How we add value We co-design and manufacture products for use in a broad range of challenging process and manufacturing environments for numerous industrial applications such as insulation for foundry process and kiln furniture for glass and ceramic production. Our materials offer superior insulating properties, dimensional stability, strength and stiffness. These characteristics support optimised process efficiency and increases productivity, allowing our customers to reduce industrial waste, improve safety and lower their environmental impact. Examples of our solutions Superwool ® Blok improves kiln lining life and thermal efficiency. Pyro-Bloc ® modules for regenerative thermal oxidisers reduce heat loss and fuel consumption. Halsinc kiln furniture enable efficient use of energy and an optimal ratio between kiln furniture and sinter ware. EPCs and specialist technology distributors Industrial Components Market trends Global manufacturing growth is a primary catalyst for rising demand in industrial components. As manufacturing output expands - particularly in emerging economies - demand increases for bearings, gears, motors, valves, pumps and other precision-engineered components. How we add value We co-design and manufacture products for use in a broad range of challenging environments. Our materials offer a wide range of performance characteristics. Our components are highly resistant to chemical and physical wear, corrosion and extreme temperatures. Examples of our solutions Self-lubricating seals and bearings and ceramic shafts reduce energy consumption of pumps in chemical plants. FireMaster ® insulation for automotive exhaust catalyst, manages high temperatures, protects surrounding components and improves the efficiency of the emission control system. Laser Reflectors generate diffuse reflectance, which provides a highly uniform beam profile for use in industrial lasers for cutting, welding and marking. Examples of our customers Automotive suppliers, industrial equipment manufacturers Market environment There are a number of megatrends that are shaping the future of our world and are driving an ever greater need for advanced materials. Our materials and solutions have an important role to play in addressing the challenges arising from climate change, resource scarcity, urbanisation and migration, a growing middle class, an ageing population and digitalisation. Ceramics and carbon are very versatile materials and as a result we participate in a wide range of end-markets; you will find our products all around you in products and technologies that enable the modern world. The chart below shows the split of our headline* revenue by end-market applications. In the following section, we have provided insight into our most significant markets. Industrial 41.6% Aerospace & Defence 20.7% Oil & Petrochemical 9.7% Healthcare 7.0% Energy 6.9% Semiconductors 6.8% Rail 4.0% Examples of our customers Industrial markets shown below comprise 'Industrial processes, Industrial components and Metals.' The dynamics of these markets are set out overleaf. Headline revenue £1,030.3m (3.3)% OCC 1 Other 3.3% 10 Morgan Advanced Materials / Annual Report 2025 11 Market environment continued Examples of our customers Steel mills, Iron & Steel manufacturers, Foundries, aluminum manufacturers Market trends The demand for Iron & Steel remains strong, fuelled by industrialisation, population growth and urbanisation. Steel producers seek new solutions to tackle environmental concerns, rising energy costs and to increase operational efficiency. How we add value We support the design phase, including material selection, in order to reduce energy, improve furnace performance and ensure that any molten metal transfer vessel melt holds. Our global network of subject matter experts are ready to support the commitment from the metals industry, to reduce emissions in their plants. Examples of our solutions Superwool® XTRA for severe atmospheric conditions. Pyro-Bloc® modules provide the furnace design with a superior lining. K™, JM™, TJM™ ranges of insulating fire bricks offer superior performance to lining designs. Metals Aerospace & Defence Market trends Demand in air travel is increasing in line with economic growth, driven by both business and leisure customers across the globe. There is a growing need for engines to run more efficiently and at greater extremes in temperature. Rising geopolitical tensions have resulted in a global increase in defence spending. There is a growing need for materials that can withstand greater strains, pressures and temperatures. How we add value We make proven high-performance components and sub-assemblies to exacting standards for aerospace. We co-design and supply precision-engineered materials that offer superior dimensional stability, strength, stiffness and chemical resistance across a wide range of temperatures to meet the technical demands of the global security and defence markets. Examples of our solutions Complex cores for casting turbine blades to enable more fuel efficient jet engines. Components for night vision systems which enable superior performance. Ceramic tiles to build high-performance body and vehicle armour. Examples of our customers Aerospace OEMs, sub-system suppliers and Defence contractors Oil & Petrochemical Market trends In the Petrochemical and Chemical markets our customers demand high performance insulation and fire protection solutions. How we add value We manufacture a range of components ideally suited to the uniquely demanding operating environments. Examples of our solutions Our products and materials are routinely chosen to fulfil critical applications for thermal management and downstream processing, owing to their resistance to chemical wear, corrosion and extreme heat. Our self-lubricating seals and bearings and our ceramic shafts reduce the energy consumption of pumps in chemical plants. Examples of our customers Energy producers, manufacturers of industrial gases and refractory builders Healthcare Market trends The global medical devices sector is undergoing a period of significant transformation, largely driven by demographic shifts, evolving patient needs and technological advancements. Global healthcare systems are increasingly focused on early detection, prevention and improved treatment pathways to manage the growing burden of chronic disease. Technological advancements, including artificial intelligence, robotics, predictive analytics and wearable medical technology, have revolutionised the landscape of medical diagnostics and treatment. How we add value Medical engineering demands the highest standards of precision, accuracy, reliability and performance. We manufacture a broad variety of components for use in medical instrumentation as well as in tools for treatment and surgery. Biocompatibility, excellent chemical and electrical resistance and low wear rates of our materials, combined with our high-quality, volume manufacturing means we are perfectly placed to supply components for medical applications. Equipment manufacturers and medical professionals choose our materials for their exceptional physical characteristics. Our deep understanding of ceramic material properties, together with our expertise in braze alloy design, allows us to produce high-density, highly reliable feedthroughs for medical devices. Examples of our solutions Bare ceramics and metallised components for medical imaging and oncology equipment. Ceramic feedthroughs for implantable technology such as cochlear implants and neuro-stimulation. Small precision componentry for use in a range of surgical equipment from ablation tools to surgical laser waveguides. Examples of our customers Major medical equipment and imaging OEMs Semiconductors Market trends Our world is rapidly evolving, it is becoming more connected, smarter and more energy-efficient by the day. Semiconductors are at the heart of this transformation. How we add value Our extensive product portfolio enables the production of SiC, GaN and silicon chips. Our technology is critical from crystal growth of the semiconducting material, at the very beginning of the value chain, on through the many wafer fabrication steps. We offer a broad portfolio of unique materials and components that are made from highly purified carbon, graphite, alumina, silicon carbide and braze metal alloys. Our products have been key to facilitating the manufacture of SiC wafers at sufficient quality, cost and quantity to unlock widespread SiC usage in power devices. Examples of our solutions Ultra-high purity consumables for crystal boule growth. Graphite and ceramics for semiconductor wafer fabrication. Examples of our customers: Major American, Japanese and European Wafer Fabrication OEMs, Material Growth OEMs. Examples of our customers Wafer fabrication equipment manufacturers, Crystal boule growers Energy Market trends As society advances, there is a growing need for greater energy security and cost-effective decarbonisation. The demand for reliable energy is growing rapidly, driving demand for increased power generation and energy transition through wind and solar power, energy storage and nuclear generation. How we add value We develop products for renewable and traditional power generation and insulation materials for heat management. We produce high-temperature insulation for power plants to minimise energy loss and reduce CO 2 emissions. We enable the conversion and of power generation to solar and wind and the large-scale power storage this requires. We are the leading supplier of refractories and insulation for the furnaces which produce cathode materials for Lithium-ion battery-based power storage. Our superior product performance drives lower maintenance activity and cost for wind farm operators. Examples of our solutions Ceramic materials for the manufacture of the latest generation of solar panels. Carbon brush grades power transmission and grid infrastructure wind turbines offering, reliable world-leading performance. Superwool® thermal insulation for heat recovery steam in generators, fuel cells, and energy storage walls. Examples of our customers Generator Original Equipment Manufacturer, Solar panel manufacturers Market environment continued Our strategy in action Uniquely positioned to power progress that truly matters Case study Carbon strips enable reliable power transmission in high-speed rail Whether its fossil fuel or clean energy, the power demands of rail require high-performance generators Case study Carbon cloth in reusable rocket technology enables global connectivity Rockets can be launched into space to put satellites into orbit - essential for internet access, mobile communications and earth observation Case study Feedthroughs enable breakthroughs in implantable pain therapy Patients with complex medical conditions require long-term sustainable pain management methods to avoid over reliance on opioids ‌Key performance indicators (KPIs) Measuring our progress Financial KPIs Organic constant-currency* revenue growth (%) 3.7% 2.5% Adjusted operating profit* margin (%) 11.6% 10.8% 9.4% Adjusted EPS* (p) 25.0p 24.2p 15.9p We measure our success by tracking a number of key performance indicators (KPIs) that reflect our strategic execution priorities and growth drivers. Performance against these KPIs informs our financial, strategic and operating decisions. Successful delivery against a number of these KPIs forms a component of remuneration for Executive Directors and senior management. In 2025, certain metrics have also been presented on a 'Headline' basis which includes the results earned by MMS up to the completion date of the disposal. Refer to page 50 for further details (3.3)% 23 24 25 Purpose Organic constant-currency growth is a non-statutory measure used by the Board and Management to monitor the Group's performance. It provides an important indicator of organic like-for-like growth of the Group reporting businesses over time. Organic constant-currency growth eliminates the impact of acquisitions, divestments and foreign currency variances. Performance Revenue declined by 3.3% on an organic constant-currency basis, reflecting challenging market conditions notably in Semiconductor and industrial and automotive markets. Refer to pages 46 to 52 for further details 23 24 25 Purpose Adjusted operating profit margin is a non-statutory measure that the Board and Management monitor to assess the underlying trading profitability of the Group, excluding the impact of specific adjusting items and the amortisation of intangible assets. Performance On a continuing basis, adjusted operating profit margin for 2025 has decreased by 220bps to 9.4%, reflecting reduced revenue. Volume decline and mix drove a significant decrease in margin, but our continued focus on actions within our control allowed us to offset a significant portion of this decline. Refer to page 46 to 52 for further details 23 24 25 Purpose Adjusted EPS is a non-statutory measure used to assess the Group's underlying financial performance. Performance Adjusted EPS has decreased by 8.3 pence to 15.9 pence during 2025, reflecting the decrease in adjusted operating profit. Free cash flow before acquisitions, disposals and dividends* (£m) Return on invested capital* (%) Net debt* to EBITDA* (excluding lease liabilities) (x) 45.4 17.6% 17.7% 14.1% 1.2x 1.5x 1.4x 1.9x 1.8x Continuing basis Headline basis 14.6 15.1 In the year ended 31 December 2025 the results of MMS for the period up to disposal are presented in discontinued operations in the Consolidated income statement. Prior year figures have been restated to present results for MMS in discontinued operations. The income statement metrics used to assess Group performance exclude the results of MMS and in order to provide meaningful comparison to prior years certain metrics are presented a 'Headline' basis which includes the results of MMS for the period of ownership. 23 24 25 Purpose Free cash flow generation is an important non-statutory measure used by the Board and Management to measure the Group's ability to support future business expansion, distributions or financing. Performance Headline* free cash flow has increased to fi45.4 million, driven by lower capital expenditure and by the implementation of focused working capital initiatives across the Group. See page 96 for details of how Financial KPIs are reflected in Annual Bonus and long-term incentive performance targets 23 24 25 Purpose Return on invested capital (ROIC) is an important non-statutory measure used by the Board and Management to assess the Group's profitability and capital efficiency. Performance ROIC has decreased by 360 bps to 14.1%, reflecting the decrease in adjusted operating profit. 23 24 25 Purpose Net debt to EBITDA ratio is an important non-statutory metric used by the Board and Investors to assess the Group's financial leverage and capital structure. This key metric is also a covenant under the Group's debt facilities. Performance On a continuing basis, net debt to EBITDA has increased to 1.9x, driven by reduced adjusted operating profit delivery in the year and impacted by the disposal of MMS in the year, with full realisation of proceeds not expected until 2026. On a headline basis, which includes the results of MMS for our period of ownership in 2025, net debt to EBITDA was 1.8x. ‌Key performance indicators (KPIs) continued As a responsible business, we are committed to creating a positive impact both on the Key environmental, social and governance (ESG) KPIs CO 2 e scope 1 and 2 emissions (metric tonnes) Total water withdrawal (million m 3 ) Water withdrawal in water stressed areas 1 (m 3 ) environment and society. We have established ambitious environmental and social targets for our own operations, reflecting our role as stewards of the natural environment and the communities in which 211,104 157,574 152,871 145,137 Target 171,347 1.93 1.72 1.61 1.43 Target 1.63 390,311 335,961 341,052 331,175 Target 301,703 we operate. 22 23 24 25 2030 22 23 24 25 2030 22 23 24 25 2030 Beyond reducing our own footprint, we design and manufacture products that help our customers improve efficiency, enhance safety, and minimise environmental impact. Through these efforts, we contribute to a more sustainable world and help improve quality of life globally. Alignment to strategy Purpose Reducing greenhouse gas (GHG) emissions is an important part of our strategy. We are committed to reducing our absolute Scope 1 and 2 emissions by 50% by 2030 from a 2015 baseline. Performance Total emissions were 145,137 tCO 2 e, a 5% decrease from 2024 and 58% decrease over our 2015 baseline. Alignment to strategy Purpose Water is critical to our manufacturing operations. We will reduce our total water withdrawal by 30% by 2030 from a 2015 baseline. Performance Total water withdrawal was 1.43 million m 3 ; which is a 11% decrease over 2024 levels and a 39% decrease over our 2015 baseline. Alignment to strategy Purpose We recognise that in some instances our water demands are in areas of increasing water stress. Our goal is to deliver a 30% reduction of water withdrawal in water stressed areas by 2030 from a 2015 baseline. Performance Total water withdrawal in water stressed areas was 331,175m 3 . This is 3% lower than 2024 and 23% lower than our baseline, reflecting better water management practices 2025 water stressed areas include Chile, China, India, Italy, Luxembourg, Mexico, South Africa, Spain, Turkey, the UAE. and the state of California, USA. These were evaluated using the most recent World Resource Institute data 2025 (Aqueduct). See page 29 for details. Alignment to our strategy To deliver our strategy and to achieve our ESG goals we Lost-time accident (LTA) rate 2 Female representation in leadership 3 Employee engagement rate Target Target align our efforts to our three strategic execution priorities. Transform Drive Maximise 0.28 0.19 0.13 0.18 Target 0.10 29% 30% 34% 36% 40% 53% 54% 4 52% 75% 75% Read more on page 7 22 23 24 25 2030 22 23 24 25 2030 22 23 24 25 2030 Alignment to strategy Alignment to strategy Alignment to strategy Purpose We have an aspiration of 'zero harm' to all employees. We commit to build a caring safety culture and a world class safety system to achieve a 0.10 LTA rate by 2030. Performance Our LTA rate increased to 0.18 in 2025. This is a significant area of focus for the Board and senior management and we have a focused plan to address identified root causes during 2026. See pages 30 for more information A lost-time accident (LTA) is defined as an accident or work-related illness which results in one or more days of lost-time. Calculated as total number of lost-time accidents in the year, multiplied by 100,000 hours worked, divided by total number of hours worked. Purpose A greater gender diversity is good for Morgan Advanced Materials and good for employees. Performance Female representation continues to progress. We are supporting women through early careers and at the recruitment stage through women-centred events. We have female mentoring programmes and a thriving employee resource group, Women@Morgan. See page 31 for more information Includes Executive w/o CEO/CFO plus 2nd to 4th tier. Purpose Maintaining an engaged workforce is critical to delivery of our strategy. We measure the engagement of our employees through an employee engagement survey called 'Your Voice'. Performance We are taking direct actions on the things our employees care about. We hear from employees directly through our 'Your Voice' employee engagement survey. See page 64 for more information This was a pulse survey including employees with a Morgan Advanced Materials email address only. On a like-for-like basis, engagement went down by ~1%. ‌Stakeholder engagement Effective engagement with our stakeholders Delivering long-term value for all our stakeholders is critical to the long-term success and sustainability of Morgan Advanced Materials. We are committed to understanding the perspectives of all our stakeholders: our employees, our customers, our suppliers, our pensioners and pension trustees, our shareholders and the communities in which we operate. See pages 64 to 65 for details of Board consideration and oversight of the needs of our stakeholders Our employees Why they are important to us Our employees are key to driving the business forward and ensuring that it remains relevant in the future. What we believe is important to them Meaningful roles linked to our purpose. Clear progression, training and development. Recognition and competitive compensation. Flexible working opportunities. A safe, ethical and inclusive working environment. How we engage Local and global surveys, including 'Your Voice'. In-person and virtual meetings, briefings and training sessions. Internal communications to keep employees informed about Group-wide issues. Close collaboration our three employee resource groups (ERGs): PRISM, Women@Morgan and Military@Morgan, to help shape thinking and inform policies. Board engagement with a diverse cross-section of employees, as well as ongoing Board monitoring of culture across the Group. Our customers Why they are important to us Delivering sustainable growth requires customers who value the services that we provide and choose us as their supplier. What we believe is important to them Reliable and consistent service. Good value, high-quality products. Product and process innovation. Ability to solve complex problems. Application engineering capabilities. Transparent and responsible sourcing of raw materials and componentry. The environmental impact of the products we make. How we engage We are shaping our product and service offerings based on customer and market needs, using insights gained from our customers. We monitor customer service performance, quality control and delivery metrics across the Group on a regular basis to ensure that we can meet and exceed our customers' expectations. We further our materials science knowledge and solutions expertise through our ongoing programme of R&D, centred around our four global CoE. We share details of our innovation and new product applications through digital and physical channels. Our shareholders Why they are important to us Our shareholders are the owners of the Company and we have a responsibility to them to be transparent and open about our strategy, our financial performance and our governance processes to enable them to make informed investment decisions. What we believe is important to them Strategic focus and business growth. Share price evolution. Capital allocation and shareholder returns. High-quality management and governance. Protection of the environment through sustainable working practice. Delivering a positive contribution to society through our commitment to our employees and the communities in which we operate. How we engage Comprehensive investor programme comprising in-person and virtual meetings with current and prospective shareholders, and formal financial results presentations and market updates. Periodic Capital Markets events to talk in more detail about our growth strategy and key aspects of our business model and market trends. Attendance at investor conferences. Complete investor questionnaires as requested. Dedicated investor section on our website which offers timely information on how we are performing against our stated sustainability goals, including full disclosure of metrics and ratings linked to environmental performance. Our pensioners and pension trustees Why they are important to us After more than 160 years in business, we would not be as strong as we are today without the combined efforts of all those who went before. By keeping our pension commitments, we honour the hard work and dedication of both current and past employees. What we believe is important to them Pension scheme funding position and investment strategy. Group performance. How we engage We engage with both current pensioners and those yet to retire through regular pension communications in conjunction with our pension trustees. Our suppliers Why they are important to us To succeed, we need suppliers that understand our business in order to provide assurance and continuity of supply of goods and services at the right quality and a fair, market competitive price. We strive to use all our resources as efficiently as possible, minimising our environmental and social impact on the world around us. What we believe is important to them Fair treatment and timely payment. Growing their business. Cost-efficiency. Ethical trading policies and sustainable sourcing. Developing long-term relationships. Human rights. Environmental and climate impact. Quality management. How we engage We maintain constant constructive dialogue to address any issues and ensure productive relationships. We require our Suppliers to sign up to our 'Supplier Code of Conduct' which defines the minimum standards that must be met by our suppliers, vendors, subcontractors and contract manufacturers, and compliance is reviewed at regular intervals. The communities in which we operate Why they are important to us Our employees live and work within wider communities, and relationships with these communities are key in supporting our business for the future. We aim to have a positive impact on the communities we serve, from supporting job creation and skills advancement, to reducing energy and water consumption at our plants. What we believe is important to them Our commitment to the local environment. Our conduct as a socially responsible organisation. The positive impact we can have on the community living and working around us. Employment opportunities. How we engage All our efforts and engagements are governed by the Morgan Code, our purpose and our policies on the environment. We want our employees to have the freedom to support what they care about most. We share these stories through our internal social media platform Viva Engage, where you will often see the generous spirit and nature of our employees -from bake sales to cultural celebrations and charity donations to sponsorship events. ‌Section 172(1) statement It is not always possible to provide positive outcomes for all stakeholders and the Board sometimes has to make decisions based on balancing the competing priorities of stakeholders. All of the Board's key decisions are subject to a Section 172 (of the Companies Act 2006) evaluation to identify the likely consequences of any decision in the long-term and the impact of the decision on our stakeholders. Details of our key stakeholders, how we have engaged with them during the year and the outcomes of that engagement are set out on pages 20 and 21 and are incorporated by reference into this Section 172(1) statement. Engagement activities specifically carried out by the Board collectively and individually can be found on page 65. Sale of MMS business We announced in August 2025 that we had entered into an agreement to sell MMS to Vesuvius plc ('Vesuvius'). The disposal continued our strategy of simplifying the Group's operations, accelerating organic growth and generating higher returns by focusing on specific faster growing markets, with the proceeds of the sale intended to further strengthen the balance sheet and reinvest in the core business. The total consideration payable to Morgan Advanced Materials was fi76.2 million. The sale completed on 12 November 2025. Stakeholder considerations Shareholders Improves the financial position of the Group and realises significant value for shareholders. Provides optionality both for investment in growth and enhanced shareholder returns in line with our capital allocation priorities. Employees Management focus on supporting employees affected by the disposal. The staff and senior management team of MMS transferred to Alongside the key decisions outlined below, the table highlights other sections of this Report which explain how the Directors have had regard to Section 172(1). (a) The likely consequences of any decisions in the long-term Our business model 08 Our strategy 07 (b) Interests of employees Our business model 08 Effective engagement with our stakeholders 20 Engaging with our workforce 64 Remuneration Report 78 (c) Fostering the Company's business relationships with suppliers, customers and others Market environment 10 Our business model 08 Effective engagement with our stakeholders 20 Our strategy 07 Impact of operations on the community and environment Our business model 08 Effective engagement with our stakeholders 20 Our strategy 07 A responsible business incorporating TCFD 26 Maintaining a reputation for high standards of business conduct Our business model 08 A responsible business incorporating TCFD 26 Non-financial and sustainability information statement 25 Risk management 41 Report of the Audit Committee 69 Our business model 08 Effective engagement with our stakeholders 20 Our strategy 07 Acting fairly between members of the Company Remuneration Report 78 Pausing of the share buyback programme In December 2025, we announced the intention to pause our buyback programme as part of our focus on balance sheet resilience. The programme was paused in January 2026 after the completion of the second tranche, by which time we had purchased fi20 million of shares. When considering the proposal to pause the programme, the Board considered the cash flow generated during the year, the strength of the balance sheet, as well as the ability to support future growth opportunities under the refreshed strategy and deliver increased returns to shareholders. Vesuvius to continue to run the business, providing continuity and support to affected employees. Customers Management focus on ensuring there was no disruption for customers throughout the transition. The decision to sell MMS followed a portfolio review. The review concluded that MMS's long-term future would be better served outside of the Group. MMS is highly complementary to Vesuvius's existing business, enabling customers to benefit from synergies with Vesuvius's existing business. Stakeholder considerations Shareholders Shareholders' expectations of the programme. Impact on distributable reserves and ability to pay dividends. Impact on capital available for future M&A. Lenders and debt holders Ability to stay well within financial covenant ratios and maintain financing headroom, ensuring revolving credit facility banks and private placement noteholders are not disadvantaged. Key decisions in the year Refreshed strategic plan The Board reviewed and agreed the refreshed strategic plan, ahead of the Strategy Update Event in December 2025. When reviewing the plan, during its development, the Board considered margin enhancement initiatives, financial targets, portfolio maximisation, internal and external risk factors, sustainability strategy and divisional growth plans, as well as the key roles of technology and talent. See page 62 for more information. Key to stakeholders Stakeholder considerations Shareholders: An interview-based perception audit of Morgan Advanced Materials' investor base was carried out and considered by the Board to ensure that the investor perspective was considered as part of the strategic review. The need to maintain a strong balance sheet and low leverage from which to invest in growth and increase shareholder returns. Employees: Focus on simplifying and improving the Group's operations and therefore our employees' experience. Empowering our employees to deliver the strategy and best serve our customers. Customers: Enhance customer experience and build strategic partnerships with our customers. More rigorous customer focus to ensure that the service we Approval of shareholder dividends We also announced in December 2025 that we would continue to provide regular returns to shareholders by maintaining, then growing the regular dividend with adjusted earnings cover of circa 2.5x, and provide additional returns of surplus capital to shareholders as appropriate. When considering the proposals to pay interim and final dividends during 2025, the Board considered cash generation, the performance of the underlying business and the long-term impact of paying the dividends on the liquidity and solvency positions. The Board also considered the impact of the dividend decisions on expectations relating to the dividend policy. The Board recommended a full-year dividend of 12.2 pence per share, with payment of a final dividend of 6.8 pence to shareholders in May 2026 and an interim dividend of 5.4 pence in November 2025. This recommendation reflected the Board's confidence in the Group's structural growth drivers into the future. The Board concluded that it was in the long-term interest of the Company to proceed with the payment of the dividends. Stakeholder considerations Shareholders Shareholders' expectations in relation to the payment of dividends, both from a capital return perspective and as a signal of future performance. The Board also considered the impact of the dividend decisions on expectations relating to the dividend policy. Lenders and debt holders The impact of paying dividends on whether the business remained within the financial covenants agreed with lenders. Employees For employees who participate in the Group's employee share schemes, the payment of dividends enabled returns for those employees. Key to stakeholders Investors Customers Suppliers Employees Communities Lenders and debt holders deliver to our customers matches the best-in-class quality of our products. Investors Customers Suppliers Employees Communities Lenders and debt holders ‌Section 172(1) statement continued Application of the capital allocation framework The Board applied the capital allocation framework below, when considering the relative priorities for the use of cash during 2025. Morgan Advanced Materials' capital allocation framework is used to prioritise the use of cash generated by the Group. The framework addresses the investment needs of the business, regular dividend payments and additional returns to shareholders. The framework also seeks to maintain an appropriate capital structure for the business and a strong balance sheet with solid investment grade credit metrics. The diagram below summarises the key priorities. Non-financial and sustainability information statement 'Our business model' on pages 8 and 9 provides an insight into the key resources and relationships that support the generation and preservation of value within Morgan Advanced Materials. All of our non-financial KPIs are presented together on pages 18 to 19. A summary of our principal and emerging risks, including those related to ESG matters, as well as a description of our risk management process, starts at page 41 . Committed to maintaining then growing the dividend with an adjusted earnings cover of circa 2.5x. Deliver regular cash returns to shareholders. Progressive Dividend Policy Capital spend to sustain our existing operations, drive efficiency, address limited capacity needs, and improve safety and environmental performance. Reinvest for organic growth Complementary, disciplined M&A focused on accelerating margin. Investment in structural changes and active portfolio management. Strategic investments Return cash through share buyback programmes or payment of special dividends as appropriate. Return excess cash to shareholders Areas of impact Employees The Group has an overarching policy designed to attract, develop, reward, retain and engage talented people and support an inclusive, safe and ethical workplace. The Group policy is supplemented by a number of people policies specific to the business or jurisdiction. Our Environmental, Health and Safety (EHS) Policy is designed to promote a culture of 'zero harm' for our employees, contractors and visitors, and eliminate and control health risks proactively. Related principal risks, pages 41 to 45 Environment, health and safety Business change and development Outcome of policies, due diligence and impact of activities Employee engagement is at 75%, from a survey conducted during the year LTA rate, the headline* measure for health and safety, was 0.18 Annual Report page references and relevant sections on our website Our people and communities (pages 30 to 31) Effective engagement with our stakeholders ( pages 20 to 21 ) Monitoring and embedding culture ( page 63 ) Engaging with our workforce ( pages 64 to 65 ) ESG policies ESG goals Health, safety and wellbeing Diversity, equity and inclusion Gender pay gap Our people and communities Capital allocation framework Morgan Advanced Materials has applied its capital allocation framework during 2025 as follows: 12.2p fi76.2m fi67.1m Maintained its full-year dividend Total consideration for the sale of MMS Investment in CAPEX at 12.2 pence Environmental matters Social and community matters Our EHS Policy sets out the Group's commitment to the protection of the environment in the communities where we operate, work and live. The Policy sets out our intention to reduce energy and water use, reduce our dependence on natural resources, protect biodiversity and aim to maximise the positive impact of our products. For our TCFD regulation disclosure, see our 'Responsible business' section on page 26. Our sites take ownership of local community engagement to support our strategic priorities and benefit local communities. External environment Environment, health and safety Business continuity Data gathering on GHG emissions Audits under the EHS Policy Annual self-certification Our 'Speak Up' hotline Internal audit processes Our business and our employees are more deeply connected to our local communities A responsible business, incorporating TCFD (pages 26 to 40) Environmental Policy Sustainability & Responsibility Report Climate action Water conservation TCFD Reporting A responsible business, incorporating TCFD Effective engagement with our stakeholders ESG policies Community Maintain a strong balance sheet with solid investment grade credit metrics Review the principal risks of the Group and relevant financial These risks and financial parameters are considered by the parameters, both historical and projected, including liquidity, Board when assessing the viability of the Group, as set out net debt* and measures covering balance sheet strength and on pages 53 and 54. cash flow. Human rights Our Human Rights Policy establishes our commitment to protect the human rights of everyone who works for the Group and all those who have dealings with us. The Policy is supplemented by the Morgan Code. Legal and regulatory No incidents of human rights abuse or modern slavery were identified during 2025 Monitoring of compliance with the Morgan Code Supplier due diligence processes Publication of our Modern Slavery Statement on our website Effective engagement with our stakeholders A responsible business, incorporating TCFD ESG policies ESG goals Modern Slavery Statement Human rights Ethics hotline Anti-bribery, and anti-corruption The Morgan Code; Bribery, Corruption & Facilitation Payments Policy; Gifts & Entertainment Policy; and Donations & Sponsorships Policy make up our key anti-bribery and corruption policies. Together these policies seek to prevent bribery and ensure that our business is undertaken in an ethical manner and in compliance with all applicable anti-bribery and anti-corruption laws. Legal and regulatory Regular training provided to employees, via e-learning modules, with high completion rates Any reports of breaches in compliance are investigated and reported to the Audit Committee, and appropriate action is taken Monitoring and embedding culture Risk management ( pages 41 to 45 ) Ethics and compliance Supplier Code of Conduct Strategic Report Governance Financial Statements Our environment Climate action Pursuing carbon neutral operations by 2050 A responsible business Alignment to strategy To improve the execution of our strategy and deliver our sustainability goals we have set three strategic execution We are committed to decreasing our carbon emissions and lowering our energy consumption. Our targets were validated as science-based (SBTi) targets in 2023 and are aligned with the well below 2°C ambition for our Scope 1 and Scope 2 commitment. To achieve this we are focusing on our operational efficiency and are actively evaluating alternative manufacturing technologies. Energy performance in 2025 Our Scope 1 and Scope 2 GHG emissions come from our manufacturing operations and represent the part of our footprint that we can directly influence by changing the way we use energy in our facilities. Scope 1 GHG emissions (tCO 2 e) from stationary fuel combustion were 106,088 tonnes and Scope 1 GHG emissions (tCO 2 e) from process and mobile emissions were 5,976 tonnes (of which process emissions were 5,655 tonnes). For 2025, total Scope 1 GHG emissions (tCO 2 e) were 112,064 tonnes, which is a 0.9% increase over 2024 values and 45.5% decrease over 2015 values. Market-based Scope 2 GHG emissions (tCO 2 e) 1 were 33,072 tonnes, which is a 21% decrease over 2024 values and 76% decrease over 2015 values. Our GHG emissions, such as carbon dioxide (CO 2 ), are mostly generated by the combustion of fossil fuels at various stages of our manufacturing processes. We track these using a reporting methodology based on Department for Environment, Food and Rural Affairs (DEFRA), which is applied globally Green energy procurement As part of our SBTi commitment, we have a target to procure 80% of our electricity from renewable and nuclear sources by 2025, reaching 100% by 2030. In 2025, we reached our SBTi target of 80% renewable and nuclear electricity. Our total energy consumption (fuel and electricity) was 897.4 GWh for 2025, which is 2% lower than 2024. We have put in place a number of long term contracts to secure our renewable and nuclear energy portfolio and continue to strive to get these contracts in place where possible. Assurance Our Scope 1 and Scope 2 GHG emissions and selected other environmental metrics for 2025 have been assured by ERM CVS. A copy of the assurance report can be found on our website at morganadvancedmaterials.com Our calculation methodology details can be found in the Basis for Reporting, which is available on request at [email protected] Our decarbonisation roadmap We continue to improve the efficiency of our gas-fired kilns whilst actively assessing the feasibility of green technology options for our material portfolio. For further information on our path to net zero, see page 38. priorities for the coming years: Transform operational effectiveness through safer, cleaner operations Health & Safety: Embedding robust safety practices and process safety management will reduce incidents, protect our workforce, and ensure uninterrupted operations, all critical for efficiency. Environment: Continued focus on environmental controls will minimise risks such as spills or emissions, safeguarding compliance and reputation. Sustainability: Streamlined operations will lower resource consumption and waste, driving cost savings and supporting our ESG commitments. Drive stronger growth by meeting market demand for sustainable solutions Health & Safety: Demonstrating a strong safety culture builds trust with customers and partners, making us a preferred choice. Environment: Offering solutions that reduce environmental impact aligns with customer sustainability goals, and creates new revenue streams. Sustainability: Co-developing sustainable practices through customer partnerships and supply chain engagement will support our position as a leader in responsible growth. Maximise portfolio value Health & Safety: Many of our products are integral to customer safety applications, meaning our commitment to safety directly enhances their operational reliability and risk management. Environment: Our technologies improve efficiency in customer processes, reducing energy use and emissions. Sustainability: By delivering solutions that combine safety, efficiency, and sustainability, we strengthen customer trust and differentiate our products. (2025 Version 1, published 10 June 2025). Energy mix Natural gas 55.7% Renewable and nuclear purchased electricity 33.1% Non-renewable, Standard Grid electricity 8.6% LPG/propane 1.7% Fuel oil 0.4% Green on site Generation 0.4% Steam/Other 0.1% 1. The Scope 2 emissions figure was calculated using the market-based methodology. The location-based figure for the same period is 144,130 tCO 2 e. 2 2 6 6 Morgan Advanced Materials / Annual Report 2025 27 Contents Our environment Our people and communities TCFD reporting 27 30 32 ‌Our environment continued Climate action (continued) Pursuing carbon neutral operations by 2050 Water conservation Managing our impact Energy efficiency projects of note in 2025 Thermal Products One of our major sites in the US has installed a new sitewide asset energy monitoring system. One of our sites in India has installed a more energy efficient water cooling system. One of our sites in France replaced a gas asset with a new electric annealing oven. Performance Carbon One of our sites in the US installed a more efficient thermal oxidiser system. Technical Ceramics One of our UK sites has installed photosensor controllers and has been working to systematically reduce firing temperatures. One of our sites in Germany has been focusing on more efficient furnace cycles and implemented a new, more efficient electrical dryer. Green energy generation projects Performance Carbon Solar farm on land adjacent to Performance Carbon plant in the US was completed. We aim to use water responsibly across our business. We use this valuable resource to cool our machines, clean our products and in our sanitary facilities for our workforce. We have targets to reduce water across all sites, and in water stressed areas in particular to ensure we are taking action in the regions where it matters the most. By improving our water usage, we have a positive impact in the communities where we operate. For 2025, the list of water-stressed countries includes Chile, China, India, Italy, Luxembourg, Mexico, South Africa, Spain, Turkey and the UAE. Our sites in the state of California, USA, are included in our water stress figures, based on water stress issues within the state. We have continued to make investments in closed loop cooling systems across our sites, making significant strides towards our 2030 goals. In 2025 we made further improvement in our total water withdrawal. This reduction was driven by our investment in water recirculation projects through 2023 and 2024, better operational efficiency practices and changes in product mix. Water withdrawal intensity was 1,383 m 3 /fim (revenue), compared to 1,459 m 3 /fim (revenue) in 2024. Examples of water reduction projects: Thermal Products One of our major sites in the US has introduced a system to recycle waste water from one process as an input into another. One of our major sites in the US has introduced dynamic water consumption monitoring to identify and reduce waste. Technical Ceramics One of our sites in the US has installed a closed loop water recycling system in plating area. Case study Largest investment in solar power activated In 2025 a Performance Carbon site in the US activated a 1.8 MW solar array which is the largest in our portfolio. The installation was complex, taking 13 months to complete and requiring significant preliminary work to prepare the site before construction could begin. The field will generate 93,000 MWh of electricity over its lifetime and power 12% of the sites annual electricity requirement. Case study Investment in closed loop system In 2025, our Thermal Products site in India replaced their conventional cooling system with a closed loop adiabatic cooling tower. The system will save approximately 3.6m litres of water, 39,600 kWh of energy and requires far fewer chemicals to treat the water. Case study Saving water by enabling reuse In 2025, one of our Technical Ceramics sites in the USA invested in a water recirculating system on their wash tanks. The new system more efficiently purifies the water before recycling it back to be used again. The new system saves approximately 2,000 gallons of water a day and the purification system means that any water that does leave the system is of a higher standard. Waste performance Case study Decarbonisation Roadmap on track During 2025, a new electric annealing oven was brought into operation at our Thermal Products site in France. A key part of our decarbonisation strategy, alongside other efficiency initiatives, this multi-year project delivered energy savings of 740 tonnes CO 2 emissions per annum. Through continuous improvement efforts we are reducing all hazardous and non-hazardous waste streams. Every year we set internal targets to reduce waste generation and increase recycling. This is achieved through activities such as Kaizen and 6S (Sort, Set in order, Shine, Standardise, Sustain and Safety) which focus on improving quality and eliminating waste. We are making good progress to reduce our waste generation, improve recycling and minimise hazardous waste. Waste and recycling Units 2025 2024 2023 2022 2021 Total waste generated metric tonnes 33,889 34,972 36,853 47,879 39,918 Waste generation intensity metric tonnes/fim 33 32 33 43 42 Total waste recycled metric tonnes 16,895 16,905 17,384 25,406 21,547 % recycling of total waste % 50 48 47 53 54 Hazardous waste generated metric tonnes 1,601 2,106 2,109 2,891 2,509 ‌Our people and communities Health, safety and wellbeing At Morgan Advanced Materials, safety is a shared responsibility. We rely on the expertise and commitment of our operational and safety teams to uphold high standards across our sites, ensure all incidents are thoroughly investigated, and implement effective controls to prevent recurrence. Actual and potentially severe incidents are reviewed biweekly with the Group CEO and Divisional Presidents. We recorded no fatalities in 2025 and have maintained this record since 2012. Our Group Environmental, Health and Safety (EHS) Policy -available in local languages - is supported by our Company EHS Framework, which guides sites in establishing robust local EHS processes. Compliance is assessed through our annual audit programme, and our ThinkSAFE programme continues to embed Visible Safety Leadership, Don't Walk By, and 'TAKE 5' behaviours across the business. Protecting our people from hazardous material risks remains central to our EHS approach. We assess and monitor controls, provide targeted training, and require each site to maintain an industrial hygiene monitoring plan to identify potential exposures and define appropriate mitigation. Progress in 2025 In 2025, we delivered quarterly safety topics focused on the business's key EHS challenges, reinforcing our ThinkSAFE commitment and the 'TAKE 5' programme message. We were disappointed to see that our LTA rate increased to 0.18 in 2025. Through accident and incident root cause analysis we identified a skills gap among frontline site leaders in balancing safety leadership with production and people responsibilities. In response, we launched the ThinkSAFE Leaders programme to strengthen safety leadership capability and reinforce expectations for sustaining a proactive safety culture. To enhance clarity on safety risk management requirements, we introduced new safety standards and guidance, supported by site-level gap analyses. Compliance audits will begin in 2026 to assess adoption and effectiveness. We also launched our Process Safety Risk Management framework, identifying all major accident hazards across the business. We are now conducting process hazard analyses for all high-risk processes and providing organisation-wide training to embed strong process safety practices and reduce the likelihood of serious events. As a result of this work to clarify and standardise safety performance, we are now able to report additional safety metrics. These give additional insight into our safety performance and will be important in tracking the overall maturity of our safety programme. New safety metrics (all rates per 100k hours worked) 2025 Units Full Year Our safety plans for 2026 and beyond In 2026, we will complete the roll out of the thinkSAFE Leaders programme, to strengthen our operational safety leadership. Closing this skills gap will be central to improving our safety performance and maturing our safety culture. We will also improve our incident investigation process, through training, by strengthening root cause analysis capability and ensuring we are taking the learning opportunities that arise from events and then provide thorough follow up of corrective actions. We will continue to perform and build on the findings of Process Hazard Analyses studies to deepen process safety knowledge, implement improvement actions, refresh maintenance programmes and roll out enhanced, localised process safety training. Alongside this, we will focus on reviewing and improving the actions driving our leading indicators, to maximise their effectiveness and ensure the actions taken positively impact on our safety performance. Community In 2025 our sites engaged in a number of community projects as follows: Our Penn State Carbon Centre of Excellence (CoE) team were busy igniting curiosity and hands-on learning in local schools, engaging students from elementary level to college. The team welcomed students to the CoE to explore cutting-edge carbon products, from wind turbine brushes to wheel flange lubricants, while witnessing the science behind them through dynamic demonstrations. Our Fostoria, Ohio, USA team came together to support the Seneca Humane Society through a generous donation drive. Employees collected essential items to help improve the lives of animals in need. Our MMTCL team in India, donated a blood transportation van to the Red Cross. This contribution represents a meaningful investment in community health, aligning with the humanitarian values of our team; to improve the quality of life. Our Atlacomulco, Mexico team reaffirmed their commitment to education and development as key pillars for the future, by hosting a scholarship award ceremony for the children of their employees. On the day, the scholarship beneficiaries enjoyed a guided tour of the Atlacomulco facilities, where they learned about the site's production processes and saw the effort and dedication of their family members in action. This programme recognises the commitment of the families that are part of Morgan Advanced Materials, while supporting the next generation in achieving their academic goals. For safety week, Our team in Argentina got family members involved. Focusing on fire safety through creative artwork, the children of the site's employees reminded everyone that safety begins at home, grows at work, and lives in each of us. While our Jingmen City, China team organised fun games to promote fire safety knowledge and emergency evacuation. Diversity and inclusion We are committed to creating a diverse and inclusive culture as our people are the driving force behind our success. We aim to be open and engaging to all. In 2025, our Women@Morgan employee resource group tackled key health subjects that face men. Organising health related talks on prostate cancer and men's mental health. Our Erlangen, Germany team welcomed five new apprentices joining us on a three and a half-year scheme. The 2025 apprentice group will spend half of their time in practical training with us, and the other half attending college classes. They finish with an official German government degree and are recognised as highly skilled co-workers. You can find examples of our engagement on LinkedIn. In 2025, Women@Morgan continued empowering women globally, by increasing internal engagement through topics relevant to all employees. We marked International Women's Day with a well attended online webinar on allyship, alongside on site celebrations such as female empowerment film screenings and the King's Trust 'Brilliant Breakfast' initiative. Throughout the year, we delivered additional virtual sessions covering men's mental health, caregivers, and prostate cancer, with plans to address common female health conditions in 2026. Our Women@Morgan country chapters also maintained regular meetings and activities focused on their local priorities and community initiatives. You can find examples of our engagement on our website: morganadvancedmaterials.com Gender pay gap reporting The UK Government introduced gender pay gap reporting regulations for companies with more than 250 employees. The phrase 'gender pay gap' refers to the difference in the average earnings of men and women within the same organisation. In 2025, the average gender pay gap for our UK workforce was 16.0% (17.6% in 2024). Our full Gender Pay Gap Report is available on our website. We met the Board diversity targets set out in the Financial Conduct Authority's Listing Rules: our Board composition was 50% female, and the role of Senior Independent Director was held by a woman. Female 39% (2024: 33%) 19 Male 61% (2024: 67%) Senior leaders 30 Senior leaders Female 39% (2024: 36%) 3,192 Female 25% (2024: 33%) Female 36% (2024: 34%) All Employees 2 Male 61% (2024: 64%) Female 50% (2024: 43%) Executive Committee 4,896 Male 75% (2024: 67%) Male 64% (2024: 66%) All Employees 6 150 All leaders 4 Female Board 267 Male 50% (2024: 57%) Executive Committee All leaders 4 Male Board Workforce by gender: Members as at 31 December 2025 Total Recordable Injury (TRI) Rate Rate 0.41 Process Safety Incident Rate Rate 0.21 Total Recordables included in TRI Rate calculation based on OSHA record keeping criteria applied globally. Process Safety Incidents only include Actual Process Safety Incidents (not Near Misses) ‌Task Force on Climate-related Financial Disclosures (TCFD) reporting Our disclosures within this Annual Report are consistent with TCFD recommendations and the recommended disclosures as required by the UK Listing Rules 6.6.6R(8). These disclosures also comply with the requirements of the Companies Act 2006 as amended by the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and UK Government Climate-Related Financial Disclosure guidance. We consider our climate related financial disclosures to be consistent with eight of the eleven recommendations, which are set out in the table below. We are adopting an explain stance for 'Strategy' requirements b) and c), and 'Metrics and Targets' requirements b). Summary of disclosures: Under the strategy pillar we have modelled our most material risks under a range of scenarios and identified the tactical and strategic mitigations needed to continue to deliver on our strategy. Financial impacts have been assessed and are presented in this Report but do not encompass all transition aspects such as changing stakeholder expectations. To improve our metrics and targets reporting, in 2024 we developed a full Scope 3 inventory, marking a significant improvement in our reporting methodology and accuracy. We are continuing to refine this and we will share the results once appropriate third party validation has been obtained. ESG Governance structure Board Governance Describe the Board's oversight of climate-related risks and opportunities. 33 Describe management's role in assessing and managing climate-related risks and opportunities. Strategy Describe the climate-related risks and opportunities the organisation has identified over the short, 34 - 38 medium and long term. Describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy and financial planning. Describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios including a 2°C or lower temperature scenario. Risk management Describe the organisation's processes for identifying and assessing climate-related risks. 39 Describe the organisation's processes for managing climate-related risks. Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation's overall risk management. Metrics and targets Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line 39 - 40 with its strategy and risk management process. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. Section Requirements Page EHS&S leadership teams Workstream SteerCo Divisional leadership teams Initiatives Executive Sustainability Council Nomination Committee Remuneration Committee Audit Committee Board and Management oversight of climate-related risks and opportunities Governance Our climate-related risk and opportunities governance structure starts with the Board, and cascades down through the organisation, as outlined in the table below. Our Board has oversight of our climate change, environmental and corporate responsibility matters and ensures that our Executive team progresses as planned to meet our commitments and goals. The Board receives a written update from the Group Director for Environment, Health, Safety and Sustainability four times a year on progress against climate-related activities and actions. A presentation and discussion of climate-related matters is included as a standing topic in the CEO's report to the Board. The impact of major capital expenditure projects on our 2030 environment goals is also assessed as part of the Board review process. The metrics reviewed at each meeting include: Board of Directors Frequency: Four times per year. Chair: Ian Marchant. Attendees: Main Board Has oversight of our climate change, environmental and corporate responsibility matters to ensure our Executive team progresses as planned to meet our commitments and goals. Climate-related risks and opportunities are a scheduled Board agenda item four times per year and progress on environmental matters is reviewed four times per year, with updates on CO 2 e and water progress in each meeting. The competencies of the Board can be found on pages 57 and 58 of the Annual Report, which includes skills and experience relevant to clim ate matters. Nomination Committee Ensures the Board possesses the correct depth and balance of capabilities to support the Group's long-term position, including the expertise to assess the impact of climate change. Audit Committee Supports the Board on matters relating to financial reporting, internal control and risk management. The Committee reviews the integrity of the Group's climate-related financial reporting and the process used to develop our TCFD-aligned disclosures and assesses climate-related risks for the purpose of monitoring management's progress in addressing them. Remuneration Committee Responsible for Remuneration Policy, including the inclusion of sustainability-linked metrics and targets within performance-related pay. GHG emissions targets are part of our Long-Term Incentive Plan (LTIP). Executive Sustainability Council Frequency: Four times per year. Chair: Damien Caby. Attendees: Executive plus Group Function Senior Reps and Workstream Initiative Leads. Responsible for execution and monitoring of the sustainability strategy, including environmental and corporate responsibility matters, and the processes and controls regarding climate risks at a Group-level. Includes Divisional Presidents. Provides strategic direction, secures investment and resources. Provides oversight and decision-making across the workstreams, manages escalation with a focus on outcomes and benefits. Workstream SteerCo Frequency: Bi-monthly Chair: Group Finance Director. Attendees: Initiative Leads, Group EHS&S Director, Group ESG Manager, Group Risk Lead, Divisional ESG Leads, Group Head of FP&A, Group Comms Director. Monitors delivery against our net zero strategy through various workstreams, manages dependencies across projects. Resolves risks and issued raised and identifies escalations. Reports to the Executive Sustainability Council. EHS&S leadership team Led by the Group Director EHS&S and comprising EHS&S leads from each of the divisions, the team meets monthly to review strategy implementation and performance against 2030 targets. Divisional leadership teams Each division has a leadership team and they are responsible for sharing, reviewing and managing of both principal and emerging risks including climate risks. This includes related policy, guidelines and process, and is subject to Board oversight. The divisions develop business-specific risk registers and business continuity plans which are used in their annual strategic planning. These are presented to the Audit Committee and Executive Committees. The individual divisions monitor their own performance against ESG targets and implement climate-related policies and projects. Representatives from the divisional leadership teams are members of the Workstream SteerCo to ensure smooth rollout of workstream-related projects in the division. Initiatives Frequency: As required. Chair: Initiative Lead. Attendees: Divisional Functions, Group EHS&S, Finance as appropriate. progress towards our 2030 absolute Scope 1 and Scope 2 CO 2 e emissions target; and progress towards our 2030 water withdrawal and water stress targets. During 2025 the Board received external training on Corporate sustainability, including an update on the legislative landscape and quantitative examples of creating value from climate-related risks and opportunities. The Board received four internal updates from the Group Director EHS&S on the Group's sustainability strategy and progress against an in-year plan. ‌Task Force on Climate-related Financial Disclosures (TCFD) reporting continued Strategy Identification of risks and opportunities In late 2020, we conducted a comprehensive materiality assessment to establish our ESG priorities up to 2030. We obtained feedback from our Board and surveyed over 160 senior business leaders to determine what ESG means to our organisation. Additionally, we gathered input from internal and external stakeholders and assessed our business performance against key ESG topics. Based on this information we identified our sustainability impacts on the environment and society as well as the risks and opportunities that were material to our business, and set ambitious goals for the future. During 2025, we reviewed this materiality assessment....

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