Annual Report & Accounts 2025

Unlocking our potential

Annual Report 2025

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

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

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.

1. 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.

2. 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.

3. 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.

4. Reduce scope 1 and 2 CO2emissions 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.

5. 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...

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.

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.

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

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 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)% OCC1

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 CO2emissions.

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

CO2e scope 1 and 2 emissions (metric tonnes) Total water withdrawal (million m3) Water withdrawal in water stressed areas1 (m3)

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 tCO2e, 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 m3; 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 331,175m3. This is 3% lower than 2024 and 23% lower than our baseline, reflecting better water management practices

1. 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) rate2 Female representation in leadership3 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

2. 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

3. 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

4. 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).

1. 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

2. 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

3. 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.

Complementary, disciplined M&A focused on accelerating margin.

Investment in structural changes and active

portfolio management.

Return cash through share buyback programmes or payment of special dividends

as appropriate.

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

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

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

Our environment

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 (tCO2e) from stationary fuel combustion were 106,088 tonnes and Scope 1 GHG emissions (tCO2e) from process and mobile emissions were 5,976 tonnes (of which process emissions were 5,655 tonnes). For 2025, total Scope 1 GHG emissions (tCO2e) 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 (tCO2e)1were 33,072 tonnes, which is a 21% decrease over 2024 values and 76% decrease over 2015 values.

Our GHG emissions, such as carbon dioxide (CO2), 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 investor.relations@morganplc.com

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

Drive stronger growth by meeting market

demand for sustainable solutions

1. Health & Safety: Demonstrating a strong safety culture builds trust with customers and partners, making us a preferred choice.

2. Environment: Offering solutions that reduce environmental impact aligns with customer sustainability goals, and creates new revenue streams.

3. 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

1. 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.

2. Environment: Our technologies improve efficiency in customer processes, reducing energy use and emissions.

3. 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

1. The Scope 2 emissions figure was calculated using the market-based methodology. The location-based figure for the same period is 144,130 tCO2e.

2266 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 m3/fim (revenue), compared to 1,459 m3/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.

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 CO2emissions 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

‌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

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

Section Requirements Page

EHS&S leadership teams

Workstream SteerCo

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:

progress towards our 2030 absolute Scope 1 and Scope 2 CO2e 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. We engaged a number of key internal and external stakeholders, to ensure the topics identified remained relevant, and to better understand our business strategy and resilience. Having considered the all-sector and sector-specific risks and opportunities in Tables A1.1 and A1.2 in the TCFD guidance, the information in the table on page 35 summarises our material risks and opportunities across the appropriate time horizons.

Climate-related risks and opportunities

Climate-related risks and opportunities could impact the Group strategy over the short, medium and long term. These are aligned with our broader risk assessment criteria and are defined as follows:

Short term (0-3 years). Detailed financial plans are developed, incorporating the strategic spending requirements to decarbonise our business and realise growth opportunities.

Medium term (3-10 years). Aligns with our 2030 ESG targets. Each division is developing transition plans within this time horizon to realise these targets.

Long term (10-25 years). Aligns with our 2050 ESG ambitions. In this time horizon we expect to see a significant shift in technologies to allow us to decarbonise our business but realise that significant uncertainties exist and must be considered when developing long-term transition plans.

Through a review of our Materiality Assessment in 2025 we have appraised our climate related risks over the short term, and the potential impacts were concluded to not be material.

We have therefore focused our detailed scenario analysis over the medium-term and long-term and prepared the management responses on the same basis.

We recognise the importance of scenario analysis in the development of our strategy. During the 2025 strategy plan review, the glidepath to reduce reliance on natural gas was reviewed by all of the Divisions.

In the short term, the business focus is on efficiency improvements while the technology teams and global kiln working group conduct pilot studies to validate emerging green technologies. Development of a glidepath aligned with the revised group strategy will be a focus for 2026, where the global kiln working group will be leveraged.

Scenarios chosen

We have assessed the potential likelihood and impact of relevant climate-related risks and opportunities across a range of scenarios, as set out in the table below.

Transitional risks: The business reliance on natural gas. We have modelled the potential financial impact of GHG taxes using our 10 sites that have the highest GHG emissions output.

Physical risks: We consider Heat Stress and Water Stress to be the most significant physical climate change risks for the Group. We have considered the financial impact of Heat Stress and/or a Water Stress incident for the top 25 applicable sites. Our applicability assessment considers revenue, GHG emissions,

water consumption and whether the site is located in a geography or region that is likely to be exposed to a water stressed region. We have also modelled the financial impact from sea level rise and coastal flooding events for nine sites which were selected due to their low lying locations and proximity to the coast.

During the 2025 strategy review, each division reviewed their glidepath to reduce reliance on natural gas. In the short term, the business remains focused on efficiency improvements. Our technology teams and global kiln working group are conducting pilot studies to validate emerging green technologies which may support more meaningful reductions in the longer term. During

2026, we will focus on developing glidepaths that are aligned to the Group's revised strategy and we will leverage the work undertaken by our global kiln working group.

Risk likelihood (Transitional or Physical)

Optimistic trajectory based on current government pledges

Risk

Medium term

Long term

Low to moderate

Low to moderate

Climate change action is limited initially but stronger actions follow

Risk

Medium term

Long term

Low toLmowoderate

Low toLmowoderate

Low to moderate

Very limited steps are taken and warming continues unchecked

Risk

Medium term

Long term

Low to moderate

Summary of scenarios

A range of scenarios were chosen to explore the impact from a range of possible outcomes. The likelihood in each case was assessed and factored into the results.

Scenario Deep and rapid cuts Current trajectory Unchecked pollution

Temperature <2°C 2-4°C >4°C

Description the optimistic trajectory based on government pledges.

medium-case scenario where warming is somewhat limited.

no steps are taken to limit warming. Global collaboration focuses on protecting the population.

Financial impact

Likelihood High Medium Low

IEA/IPCC* APS**, SSP 1-2.6 SSP 3-7.0 SSP 5-8.5

* IEA - International Energy Agency, RCP - Representative Concentration Pathway

** Announced Pledges

Negligible

(fi0-fi0.1m)

Low

(fi0.1-fi1m)

Moderate

(fi1-fi5m)

High

(fi5-fi10m)

Significant

(fi10-fi20m)

Critical

(>fi20m)

‌Task Force on Climate-related Financial Disclosures (TCFD) reporting continued

Risk/opportunity description Management response

Opportunities Climate driven opportunities and their impact on our strategy

Our customers' exposure to carbon pricing creates opportunities for Morgan Advanced Materials. Our thermal management solutions help customers maximise efficiency and minimise carbon footprints. This is a critical advantage in regulated markets.

We also see significant transition opportunities in sectors affected by global climate policy. Success depends on understanding customer needs and tailoring our offering accordingly. Some markets seek partners aligned with their sustainability goals, while others focus on regulatory compliance. Our strategy is to serve both ends of this spectrum - and everything in between.

Opportunity description Management response

Impact of risks and opportunities on the business strategy Climate-related risks

As we execute our strategy, we recognise that increased production could lead to higher emissions, creating long-term exposure to carbon taxes across all scenarios. To mitigate this, we are strengthening our transition plan, ensuring robust management of emissions and other critical resources such as water. Failure to proactively implement our decarbonisation roadmap could impact our ability to execute strategy effectively.

Currently, only two sites operate under emissions trading schemes. However, we anticipate broader exposure to carbon pricing instruments and potential challenges in accessing affordable renewable energy in the future. Proactive planning is essential

to safeguard our ability to deliver on strategy.

In the short to medium term, climate considerations are embedded in financial planning decisions, including:

Renewable and nuclear electricity tariffs: Continuing investment where feasible, despite rising energy costs. In 2025, our consumption of renewable and nuclear electricity rose to 80% from 75% in 2024.

Self-generation projects: In 2025, we commissioned a 1.8 MW solar field at a Performance Carbon site in the US which is our largest investment to date. The project, costing fi2.8 million, includes 4,264 panels and significantly boosts our renewable capacity.

On-site renewable generation: In total, we generated 3.5 GWh of renewable electricity in 2025, more than double the level of renewable electricity generated in 2024.

Physical risks such as heat stress, water stress, and sea level rise currently have limited impact on business strategy but remain integral to decisions.

‌Task Force on Climate-Related Financial Disclosures (TCFD) reporting continued

Business resilience

In considering our climate-related risks and opportunities under these scenarios, we believe our business model and strategy is sufficiently resilient to climate change. Our current assessment indicates that the impact of climate-related issues has not significantly impacted our financial performance or financial position, and we do not anticipate that it will in the short to medium term.

Our global footprint, strong market positions, and diverse portfolio are our strengths. Our customer base is widely spread. We largely make products where we sell them with localised supply chains.

In the event of a local shock, manufacturing of product could be transferred to other sites within the division or Group.

Our scenario analysis around our natural gas reliance allows us to plan for changes in operating costs and balance our global manufacturing strategy.

As part of our strategic planning process in 2025, we have further embedded climate considerations into our financial and strategic planning processes through the piloting of a shadow internal carbon price (ICP) on capex. Although the ICP is not a real cost of the investment, it demonstrates what the impact would be of carbon taxation forecast for 2030, and we will use it to evaluate and compare potential investments. During 2025, the ICP was trialled as part of our capital investment business case assessment process.

Our net zero roadmap

This will be rolled out to all capital investment business cases reviewed at an executive level in 2026.

Therefore, the climate-related threats and opportunities identified are emerging and/or operational risks that will continue to be monitored and evaluated. The most significant risks have been integrated into functional and divisional risk registers and they are reviewed by risk owners.

Transition plan

The risks and opportunities considered by the Board have directly informed our strategy to deliver on our 2030 goals. These form the foundation of our net zero roadmap to ensure we achieve our

targets. We are mindful that external factors may have an impact on our transition plan and we are monitoring geopolitical trends with respect to climate change commitments.

We are making good progress. We have transitioned a number of lower temperature furnaces and ovens from natural gas to electric firing with good results and have reduced water usage considerably through recycling. We are utilising the global kiln working group to develop decarbonisation pathways for key products, gaining an improved understanding of the technology availability and the cost. We now understand our Scope 3 position and the opportunities in more detail, leveraging supplier assessments to understand their maturity and ensure alignment with our ambition.

Risk management

The Board recognises the need to understand and assess climate-related risks. Risk management and internal control are fundamental to achieving the Group's strategic objectives. Principal and emerging risks are identified both 'top-down' by the Board and the Executive Committee and 'bottom-up' through the divisions and central functions. Senior executives including the CEO and Executive Committee are responsible for the management of the Group's principal risks, including climate related-risks. Further details on

our procedures for identifying, assessing, and managing risk can be found on pages 41 and 42, in the 'Risk management' section of our Annual Report.

Our Workstream Steering Committee meets bi-monthly to oversee management of our most significant environmental and climate-related risks.

The senior management teams for the different divisions are responsible for developing risk mitigation and management strategies for the risks identified for their individual businesses.

Each risk is assessed to determine its potential financial impact, and potential likelihood of materialising. Mitigating controls are identified and assessed to derive a net risk score, used for risk prioritisation.

Climate change is captured as part of the new combined principal risk, External environment, which covers transition and physical term risks listed on page 43 in the 'Risk management' section of this Report.

The Board reviewed the preparedness of Morgan Advanced Materials to the principal risks with a significant potential impact at Group-level twice during 2025. Additionally, the Audit Committee carried out a focused risk review of each division. These reviews included an analysis of the principal risks, and the controls, monitoring and assurance processes established to mitigate those risks to acceptable levels. The overall risk from climate change was assessed to have a high severity rating.

Metrics and targets

We have reflected on the most appropriate metrics and targets to help us manage our climate risks and opportunities effectively.

These are identified in the management response table on page 36 and and their values are summarised here. We have had our Scope 1, Scope 2 & Scope 3 targets independently verified by

the Science Based Targets initiative to ensure that our ambition is aligned with the UN Paris Agreement on climate change well below 2°C scenario.

Our commitments are as follows:

Morgan Advanced Materials commits to reduce absolute Scope 1 and Scope 2 GHG emissions 50% by 2030 from a

2015 base year1;

Morgan Advanced Materials also commits to increase active annual sourcing of renewable and nuclear-backed electricity from 0% in 2015 to 80% in 2025 and 100% by 2030; and

Morgan Advanced Materials further commits to reduce absolute Scope 3 GHG emissions 15% by 2030 from a 2019 base year.

Remuneration Committee integration of targets into Long-Term Incentive Plan

Sustainability measures represent 15% of total LTIP awards for Executive Directors, and these are linked directly to the business metrics for Scope 1 and Scope 2 GHG emissions. The balance of the award is focused on financial performance measures.

Preparing for the future

Our net zero roadmap also incorporates Scope 3 emissions. In the near term, we are focused on identifying the largest Scope 3 contributors and the solutions that will help us decarbonise. Over this period we will:

Convert some low temperature furnaces to electricity. Develop Scope 3 emissions strategy.

Undertake lifecycle assessment on key products. Refine divisional decarbonisation glidepaths.

80% of our electricity will be renewable and nuclear.

Develop engineering solutions to increase energy efficiency and water recycling.

Include a shadow carbon price in capex business cases. Invest in R&D for carbon-free furnaces.

Scaling up

We will begin to invest in decarbonising our business and value chain. We will:

Install pilot carbon-free furnaces.

Increase conversion of lower temperature furnaces to electricity.

Work with our value chain to reduce Scope 3 emissions.

Invest in key technologies

Invest in new technologies to transition the business to a greener future.

We will reduce our Scope 1 and 2 emissions by 50%.

We will source 100% renewable and nuclear-backed electricity.

We will reduce our Scope 3 emissions by 15%.

We will convert higher temperature furnaces to electricity/alternative low carbon fuel.

We will work with our value chain to further reduce Scope 3 emissions.

We will convert remaining furnaces to carbon-free alternatives.

Our ambition is to reach net zero Scope 1 and Scope 2 emissions by 2050.

2030

2050

2027 2025

1. The target boundary includes biogenic land-related emissions and removals from bioenergy feedstocks.

   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 website2.

   Scope 1 and Scope 2 GHG emissions are reported from manufacturing/production sites only, accounting for approximately 93.6% of Morgan Advanced Materials' operational control based on personnel headcount distributed by sites globally.

   In 2024, a comprehensive Scope 3 inventory exercise and subsequent development of improved reporting methodology was completed. Our screening exercise, across all relevant categories, used spend and/or volume based data which was retrieved from the Company's ERP3 systems and/or finance systems, with updated emission factors taken from appropriate sources. Following the improvement to our methodology, we will take steps to validate this data before re-validating with SBTi and publishing the values.

2. https://www.morganadvancedmaterials.com/ESGAssurance/

3. Enterprise Resource Planning.

   ‌Task Force on Climate-Related Financial Disclosures (TCFD) reporting continued Risk management

   Streamlined energy and carbon report

   This report summarises our energy usage, associated emissions, energy efficiency actions and energy performance under the government policy Streamlined Energy & Carbon Reporting (SECR); see table below. This is implemented by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. Also, it summarises in the appendix, the methodologies utilised for all calculations related to the elements reported under energy and carbon. Morgan Advanced Materials plc is a UK incorporated business and is also a main-market listed company. Under SECR legislation we are

   Methodology

   This report (including the Scope 1 and Scope 2 consumption and CO2e emissions data) have been developed and calculated using the GHG Protocol - A Corporate Accounting and Reporting Standard (World Business Council for Sustainable Development and World Resources Institute, 2004); Greenhouse Gas Protocol - Scope 2 Guidance (World Resources Institute, 2015); Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance (HM Government, 2019).

   Global Scope 2 calculations have been developed using a combination of sources - e-Grid for US locations; AIB (2024

   We have an established risk management methodology which seeks to identify, prioritise and manage risks, underpinned by a 'three lines of defence' model comprising internal control frameworks, internal monitoring and independent assurance processes.

   Identifying and managing risk

   mandated to include energy consumption, emissions, intensity metrics and all energy efficiency improvements implemented in our most recent financial year, for our UK operations. An operational boundary has been applied for the purposes of the reporting.

   For specific examples of actions taken within the year to reduce energy consumption please refer to page 28.

   Responsible business

   version) where available for European countries, and IEA 2024 emission factors in all other cases globally. DEFRA Emissions Factor Database 2025 version 1 has been used across the majority of Scope 1, utilising the published kWh calorific value (CV) and kgCO2e emissions factors relevant for reporting period for the

   year ending 31 December 2025.

   The Board considers that risk management and internal control are fundamental to achieving the Group's strategic objectives. Principal and emerging risks are identified both 'top-down' by the Board and the Executive Committee and 'bottom-up' through the divisions and central functions. Senior executives are responsible for the strategic management of the Group's principal and emerging risks, including related policy, guidelines and processes, subject to Board oversight.

   Risk management governance

   Not all the risks identified as part of our risk management processes are considered principal risks. Principal risks are individual risks, or a combination of risks, which could result in circumstances that might threaten the Group's reputation or business model, its future performance, solvency or liquidity. As with all businesses operating in a dynamic environment, some risks may not yet be known, whilst other low-level risks could become material in the future.

   Principal and emerging risks formally reviewed throughout the year by the Board and the Audit Committee. Risk appetite discussed and threshold for principal risks agreed. Overall system of risk management reviewed by the Audit Committee on behalf of the Board.

Scope 1 and Scope 2 emissions and streamlined energy and carbon reporting

'Speak Up' hotline

Audit reports

Units 2025 2024 2023 2022 2021

Divisional management and central functions

(Divisional leadership team and Group-level functions)

Independent assurance

(Internal audit and other independent assurance providers)

First line of defence

Second line of defence

Third line of defence

Test of design and effectiveness of procedures and controls

Policy self-certifications Fraud risk assessments Divisional-level risk registers Risk and control monitoring

Implement policies Operate controls

Employee behaviours in line with the Morgan Code

1. Biogenic emissions result from the combustion of biological materials. These are considered carbon neutral and therefore reported separately. Emissions were calculated using the UK Government GHG Conversions Factors for Company Reporting (2025 version).

Risk appetite

Our process aims to mitigate the significant risks faced by the Group in accordance with our risk appetite. During the biannual Board risk review, the Board led discussions on risk appetite, taking into account principal risk trends and movements, ensuring alignment with the Group's strategic objectives and the evolving risk landscape.

Emerging risks

Emerging risks are 'new' risks that have the potential to crystallise in the future, but are unlikely to impact the Group during the next year. The potential future impact of such risks are often uncertain. They may begin to evolve rapidly or simply not materialise.

Key emerging risk

Generative artificial intelligence: The Group is monitoring developments in regulatory requirements of generative artificial intelligence, its potential wider impacts on our business model

and strategy, as well as evaluating appropriate mitigating measures.

‌Risk management continued

Risk analysis during the year 2025 risk and control assessments

During 2025, the Board undertook a comprehensive review of the Group's overall risk profile, which involved detailed discussion of risk assessment outputs provided by the divisions and central functions. This included deep dives into principal risks and horizon scanning, identifying emerging risk themes. The Board actively

Advancing documentation of controls and assurance processes.

Planning internal controls assessment "dry runs" ahead of the formal declaration included in the 2026 Annual Report & Accounts.

Changes in principal risk disclosures

There were no fundamental changes to the Group's principal risks during the year; however, risk narratives were refreshed to reflect

Principal risks and uncertainties Strategic impact

Transform

A. External environment

Strategic impact:

Risk trend:

Drive Maximise

Risk trends

Adverse Unchanged Favourable

engaged in discussions on risk trends and mitigation strategies,

ensuring alignment with the Group's strategic objectives for 2025 and beyond.

Members of the Board, Audit and Executive Committee received regular updates on the Group's principal risks and the steps taken to mitigate any potential impacts throughout the year, supplemented by thematic reviews and assurance reports from internal and external sources.

Material control activities

In preparation for compliance with Provision 29 of the 2024 UK Corporate Governance Code, the Board oversaw readiness efforts that included:

Setting up a project team to identify material controls and link them to principal risks.

Conducting gap analyses and implementing enhancements to control frameworks as needed.

Risk heatmap (net risks)

evolving external conditions and internal priorities. Specific updates included:

Enhanced commentary on IT infrastructure and security, reflecting increased sophistication of cyber threats.

Greater emphasis on supply chain resilience and cost inflation pressures.

Following enhancements to control frameworks, contract management risk has been removed as a standalone principal risk. It continues to be managed as part of our operational risk framework.

Principal risks heatmap

The heatmap below illustrates the relative residual positioning of our principal risks from the perspective of potential impact, and potential probability after mitigating controls.

Risk description and drivers

Events outside of the Group's control, such as geopolitical and macro-economic concerns, as well as other global events, such as pandemics and natural disasters, could adversely affect the environment in which we operate, and we may not be able to manage our exposure to these conditions and/or events.

These events could lead to; fluctuation in commodity prices and high inflation, potential for conflict or broader political issues, as well as introduction of tariffs and/or taxes. This could adversely affect customer demand, the financial performance of the Group or cause sudden and unanticipated disruption to the Group's supply chain and wider operations.

Global climate change poses a number of medium-term and longer-term challenges for our business. Climate-related risks are addressed in greater detail on pages 32 to 40.

Key controls and mitigation

We remain alert to the current geopolitical and macro-economic uncertainty and continue to monitor the potential impact on our business operations, as well as the broader markets we serve.

The Group's diversified global footprint mitigates against geopolitical shocks.

Regular monitoring of order books, cash performance, cost-control and other leading indicators to identify adverse trading conditions.

Onboarding of dual source suppliers and alternative materials where available.

Group Business Continuity Plan Policy, requiring appropriate planning at our highest risk sites.

Trend commentary

Impact

Escalating geopolitical tensions and macro-economic instability are creating a highly volatile operating environment. Conflicts and political uncertainty are leading to the introduction of tariffs and taxes, while global events such as natural disasters add further unpredictability. These factors are driving fluctuations in commodity prices, sustained inflationary pressures, and sudden disruptions to supply chains, all of which can adversely impact customer demand, financial performance, and the Group's ability to maintain operational continuity.

B. Business change and development

Strategic impact:

Risk trend:

Probability

Key Risk title Risk trend since last Annual Report 2025 2024

A

B

External environment

Business change and development

Adverse

Adverse

1. Business continuity Favourable

2. Environment, health and safety (EHS) Unchanged

   
   
   

3. IT infrastructure and security Unchanged

4. Legal and regulatory Unchanged

5. Key finance processes Unchanged

Risk description and drivers

The Group has a number of high-impact, strategically important transformation initiatives underway, temporarily increasing the risk trend; these initiatives require changes to systems, operational processes and organisational structures.

Failure to manage these projects successfully could result in disruption to daily operations, employee fatigue and could require significant execution involvement from management, serving as a distraction from other strategic priorities.

If this risk was to materialise, it could mean that anticipated benefits were not delivered, or were not delivered in accordance with anticipated timelines.

Key controls and mitigation

Central and divisional project governance deployed, including Executive Committee and Board oversight of changes where required.

Dedicated project managers overseeing project implementations.

Regular monitoring and challenge of project overruns, expected improvements and savings against budgets.

Trend commentary

The Group has a number of significant transformation programmes underway. They introduce complex changes to systems, processes and organisational structures. These initiatives increase execution risk and resource strain, creating potential for delays, cost overruns and disruption to core operations. While strong governance and dedicated project management are in place, the scale and interdependencies of these projects mean the risk will remain heightened until stabilisation and benefits realisation are achieved.

Risk management continued

Principal risks and uncertainties (continued)

Strategic impact

Transform Drive

Maximise

Risk trends

Adverse Unchanged Favourable

Strategic impact

Transform Drive

Maximise

Risk trends

Adverse Unchanged Favourable

C. Business continuity

Strategic impact:

Risk trend:

E. IT infrastructure and security

Strategic impact:

Risk trend:

Risk description and drivers

The Group's manufacturing processes, supply chain and product profiles introduce risks to the business continuity of the Group:

Property facilities and processes might not be adequately maintained, making them unsuitable for our complex manufacturing operations.

There are single-point (key supplier/key site) exposure risks within the Group's supply chain.

Rising cost inflation across raw materials, energy and logistics adds pressure to operational resilience and profitability.

Some of the products manufactured by the Group are used in potentially high-risk applications, for example in the Aerospace, Automotive, Electric vehicle, Healthcare and Power industries.

D. Environment, health and safety (EHS)

Strategic impact:

Risk trend:

If this risk was to materialise, it could lead to supply chain disruption, increased operating costs, loss of customers and/or market share, and reduced competitiveness, ultimately affecting the Group's current and future financial performance.

Risk description and drivers

The Group operates a number of manufacturing facilities around the world, often involving risks related to heavy duty machinery, chemical use, movement of parts such as lifting or transportation, as well as energy, such as electricity and pressurised systems.

A serious accident in the workplace could lead to environmental damage or have a major impact on employees, their families, colleagues and communities. Such an incident could also result in legal claims, reputational damage and financial loss.

Key controls and mitigation

Group property risk management framework.

Onboarding of dual source suppliers and alternative materials where available.

Quality management systems across the Group.

Group insurance programme ensuring adequate protection.

Maintaining strong customer relationships built on technical expertise and product quality.

Continue building market differentiation capabilities and key partnerships.

Trend commentary

The implementation of an enhanced property risk management framework has helped reduce exposure to facility-related vulnerabilities, favourably impacting the risk trend. However, residual risks remain due to single-point dependencies (key supplier/ key site) and the critical nature of products used in high-risk sectors such as Aerospace and Healthcare. While dual sourcing and quality management systems provide additional resilience, the complexity of manufacturing operations and supply chain interdependencies mean continued attention is required.

Key controls and mitigation

The Group has a comprehensive EHS programme managed by the Group EHS and Sustainability Director, with clear standards and a comprehensive programme of audits to assess compliance.

The Executive Committee approves annual priorities for EHS. These form the basis for individual sites' own priorities and plans which complement the Group's 'thinkSAFE' behavioural safety programme.

KPIs are monitored by the Executive Committee and the Board. Our LTA rate was 0.18 (2024: 0.13); which is an increase compared to the prior year. Safety of our employees is a critical focus. We have performed root cause analyses and developed

a targeted plan for 2026. This is addressed in greater detail on page 30.

Trend commentary

There is no material change to the risk trend.

Risk description and drivers

It is critical that the Group's information technology and operational technology infrastructure remain cyber resilient, ensuring that proprietary, confidential and otherwise protected information, intellectual property and personal data held and processed on these systems are appropriately secured. The increasing sophistication and frequency of cyber threats, including targeted attacks and advanced persistent threats, heightens the risk environment and demands continuous improvement in our defence posture.

F. Legal and regulatory

Strategic impact:

Risk trend:

Failure to prevent or respond effectively to a cyber security event could compromise the availability, confidentiality and integrity of our IT systems, disrupt key operations, impede recovery of critical data or services, and cause irrevocable damage to assets and reputation.

Risk description and drivers

The Group must comply with relevant national and international laws and regulations, including those related to anti-bribery and corruption, trade/export compliance and competition/anti-trust activities, as well as data privacy laws. The increasing global legislative environment requires ongoing focus.

G. Key finance processes

Strategic impact:

Risk trend:

Failure to comply with such laws and regulations could result in civil or criminal liabilities and/or individual or corporate fines, debarment from government-related contracts or rejection by financial market counterparties and reputational damage.

Risk description and drivers

The Group follows defined finance processes, including those over financial control, treasury, tax and pensions. There is a risk of errors in existing processes, or from new processes as a result of the ongoing change activities which inherently increases the risk profile.

Failure of key finance processes and controls could lead to misstatements of financial results due to error, omission, fraud or non-compliance with accounting standards and other applicable regulations. This could affect the reputation and performance of the Group, as well as expose it to legal and regulatory sanctions.

Key controls and mitigation

The IT strategy is reviewed by the Board annually.

Regular external reviews to reduce the risk of successful cyber attacks, including vulnerability and penetration tests.

Comprehensive cyber security framework to prevent, detect and respond to incidents, including hardware, Group policies and procedures on passwords and data management, and IT disaster recovery plan.

Mandatory 'thinkSECURE' information security training programme for all employees.

Trend commentary

There is no material change to the risk trend. Although our controls are strengthening, the broader threat landscape continues to intensify in both volume and complexity.

Key controls and mitigation

The Morgan Code outlines the Group's commitment to doing business ethically, and is implemented through a global suite of policies, standards and guidance.

Mandatory ethics training for staff covers topics including

anti-bribery and anti-corruption, anti-trust and trade controls.

We provide a confidential ethics 'Speak Up' hotline to allow employees to raise concerns or possible wrongdoing.

To strengthen export control, the Group runs a global 'thinkTRADE' programme.

Trend commentary

There is no material change to the risk trend.

Key controls and mitigation

Group policies and procedures including Internal Financial Controls Policy, treasury and tax policies, as well as a well-established pensions strategy and accompanying framework.

Annual policy self-certification process for all divisions.

Quarterly internal financial control self-assessments for all relevant locations.

Trend commentary

There is no material change to the risk trend.

Group financial review

"We have delivered a robust financial performance against a challenging market backdrop.

Demand in our end-markets has now broadly stabilised. The work we have done to reduce our manufacturing cost base over the last three years, coupled with our planned optimisation opportunities, leaves us well placed to deliver margin growth as end-markets recover."

Richard Armitage

CFO

Group financial performance Summary financial information for the year ended 31 December 2025

Summary income statement and key metrics

2025

£m

20242

£m

Change

%

(3.3)%

Organic constant-currency revenue decline

9.6%

Headline adjusted operating profit* margin

14.1%

Return on invested capital*

1.8x

Net debt*/Headline EBITDA* leverage ratio

Discontinued operations and Alternative Performance Metrics

In August 2025, the Group announced that it had reached an agreement to sell the majority of its MMS business which was reported within the Thermal Products reporting segment. The transaction completed on 12 November 2025. The disposal

The Group defines each APM and therefore they may not be directly comparable with similarly named metrics in other businesses. The purpose and definition of each APM, along with a reconciliation to the equivalent statutory metric are included in the 'Glossary of Terms and Alternative Performance Metrics' sections on pages 199 to 204.

Summary cash flow and key metrics

2025

£m

2024

£m

Change

%

represented a major line of business for the Group and accordingly, it is classified as a discontinued operation under 'IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations.' In accordance with IFRS 5, current year results for MMS are shown

as one line 'profit from discontinued operations' on the face of the income statement and prior year results have been restated on the same basis.

In addition to statutory metrics, the Group monitors business performance through alternative performance measures (APMs) which are non-GAAP measures not defined under IFRS. The Directors consider that these APMs provide useful information to stakeholders, including additional insight into ongoing trading and year-on-year comparisons. These APMs are not intended as a substitute for IFRS measures and should be considered as providing complementary insight.

In order to help users of these financial statements understand

the performance of the Group during 2025, where relevant, the Directors have presented 'Headline' metrics which include the results earned by MMS up to the date of the disposal. These

metrics are clearly denoted by the use of the term 'Headline' and they are presented alongside statutory results and in addition to the usual APMs presented by the business.

Throughout this Report, these non-GAAP measures are clearly identified by an asterisk (*) where they appear in text and by a footnote where they appear in tables and charts.

Unless otherwise stated, all financial information reported in the Financial review relates to continuing operations.

1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary and Alternative Performance Metrics' section on pages 199 to 204.

2. Statutory financial results have been restated for the year ended 31 December 2024 to present the results of MMS within discontinued operations.

3. Movements where the percentage movement is not meaningful are represented by n/m.

4. Details of specific adjusting items arising during the year and the comparative period are given in note 6 to the consolidated financial statements.

‌Group financial review continued

Revenue

OCC

Adjusted operating profit*

2025 2024

Specific adjusting items

Specific adjusting items from continuing operations were

As at 31 December 2025, the Group's business simplification initiatives have delivered total cumulative adjusted operating profit* benefits of fi24 million, compared to our 2023 baseline, for a total

2025

Revenue £m

2024

£m

Change

%

Change

%

Adjusted operating profit1

Profit

£m

Margin

%

2024

£m

Margin

%

fi47.6 million (2024: fi22.4 million) and comprised the following:

cost total of fi35 million. During 2025, we have rephased certain planned activities to ensure clear prioritisation and execution

On a headline* basis, the Group recognised revenue of fi1,030.3 million (2024: fi1,100.7 million), a year on year decrease of 6.4% at reported currency rates. Revenue was significantly impacted by foreign exchange headwinds, largely related to the US Dollar and sterling exchange rates. On an organic constant currency* basis, Group revenue decreased by 3.3% year-on-year.

Performance Carbon was heavily impacted by the well-publicised conditions within the Semiconductor market and in total the division delivered revenue of fi306.8 million, an 8.9% decline versus the prior year on an organic constant currency* '(OCC') basis. Lower Semiconductor sales drove the year on year decline, although we note that revenue has stabilised in the second half of the year. Across other markets, the business has demonstrated a resilient revenue performance. The business saw a smaller decline

1 Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary and Alternative Performance Metrics' section on pages 199 to 204.

The Group delivered headline adjusted operating profit* of fi99.1 million (2024: fi128.4 million) and a headline adjusted

operating profit* margin of 9.6% (2024: 11.7% reported; 11.3% on an OCC* basis). Whilst volume and mix impacts drove a 440 bps decrease in margins, our overall margin delivery was positively impacted by our continued focus on simplification and efficiency. On a combined basis, the net impact of pricing, inflation and

2025

£m

2024

£m

throughout the business. We continue to expect to deliver total cumulative savings of fi27 million by 2026, compared to the 2023 baseline, for a total cost of approximately fi40 million.

The Group incurred fi13.3 million of exceptional costs associated with the design, configuration, customisation and implementation of a Global ERP system (2024: fi5.2 million). We made good progress in 2025, completing a pilot system roll-out and finalising design and build ahead of a go-live of material sites across North America and Europe during 2026. We anticipate that roll-out and implementation will be completed by the end of 2027. Alongside our investment in implementation, we are building out a dedicated ERP and project team that will remain with the business post-implementation and these costs are recognised within underlying results. We expect to incur ERP implementation costs of between fi22-24 million in 2026 which will be recognised within specific adjusting items.

The Group recognised a credit of fi1.9 million relating to the reversal of a fixed asset impairment associated with operations in Argentina. The impairment was recognised in 2023, following a currency devaluation of more than 50%. During 2025, we have successfully repatriated a cash dividend from Argentina to the

UK via the Bopreal mechanism and the business has continued

in Aerospace & Defence sales which reflects the timing of some large defence orders which are now expected in 2026. This was largely offset by increased demand in Rail and Energy markets.

Technical Ceramics has demonstrated good resilience over the year, delivering revenue of fi341.6 million, a 3.4% increase on an OCC* basis. The business saw strong demand in Aerospace & Defence markets, driven by demand for new aircraft along with robust maintenance revenue driven by increased fleet utilisation.

efficiency initiatives contributed 170 bps improvement to margin

with simplification initiatives providing a further 160 bps margin. The remaining movement in margin relates to foreign exchange and other non-trading items.

Performance Carbon delivered an adjusted operating profit* margin of 13.4%, a 260 bps decrease compared to the prior year. The impact of lower volume and an adverse sales mix was partially offset by substantial gains from efficiency and simplification

1 Details of specific adjusting items arising during the year and the comparative period are given in note 6 to the consolidated financial statements.

During 2025, the Group has recognised an impairment charge of fi15.6 million related to certain specialist assets at a UK site which are dedicated to the Semiconductor market. Our current view of future demand for this market subsegment indicates that these assets will not be utilised. Since this specialist machinery cannot be redeployed to fulfil other demand in the near-term without

to operate profitably despite ongoing economic uncertainty.

Accordingly, the Group has recognised a full reversal of its previous fixed asset impairment.

Within 'specific adjusting items' from continuing operations, the Group recognised a fair value and foreign exchange loss on consideration shares received in a listed Indian business as part of the consideration received for the disposal of MMS. Further details of the MMS transaction are set out below.

This growth was partially offset by the impact of Semiconductor market dynamics and notably lower sales into Healthcare markets driven by customer inventory adjustments.

Thermal Products delivered revenue of fi348.2 million, a 4.2% decline on an OCC* basis. This performance was impacted by regional economic dynamics, primarily driven by continued challenging conditions in European industrial markets. Overall,

we note revenues have remained broadly stable since the second half of 2024.

initiatives. Margin was further supported by fi5.2 million of

trading receipts that will not repeat in 2026.

Technical Ceramics delivered an adjusted operating profit* margin of 11.5% which was broadly in-line with the prior year.

Thermal Products delivered an adjusted operating profit* margin of 6.7%, a 320 bps decrease compared to the prior year. Performance reflects challenging market conditions and foreign exchange headwinds and hyperinflation accounting.

On a continuing operations basis, Central costs of fi10.3 million have increased by fi1.8 million compared to 2024. This increase reflects the build out of our central ERP team who will support the new system on an ongoing basis. Central costs for the prior year have been restated to include central costs which were previously allocated to MMS that have remained with the Group post deal close.

further investment, we have fully impaired the asset, in-line with

the requirements of 'IAS 36 - Impairment of assets'. There is no change to our previously communicated expectations for the Semiconductor market opportunity for Morgan.

The Group has recorded a cumulative total of fi28.6 million impairment charges recognised in current and prior periods, for assets which it continues to use. These impairments could be reversed if the businesses were to outperform significantly against their budgets and strategic plans, or if market conditions materially change. A sensitivity analysis was carried out using reasonably possible changes to the key assumptions in assessing the value in use of these non-financial assets. This did not result in a material reversal of the remaining impaired amounts in 2025 (2024: finil); the only impairment reversed during the year relates to trading assets in Argentina, as noted overleaf. Refer to note 6 to the consolidated financial statements for details of the impairment review and key assumptions made.

2025

£m

2024

£m

Adjusted profit* margins for the discontinued MMS business

are not considered meaningful since they exclude central costs previously allocated to the division, thus artificially increasing the profit attributable to the operating unit.

The Group incurred total expenditure of fi14.3 million in respect of our business simplification and restructuring programme during the year (2024: fi13.1 million). Of this total, fi13.4 million relates to continuing operations (2024: fi12.4 million) with the balance of fi0.9 million incurred by MMS and included within discontinued operations (2024: fi0.7 million).

1 Details of specific adjusting items arising during the year and the comparative period are

given in note 6 to the consolidated financial statements.

‌Group financial review continued

Gain on disposal of MMS

During the year the Group announced the sale of its MMS business to Vesuvius plc. MMS was previously reported within the Thermal Products reporting segment. The business represents a major line of business and therefore meets the criteria of a disposal group under IFRS 5. The results of MMS for the year ended 31 December 2024 and the period up to the completion of the transaction on

12 November 2025 are presented as discontinued operations in the Group's audited financial statements.

MMS was sold for total consideration of fi76.2 million. The transaction was structured as an acquisition of Morgan's 75% shareholding in its Indian listed subsidiary, Morganite Crucible (India) Limited ('MCIL'), by Vesuvius' Indian listed subsidiary, Foseco India Ltd ('FIL'), with consideration for the acquisition being the issuance of new FIL shares to Morgan, plus a cash acquisition for the remainder of the MMS business ('Rest of World').

At completion, Morgan received 1.2 million consideration shares in FIL, which represents a circa 15% shareholding in FIL valued at approximately fi55.7 million. These shares are subject to a

six-month lock-up period post-initial listing, in accordance with applicable Indian regulations.

In addition, Morgan received fi20.5 million in cash as gross

Statutory operating profit

Statutory operating profit from continuing operations was

fi45.2 million (2024 restated: fi99.2 million), a significant reduction compared to the prior year, driven by reduced revenues and increased charges from specific adjusting items as a result of our investment in the Global ERP programme, the fair value and foreign exchange loss on consideration shares held following the disposal of MMS and the impairment of certain Semiconductor related assets.

Net financing costs

Net financing costs of fi22.2 million (2024: fi19.0 million) comprise net bank interest and similar charges of fi17.8 million (2024:

fi15.8 million), interest payable on supplier finance arrangements of fi1.2 million (2024: finil), net interest on IAS 19 pension obligations of fi0.4 million (2024: fi0.6 million), and interest expense on lease liabilities of fi2.8 million (2024: fi2.6 million) resulting from IFRS 16 Leases.

The impacts of potential changes in interest rates on profit or loss are stated in note 22 to the consolidated financial statements.

Net financing costs for 2026 are expected to be within the range of fi22-26 million.

Earnings per share

Basic earnings per share from continuing operations was a loss of (1.0) pence per share (2024: 16.5 pence) and adjusted earnings per share* was 15.9 pence (2024: 24.2 pence).

Basic earnings per share from continuing operations was impacted by overall trading performance and increased charges associated with specific adjusting items, as noted above.

Details of these calculations can be found in note 10 to the consolidated financial statements.

Foreign currency impact

The Group receives revenue and incurs expenses in a number of foreign currencies and, as such, movements in foreign exchange rates can materially impact the Group's financial results.

For illustrative purposes, the table below provides details of the impact on 2025 revenue and Group adjusted operating profit* if the actual reported results, calculated using 2025 average exchange rates were restated for GBP weakening by 10 cents against the

US dollar in isolation and 10 cents against the Euro in isolation:

Adjusted operating

Cash flow

2025

£m

Restated

2024

£m

consideration for the Rest of World Transaction, which was subject to customary post-completion cash, debt and working capital adjustments and prior to any taxes, fees and other expenses

Taxation

The Group tax charge from continuing operations, excluding

Increase in 2025 revenue/

adjusted operating profit1 if:

GBP weakens by 10c against the US Dollar

Revenue

£m

profit1

£m

related to the overall MMS transaction.

The calculation of the gain on disposal of MMS is presented in the table below. The gain on disposal has been included in 'specific adjusting items' within discontinued operations in the consolidated income statement.

It is our intention to sell the consideration shares and therefore they have been designated as held for trading and are recognised at fair value through profit and loss and revalued at the balance sheet date by reference to the publicly listed share price. Movements in share

specific adjusting items, was fi19.4 million (2024: fi27.0 million).

The effective tax rate, excluding specific adjusting items, was 27.5% (2024: 26.3%). Note 8 to the consolidated financial statements provides additional information on the Group's tax charge.

On a statutory basis, the Group tax charge was fi17.9 million (2024: fi24.7 million), lower than the previous year due to lower taxable profits.

We expect our effective tax rate, excluding specific adjusting items, to be within the 27-28% range in 2026.

in isolation 39.0 3.8

GBP weakens by 10c against the Euro

in isolation 17.8 2.5

1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary and Alternative Performance Metrics' section on pages 199 to 204.

The principal exchange rates used in the translation of the results of overseas subsidiaries were as follows:

2025 2024

price and associated foreign exchange movements are recognised in specific adjusting items due to their nature and size. In accordance with applicable accounting standards, the fair value movement in the consideration shares held is recognised within continuing operations as it relates to an asset held by the continuing business.

Tax risks

The Group follows a Tax Policy to fulfil local and international tax requirements, maintaining accurate and timely tax compliance

GBP to:

Closing

rate

Average

rate

Closing rate

Average

rate

1. Definitions of these non-GAAP measures can be found in the glossary of terms on page 199, reconciliations of the statutory results to the adjusted measures can be found on pages 200 to 204.

whilst seeking to maximise long-term shareholder value. The

Group adopts an open and transparent approach to relationships with tax authorities and continues to monitor and adopt new reporting requirements, for example those arising from the implementation of the OECD Base Erosion and Profit Shifting proposals within tax legislation across various jurisdictions.

The tax strategy is aligned to the Group's business strategy and ensures that tax affairs have strong commercial substance.

The potential impact of changes in foreign exchange rates is given in

note 22 to the consolidated financial statements.

The Group generated cash from operations of fi168.6 million (2024: fi163.0 million) which was fi5.6 million higher than the previous year, with lower headline adjusted operating profit* materially offset by a continued focus on working capital management as a result of focused initiatives across the Group. Working capital initiatives included the initiation of a focused Supplier Financing arrangement for those areas of the business where supplier terms are materially below standard industry levels and an extension of our non-recourse debt factoring programme. These initiatives improve the Group's diversification and cost of liquidity, and the total benefit from these arrangements as at

31 December 2025 was fi37.2 million.

Free cash flow before acquisitions, disposals and dividends* was fi45.4 million (2024: fi15.1 million). The increase in free cashflow was driven by a significant reduction in capital expenditure compared to the prior year following the reduction of the scope of our investment in Semiconductor capacity.

‌Group financial review continued

For the purposes of compliance with external debt covenants, net debt* is calculated excluding IFRS 16 lease liabilities. On this basis, net debt* was fi232.2 million (2024: fi226.2million), representing a net debt* to continuing operations EBITDA* ratio of 1.9 times (2024: 1.5 times). On a headline basis, which includes the profits earned from MMS up to the date of disposal, net debt* to headline EBITDA* ratio was 1.8 times (2024: 1.4 times). The Group has yet to receive the majority of the consideration associated with the sale of MMS and the value of these consideration shares was

fi47.2 million at the balance sheet date. Leverage on a continuing basis will begin to return towards our target range during 2026 upon realisation of these proceeds. We expect leverage to be at or around 1.7x by the end of 2026.

Commitments for property, plant and equipment and computer software for which no provision has been made are set out in note 26 to the consolidated financial statements. Treasury and risk

management policies, which remain unchanged from the prior year, are set out in note 22 to the consolidated financial statements.

Liquidity

At the balance sheet date, the Group had net cash and cash equivalents* of fi74.2 million (2024: fi111.5 million) and undrawn headroom on its revolving credit facility of fi295.3 million (2024: fi279.3 million).

Capital structure

At the year end total equity was fi348.9 million (2024: fi389.3 million) with closing net debt* of fi232.2 million (2024: fi226.2 million).

Non-current assets were fi568.5 million (2024: fi597.3 million) and total assets were fi984.8 million (2024: fi1,077.1 million).

Details of undiscounted contracted maturities of financial liabilities and capital management are set out in note 22 to the consolidated financial statements on page 157 and 163.

Capital structure is further discussed in note 22 to the consolidated financial statements under the heading Capital management.

Final dividend

The Board is recommending a final dividend, subject to shareholder approval, of 6.8 pence per share on the Ordinary share capital of the Group, payable on 12 May 2026 to Ordinary shareholders on the register at the close of business on 10 April 2026. The ex-dividend date is 9 April 2026.

Together with the interim dividend of 5.4 pence per share paid on 17 November 2025, this final dividend, if approved by shareholders, brings the total distribution for the year to

12.2 pence per share (2024: 12.2 pence).

A total dividend of 12.2 pence per share represents a dividend cover of adjusted EPS* of 1.3 times. The Board has committed to maintaining then growing the Ordinary dividend with adjusted earnings cover of circa 2.5 times.

Note 14 to the Company financial statements provides additional information on the Company's distributable reserves.

Share buyback

On 5 November 2024, the Group announced its intention to undertake a buyback programme of up to a maximum fi40 million, excluding expenses. In December 2025, we announced our intention to pause the buyback programme after the second

fi10.0 million tranche had been completed in order to support our focus on balance sheet resilience. As at 31 December 2025, the Group had purchased 8,576,587 shares, for total consideration of fi19.9 million including fees and stamp duty. The second tranche completed in January 2026.

Refer to note 19 in the consolidated financial statements for further details about the share buyback programme.

Post balance sheet events

There are no reportable balance sheet events.

We note the emerging situation in the Middle East. Whilst the Group has a small footprint in the region, with a relatively low profit exposure we are mindful that the situation could have an impact

on broader trade and cost inflation. It is too early to assess the potential impact for 2026 and our primary focus is the safety of our employees.

Directors' statements

Going concern statement

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report on pages 2 to 54. The financial position of the Group, its cash flows, liquidity position and borrowing facilities, are described in the Financial review on pages 46 to 52. In addition, note 22 to the consolidated financial statements includes the Group's policies and processes for managing financial risk, details of its financial instruments and hedging activities, and details of its exposures to credit risk and liquidity risk.

The Group meets its day-to-day working capital requirements through local banking arrangements underpinned by the Group's fi230 million unsecured multi-currency revolving credit facility, which matures in November 2029. As at 31 December 2025, the Group had both significant available liquidity and headroom on its covenants. Total committed borrowing facilities were fi601.7 million. The amount drawn under these facilities was

fi306.4 million, which together with net cash and cash equivalents of fi74.2 million, gave a total headroom of fi369.5 million. The

€150 million delayed draw Term Loan was €75 million drawn and the multi-currency revolving credit facility was undrawn at 31 December 2025. The Group has scheduled debt maturities of

$97 million and €25 million due in October 2026. We expect to repay these facilities using existing facilities.

The principal borrowing facilities are subject to covenants that are measured biannually in June and December, being net debt* to EBITDA* of a maximum of 3 times and interest cover of a minimum of 4 times, based on measures defined in the facilities agreements which are adjusted from the equivalent IFRS amounts.

The Group has modelled its cash flow outlook, taking account of reasonably possible changes in trading performance, exchange rates and plausible downside scenarios. This review indicated that there was sufficient headroom and liquidity for the business to continue for the 18-month period based on the facilities available as discussed in note 22 to the financial statements. The Group was also expected to be in compliance with the required covenants discussed above.

The Board has also reviewed the Group's reverse stress testing performed to demonstrate how much headroom is available on covenant levels in respect of changes in net debt*, EBITDA* and underlying revenue*. Based on this assessment, a combined reduction in EBITDA* of 25% and an increase in net debt* of 30% would still allow the Group to operate within its financial covenants. The Directors do not consider either of these scenarios to be plausible given the diversity of the Group's end-markets and its broad manufacturing base.

The Board and Executive Committee have regular reporting and review processes in place in order to closely monitor the ongoing operational and financial performance of the Group. As part of the ongoing risk management process, principal and emerging risks are identified and reviewed on a regular basis. In addition, the Directors have assessed the risk of climate change and do not consider that it will impact the Group's ability to operate as a going concern for the period under consideration.

After making enquiries, and in the absence of any material uncertainties, the Directors have a reasonable expectation that

the Company and the Group have adequate resources to continue in operational existence for a period of 18 months from the date of signing this Annual Report and Accounts. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.

Viability statement

In accordance with provision 31 of the UK Corporate Governance Code, the Directors have assessed the prospects of the Company over a period significantly longer than 12 months. The viability assessment period remained at five years to 31 December 2030 in the line with impairment review testing and the strategic planning process. The Directors consider this an appropriate period over which to provide its viability statement based on management's reasonable expectations of the position and performance of the Company and the dynamics in the markets in which it operates.

Taking into account the Group's current position and the potential impact of the principal risks documented on pages 41 to 45 of the Annual Report, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to 31 December 2030.

To allow the Directors to make this assessment, a business base case has been built up, initially using a detailed, bottom-up approach, and then applying what the Directors consider to be an appropriate set of assumptions in respect of growth, margins, working capital flows, capital expenditure, dividends, refinancing of borrowing facilities and all other matters that could have a significant impact on the financial performance and liquidity of the Group. The resulting base case provides the Directors with EBITDA*, net debt* and finance charge headroom relative to current bank covenants.

The Directors' assessment also included a review of the financial impact on revenue, EBITDA*, net debt*, and the adequacy of the financial headroom, relative to a severe but plausible combination of principal risks crystallising that could threaten the viability of the Company. The Directors also considered the likely effectiveness of the potential mitigations that management reasonably believes would be available to the Company over this period.

While the review has considered all the principal risks identified by the Group, the following were focused on for enhanced stress testing.

Directors' statements continued

Scenarios modelled

Link to Combined Principal Risks

The combined impact of the above 4 scenarios results in 15% reduction in Group's revenue and 44% reduction in Group's EBITA in 2026 before taking mitigating actions. In this worst-case scenario, the Group remains within banking covenants.

Whilst this review does not consider all of the possible risks that the Group could face, the Directors consider that the approach adopted, and the work performed is reasonable in the

circumstances of the inherent uncertainty involved and that it allows the Board to confirm that they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period to 31 December 2030.

This Strategic Report, as set out on pages 2 to 54, has been approved by the Board.

On behalf of the Board

Governance

Richard Armitage

Chief Financial Officer

2 March 2026

Contents

Chair's letter to shareholders 56

Board of Directors 57

Governance overview 59

Key Board focus areas during the year 60

Board oversight of strategy 62

Monitoring and embedding culture 63

Engaging with our workforce 64

Assessing Board performance 66

UK Corporate Governance Code

compliance statement 67

Report of the Audit Committee 69

Report of the Nomination Committee 75

Remuneration Report 78

Other disclosures 105

Independent Auditor's Report 110

54 Morgan Advanced Materials / Annual Report 2025 55

Chair's letter to shareholders

"The guiding principle of the Board is to do the right thing with respect to all our stakeholders and the environment."

Ian Marchant

Non-executive Chair

Board of Directors

Ian Marchant

Non-executive Chair

Committees

Richard Armitage

CFO

N R

I am pleased to present our Governance Report, setting out the Board's activities during the year, as we continue to drive long-term value creation for all our stakeholders.

The Board's focus during the year

We understand that robust governance practices are essential in supporting our business objectives. The Board has continued to ensure progress is being made against our strategic initiatives and towards our medium-term targets, whilst maintaining an appropriate engagement in near-term operational and commercial matters. We have also spent time engaging with the business, and taken steps to ensure that the Board itself continues to be effective, including undertaking an internal Board performance review which is set out on page 66.

2025 was another busy year for the Board and, in addition to our standard agenda items, we considered a breadth of matters such as succession planning, the evolution of our strategy and business plan, portfolio reviews and the disposal of Molten Metal Systems (MMS).

We have continued our dialogue with our stakeholders throughout the year, details of which can be found on pages 20 and 21 and

64 and 65. Some of our key decisions and our consideration of stakeholders in making those decisions are described in our Section 172 statement on pages 22 to 24.

Further details on our activities during the year can be found on pages 60 to 62.

Board Committees' focus during the year

The work of the Board is supported by the hard work of our Committees, who have assisted with important governance matters during the year. For example:

The Audit Committee has reviewed our compliance with the 2024 UK Corporate Governance Code ('2024 Code') and readiness for reporting against Provision 29. Further information on the Committee's work can be found on pages 69 to 74.

The Nomination Committee has supported the Board with succession planning activities, including the CEO transition from Pete Raby to Damien Caby and the appointment and induction of two non-executive Directors - Jane Lodge and Professor Mary Ryan CBE FREng. Details of the Committee's work is set out on pages 75 to 77.

The Remuneration Committee has reviewed the implementation of the Group's Remuneration Policy (approved by shareholders at the 2025 AGM). Details of the Committee's work is set out on pages 78 to 104.

More detail on the Board and Committee activities during the year can be found in the remainder of the Report.

Focus for 2026

Some of the key priorities for the Board in 2026 will be continuing to oversee trading performance and the delivery of our revised strategy. The Board will continue to support Damien in his new role as well as ensuring that the new non-executive Directors are successfully onboarded.

Ian Marchant

Non-executive Chair

Appointed: Chair Designate and non-executive Director in February 2023. Non-executive Chair and Nomination Committee Chair in June 2023.

Skills and contribution:

Ian is a highly strategic and successful leader with more than 35 years of wide-ranging experience at major businesses, bringing a strong track record of value creation and listed board experience. Ian has significant expertise in governance, finance, regulation, renewable energy and climate change mitigation.

Past experience:

Ian served as CEO of SSE plc from October 2002 to June 2013; prior to this he was Finance Director of SSE and Southern Electric plc. He is a seasoned non-executive Director and Chair, having served as Chair of Thames Water Utilities Ltd and John Wood Group plc and on the board of Aggreko plc.

External appointments:

Non-executive Director of Fred. Olsen Ltd and arbnco Ltd and a member of the Prince's Council of the Duchy of Cornwall.

Damien Caby

CEO

Appointed: Executive Director and CEO Designate in May 2025. CEO in July 2025.

Skills and contribution:

Damien brings strong leadership skills and extensive business experience in specialities across several markets. He has an established track record of strategic organic and inorganic growth, innovation and transformation of global advanced materials and processing aids and a strong technical and international background, having lived and worked in the United States, Germany and France.

Past experience:

Before joining Morgan Advanced Materials in 2022 as President of the Thermal Products division, Damien held senior business group and business leadership roles at BASF from 2017 to 2022 and Imerys from 2011 to 2016.

External appointments:

None.

Committees

Appointed: May 2022.

Skills and contribution:

Richard has broad experience including financial management, investor relations, capital markets, M&A and commercial management, gained through roles at several listed and privately owned chemicals and consumer goods companies.

Past experience:

Prior to joining Morgan Advanced Materials, Richard was CFO at Victrex Group plc from 2018 to 2022. During this time, he was responsible for finance, IT, legal and corporate development, as well as the development of the Group's Chinese businesses. Richard was CFO of Samworth Brothers from 2014 to 2018 and CFO of McBride plc from 2009 to 2014.

External appointments:

Senior Independent Director and Chair of the Audit Committee at NWF Group plc.

Jane Aikman

Independent

non-executive Director

Committees

A N R

Appointed: Non-executive Director and Audit Committee Chair

in July 2017. Jane will retire from the Board following the AGM in May 2026.

Skills and contribution:

Jane is a Chartered Accountant with significant financial experience

and knowledge of growing manufacturing, technology and marketing businesses, gained in a variety of senior executive positions. Jane brings

a valuable perspective from her role as CFO of Inside Ideas Group Limited.

Past experience:

Jane previously held CFO positions at Arqiva Group Limited, KCOM Group plc, Infinis plc, Wilson Bowden plc, Pressac plc and Phoenix IT Group plc, latterly where she was also Chief Operating Officer. Jane was a non-executive Director of Halma plc from 2007 and chaired its Audit Committee from 2009 until her departure in July 2016.

External appointments:

Group Director and Group CFO of Inside Ideas Group Limited.

Directors who resigned during the year

Helen Bunch, who was appointed as non-executive Director from February

Committee Chair Audit

Nomination Remuneration

2016 and as Remuneration Committee Chair from January 2019, retired from the Board following the Company's AGM in May 2025.

Pete Raby, who was CEO from August 2015, retired from the Board on 1 July 2025 and left the Company on 31 August 2025.

‌Board of Directors continued

Governance overview

Jane Lodge

Independent

non-executive Director

Committees

Alison Wood

Senior Independent Director

Committees

Board composition

Board balance of roles

Gender

Ethnic origin

Non-executive Director tenure

A N R

A N R

Appointed: June 2025. Jane will succeed Jane Aikman as Audit Committee Chair following the AGM in May 2026.

Skills and contribution:

Jane is a highly experienced non-executive Director and Audit Committee Chair with a significant background in international businesses in the industrial/manufacturing sector. Jane is a Chartered Accountant with substantial audit, risk and financial experience.

Past experience:

In her executive career, Jane spent 35 years at Deloitte & Touche LLP, progressing to a Senior Audit Partner working for major corporates and acted as the manufacturing and industry lead Partner, providing best practice and insights across tax, auditing, consulting and corporate finance. Jane was previously a non-executive Director and Audit Committee Chair of TI Fluid Systems plc from 2022 to 2025, non-executive Director of DCC plc from 2012 to 2022, Senior Independent Director and Audit Committee Chair of Costain Group plc from 2012 to 2021, non-executive Director and Audit Committee Chair of Devro plc from 2012 to 2021.

External appointments:

Non-executive Director and Audit Committee Chair of First Group plc, non-executive Director and Remuneration Committee Chair of Glanbia plc and non-executive Director and Audit and Risk Committee Chair of Bakkavor Group Plc.

Professor Mary Ryan CBE FREng

Independent

non-executive Director

Committees

A N R

Appointed: November 2025.

Skills and contribution:

Mary brings significant materials science expertise to the Board. She is a

leading materials scientist at Imperial College London ('Imperial'), where

Appointed: November 2024. Remuneration Committee Chair in May 2025.

Skills and contribution:

Alison is a highly experienced non-executive Director with a significant background in international industrials. She brings deep governance expertise gained across numerous listed businesses, having served as Chair, Senior Independent Director and Remuneration Committee Chair of several

FTSE 350 businesses.

Past experience:

In her executive career, Alison was Global Director of Strategy and Corporate Development at National Grid plc from 2008 to 2013. She was central to the strategic development of BAE Systems plc in her role as Group Strategic Development Director from 2004 to 2008. Alison was a non-Executive Director of TT Electronics plc from 2016 to 2025 and served as Chair of their Remuneration Committee.

External appointments:

Chair of Galliford Try Holdings plc, Senior Independent Director and Remuneration Committee Chair of Oxford Instruments plc.

Clement Woon

Independent

non-executive Director

Committees

A N R

Appointed: May 2019.

Skills and contribution:

Clement has broad managerial experience in globally operating technology and consumer-related industries. He has a strong track record of renewing

Desired/required skills, experience, attributes

Ian Damien Richard Jane Jane Mary Alison Clement Marchant Caby Armitage Aikman Lodge Ryan Wood Woon

Strategy development and oversight Accounting and financial reporting oversight Major change and transformation Innovation, disruption and R&D Materials science, semiconductor and other key growth materials Engineering and Industrial sector

Leadership, commercial and business operations Technology Remuneration, talent and culture oversight Corporate governance International business M&A/Portfolio management Safety/Environmental/Sustainability Risk management and assurance oversight

Director attendance at meetings of the Board and its Committees

she currently serves as Vice-Provost for Research and Enterprise and the

Armourers & Brasiers' Chair in Materials Science. She has significant industry

traditional industries and revitalising growth through strategic interventions,

and in-depth experience and knowledge of markets within the Asia Pacific

Director Board

Audit Committee

Nomination Committee

Remuneration Committee

of Engineering and Fellow of the Institute of Materials, Minerals and Mining (IoM3).

Past experience:

Mary has held various senior positions in Imperial, since joining Imperial in 1998.

External appointments:

Vice-Provost for Research and Enterprise and the Armourers and Brasiers' Chair for Materials Science at Imperial, non-executive director of the UK Atomic Energy Authority Board, Board member of the Francis Crick Institute and Governing Board member of the Henry Royce Institute.

From August 2016 to March 2020, Clement was Group CEO of Saurer Intelligent Technology Co. Ltd, a €1 billion textile machinery and components business listed on the Shanghai Stock Exchange. Clement continued to

an industrial company in China with diverse interests including biotech, automotive and textiles. Previously Clement held various senior positions including Division CEO of Leica Geosystems AG, President and CEO of

Non-executive Director and Remuneration Committee Chair of Elementis plc.

The table above shows individual attendance at Board and Committee meetings, out of the maximum possible number of meetings each Director could have attended.

1. Attended by invitation.

2. Damien Caby was appointed to the Board on 8 May 2025.

3. Pete Raby resigned from the Board on 1 July 2025.

4. Helen Bunch resigned from the Board on 8 May 2025.

5. Jane Lodge was appointed to the Board on 1 June 2025. Jane was unable to attend a Board meeting because of a pre-existing commitment arranged before she was appointed to the Board.

6. Professor Mary Ryan CBE FREng joined the Board on 1 November 2025. Mary was unable to attend an Audit Committee meeting because of a pre-existing commitment arranged before she was appointed to the Board.

‌Key Board focus areas during the year

The table below sets out the key areas of Board focus during the year and how these align with the Group's principal risks. It also highlights the key stakeholders considered in the Board's discussions and decision-making. Some of the principal decisions of the Board during 2025 are included in the Strategic Report on pages 22 to 24.

Key to stakeholders

Key to principal risks

Key to stakeholders

Investors Customers

Suppliers Employees

Communities

Key to principal risks

A B

External environment

Business change and development

C

Business continuity

EHS

D E F G

IT infrastructure and security Legal and regulatory

Key finance processes

Board oversight of cyber threat

Bi-annual updates from the Chief Information Officer on the cyber security posture and IT transformation programme covering:

progress of cyber security strategy and IT transformation programme

updates on incidents and key industry developments

detailed progress updates on cyber risk reduction programmes and key initiatives

insights provided on cyber threat landscape and relevant threats linked to Morgan Advanced Materials' business and technology strategy

development

C

60 Business continuity

Legal and regulatory

F G

Key finance processes

Morgan Advanced Materials / Annual Report 2025 61

Monitoring and embedding culture

Our culture is underpinned by our purpose: to use advanced materials to make the world more sustainable, and to improve the quality of life.

We work together to deliver our strategy and reliably solve problems in an ethical, safe and sustainable way. As a business with a global footprint, we strive to work collaboratively, value our differences and treat each other fairly to deliver a positive outcome for our stakeholders.

The Board is responsible for monitoring and assessing our culture. The Chair ensures that the Board is operating appropriately and sets the Board's culture which in turn forms the culture of the Company. The CEO, supported by the Executive Committee,

is responsible for ensuring the right culture and behaviours are embedded throughout the business, its operations and in all dealings with our stakeholders.

At least annually, the Board measures the culture of the Group using internal and external metrics which also enable it to identify further actions to ensure our culture remains appropriate. The Board considered the following:

Safety - an area of paramount importance to our people, customers and partners. The CEO updates the Board on safety progress and performance in every Board meeting. The Board receives an update from the EHS&S Director at Board meetings through the year which contains safety statistics, both leading and lagging indicators, progress on safety initiatives and against the plan of work for the year, and details of serious incidents and root cause analysis. Safety performance is also part of presentations to the Board by the presidents of the divisions, proposals for capital expenditure, key risks and other ad hoc presentations to the Board. This enables the Board to gauge 'tone at the top'.

Whistleblowing - we have an independent 'Speak Up' service through EQS to enable employees, customers, suppliers and other third parties to report any concerns or wrongdoing anonymously without any fear of retaliation. The Audit Committee reviewed the key themes and trends in the Speak Up reports to gain an understanding of how effectively the Morgan Code is embedded. This information has been used by the Board as part of its assessment of Morgan Advanced Materials' culture.

Workforce engagement and survey - the non-executive Directors heard directly from employees during employee listening sessions held in 2025. Together with the annual employee engagement survey, 'Your Voice', Board site visits, and presentations to the Board by those below the Executive Committee, this helps the Board to gauge the culture of the organisation.

See page 64 and 65 for information on workforce engagement

See page 64 for information on the 2025 'Your Voice' survey

Alignment of remuneration and culture - the Remuneration Committee sets remuneration for the Executive Directors and Executive Committee members and oversees remuneration for senior leaders and the wider organisation, with incentives designed to support delivery of the strategy and the establishment of the appropriate culture, desired behaviours and values.

The Board, through some listening sessions, discusses Executive Director remuneration with employees as a further input to the impact on culture.

See page 81 to 89 for information on the Remuneration Policy

Sources of Morgan Advanced Materials Culture Insights and Metrics received by the Board (as identified in the 2024 Code Guidance)

Morgan Advanced Materials / Annual Report 2025 63

Board oversight of strategy

Board strategy discussions ahead of the December 2025 Strategy Update Event

62

‌Engaging with our workforce

The Board is at the forefront of the journey to Morgan Advanced Materials having a winning culture and is keen to understand employee views and the impact its decisions have on them.

Engagement with employees and other stakeholders

Non-executive Directors and

employee listening activities 2025 Engagement with other stakeholders

For this reason, the Board took the decision that all non-executive Directors should have the opportunity to engage with the workforce, rather than limit this important role to a designated non-executive Director. Furthermore, given the global nature of the business, having all of the non-executive Directors participate increases the Board's reach.

The non-executive Directors participated in employee engagement initiatives and carried out a full programme of activities during the year, further details of which can be found on page 65.

Typically, at each engagement session the non-executive Directors have informal sessions with the site teams without managers present. No specific topics for discussion are set and teams are encouraged to share their work experiences, challenges and ideas. The engagement sessions provide valuable insights for Board discussions, ensuring employee voices are considered in decisions shaping the future of Morgan Advanced Materials.

The outputs from the sessions are fed back to the leadership team for further discussion with the CEO and Group HR Director and are then reported at the next Board meeting. Follow-up discussions are held with site managers/function leads to convey key themes, foster a positive culture and, where specific matters are raised,

to ensure they are considered and addressed appropriately.

In addition to employee engagement sessions, the Board also undertakes other meetings with employees, for example, during Board visits to Group facilities and other events.

The Board finds the engagement methods described to be effective, despite not being one of the suggested methods in the 2024 Code. Its effectiveness will be kept under review.

Virtual listening session with Technical Ceramics site employees in Auburn, California, USA attended by Helen Bunch and Ian Marchant.

Jane Aikman and Clement Woon attended a virtual listening session with Group Finance and Shared Service Centre employees.

Site visits by Alison Wood to Technical Ceramics sites in Rugby, Stourport and Corby, UK and Thermal Ceramics site in

St Marcellin, France.

Quarterly leadership calls

held for the Site visit by Jane Lodge to Thermal

senior leaders Ceramics site in Augusta, Georgia,

with the CEO and USA. members of the executive team

Alison Wood and Jane Aikman attended a virtual listening session with the Performance Carbon team in Martinsicuro, Italy.

Site visits by Jane Lodge to Performance Carbon site in Redditch, UK and Technical Ceramics sites in Rugby and Stourport, UK.

Ian Marchant and Jane Lodge attended the Leadership Conference.

Board site visit and listening sessions with Performance Carbon employees in Swansea, UK.

Virtual listening session with Thermal Products employees in Tamil Nadu, India, attended by Ian Marchant and Clement Woon.

Following publication of the 2024 results, one-to-one meetings were held with institutional investors and potential investors. The Board reviewed the feedback from investors and potential investors to gauge investor sentiment and establish whether their expectations have been met.

Meetings were held with banks to present 2024 results.

The Chair met with major shareholders to understand their views on governance and performance against the strategy. He provided feedback on those meetings to the Board.

The 2025 AGM was held in Windsor. Shareholders were able to ask questions in person or submit them in advance of the meeting. The Board encouraged shareholders to appoint

the Chair of the AGM as their proxy and provide voting instructions in advance of the meeting in accordance with the

Feedback received from employee listening sessions

Positive feedback Improvement areas Actions taken

instructions in the Notice of AGM. At the AGM, all resolutions were passed.

Following publication of the interim results, meetings were held with institutional shareholders and potential investors. The Board reviewed the feedback from investors to gauge investor sentiment and establish whether their expectations have been met.

Meetings were held with banks to present 2025 interim results.

Following publication of the Q3 trading update, meetings were held with institutional shareholders and potential investors.

Strategy Update Event to provide institutional investors and analysts with updates on the revised strategy.

'Your Voice' survey

The 'Your Voice' survey provides employees with the opportunity to give feedback on what is working well and what we could be doing differently to make Morgan Advanced Materials a great place to work. The results of the survey provide actionable feedback to improve the employee experience and offer the Board a Group-wide snapshot of how employees rate our culture and employee engagement. 'Your Voice' 2025 was conducted in June 2025 as an all-employee digital survey. The outcome of the survey was presented to the Board in July 2025. The overall engagement score was 75%, up from 52% in 2024, with a response rate of 81% (2024: 81%). The results showed that employees recognise the priority we give to health and safety, that our strategy and purpose are clear and that we work hard to exceed the expectations of our customers with innovative products and solutions. Based on these results, there continues to be strong alignment with our purpose, the Morgan Code, our strategy and the desired culture.

Focus is now on maintaining this momentum. Next steps and action plans were developed at Group, division and site levels. Broad initiatives in response to the survey were communicated to our employees throughout the year.

Ad hoc meetings were held with brokers and institutional investors throughout the year

‌Assessing Board performance

Following the externally facilitated review in 2024, an internal review of the Board's performance was undertaken during the year, led by the Board Chair.

UK Corporate Governance Code 2024 compliance statement

The Corporate Governance Report, which includes the principal Committee Reports and Directors' Report, explains how the Board has applied the principles and complied with the provisions of the UK Corporate Governance Code 2024 ('the Code'), which is available at frc.org.uk, throughout the year ended

This year's review built on the learnings and outputs from the last three years' performance reviews, and focused on the following areas:

the Board's strengths and areas for improvement

identification of important topics to be prioritised for discussion

by the Board

progress on the actions from the 2024 Board performance review

committee effectiveness, considering factors such as

Strengths identified While there have been changes to the Board composition, it has strong foundations. The Board Chair is an effective leader and the Board has a good culture with a balance of cohesion and challenge.

The Board's work and approach to succession planning, Board composition and renewal were areas rated highly by respondents.

The Board's approach to workforce engagement continues to be

31 December 2025. The table below sets out how the Board has applied the Code principles during 2025.

Board leadership and Company purpose

1. The role of the Board

   The Board provides strategic and entrepreneurial leadership within a framework of strong governance, effective controls and an open and transparent culture.

   Governance framework

   Board

   Audit Committee See page 69 Nomination Committee See page 75 Remuneration Committee See page 78

   membership, meetings, work and remit.

   The review was conducted by way of a bespoke questionnaire sent to the Board, which collected both quantitative and qualitative data. A report was produced and shared with the Board at its meeting in December 2025, summarising the responses received, highlighting areas for the Board's consideration and recommended actions which were agreed by the Board.

   The Board Chair met with each of the Directors to discuss their performance. Led by the Senior Independent Director, the

   non-executive Directors met without the Chair present to appraise

   a strength. The Board receives good insights and feedback from these sessions, which help the Board to understand employee sentiment and to have employee views in mind during Board decision-making.

   All Board members rated the progress made on the actions arising from the 2024 external review highly, with all actions from 2024 either complete or in progress.
   
   Areas of focus and actions proposed The Board calendar and agendas would be reviewed to ensure
   
   

   Executive Committee

   Drives Group and divisional strategic implementation.
   
   Delivers operational, financial and non-financial performance.
   
   Reviews health, safety and environmental performance, drives improvement and embeds the safety culture.
   
   Approves Group policies and reviews their implementation and effectiveness.
   
   

   Leads on assessment and control of risk. Oversees prioritisation and allocation of resources.

   Disclosure Committee

   Assists and informs the Board concerning the identification of inside information.
   
   Recommends how and when the Company should disclose such information.
   
   Ensures any such information is managed and disclosed in accordance with all applicable legal and regulatory requirements.
   
   

   General Purpose Committee

   Approves opening of/changes to bank accounts. Approves arrangements with financial institutions. Approves guarantees and indemnities.

   Approves substantive intra-Group loans. Approves intra-Group dividends and capital restructuring.

   Approves awards under the Company's share schemes (after Remuneration Committee approval) and any Employee Benefit Trust-related loans.
   
   

   the Chair's performance. The Board Committees reviewed the outcome of the Committee-specific performance review findings.

   The Board concluded that it, its Committees and the individual Directors had continued to operate effectively and fully discharged their responsibilities during 2025.

   that the topics suggested by the Board members are covered in 2026.

   More in-person employee engagement sessions would be arranged to take place during Board site visits, in addition to the virtual engagement sessions.
   
   The Board site visits will cover on-site innovations and technologies, to provide more insight into innovation, technology and R&D.
   
   

   There is a formal schedule of matters reserved for the Board, reviewed and approved annually, that sets out the structure under which the Board manages its responsibilities, providing guidance on how it discharges its authority and manages the Board's activities. The delegated authority framework ensures that decisions are taken by the right people at the right level, with accountability up to the Board, and enables an appropriate level of debate, challenge and support in the decision-making process.

   Information on the Board's activities in 2025 are set out on page 60, including attendance on page 59.

2. The Company's purpose, values and strategy

   A description of Morgan Advanced Materials' business model is set out on pages 8 and 9. An assessment of the principal risks facing the Group is included on pages 41 to 45.

   Potential conflicts of interest are reviewed annually and powers of authorisation are exercised in accordance with the Companies Act 2006 and the Company's Articles of Association. During the year, if any Director has unresolved concerns about the operation of the Board or the management of the Company, these would be recorded in the minutes of the meeting.

   Recommendations from the 2024 Board performance review Actions taken during 2025

   Our purpose is to use advanced materials to make the world more sustainable and to improve the quality of life.

   Pivot the Board's composition more towards the strategic needs of the business, now and for the future

   The Nomination Committee was cognisant of the need to focus on the strategic needs of the business when making its

   recommendations to the Board for the appointment of Professor Mary Ryan CBE FREng and Jane Lodge.

   The Board believes that a healthy culture, which drives the right behaviours, protects and generates value, and helps employees engage with the Morgan Code, will lead to the successful delivery of our strategy. The Board is responsible for defining our values and setting clear standards from the top. Information on how the Board monitors and assesses culture can be found on pages 60 to 65.

3. Governance reporting

   Enhance the customer updates provided to the Board Deep dives were held on key customers for each division during

   the year, covering what was working well, opportunities for improvement and to enhance customer experience and build strategic partnerships with our customers.

   Further develop the Board training programme The training requirements were discussed with each Director

   during the year. Training provided included Value Creation from Sustainability, Provision 29 Requirements, Product Stewardship and Market Abuse Regulation Update.

   Review the Board KPIs The Board KPIs were enhanced and incorporated into the CFO Reports to the Board.

   Board decisions made during the year, the outcomes and the link to our strategy and objectives can be found on pages 22, 23, 60 and 61.

4. Shareholders and stakeholders

   The Board acknowledges the importance of forming and retaining sound relationships with all stakeholder groups. Accordingly, the Board reviewed and discussed the Group's key stakeholders along with the engagement mechanisms in place to ensure that they support effective, two-way communication. These are kept under periodic review to ensure ongoing effectiveness.

   The Board engaged actively throughout 2025 with shareholders and other stakeholders. A full programme of formal and informal events, institutional investor meetings and presentations is held throughout the year. This programme of shareholder engagement aims to ensure that the performance, strategies and objectives of the Group are clearly communicated to the investment community, and provides a forum for institutional shareholders to address any issues. Morgan Advanced Materials engages proactively with the investment community and sell-side and buy-side analysts and accommodates requests for meetings and calls with senior management from existing and potential institutional investors. The programme is led by the Executive Directors. The Board is regularly kept informed of investor feedback, stockbroker updates and detailed analyst reports. For more information, see pages 60 to 65.

   Further detail on how the Board considers the impact of decisions on relevant stakeholders can be found in our Section 172 statement on pages 22 to 24. Engagement with our stakeholders can be found on pages 20 to 21 and an outline of the Board's engagement with shareholders and our workforce can be found on pages 60 and 65.

5. Workforce policies and practices

   The Board has overarching responsibility for the Group's workforce policies and practices and delegates day-to-day responsibility to the CEO and Group HR Director to ensure that they are consistent with the Company's values and support its long-term success.

   Employees can report matters of concern confidentially through our 'Speak Up' hotline. Information on how the Audit Committee reviews reports generated

   from the disclosures and ensures that arrangements are in place for investigation and follow-up action as appropriate can be found on pages 72 - 73.

   ‌UK Corporate Governance Code 2024 compliance statement continued

   Division of responsibilities

6. Role of the Chair

   Ian Marchant leads the Board in an open and transparent manner, encouraging debate and challenge. He plays a pivotal role in fostering the effectiveness of the Board and the individual Directors both in and outside the boardroom. He was considered independent upon his appointment as Chair.

   The Chair works with the Group Company Secretary to ensure that sufficient time is available to discuss agenda items for each Board meeting and to ensure that

   papers are of a high standard and circulated in a timely manner.

   G and H. Balance of the Board

   The roles of the Chair and CEO are separate, with distinct accountabilities set out in their role profiles.

   The expected time commitment of the Chair and non-executive Directors is agreed, set out in writing in a Letter of Appointment and has not changed during

   the year. Prior to any new Director appointment, the Board considers whether each non-executive Director has sufficient time to devote to their role with the Company. This was the case with the appointment of Jane Lodge and Professor Mary Ryan CBE FREng. This is reassessed by the Nomination Committee annually and considering any changes to a non-executive Director's external commitments during the year. The Committee is satisfied that their other duties and time commitments do not conflict with those as Directors.

   The Board undertakes an annual review of the independence of each non-executive Director and in 2025 continued to consider each non-executive Director to be independent.

   1. The Company Secretary

      The Group Company Secretary ensures that Directors receive appropriate information prior to meetings to enable them to make an effective contribution, and that governance requirements are considered and implemented. The appointment and removal of the Group Company Secretary is a matter for the Board.

      Composition, succession and evaluation

   2. Board appointments

      The process for the appointments of Jane Lodge and Professor Mary Ryan CBE FREng is set out on page 77. Information on succession planning can be found on page 77.

      All Directors retire at each AGM and may offer themselves for re-election or election by shareholders. With the exception of Jane Aikman who will be retiring following the Company's AGM in May 2026, all the Directors will retire at the 2026 AGM and offer themselves for re-election or election (as appropriate). The Notice of AGM will give biographical details of those Directors seeking re-election or election, including their experience and the contribution each Director brings to the Board and its Committees. The terms of appointment for non-executive Directors and service contracts for Executive Directors are available for inspection at the Company's registered office and will be available to view at the AGM.

   3. Skills, experience and knowledge of the Board

      Information on Board skills, experience and knowledge can be found on page 59.

      The Chair and Group Company Secretary ensure that new Directors receive a full induction and that all Directors continually update their skills and have the requisite knowledge and familiarity with the Group to fulfil their role. The individual training and development needs of each Director are considered by the Chair on an annual basis.

      The Board receives detailed technical updates on corporate governance and other regulatory changes, presentations from external specialists or internal managers, training via online platforms, and takes part in site visits to ensure its skills, knowledge and experience are kept up to date. The training provided during the year can be found on page 66.

   4. Annual evaluation

      A summary of the 2025 performance review can be found on page 66.

      Audit, risk and internal control

   5. Audit functions

      Information on the work of the Audit Committee can be found on pages 69 to 74.

   6. Fair, balanced and understandable assessment

      The process which supports the Board's confirmation that the Annual Report is fair, balanced and understandable is set out in the Audit Committee Report on

      page 71.

   7. Risk management and internal control framework

      Information on the risk management and internal control framework, as well as the extent and nature of the Group's principal risks, can be found on pages 41 to 45.

      The Board and Audit Committee monitor the Group's risk management and internal control framework and conduct an annual review of its effectiveness. See pages 72 to 73.

      Remuneration

   8. Remuneration policies and practices

      The Directors' Remuneration Policy, approved by the shareholders in 2025, is set out on pages 81 to 89.

   9. Policy on executive remuneration

      The Remuneration Committee, on behalf of the Board, sets the remuneration of the Chair, the Executive Directors and Executive Committee members. It also reviews the remuneration of certain senior management. In setting remuneration, the Remuneration Committee seeks to ensure it is aligned with the Group's remuneration principles which are applicable to all employees. No Director is involved in determining their own remuneration outcome.

      See from page 78 for more information on the work of the Remuneration Committee.

   10. Remuneration outcomes

       Details of remuneration outcomes can be found on pages 80 and 81.

       Report of the Audit Committee

       Jane Aikman, a Chartered Accountant, has chaired the Committee since July 2017 and has recent and relevant financial experience and competence in accounting and auditing gained from her current external executive role and prior CFO roles. Jane Lodge will take over as Committee Chair following the AGM in 2026.

       The Committee as a whole has competence in the sectors in which the Group operates. All Committee members are independent non-executive Directors. Committee member biographies are set out on pages 57 and 58.

       The Board Chair, the Executive Directors, key members of senior management and senior representatives of the external auditor attend Committee meetings by invitation. Meeting attendance can be found on page 59.

       At the end of each meeting, Committee members meet with the external auditor, the Head of Internal Audit and the Ethics and Compliance Director without the Executive Directors or other members of management present.

       Between meetings, the Committee Chair keeps in contact with the CFO, the Group Finance Director, the external auditor, the Head of Internal Audit and the Ethics and Compliance Director as necessary.

       The Committee's terms of reference are available on the Company's website, morganadvancedmaterials.com.

       Committee members

       Jane Aikman (Chair) Professor Mary Ryan Helen Bunch (member CBE FREng (member until 8 May 2025) from 1 November 2025)

       Jane Lodge (member Alison Wood

       from 1 June 2025) Clement Woon

       
       
       

       I am pleased to present the Audit Committee Report for 2025, which provides insight into key areas considered by the Committee during the year in discharging its responsibilities in relation to financial reporting, risk management, internal control, the internal audit function and interaction with the Group's external auditor, Deloitte LLP.

       While the Committee's primary focus centred on the accuracy of the Group's financial reporting, during the year, the Committee also oversaw and received regular updates on work across functional areas of Morgan Advanced Materials such as ethics and compliance, risk and internal audit. Several divisional risk reviews took place, in addition to the annual internal controls and risk review that is

       undertaken, providing the Committee with a holistic view of risk.

       We monitored reports raised through the ethics hotline and ensured that executive management responded to these quickly and appropriately. The Committee reviewed the key themes and trends in the number, type and source of these reports to gain an understanding of how effectively the Morgan Code is embedded. This information has been used by the Board as part of its assessment of Morgan Advanced Materials' culture.

       The Committee continues to monitor external ESG and climate-related reporting, which either applies to Morgan Advanced Materials or which we may need to report on in future years, to both ensure readiness and that appropriate disclosures are made.

       Further information on the matters considered by the Committee throughout the year can be found on page 70.

       Deloitte completed their sixth full audit of the Group, which was James Hunter's first year as lead audit partner. The Committee also reviewed and agreed the independence and effectiveness of the audit process, in establishing positive relationships and providing a good level of service to the Group, while seeking continual improvements in the audit of Morgan Advanced Materials.

       The Committee's performance was reviewed as part of this year's internal Board performance review. The outcomes from the Board performance review, including the Committee's review, can be found on page 66 and show that the Committee is continuing to work well, is fully discharging its responsibilities and contributing effectively to the Group's overall governance framework.

       One of the Committee's areas of focus for 2026 will be continuing to monitor progress on our controls improvement activities and readiness for reporting against Provision 29 of the 2024 Code from the next financial year.

       Jane Aikman

       Committee Chair

       ‌Report of the Audit Committee continued

       Key activities in 2025

       Financial reporting	Reviewed and discussed reports from the CFO on the financial statements, considered management's significant accounting judgements and the accounting policies being applied, and assessed the findings of the statutory audit in respect of the integrity of the financial reporting of full- and half-year results. Further detail on the accounting policies can be found in note 1 to the consolidated financial statements from page 124. Reviewed the 2025 Annual Report and Accounts and provided a recommendation to the Board that, as a whole, it complied with Provision 27 of the 2024 Code (see 'Fair, balanced and understandable reporting' on page 71). Received updates on the 2024 Code requirements including in relation to Provision 29.
       Risk management and internal controls	Reviewed the effectiveness of the Group's risk management and internal control framework and integration of the components of the framework into Board and Committee reporting, prior to making a recommendation to the Board. The Committee also reviewed reports from the Division Presidents and Finance Directors on their key risks, how these risks are managed and an assessment of the control environment, on an annual basis. Monitored fraud reporting and incidents of whistleblowing, including a review of the adequacy of the Group's whistleblowing processes and procedures, prior to reporting to the Board on this activity. Oversight of the Group's ethics and compliance programme and monitored progress in compliance with the Morgan Code across the Group. Oversight and monitoring of the Group's key taxation issues and tax strategy.
       Internal audit	Considered internal audit reports presented to the Committee and satisfied itself that management had resolved or was in the process of resolving any outstanding issues or actions. Reviewed and approved the updated internal audit plan for 2025 and the internal audit plan and approach for 2026. Reviewed the quality and effectiveness of the internal audit function.
       External audit	Approved the 2025 full-year audit plan. Oversaw the 2025 statutory audit, including the key audit risks and level of materiality applied by Deloitte, audit reports from Deloitte on the financial statements and the areas of particular focus for the 2025 audit. Assessed the effectiveness of Deloitte and made a recommendation to the Board on the reappointment of Deloitte as the external auditor. Agreed the statutory audit fee for the 2025 audit. Reviewed and approved the non-audit services, and related fees, provided by Deloitte for 2025. Reviewed the findings of the Financial Reporting Council's (FRC) Audit Quality Inspection in relation to Deloitte. Oversaw the transition to the new lead audit partner, James Hunter.

       Provision 29 readiness activities

       A recurring item for the Board and the Committee has been the business's readiness activities to achieve compliance with Provision 29. This provision is applicable to the Group for the year ending 31 December 2026, requiring the Board to issue an annual formal declaration on the effectiveness of material internal controls. Management provided the Board and Committee with activity updates throughout the year:

       1. Gap analysis - review of the business's current risk and control frameworks to determine where these can be leveraged or where enhancements are needed to meet the requirements of the 2024 Code.

       2. Risk management workstream - to review principal risks, risk drivers and to develop the maturity of risk management processes in targeted areas and continue to embed the risk management framework.

       3. Definition of 'materiality' for controls - proposed approach

          agreed by the Committee, to be kept under review.

       4. Identification and scoping of material controls - proposed

          controls agreed by the Committee, to be kept under review.

       5. Consolidated view of the designed material controls -confirm ownership and documentation requirements and implementation.

Strategic focus areas

Transform Drive Maximise

Financial reporting Significant matters

In making its assessment, the Committee undertook the following process:

Considered the questions which need to be answered to evaluate whether the Annual Report and Accounts meets the fair, balanced and understandable test;

Considered the steps taken to ensure integrity and completeness of the accounting records;

Reviewed the methodology used to construct the narrative sections of the Annual Report;

Reviewed the disclosure judgements made by the authors of each section and considered the overall balance and consistency of the Annual Report;

Received confirmation from external advisors that all regulatory requirements are satisfied;

Received confirmation of verification of content from the authors of each section;

Received confirmation from the CFO that the narrative reports and consolidated financial statements are consistent; and

Made a recommendation to the Board to assist it in determining whether it is able to make the statement that the Annual Report and Accounts taken as a whole is fair, balanced and understandable.

The Board approved the Committee's recommendation that the 'fair, balanced and understandable' statement could be made, which can be found in the Directors' Responsibility Statement on pages 108 and 109 of this Annual Report.

The Audit Committee gives attention to matters it considers to be important by virtue of their size, complexity, level of judgement required or potential impact on the financial statements and wider business model, and matters pertaining to governance.

The Committee considered the significant matters set out below. Papers were presented to the Committee by management, setting out the relevant facts, material accounting estimates and the judgements associated with each item. The external auditor provided papers setting out its views on each key area of judgement.

The Committee discussed the papers with management, challenged the underlying assumptions and sought the views of the external auditor on each matter. For each area of judgement considered, following review and challenge, the Committee concurred with the treatment adopted by management and the related disclosure presented in the Annual Report.

‌Report of the Audit Committee continued

Significant matters and judgements Impairment of non-financial assets (excluding goodwill)

The Group monitors the performance of individual assets and cash-generating units at each balance sheet date to determine whether there is any indication of impairment. An impairment loss is recognised in the income statement where the carrying amount of an asset exceeds its recoverable amount.

Additional disclosures are included in note 6 to the consolidated financial statements.

Inventory valuation

At a number of our sites, local management used a manual process to calculate the inventory provision as at 31 December 2025 due to system limitations following the cyber security incident in early 2023.

The manual process followed was consistent across these sites and in line with Group policy. The methodology used is designed to replicate the provision calculation that would have been automated within our other ERP systems.

Risk management and internal control

The Group's framework of risk management and internal control has been in place for the year under review and up to the date of approval of the Annual Report.

The Committee, on behalf of the Board, undertakes an annual review of the effectiveness of the Group's framework and did so again for the year under review. The review conducted in February 2026 comprised:

a review of the relevant Principles and Provisions in the 2024 Code

a review of the Company's governance structures

a review of the sources of assurance and the Company's 'three lines of defence' model, including policies, annual self-certification process, reports from specialist functions such as the ethics

and compliance, tax, treasury and legal functions, and internal

audit reports

a review of all material controls, including financial, operational, reporting and compliance controls, and risk management systems, including the improvements achieved in 2025 and identification of further areas for improvement.

The Committee and Board receive regular risk management reports and together they ensure that there are adequate internal controls in place and that these are functioning effectively.

The Directors consider that the Group's framework of risk management and internal control provides reasonable, but not absolute, assurance in the following areas: that the assets of the Group are safeguarded; that transactions are authorised and recorded in a correct and timely manner; and that such controls would prevent or detect, within a timely period, material errors or irregularities. The systems are designed to mitigate and manage risk, rather than eliminate it, and to address key business and financial risks. The majority of internal financial controls are manual. This is driven by a diverse IT landscape and the Group's geographical breadth; as such, there is a heavy reliance on central review controls. The Directors are satisfied that an appropriate

How the Committee addressed the issues

The Committee reviewed and considered the reasonableness of the key assumptions that underpin the value-in-use calculations. They considered the consistency of the key assumption against other materials provided to the Board as part of routine performance updates and the Strategic review process.

How the Committee addressed the issues

The Committee reviewed they key assumptions underpinning the inventory valuation process and considered overall balance sheet prudence. They considered the views of Deloitte on the matter.

amount of time and consideration is dedicated to the review and challenge of results, judgements and estimates - both by the division and the Group leadership team.

The main features of the Group's framework of risk management and internal control and for assessing the potential risks to which the Group is exposed are summarised as follows.

Control environment

The Group's control environment is underpinned by the Morgan Code and its associated policies and guidelines. The Group policies cover: financial procedures; environmental, health and safety practice; ethics and compliance (for example, anti-bribery and

anti-corruption, anti-trust and anti-competitive behaviour and trade compliance); and other areas such as IT and HR. There is a Limits of Authority Policy, which describes the matters reserved for

the Board and the delegations granted to the CEO and other executives. The Group operates various programmes to improve the control environment and management of risk. These include the Group's ethics and compliance programme and the Group internal audit function, which present updates to the Committee at each meeting. In addition, the Committee receives reports

from the Presidents and Finance Directors of each division on their key risks, how these risks are managed and an assessment of the control environment, on an annual basis.

Part of the ethics and compliance programme is the provision of

an externally managed, independent whistleblower ('Speak Up') hotline which is made available for the workforce to raise concerns. Any reports made to the hotline are investigated by senior management, with reports made to the Committee at each meeting. The Committee oversees the progress and outcome

of any investigations arising from reports made to the hotline or directly to management, where there is a concern regarding ethical conduct. The reports investigated have varied in their nature and materiality, with certain matters requiring the support of external advisors and giving rise to disciplinary action against employees for breaches of Group policies.

The divisional presidents and other senior operational and functional management make an annual statement of compliance to the Board confirming that, for each of the businesses for which they are responsible, the consolidated financial statements are fairly presented in all material respects, appropriate systems of internal controls have been developed and maintained, and the businesses comply with Group policies and procedures or have escalated known exceptions to an appropriate level of management.

Financial reporting

Risk management systems and internal controls are in place in relation to the Group's financial reporting processes and the process for preparing consolidated accounts. These include policies and procedures which require the maintenance of records which accurately and fairly reflect transactions and disposals of assets, provide reasonable assurance that transactions are recorded as necessary to allow the preparation of consolidated financial statements in accordance with IFRS, and the review and reconciliation of reported data. Representatives of the businesses are required to certify that their reported information gives a true and fair view of the state of affairs of the business and its results for the period. The Committee is responsible for monitoring these systems and controls.

Performance monitoring

The Board and the Executive Committee hold regular, scheduled meetings, at which they monitor performance and consider a comparison of forecast and actual results, including cash flows and comparisons against budget and the prior year. Divisional management teams also meet regularly to review performance. Executive Committee members visit sites on a regular basis.

Risk management

The Board undertakes a formal assessment of the Group's principal and emerging risks at least twice a year. The identification, assessment and reporting of risks is a continuous process carried out in conjunction with operational management. Appropriate steps are taken to mitigate and manage all material risks, including those relating to the Group's business model, solvency and liquidity.

The Board, either directly or through the Committee, receives updates on risks, internal controls and future actions from both a divisional and Group perspective. The Executive Committee collectively reviews the risk management and internal control framework for all principal Group risks. The Group's risk

management system, which is described in more detail on pages 41 to 45, supports the Directors' statements on going concern and viability on pages 53 and 54.

Risk factors

The Group's businesses are affected by several factors, many of which are influenced by macro-economic trends beyond Morgan Advanced Materials' control; nevertheless, as described above and in the Strategic Report, the identification and mitigation of such risks are regularly reviewed by the Executive Committee and the Board. These risk factors are further discussed in the 'Risk management' section on pages 41 to 45.

Internal audit

The Group's internal audit function provides objective assurance of the adequacy and effectiveness of the risk management and

internal control framework. It may also recommend improvements. While the Head of Internal Audit reports administratively to the CFO, appointment to, or removal from, this role requires the consent of the Committee Chair. The Head of Internal Audit is accountable to the Committee Chair, attends all scheduled Committee meetings and meets with Committee members without the presence of executive management.

Each year's internal audit plan is approved by the Committee.

The plan is focused on higher-risk areas and any specific areas or processes chosen by the Committee. It is also aligned with any risks identified by the external auditor and ethics and compliance team.

The Committee is given regular updates on progress, including any material findings, and can refine the plans as needed. The Committee ensures that there are adequate resources in place for the function to carry out the plan. Reports showing the ratings and key findings from each audit are provided to the Committee.

The Committee challenges management over the key findings, discusses key themes identified by the internal audits and guides management in identifying areas of focus to continuously improve controls. Actions arising from internal audit reviews are agreed with management and the Committee monitors progress on any outstanding actions.

In the latter part of 2025, the Committee reviewed the effectiveness of the function by way of surveys completed by Committee members and key management personnel. This is the approach taken in those years that the review is not externally facilitated. The last externally facilitated review was in 2024, and an external review is recommended for 2029. The review evaluated the function's compliance with the Internal Audit Standards and assessed the wider performance of the function and its ability to add value to the organisation. The review was conducted through a questionnaire taking into consideration relevant professional and

regulatory requirements. The outcome of the review was discussed at the Committee's meeting in December 2025. The Committee

is satisfied that the quality, experience and expertise of the internal audit function are appropriate for the business and that the function was objective and performed its role effectively. The Committee also monitored management's response to internal audits during the year. The Committee is satisfied that improvements are being implemented promptly in response to the findings and believe that management supports the effective working of the function.

External auditor External auditor, including independence and Non-Audit Services Policy

The external auditor, Deloitte, has processes in place to safeguard its independence and objectivity, including specific safeguards where it is providing permissible non-audit services, and has confirmed in writing to the Committee that, in its opinion, it is independent.

‌Report of the Audit Committee continued

No Committee member has declared any connection with the external auditor. In addition, the Company has a Non-Audit Services Policy ('Policy') which was revised in 2025 and is in line with the FRC's revised Ethical Standard 2024. The Policy states that:

Certain non-audit services may not be provided. The external auditor may not review its own work, make any management decisions, create a mutuality of interest and/or put itself in the position of advocate.

Any permissible non-audit work proposed to be placed with the external auditor with a total fee between fi50,000 and fi200,000 must be approved in advance by the Committee Chair. Projects above fi200,000 must be approved in advance by the Committee, with any such proposal being submitted in writing to the CFO, who would in turn seek approval from the

Committee. All permissible non-audit work, regardless of value, must be approved by the Group Director of Finance. Work which includes multiple phases is treated as a single project for approval purposes.

The prior approval of the Committee is required for any non-audit work which, when added to the fees paid for other non-audit work, would total more than 60% (previously 80%) of the audit fee.

The value of non-audit fees must not under any circumstances exceed 70% of the average Group statutory audit fee incurred in the last three consecutive financial years.

To safeguard the objectivity and independence of the external auditor, the Company ensures that any non-audit services to be provided by the auditor are given prior approval by the Committee where required under the Policy.

In 2025, the proportion of the auditor's fees for non-audit work relative to the audit fee was 0.3% (or fi11,000), (2024: 1.2%). Audit and non-audit fees paid to Deloitte are set out in note 4 to the consolidated financial statements, on page 137.

In the opinion of the Committee, the auditor's objectivity and independence were safeguarded despite the provision of a limited number of non-audit services by Deloitte during 2025.

Auditor effectiveness

The Committee discussed the quality of the audit during the year and considered the performance of the external auditor as a separate agenda item at its meeting in February 2026. The Committee conducted a full review following the 2025 year

end to gather feedback and look for continuous improvement opportunities. The Committee reviewed the effectiveness of the external audit process, using a questionnaire which took into consideration relevant professional and regulatory requirements, and was completed by each divisional Finance Director and relevant Group functional teams. In addition to the questionnaire, the following external auditor areas were reviewed:

independence confirmation

audit methodology, use of a component auditor and audit scope and coverage

assessment of materiality and areas of audit focus, consideration of appropriate audit procedures, professional scepticism, appropriate management challenge, clarity and candour in reporting

the FRC's Audit Quality Review findings for Deloitte for the 2024-25 cycle of reviews and Deloitte's proposed actions to address these findings as a firm. The conclusion of the FRC's regulatory inspection of the 2024 audit file resulted in no

key findings.

In addition to receiving written reports from the external auditor and from management, the Audit Committee also conducted private meetings with the external auditor and other meetings separately with management. These meetings provided the

opportunity for open discussion and feedback on the audit process, the responsiveness of management and the effectiveness of both the internal and external audit teams.

Meetings with the external auditor included challenge from the Committee around the efficiency and effectiveness of the audit process, including use of data analytic techniques and opportunities to place more reliance on controls as part of the audit approach. Enhanced data analytic techniques were successfully implemented during the year, with the objective of enhancing audit quality alongside creating efficiencies in the audit process.

The Committee concluded that the external audit process in respect of the financial statements for the year ended 31 December 2025 was effective. The Committee confirmed Deloitte's independence before recommending its reappointment for approval by shareholders at the AGM on 7 May 2026.

External audit rotation

Deloitte was appointed by shareholders as the Group's statutory auditor in 2020 following a formal tender process. For 2025 Deloitte continued to provide external audit services to the Group. This year was James Hunter's first year as lead audit partner.

James Hunter took over from Jane Makrakis as lead audit partner from 1 January 2025. The Audit Committee considers annually the need to tender the audit for audit quality or independence reasons. There are no contractual obligations in place that restrict the Group's choice of statutory auditor and the recommendation is free from third-party influence. The external audit contract will

be put out to tender at least every 10 years. The Committee considers that it would be appropriate to conduct an external audit tender by no later than 2030. Following the Committee's annual assessment of the external auditor's independence, objectivity and effectiveness, no matters have been identified which would warrant an earlier tender.

The Company has complied with the provisions of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 and the FRC's 'Audit Committees and the External Audit: Minimum Standard'.

The activities taken to meet the requirements of the Minimum Standard are set out throughout this Report.

Report of the Nomination Committee

The Committee is comprised solely of non-executive Directors and is chaired by the Chair of the Board. Biographies of the Committee members can be found on pages 57 and 58.

The Group Company Secretary is secretary to the Committee and attends all meetings.

The CEO and Group HR Director attend all scheduled

meetings by invitation. Meeting attendance can be found on page 59.

The Committee's terms of reference are available on the Company's website, morganadvancedmaterials.com.

Committee members

Ian Marchant (Chair) Professor Mary Ryan Jane Aikman CBE FREng (member Helen Bunch (member from 1 November 2025) until 8 May 2025) Alison Wood

Jane Lodge (member Clement Woon

from 1 June 2025)

I am pleased to present the Nomination Committee Report for 2025, which provides insight into key areas considered by the Committee during the year in discharging its responsibilities to ensure that the Board has the requisite mixture of skills, knowledge and expertise to provide robust oversight, and to identify and respond effectively to current and future opportunities and challenges.

The Committee performs a vital role in reviewing the composition and balance of skills and experience on the Board, enabling it to lead the process for appointments to the Board, keep under review the leadership needs of the Group and ensure plans are in place for orderly succession to Board and senior management positions.

We continued our search for non-executive Directors, to replace Directors reaching the end of their nine-year tenure, and recommended to the Board that it appoint two Directors during the year - Jane Lodge (as Audit Committee Chair Designate) and Professor Mary Ryan CBE FREng. Further details on the selection, appointment and induction process can be found on pages 77.

Jane and Mary's biographical details can be found on pages 58.

The Board and Committee oversaw the comprehensive induction of, and handover of responsibilities to Damien Caby following his appointment as CEO during the year. As President of the Thermal Products business, Damien already had strong knowledge and visibility of the Group and he took the opportunity to deepen his knowledge of the other businesses through meetings with the other divisional presidents and their teams, business reviews and visits to their manufacturing sites. His induction also covered his additional responsibilities as CEO. He also met with the Group's stakeholders including colleagues, major shareholders and advisors. Details of the CEO succession process can be found on page 82 of the 2024 Annual Report.

The Board also reviewed succession planning and talent strategy for the Executive Committee members, with a particular focus on our aim to foster diversity within the leadership population, to ensure that our leadership is representative of the Group's stakeholders.

Details of our diversity progress can be found on pages 76 and 77 and details of our succession planning activities can be found on pages 77.

The Committee's performance was reviewed as part of this year's internal Board performance review, which I led, with areas for development identified for the Committee and action plans agreed at our meeting in February 2026. I am pleased to report that the Committee continues to work well and is fully discharging its responsibilities, while contributing effectively to the Group's overall governance framework.

In 2026, our main areas of focus will be on continuing to support Damien in his new role and ensuring that the new non-executive Directors settle into their respective roles.

Ian Marchant

Committee Chair

‌Report of the Nomination Committee continued

Key activities in 2025 Board and Executive Committee diversity as at 31 December 2025 Number of Board members

Percentage of the Board

Number of senior positions on the Board (CEO, CFO,

Chair and SID)

Number in executive management

Percentage in executive management

This disclosure, and the calculation as to whether targets have been met, is based on data collected from the individuals on joining Morgan Advanced Materials.

Inclusion and diversity

The Board's Inclusion and Diversity Policy, which also applies to all Board Committees, reflects the Board's belief in the benefits of diversity and that more diverse companies attract and retain the best talent and achieve stronger overall performance.

The Board considers an extensive definition of diversity when setting policies and appointing Directors, including diversity of age, gender, ethnicity, sexual orientation, disability, nationality, educational and professional experience, socio-economic background, personality type, culture and perspective.

The Committee takes diversity into account in broader discussions on succession planning and talent development, and supports management in its wider commitment to promoting diversity.

Our intention is to at least maintain the current level of diversity, in order that the Board's composition can more closely reflect the Group's workforce, stakeholders and society more generally. It is however acknowledged that in periods of Board change, there may be times when this balance is not maintained.

At 31 December 2025, the percentage of women on the

Group's Executive Committee is 25%. 37% (2024: 33%) of senior management, defined in accordance with the 2024 Code as the members of the Executive Committee including the Company Secretary and their direct reports, were women. Our aim is to have at least 40% of senior leadership roles held by women by end of 2030 and at least 18% held by individuals from an ethnic minority by the end of 2027.

Inclusion and Diversity Policy

The Board has agreed objectives for achieving gender, ethnic and cultural diversity on the Board and its Committees.

The Board's Inclusion and Diversity Policy (which also applies to its committees) informs and steers the Committee in identifying candidates and sets the tone for the wider Group's diversity aspirations, in particular in the context of developing its leadership population. To promote diversity and inclusion, the Board will:

consider all aspects of diversity when reviewing the composition and effectiveness of the Board and its Committees

only engage with executive search firms which are accredited under the Voluntary Code of Conduct for Executive Search Firms, or which have a proven track record in sourcing diverse candidates, when seeking to make new appointments

ensure that candidate lists include individuals from a broad and diverse range of backgrounds and that all candidates with the requisite skills and capability are considered, including those with less 'traditional' track records than the corporate mainstream

agree new Board appointments based on merit against the objective criteria set

review senior management succession planning annually and monitor the development of a diverse pipeline of future senior leaders, reflecting the composition of Morgan Advanced Materials' workforce

set the tone and provide visible support for the Group's diversity and inclusion objectives, including the fostering of an inclusive culture, role-modelling and promoting inclusive leadership

review and challenge the goals and progress of senior management in improving inclusion and diversity.

Succession

The Committee continued to review the plans for orderly succession so that the right balance of appropriate skills, diversity and experience is represented on the Board, building on the work previously undertaken. The Committee also recognises that building a broad and diverse talent pipeline for executive succession is a key priority to deliver the revised strategy.

Non-executive Director appointments and induction

During the year, the Committee continued to manage a phased succession programme for non-executive Directors. Korn Ferry, an external search consultancy, was selected to lead the search for the Directors, following a tender process. Korn Ferry is independent and has no other connection with the Company or individual Directors. The Committee devised candidate specifications for both roles.

The desired skills and experience included international experience, materials science experience, technology expertise and an individual with financial and/or auditing experience to take over the role of Audit Committee Chair. Korn Ferry produced a longlist of candidates for the roles. Shortlisted candidates were interviewed by Committee members and later by other Board members.

Following recommendations by the Committee, Jane Lodge and Professor Mary Ryan CBE FREng were appointed and received a thorough induction, which included:

A comprehensive pack of documentation and materials relevant to Morgan Advanced Materials' business and each Director's role, including information such as key contacts, Board Committee Terms of Reference, the Schedule of Matters Reserved for

the Board, the Share Dealing Code, Board and Committee meeting dates and forward planner, and Group and division strategy updates.

One-to-one meetings scheduled with the Executive Directors, the Executive Committee members, certain senior management personnel and with senior representatives of the Company's external auditor, remuneration advisor and brokers. As Jane will be taking on the role of Audit Committee Chair in 2026, her induction also included additional meetings on risk management and internal audit at Morgan Advanced Materials.

Their inductions also included visits to several sites, touring the sites and participating in employee engagement sessions, to help build their understanding of Morgan Advanced Materials' business and to hear directly from employees about their experience of working at Morgan Advanced Materials.

Senior management succession

The Committee reviewed the Group's senior management talent pipeline during the year, their development and own succession plans, as well as progress against the talent and development framework. The Committee has visibility of emergency successors and those identified as medium- and long-term successors, and reviews the development programme for these individuals to understand their strengths and skill gaps.

Board members engaged with Executive Committee members and their direct reports throughout the year during formal presentations at Board meetings, as well as at Board dinners. This provided the opportunity for them to get to know some of the individuals identified in the succession plans.

The Committee monitors the impact of the diversity and inclusion strategy on appointments that are made and their progress within the Company, including at the level of those who report to the Executive Committee, to develop a pipeline of diverse talent that will serve to widen the pool of candidates for Board and leadership positions in the future. The Committee will continue to work with the CEO and Group HR Director on senior management succession.