Annual Financial Report

ANNUAL REPORT & ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Innovation

that endures

Solutions

that deliver

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Powering

Financial highlights Operational highlights

the world's

critical systems

Order intake Total revenue

£225.9m £230.1m

2024: £181.6m 2024: £247.3m

Adjusted profit before tax (Loss)/profit before tax

£9.5m £(7.3)m

• Cost discipline maintained and further efficiency improvement actions taken

• Inventory reduced and optimised, maximising cash

• Full pipeline of new products with 24 new products launched

• Improved customer service and satisfaction levels

• Improved supply chain efficiency

Founded in 1988 and listed on the London Stock Exchange in 2000, XP Power now employs

c. 2,100 people across Europe, North America and Asia.

We design and manufacture a diverse portfolio of

power converters, with unrivalled customer service and support.

We focus on sectors where power is mission-critical, and failure is not an option. Our enduring relationships are built on a reputation for quality.

2024: £13.8m 2024: £(7.7)m

Adjusted earnings per share Leverage ratio

22.5p 1.2x

2024: 42.9p 2024: 2.3x

• Completion of construction of our Malaysia plant, allowing closure of our China manufacturing facility

• Decision taken to exit RF market to focus on higher profitability product categories

  CONTENTS

  OVERVIEW

  OUR BUSINESS AT A GLANCE 02

  POSITIONED FOR GROWTH 04

  INVESTMENT CASE 06

  CHAIR'S STATEMENT 08

  STRATEGIC REPORT

  OUR MARKETS 12

  OUR BUSINESS MODEL 16

  CHIEF EXECUTIVE OFFICER'S REVIEW 18

  OUR STRATEGY 24

  CHIEF FINANCIAL OFFICER'S REVIEW 28

  GOVERNANCE

  GOVERNANCE AT A GLANCE 84

  BOARD AND COMMITTEE ATTENDANCE 85

  INTRODUCTION TO GOVERNANCE 86

  BOARD OF DIRECTORS 88

  CORPORATE GOVERNANCE REPORT 91

  SECTION 172(1) STATEMENT 98

  NOMINATION COMMITTEE REPORT 105

  AUDIT COMMITTEE REPORT 110

  REMUNERATION COMMITTEE REPORT 117

  DIRECTORS' REPORT 141

  DIRECTORS' RESPONSIBILITIES STATEMENT 145

  RISK MANAGEMENT FRAMEWORK 34

  Positioned for

  Sustainability

  MANAGING OUR RISKS 35

  VIABILITY STATEMENT 42

  HOW WE ENGAGE WITH OUR STAKEHOLDERS 43

  OUR SUSTAINABILITY STRATEGY 44

  SUSTAINABILITY REPORT 46

  SUSTAINABLE PRODUCTS 48

  ENVIRONMENTAL LEADERSHIP 53

  TCFD REPORT 56

  FINANCIALS

  INDEPENDENT AUDITOR'S REPORT 148

  CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 153

  CONSOLIDATED BALANCE SHEET 154

  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 155

  CONSOLIDATED STATEMENT OF CASH FLOWS 156

  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 157

  COMPANY BALANCE SHEET 211

  growth

  How our high performing products serving customers in growing markets are driving our annuity model.

  A solutions business

  How our technical expertise enables us to deliver for long-term customers.

  is a commercial imperative

  Improving the sustainability of power conversion is a key part of our strategy.

  PEOPLE AND WORKPLACE 66

  ETHICS AND COMPLIANCE 72

  KEY NON-FINANCIAL PERFORMANCE INDICATORS 74

  NOTES TO THE COMPANY BALANCE SHEET 212

  FIVE-YEAR REVIEW CONSOLIDATED INFORMATION 223

  ADVISERS 224

  SEE PAGES 04-05 SEE PAGES 16-17 SEE PAGES 46-80

  XP Power Annual Report & Accounts 01

  for the year ended 31 December 2025

  
  
  

  ‌OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

  OUR BUSINESS AT A GLANCE

  Power converters

  We make power supplies that convert power into a useable form. We do this where reliable power is critical.

Electricity generation & transmission

• Alternating Current (AC)

• High Voltage Transmission (c. 200kVAC)

• 30 TWh generated globally

  Electricity consumption

• c. 50% AC (motors, fans, etc)

• c. 50% Direct Current (DC) (electronics, lighting, EVs etc)

• Typically Low Voltage (0 - 500V)

  Our products

Power converter systems are at the core of our business and are essential for the reliable operation of electrical equipment. They safely and efficiently convert grid power into the exact form required, for example by delivering stable low-voltage DC for semiconductor-based electronics while providing critical safety isolation from the mains. The precision of power delivery is vital in mission-critical applications where reliability and safety are paramount.

Our portfolio, tailored for a broad range of voltage and power combinations, supports a wide range of

industries, from sensitive electronic devices to complex industrial systems.

With c. 500 product families, we offer one of the most comprehensive ranges in the industry. This breadth, combined with strict regulatory compliance and full component traceability, creates significant barriers to entry and reinforces our position as a trusted partner for innovative, reliable and safety-compliant power solutions.

Industrial Technology

Our power converters support advanced automated equipment, which improves workplace safety and productivity. Consistent power and low electrical noise help these systems operate reliably without disruption or risk to operators.

Semiconductor Manufacturing Equipment

Our products power mission-critical processes such as wafer fabrication and inspection, where precision and reliability are essential, enabling complex processes that support technologies driving the global economy.

Healthcare

Our power conversion solutions ensure the reliable operation of critical medical devices, such as ventilators, especially in high-demand situations. Stable voltage and safety isolation protect the performance of life-saving equipment and the safety of healthcare providers and patients.

Technology

North America

We operate six sales offices across North America, supported by design and production facilities in Massachusetts, New Jersey and Southern California. Our Technology Solutions Group in Silicon Valley serves major Healthcare and Semiconductor Manufacturing Equipment customers, making the region a key driver of innovation and growth.

Europe

With eight direct sales offices and a robust distribution network, we serve customers throughout the region with particular strength in Industrial Technology and Healthcare. We support businesses in 3D printing, process automation and analytical instrumentation, positioning us as a critical partner in Europe's evolving industrial landscape.

Asia

We have four direct sales offices and ten distributors across Asia. With design engineering in Singapore, South Korea and the Philippines, plus production in Vietnam, until the end of 2025 in China, and shortly Malaysia,

we directly serve this region and provide cost-effective manufacturing for the rest of the Group.

02 XP Power Annual Report & Accounts

for the year ended 31 December 2025

XP Power Annual Report & Accounts 03

for the year ended 31 December 2025

Number of employees

c. 2,100

Number of sites

22

Number of active customers

c. 2,500

Top 30 client concentration as % Group revenue

c. 50%

Average length of customer relationships

15 years

Total addressable market size

$4.4bn

‌OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

POSITIONED FOR GROWTH

Over the last five years, XP Power has successfully navigated an unusual period of volatility in external markets.

we deliver high-performing products...

High Voltage High Power

Low Voltage High Power

In the markets we serve...

Attractive growing end-markets

XP Power is a leader in a highly fragmented market. Our target market is large and focuses on three growing sectors, each of which requires and values power as a key part of their processes and delivery. We benefit by operating in markets that are well diversified by both region and sector.

Power

All power supplies

A broad-based product offering

Generating long-term revenue

Our customers' products will often have a multi-year life-cycle and the cost to our customers of changing power supply in those products is often high. Our technology is usually designed into our customers' products and, therefore, we benefit from the consistent generation of long-term annuity revenue over the lifetime of the product, which can extend for over ten years.

We are designed into hundreds of individual customer products at a time, at various stages of their own product life-cycle, sustaining future demand and minimising our exposure to the commercial success of any individual customer project.

Typical Typical Active projects

design-in revenue with revenue phase: annuity: annuity >10 years:

2 years 7 years 73

More than $350m of sales to a single customer over the last 6 years

FY20 FY21 FY22 FY23 FY24 FY25

READ MORE ABOUT OUR ANNUITY MODEL ON PAGE 26

to drive our annuity model...

READ MORE ABOUT OUR TECHNOLOGY ON PAGES 16-17

Fully digital control

Analogue control

A stocking manufacturer

Order-based producer

To

Full sensor capability

Bespoke turnkey solutions for customers

From

Provision of basic electrical power

Commodity provider

Market-leading solutions

As long-term partners with our customers, we understand their engineering and operational challenges and deliver the solutions they demand:

• Fast to design

• Fast to prototype

• Fast to high-volume manufacturing

Powering our customers' IP

We start with the user experience, then work backwards to integrate the technology. This approach has enabled us to evolve from powering the customer's process to being an integral part of the process itself.

Changing the role of power supply

With our technology and products, we are transforming the role that power delivery plays in the world today.

with designed-in technology...

We have a market-leading portfolio, further enhanced over recent years through new standardised product launches and customer-specific modified products.

Power supply product portfolio

Over time, we have extended our offer from Low Voltage Low Power products into adjacent markets.

Our target

$35-40bn

$4.4bn

Complexity

Low Voltage Low Power

Voltage

High Voltage Low Power

market:

Critical power

Semiconductor Manufacturing Equipment

To achieve precision at the heart of the fabrication process, we often tailor solutions to large customers.

Industrial Technology

We deliver power solutions to industrial customers in market sectors with healthy long-term growth attributes such as process automation, analytical instrumentation, and test & measurement.

Healthcare

An ageing population and increasing need for medical technology supports long-term growth in demand for power in this market.

Low Voltage Low Power

• Medical devices for patient treatment and imaging

• Factory automation and robotics

• Analytical instruments and life sciences equipment

  Low Voltage High Power

• Semiconductor etch and deposition

• Surgical robotics and medical imaging systems

• Medical diagnostics and monitoring equipment

  High Voltage Low Power

• Electrostatic chuck for semiconductor manufacturing

• Analytical instruments - mass spectrometry and SEM

• Pulsed electric field creation for medical devices

  High Voltage High Power

• Ion implantation

• E-beam lithography systems

• E-beam welding equipment

READ MORE ABOUT OUR MARKETS ON PAGES 12-15 READ MORE ABOUT OUR PRODUCTS ON PAGE 25

04

... and create long-term value

XP Power Annual Report & Accounts

for the year ended 31 December 2025

and opportunities for growth

XP Power Annual Report & Accounts

for the year ended 31 December 2025

05

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INVESTMENT CASE

Expected market growth

7%

Target market size

$4.4bn

We focus on markets where power is critical and where we can benefit from both macro growth trends and high levels of innovation.

New products released this year

24

Product families

c. 500

We have a market-leading portfolio of products, covering a broad spectrum of applications and a wide range of voltage and power requirements.

Our investment case creates real value, whatever part of the cycle we're in.

FLXPro case study

XP Power's leadership in configurable power traces back to the launch of fleXPower in 2005, followed by higher-power variants and, later, the 1U 1200W nanofleX platform in 2015. Each generation expanded capability, power density and flexibility to meet evolving customer needs. Over the past decade, nanofleX became a flagship solution across demanding applications, while customer feedback increasingly highlighted the need for higher power in smaller form factors, wider output adjustability without compromising electromagnetic emissions, enhanced controllability, reliability and system-level diagnostics. Released in 2025, FLXPro is the result of this continuous, customer-driven evolution,

representing the next generation of industry-leading configurable AC-DC power supplies.

FLXPro leverages Silicon Carbide (SiC) and Gallium Nitride (GaN) wide-bandgap technologies to deliver significantly higher power density in a smaller footprint than its predecessor, enabling customers to design more compact, efficient systems. Built

on a fully digital architecture, the modular four-slot platform allows customers to configure output voltage and power precisely to their needs while maintaining high stability, reliability, and safety.

FLXPro is the first product from XP Power to

CASE STUDY

Cumulative five-year R&D spend

£117m

R&D and product design staff

>160

Our highly experienced teams provide fully customised solutions to solve customers' power problems with a proven process for swiftly transitioning into volume manufacturing.

Top 30 client concentration as % of Group revenue

52%

Average length of customer relationships

15 years

We work closely with our customers to deliver tailored solutions and focus on providing high-quality products with excellent customer service.

Our strong customer relationships and the designed-in nature of our products provide access to significant annuity revenue.

R&D centres

8

Manufacturing locations

6

Our supply chain operations with a global footprint give us flexible manufacturing capacity, the ability to

engineer solutions hand-in-hand with our customers and accelerate the time-to-market.

incorporate iPSU™ Intelligent Power technology, providing real-time monitoring, predictive diagnostics, shutdown event analysis (Black Box Snapshot) and multi-level password protection to support uptime, faster fault resolution and cybersecurity compliance. These capabilities are further enhanced by XPInsight, an intuitive, human-centred user interface that simplifies system control and provides a trusted window into the health and performance of the customer's application, enabling faster, more informed decisions.

Typical revenue annuity

7 years

Typical design-in phase

2 years

This combination of flexibility, control and diagnostics makes FLXPro ideal for demanding applications including surgical robotics, mass spectrometry, molecular analysis, LED laser projection, and semiconductor inspection and metrology.

Industry-leading features

Cash generated from operations

£49.3m

Gross profit margin

41.9%

Our attractive operating margins and relative low capital investment requirements enable us to deliver strong, free cashflows.

01

Market-leading levels of output power and power density in the smallest package.

We aim to lead the industry by reducing energy consumption, prioritising our people and enhancing our product design process, with an aim to reach net zero by 2040.

05

CDP climate change score

A

Emissions reductions (versus 2024)

8%

XPInsight UI simplifies configuration accelerating development timelines and reducing engineering costs.

02

Unique, fully digital modular architecture for precise control and flexibility.

06

Black Box Snapshot and tricolour-status LEDs for in-depth diagnostics.

03

SiC/GaN design delivers up to 93% efficiency levels.

07

ES1 isolated digital communications enhance safety, reliability and system protection.

04

Wide adjustable outputs enable precise control and optimised application performance.

08

Secure multi-level password protection supports cybersecurity compliance in critical applications.

06 XP Power Annual Report & Accounts

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XP Power Annual Report & Accounts 07

for the year ended 31 December 2025

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

CHAIR'S STATEMENT

Strong leadership through sluggish market conditions and well-positioned for growth.

JAMIE PIKE

CHAIR

‌OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

We entered 2025 with confidence in the Group's long-term recovery as

market conditions improved, but with uncertainty as to precisely when this improvement would be seen.

The macroeconomic environment provided a challenging backdrop for the broader manufacturing sector in 2025 with slow growth and macroeconomic uncertainty leading to relatively weak demand conditions. The introduction

of additional US import tariffs in the first half of the year created an additional complexity to navigate.

The situation was closely monitored and diligently managed by the Group throughout the year, and we took mitigating actions proactively to improve efficiency and underpin performance. After a sluggish start, this led to a significant increase in profitability as the year progressed, while maintaining a sharp focus on the delivery of our long-term strategy.

It was pleasing to see a significant increase in order intake in the year, indicating a slow-down in the rate of customer destocking and, for some customers, destocking appears to have been fully completed.

With revenue underpinned by the increased order intake, and second-half profitability improved by internal actions, we have a sound foundation with which to enter 2026. The same disciplined approach that has served us well in 2025 will be maintained as the market recovers.

Throughout the market downturn, we have been careful to continue the investment in, and delivery of, our long-term strategy. We made significant progress with our key strategic initiatives this year, as set out in more detail below. We also took the decision to focus our resources on the low voltage and high voltage markets by exiting the less attractive RF market. We rationalised and added resilience to our supply chain by completing the construction of our new facility in Malaysia and closing our manufacturing facility in China.

These decisions position us well to continue to deliver for our customers, employees and shareholders.

Delivering our strategy

While, demand conditions remain subdued, we have continued, if not accelerated, the delivery of our strategy. We have further invested in our product development pipeline, which is fuller now than it has been for many years. During the year, we have released 24 new products which at maturity are expected to generate annual revenue of

c. £30m.

We have delivered healthy growth in new business wins in the year, many being value-adding bespoke technology solutions, which are central to our strategy. Our Top 30 customers, identified for their long-term growth potential,

grew faster than the overall business as we grow our wallet share with these important accounts. Our progress was aided by continued improvement in customer service, recognised in our latest customer opinion survey.

We continued to focus on improvements in our supply chain, which are set out in more detail in the Chief Executive Officer's Review. These improvements allowed the Group

to deliver a 170bps year-on-year improvement in Adjusted Gross Margin during a period of reduced manufacturing output and, therefore, reduced utilisation of manufacturing overhead, which was pleasing to see.

Our diverse, talented and experienced workforce continues to deliver at a high level. The latest workforce survey showed they are more engaged and satisfied by their employment with XP, which is very pleasing to see. We continue to be a leader in our industry for sustainability, reflected in improved rating agency scores in 2025, and we are committed to ensuring that continued improvements in this area do not lose momentum.

Supply chain restructuring

We are pleased to report that construction of our new production facility in Malaysia is now complete.

Commissioning will commence shortly and is expected to be completed later in 2026, with a gradual introduction of manufacturing output planned. The progress with the

Malaysia site allowed the Board to take the decision to close our manufacturing facility in China in December 2025. The new facility in Malaysia offers greater flexibility, particularly in terms of serving US customers, which form our largest geographical market by revenue.

Exit from RF market

In late 2025, the Board took the decision to exit the

RF market. The RF Division has historically delivered gross margins and overall returns materially lower than the Group average. Furthermore, as previously announced, US export controls introduced in late 2024 prevent us from selling

RF products to key customers in China after 2025, limiting future prospects.

This decision will allow the Group to maximise investment and returns from other parts of the product portfolio, which have a far stronger market position and greater long-term growth prospects. The exit will be achieved gradually over the next approximately three years in order to provide our customers with a smooth transition.

Governance

I am satisfied that the Board continues to provide appropriate oversight, challenge and direction in supporting the Group in its development and performance.

As announced in October, Amina Hamidi stepped down from her role as Non-Executive Director after a promotion with her current employer. In December, we announced the appointment of Charlotta Ginman as Non-Executive Director and Senior Independent Director designate. Charlotta brings extensive experience and senior leadership to our Board.

Polly Williams retired from the Board in February 2026 after over nine years of service with the Group and Charlotta has now assumed the role of Senior Independent Director. I would like to reiterate my thanks to Polly and Amina for their significant contributions to the Board.

I was delighted to meet many of our shareholders at XP's first Investor Seminar held in November. This event provided an opportunity for the Company to set out its investment case to both current and prospective investors and was well received.

Looking to the future

We have navigated sluggish market conditions with discipline and increasing confidence. Our strategy remains unchanged and was well executed in the year. The Board believes that the business is now very well positioned and appropriately structured to make healthy progress as end-markets fully recover and return to normal levels of growth.

JAMIE PIKE

CHAIR

2 March 2026

08 XP Power Annual Report & Accounts

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XP Power Annual Report & Accounts 09

for the year ended 31 December 2025

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Strategic

Report

10 XP Power Annual Report & Accounts

for the year ended 31 December 2025

XP Power Annual Report & Accounts 11

for the year ended 31 December 2025

CONTENTS

OUR MARKETS

OUR BUSINESS MODEL

CHIEF EXECUTIVE OFFICER'S REVIEW OUR STRATEGY

CHIEF FINANCIAL OFFICER'S REVIEW RISK MANAGEMENT FRAMEWORK MANAGING OUR RISKS

VIABILITY STATEMENT

HOW WE ENGAGE WITH OUR STAKEHOLDERS OUR SUSTAINABILITY STRATEGY SUSTAINABILITY REPORT

SUSTAINABLE PRODUCTS ENVIRONMENTAL LEADERSHIP TCFD REPORT

PEOPLE AND WORKPLACE ETHICS AND COMPLIANCE

KEY NON-FINANCIAL PERFORMANCE INDICATORS

12

16

18

24

28

34

35

42

43

44

46

48

53

56

66

72

74

‌OUR MARKETS

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Overview

We serve a broad spectrum of power needs for our customers, from the low voltage market - where power is used to operate electronic systems which then perform a process (e.g. robotics) through to the high-voltage market - where power is used directly in the process (e.g. particle acceleration or ionisation).

We have attractive positions in our key markets, which are typically fragmented with clear long-term demand

drivers and, therefore, offer us significant opportunities for revenue growth.

Our position

Our broad and up-to-date product portfolio, combined with our engineering services capability to integrate modified products within a power system solution, means our products form a key indispensable element

Our marketplace

1 Average best year value is the average expected revenue per project in peak year of project lifecycle

Key trends

• Customers' applications are becoming more complicated and increasingly connected. Our products are evolving similarly, incorporating more and more technology over time.

• Technology innovation is focused on increasing voltage and power, shrinking power density, greater rapid configurability, greater precision and improved connectivity.

• Market growth is also supported by sustained long-term trends, such as production automation and digital transformation and analytical instrumentation within precision manufacturing applications.

Our response

We will target fast-growing niches within the market, including robotics, test and measurement, 3D printing and additive manufacturing, smart grid and analytical instruments. By focusing on these higher growth sectors, we can capitalise on emerging trends and offer innovative products that meet these industries' unique needs.

1000s

$150k Medium/Low

Number of customers

Average best year value1 Need for solutions

Typical applications

• Analytical Instrumentation

$2.8bn

Market overview

Market size

Our markets are highly fragmented and supported by long-term demand drivers. They provide opportunities for us to grow through both market expansion and market share gain.

• Our customers can be grouped into three end-markets: Industrial Technology, Healthcare and Semiconductor Manufacturing Equipment.

• Products can principally be split into Low Voltage (LV) and High Voltage (HV).

• Total market is valued at ~$4.4bn, of which XP Power has ~6% market share.

  Total market value US$bn

  of the customer's application. This means we are ideally positioned to support our customers and solve their power problems.

  2.8

  Industrial

  Technology

  1.1

  Semiconductor Manufacturing

  0.5

  Healthcare

  Macro growth drivers

  In addition to sector-specific growth drivers, we see many opportunities to expand our addressable market and customer base, which apply to all end customer markets.

  Customer penetration

  Our blue-chip customer base offers significant opportunities to secure further programmes from engineering teams worldwide. Having worked closely with leading companies in our markets, we are a trusted partner and can now capitalise on these relationships to capture a larger share of their spend. By expanding our product range and delivering innovative, high-quality, tailored solutions, we aim to deepen partnerships, strengthen loyalty and unlock additional growth across global markets.

  Climate change

  Climate change and greenhouse gas emissions are a growing issue as emerging countries develop and urbanise. We lead the development of ultra-efficient products that consume and waste less energy, suited to healthcare and industrial applications.

  By aligning product development with environmental priorities, we help mitigate climate change and position ourselves

  as a partner for businesses focused on achieving their own sustainability goals.

  Energy efficiency and reliability Rising customer expectations and tighter legislation on energy use drive demand for more efficient power converters.

  For critical applications, this goes hand in hand with reliability, as greater energy efficiency typically improves the reliability extending the life of

  key components. This combination of efficiency, reliability and longevity makes our solutions attractive across industries from healthcare to industrial automation, where performance and dependability are vital.

  Legislation

  Our industry is increasingly shaped by global legislation focused on environmental impact, safety and, in particular, energy efficiency. Legislation requires products throughout the supply chain to be

  certified by regulatory bodies, both for our customers and for us. This creates a

  barrier to entry for new competition within the power supply industry and is also a driver of revenue annuity, since regulatory approval often specifies the power supply solution that must form part of our customers' product design.

  Capital equipment

  Our products often power capital equipment and are influenced by the cyclical nature of these markets. However, we have established a firm foothold in exciting emerging industrial technologies such as 3D printing, analytical instruments, smart grids and robotics, which are advancing rapidly and being widely adopted. We believe the medium- and

  long-term outlook for capital equipment is positive, particularly in emerging markets where rising labour costs drive automation, creating strong demand for innovative and efficient solutions that our products are well placed to support.

  Innovation

  Our customers must launch innovative products that enhance productivity and functionality, while reducing environmental impact to stay competitive and meet sustainability expectations. Their drive to differentiate often results in more demanding power requirements for greater power density, fine precision, very high reliability and tailored solutions. By aligning our capabilities with these changing needs, we position ourselves as a critical partner in enabling customer innovation and long-term success.

  Market dynamics

  Power supply

  manufacturers OEMs - Our customers Our customers' customer

  Analytical instruments	Limited number of manufacturers
  Specialist manufacturing equipment	Limited number of manufacturers
  General equipment	Large number of manufacturers with standard products

  • Both customised and off-the-shelf products plus design support

  • Small number of OEMs

  • Average instrument cost > $0.5m

  • Limited choice of equipment suppliers

  • Diverse products including pharmaceutical, food and beverage and airport security

  • Specialised products to enable process

  • Limited choice of equipment suppliers

  • Wide variety of factories and production sites globally

  • Standard and some non-standard products

  • Wide choice of products from regional and global manufacturers

  • Wide variety of professional equipment users ranging from AV equipment to food production

  OUR MARKETS

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  OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

  1 Average best year value is the average expected revenue per project in peak year of project lifecycle

  Key trends

  • The market has an attractive long-term growth outlook.

  • Demand for processing power for AI and big data is expected to fuel at least a $1tn market by 2030.

  • The industry is adding more semiconductor fabrication facilities globally, with many nations seeking to establish their own manufacturing supply chains.

  • The accelerated proliferation of electronic devices in our lives (including AI, big data, smart technology, AR/VR, and autonomous and electric vehicles), which run on semiconductors, drives high demand and investment.

  Our response

  We offer the broadest technology-leading range of standard products, which can easily be redesigned or modified to power a customer's specific applications. We will continue to leverage our unique position as one of few companies globally offering a full range of power and voltage products for semiconductor manufacturing. Our ability to integrate these products into comprehensive power solutions at pace provides significant value to our customers. Manufacturing equipment is becoming increasingly sophisticated with more demanding power needs. We act as an extension of our customer's product development team, delivering customised solutions quickly to accelerate their time-to-market, which is often critical to success in the industry.

  Ion implantation Deposition and etch Lithography

  Inspection and measurement

  Wafer cleaning

  •

  •

  •

  •

  •

  $1.1bn 8%

  7 - 10%

  £85.6m 37%

  10s

  $650k High

  Typical applications

  Market overview

  Market size Market share

  Annual market growth 2025 revenue

  % of revenue Number of customers

  Average best year value1

  Need for solutions

  End customer market: Semiconductor Manufacturing Equipment

1 Average best year value is the average expected revenue per project in peak year of project lifecycle

Key trends

• Growth is driven by megatrends of an ageing global population, rising global medical standards, and the increasing need for medical technology to improve the efficacy and efficiency of medical interventions.

• Innovation and advancement in diagnostic technology and treatments drive demand for more sophisticated devices.

• Customers require complex power solutions with high safety standards to meet strict regulatory requirements.

• Customers prioritise quality, reliability and support.

• The sector demands more robust and scalable healthcare infrastructure to accelerate investment.

Our response

Our broadest, most up-to-date range of medically approved power supplies, combined with a high level of customer service, makes our value proposition appealing to healthcare providers. By focusing on delivering reliable, high-quality solutions that meet the stringent requirements of the healthcare industry, we aim to strengthen our position and expand our presence in this vital and growing market.

Robotic surgery Pulse field ablation

Minimally invasive surgery

Imaging and diagnostics Home healthcare

•

•

•

•

•

$0.5bn 15%

5 - 7%

£57.2m 25%

100s

$250k Medium/High

Typical applications

Market overview

Market size Market share

Annual market growth 2025 revenue

% of revenue Number of customers

Average best year value1

Need for solutions

Market dynamics Market dynamics

Power supply

manufacturers OEMs - Our customers Our customers' customer

Power supply

manufacturers OEMs - Our customers Our customers' customer

Small number of approved manufacturers

•

•

•

Customised solutions to support process innovation

A limited number of OEMs Tools cost >$1m

Semiconductor manufacturers and OEMs work together to drive innovation

Limited number of semiconductor manufacturing business globally

Large number of manufacturers with standardised products. Medical technology products often require unique, modified and complex solutions.

•

•

•

Standard and modified standard products

A large number of OEMs supply a wide array of equipment

Equipment costs $10k to $1m

• A large number of hospitals and healthcare providers globally

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OUR BUSINESS MODEL

Our vision

To be the first-choice power solutions provider delivering the ultimate experience

for our customers and our people.

Key resources

Research and development enhances product performance, creates tailored solutions and ensures quick responses to emerging trends.

Speed

Integrity

Customer focus

Flexibility

Knowledge

Our purpose

We power the world's

critical systems

Our values

Inputs

Value generated

Our key strengths through the product life-cycle A technology solutions business

to the highest quality standards.

• We have complete control over quality, adherence to regulations and

delivery against customer requirements.

• Our processes are streamlined and continually improving, to

achieve strong on-time delivery performance.

Manufacturing 04

03

Supply chain management

• We maintain quality and reliability through our rigorous approval process of prospective suppliers.

  • We provide flexibility through our global multi-site and low-cost

    
    
    

    manufacturing footprint.

    • We hold appropriate inventory of both raw materials and semi-

finished goods to minimise customer lead time.

• We provide a broad range of up-to-date and adaptable

  product offerings across more than 500 product families.

• We ensure rigorous adherence to regulatory standards and build in class-leading energy efficiency to our designs.

• We maintain stringent component traceability.

  01

  Product development

  02

  Solution design

• Our sales teams work with current and potential customers worldwide to understand their power needs.

• We match our customers' needs with existing products or develop requirements for a customised solution.

• Our engineering teams on three continents design and produce samples of customised products for customer validation.

We are one of few suppliers that can deliver fast-to-market solutions, which provides customers with a competitive advantage.

Our people

Employee engagement score in 20251

1 Results exclude Vietnam and China employees.

4.15 / 5

Integrated software solutions

Our customers

New product families released over a

five-year period

87

Customers are looking for power supplies that incorporate system diagnostics and process matching. These digital capabilities require hardware and software integration. This integration is critical for customers to diagnose device shutdown events and is beyond the capabilities of conventional power supplies. This trend, which began with North America customers

in the Semiconductor Manufacturing and Healthcare sectors, is quickly expanding to other markets. We lead the way with our product portfolio and provide digital capability integrated with quality hardware. A leading example is FLXPro with the incorporated iPSU-Intelligent Power technology, which provides shutdown event diagnostics (see page 07 for a deep dive).

Long-term partnerships

Our suppliers

CDP supplier engagement assessment

A list

Our customer-centric approach is a key strength as more customers seek technical solutions from long-term partners who understand their

engineering and operational challenges. Our Advanced System Engineering Group's in-depth understanding of end user application and requirements, combined with cross-functional global teams, accelerates time from initial design to market.

Our communities and the environment

Reduction in carbon emissions compared to 2024

8%

Our shareholders

Adjusted operating cash conversion

225%

Underpinned by:

16 XP Power Annual Report & Accounts

for the year ended 31 December 2025

XP Power Annual Report & Accounts 17

for the year ended 31 December 2025

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

CHIEF EXECUTIVE OFFICER'S REVIEW

Our strategy positions us for a bright future."

GAVIN GRIGGS

CHIEF EXECUTIVE OFFICER

‌OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

I am pleased with the way the business navigated a year of relatively slow market conditions and macroeconomic uncertainty, improving our financial performance as the year progressed.

We took disciplined and proactive actions to deliver a much stronger second-half financial result, while also strengthening the foundations for longer-term success.

It was also encouraging to see order intake strengthen as the rate of customer destocking slowed, underpinning future revenue.

We continued to focus on innovation, with development of new products and technology solutions, and to invest in resilient, scalable infrastructure to deliver world-class, efficient customer service across our global supply chain.

With improved operations and enhanced strategic positioning, we are well placed to make healthy progress as markets recover.

Review of our year

Order intake totalled £225.9m (2024: £181.6m), up 28% in constant currency. As we entered the year, we saw a

significant step-up in order intake that indicated customers intended to slow their rate of destocking as the year progressed. The strongest growth came from distribution customers, where orders increased 69% year-on-year as their inventory holding of our products normalised, a positive sign that this extended period of destocking is coming to an end.

Group revenue was £230.1m (2024: £247.3m), down 4% in constant currency. All of the revenue decline in constant currency arose in the first half of the year, as destocking by both Industrial Technology and Healthcare customers reached a peak. Destocking eased as the year progressed,

resulting in a 7% uplift in second-half revenue compared with the first half.

The Healthcare sector delivered our strongest revenue performance in 2025, growing 2% in constant currency. This reflected slower destocking by our customers as the year progressed, alongside healthy demand for some key medical technology projects in the US. Revenue from the Industrial Technology sector reduced by 5% in constant currency, reflecting ongoing destocking amongst OEM customers

but growth from distribution customers, particularly in the second half. Semiconductor Manufacturing Equipment revenue was 7% lower in constant currency, against a 2024 comparative that benefited unusually from backlog clearance within our High Voltage High Power ("HVHP") business. The tough comparative for HVHP sales masked strong growth elsewhere in this sector which is encouraging for the Group's long-term growth prospects.

By region, North America revenue was up by 1% in constant currency as the increased US tariff costs were successfully passed through to customers without any material impact on demand. Europe and Asia declined by 11% and 13% respectively as a result of weaker end-customer demand conditions.

In response to a slow start to the year and the prospect of a slower overall pace of market recovery, we acted early to improve profitability in the second half of the year. The efficiency actions taken focused on reducing overheads

within our supply chain, particularly as production volumes slowed or shifted within our production network. Together with purchase price savings negotiated on certain direct material costs, our Adjusted Gross Margin improved from 41.0% in 2024 to 41.4% in the first half of 2025 and 43.9% in the second half of the year.

Cash generation remained strong at £38.9m, representing Adjusted Operating Cash Conversion of 225% in the year. Inventory reduced by 20% to £57.0m while at the same time improving customer service and reducing delivery lead times. A new inventory holding strategy was implemented at year end, which is expected to further improve customer service levels from 2026 onwards.

New business wins grew by 12% and growth was strongest within our Technology Solutions offering, which is strategically important to our long-term success.

After a strategic review, we decided to exit the market for RF products. We held a minor c. 1% market share and this

gave us fewer opportunities for differentiation than our other product categories. The lack of a clear strategic advantage resulted in the RF business generating margins and returns materially lower than the Group average in recent years. This decision allows us to focus our resources on our Low Voltage and High Voltage Divisions, which enjoy superior strategic positioning, higher gross margins and significant growth potential.

We will wind down the RF business over approximately three years in order to continue to support our customers through a supply chain transition. In 2025, the RF business generated revenue of £24.3m and was close to break even, including unusually buoyant sales to China Semiconductor customers prior to expiry of export licenses, which will not repeat beyond 2025. We anticipate that annual revenue in RF products will be similar to 2025 during the wind down period.

Construction of our new manufacturing facility in Malaysia is complete, with production set to commence later in 2026 following a period of commissioning. This has allowed us

to close our manufacturing facility in China, consolidating our supply chain footprint into Vietnam and Malaysia. Both facilities will enable the Group to serve global customers efficiently. Production in Malaysia will be increased at a pace required by demand.

Global trading rules continue to evolve and become more complex, particularly regarding product exports. We

take our responsibilities in this area very seriously and continually invest in our export control processes. In 2025, we implemented new software that automatically screens sales prospects for compliance with export rules throughout the sales life cycle. We tightened even further our terms and conditions of sale to ensure our customers understand our rules governing the use and re-sale of our products. We continue to train our global sales team on new rules as they were implemented.

Our appeal in respect of the Comet legal action was heard on 19 September 2025 in the US Court of Appeals for the Ninth Circuit. We await the judgement from the panel of appellate judges.

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

CHIEF EXECUTIVE OFFICER'S REVIEW

CONTINUED

Revenue by market sector

The breakdown of our revenue by sector was as follows:

Revenue

2025

£m

2024

£m

% change in constant currency

Revenue by region

The breakdown of our revenue by region was as follows:

Revenue

2025

£m

2024

£m

% change in constant currency

Semiconductor Manufacturing Equipment

We provide precision solutions, which are often tailored to specific end-customer requirements, to customers at the heart of the semiconductor fabrication process. The

demand for semiconductor fabrication equipment continues to be driven by the rapid expansion of High Performance Computing to support Artificial Intelligence demand.

Revenue for 2025 was £85.6m, which was 7% lower than 2024 in constant currency. HVHP revenue within this sector reduced by £14.2m against a challenging comparative in 2024 which was boosted by a one-off clearance in order backlog. Revenue from all other product categories grew by

£5.0m, or 8%, representing a good recovery in demand for those product lines, particularly from customers in North America.

Order intake for 2025 was £84.3m, 10% higher than 2024 in constant currency. The rate of order intake increased by 18% sequentially from the first half year to the second and we are well positioned to benefit as the Wafer Fabrication Equipment market enters its next upcycle.

Our book-to-bill ratio improved to 0.98x (2024: 0.83x). The ratio for 2025 was reduced by final shipments to semiconductor manufacturing equipment customers in China prior to the expiry of US export licences, with orders for these shipments received in prior years. Absent these

shipments, sector book-to-bill was 1.05x, which is supportive of future growth.

Industrial Technology

We deliver power conversion products which meet a broad range of customer demands across a diverse range of industrial applications, with a focus on precision projects where we can shorten the time to market for our customers. We offer a variety of standardised, customisable and bespoke products to ensure that we can provide the right solution for our customers in a diverse market.

Revenue for 2025 was £87.3m, 5% lower than the prior year in constant currency. Sales to distributors grew as stock of our products at high service level distributors reached normal

levels. Sales to OEM customers declined as they continued to destock, albeit a Book to Bill of 1.0x indicates that the pace of destocking is slowing. We returned to revenue growth in the second half of the year.

Order intake for 2025 was £90.5m, 39% higher than the prior year in constant currency. Orders from high service level distribution customers, who represent around a quarter of this sector, grew by 78%. Orders from our "design in" distribution partner in Europe, Avnet, also increased

materially with Avnet's sales pipeline continuing to build after the start of our relationship in 2023. Orders from Industrial OEM customers grew by 22%.

Our book-to-bill ratio was 1.03x (2024: 0.71x).

Healthcare

We work with major healthcare technology businesses in delivering tailored, compliant solutions in this fast-moving sector. Global megatrends of an ageing global population and advancements in healthcare technology underpin a longterm growth opportunity.

Revenue for 2025 was £57.2m, which was 2% higher than 2024 in constant currency. We saw healthy demand from US medical technology customers to whom we provide technology solutions in key areas such as Pulsed Field Ablation and Robotic Surgery tools.

Order intake for 2025 was £51.1m, 48% higher than the prior year in constant currency

Our book-to-bill ratio was 0.90x (2024: 0.61x), slightly lower than the other two sectors due to the timing of orders and shipments for larger US projects.

Our revenue in 2025 was reduced by the weaker US dollar, being the currency in which the majority of our revenues

is transacted. The revenue decline in the year in constant currency was less than on a reported basis.

Sales to North America totalled £142.0m, up 1% in constant currency against a tough comparative that benefited from HVHP backlog clearance of £14.2m in 2024, as explained above. Underlying growth absent this backlog impact was therefore strong, driven largely by improved demand from US distributors, business wins with US medical technology customers and growing demand for our Technology Solutions offering, particularly from US Semiconductor Manufacturing Equipment customers.

Sales to Europe totalled £65.9m, down 11% in constant currency, as demand reflected continued destocking.

However, the region delivered sequential quarterly growth throughout the year. This included progressively normalising sales to distributors and a growing pipeline with Avnet, our 'design-in' distributor.

Sales to Asia totalled £22.2m, down 13% in constant currency due to destocking and regional macroeconomic uncertainty as global trade rules evolved. The region benefited from the final purchase of RF products by China Semiconductor Manufacturing Equipment customers prior to the expiry of export licenses that prevent shipments beyond 2025. These shipments totalled £6.2m in 2025. Demand elsewhere in Asia was impacted by the knock-on impact of macroeconomic headwinds in China, the Region's dominant economy.

Delivery of our strategy in the year

Our vision is to be the first-choice power solutions provider and deliver a compelling experience for our customers and our people. We have made good progress in delivering against our strategic priorities during the year.

Products

During 2025 we launched 24 new innovative products spanning conduction-cooled, external, high power, high voltage, DC-DC converters and fully programmable units. Our product offering showcases innovation, with several products featuring fully digital architecture, giving customers complete programmability and control.

We focus our own internal engineering resources on the development of more technologically complex base

products with significant long-term growth potential. This typically means high-voltage and/or high-power devices. These solutions are addressing many complex and novel applications, including ion implantation, mass spectrometry and pulsed electric field technology. The breadth of our existing product range is very competitive and our pipeline for future product development remains strong. This includes new product families and additions to existing product ranges like the CCR series and FLXPro.

Our Technology Solutions Group, primarily operating out of our new Silicon Valley Customer Innovation Centre, delivered 28 (2024: 19) new customised products to customers during the year. We worked closely with our customers to customise our base products to provide innovative, bespoke solutions to meet our customers' most complex needs. Approximately a third of our revenue is derived from Technology Solutions Group activities.

Customers

Improvements to our supply chain capabilities drove faster and more consistent product delivery to our customers in the year. We worked closely with US customers to navigate additional US tariffs, including shifting production from China to Vietnam, where the tariffs were lower, and shipping directly to their manufacturing plants outside of the US in order to reduce tariff costs.

We had open dialogue with our principal RF customers in determining the best approach to our exit from the RF market, resulting in significant final delivery requirement being secured.

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CHIEF EXECUTIVE OFFICER'S REVIEW

CONTINUED

New business wins increased 12% on 2024. Sampling activity

i.e. projects not yet won where we have provided one or more units of a product to allow the customer to complete internal evaluation, also increased by 21%. Historically, we have a healthy success rate in converting projects which reach sampling stage into new business wins.

We saw much increased interest from customers in new Technology Solutions projects, particularly in the US, demonstrating the strength of these key relationships and increasing investment in product development amongst our customers.

The Net Promoter Score (NPS) in our most recent survey rose significantly to 25, up from 8 in the prior year. This reflects stronger customer sentiment and engagement, with all three regions recording increases of at least 15 points year-on-year.

Supply Chain

We continued to strengthen our supply chain capabilities and efficiency during the year. Inventory reduced by a further

£10.9m during the year as we reduced both the value of finished goods and raw materials. Additional buffer inventory built up in previous years to mitigate global supply chain disruption has now been removed. The remaining reduction in the year of £3.3m was due to the impairment of inventory following the decision to exit the RF market (£3.0m) and a small write-off of components that cannot be transferred from the China factory to Vietnam (£0.3m).

We developed a new approach to inventory management, with improved data-led methodologies employed to

drive better customer service. This will require a modest investment in additional raw material inventory for high running products in early 2026 to deliver a significant reduction in lead times for our customers, as well as cost efficiencies.

We continued to improve our sourcing capabilities in Asia, resulting in c. £1m of annualised component cost savings secured during the year. Through identifying alternative suppliers and negotiations with existing key suppliers,

we have made good progress in making our sourcing arrangements more flexible, agile and resilient to unexpected shortages of individual components.

Underlying manufacturing efficiency improved further through rationalisation of production overheads and adopting Lean techniques. The impact of these efforts on gross margin was somewhat masked by reduced utilisation of factory fixed costs as a consequence of revenue reduction, but we are confident that the steps we are taking now will support the Group's return to target margins in normal demand conditions.

The construction of the new Malaysia manufacturing facility is complete, with £20.3m of capex incurred to date (of which

£7.0m remains to be paid in early 2026). Commissioning of the facility is underway and will be completed during

2026. The progress on the Malaysia facility allowed closure of our Kunshan manufacturing plant in China to streamline our manufacturing footprint and to ensure our operational capacity is aligned to current trade restrictions.

People

I have had the pleasure of visiting many of our teams around the world during 2025 and I hold regular open discussions with our senior leadership team to facilitate effective

two-way communication. Our colleagues have consistently demonstrated our values in responding to the challenging environment we face and morale remains high. Despite the difficult external circumstances, our most recent Gallup employee survey showed improved engagement scores.

We have also seen improved retention at our Vietnam plant, where a large proportion of our colleagues are based, following the introduction of new compensation arrangements and skills development.

During the year we made targeted headcount reductions to ensure that our resources were appropriately deployed in response to lower manufacturing output. The closure of our manufacturing plant in China directly impacted a number

of colleagues. The decision to exit the RF market has not had a significant impact on headcount in our Gloucester, Massachusetts plant in the US because we will continue to serve existing customers in this market for approximately three years. We have supported the individuals affected by these changes through senior leadership engagement,

transparent communications and appropriate outplacement services.

We have provided additional training and support for managers on people development, delivered an active engagement programme run by our People & Organisation team and strengthened our anti-fraud controls in response to the introduction of ECCTA legislation in the UK, with targeted training rolled out. We continued our focus on health and safety and saw tangible benefits from our 'Safety Begins with Me' programme implemented in 2024 with a 64% reduction in our Total Recordable Incident Rate (TRIR) and 79% in our Lost Time Injury Rate (LTIR) year-on-year.

The achievement on TRIR is particularly notable as it was delivered during a period of re-emphasis on complete and accurate reporting, which often leads to an initial increase in reported incidents.

Sustainability

We continue to prioritise sustainability as a critical enabler of our strategy. We are leading the way in developing

ever more energy efficient power conversion solutions to meet the current and future needs of our customers. As an example, our exciting new FLXPro range launched this

year is more power efficient and uses more environmentally friendly packaging than previous generation models. Full digital control allows end users to monitor and optimise energy usage.

We have made further progress in dual sourcing for components to mitigate the risk of climate impacts on our supply chain. Our own manufacturing sites (including our new site in Malaysia where a physical climate risk assessment has just been completed) are not exposed to significant direct impact from climate risks, although we remain

vigilant with appropriate disaster recovery plans in place. All electricity consumption across the Group is from renewable sources or is covered by the purchase of Energy Attribution Certificates.

Our latest external rating agency scores reflect the progress we continue to make in this area. Our Sustainalytics score for ESG Risk management improved by 11.7 points with an overall grading of 'strong management'. In recognition of the

strength of our climate transparency and action, we improved from a B to an A in our CDP Climate Change 2025 disclosure, achieving the highest rating for climate performance,

placing us in the top 4% of c.20,000 assessed companies. This recognition underscores XP Power's leadership in environmental sustainability, our strong commitment

to transparent disclosure for stakeholders and ability to support our customers in their own climate journeys. There is still work to be done to deliver our Science Based Target Initiative approved net-zero plan, but we remained focused on ensuring that sustainability is embedded into everything that we do.

Financial position and funding

Following the share placing in March, we continued to reduce borrowings through strong operating cash conversion. As a result, we ended the year with net debt reduced to £41.5m (2024: £93.5m). Adjusted Operating Cash Flows for the

year were £38.9m and in addition we received a one-off customer prepayment of £16.4m, primarily for planned 2026 deliveries. Year-end leverage (Net Debt: Adjusted EBITDA) was 1.2x (31 December 2024: 2.3x).

We have made excellent progress in strengthening our balance sheet which provides a stable foundation as we prepare for market recovery. We are confident of achieving a consistent leverage of less than 1x as market conditions return to normal.

Outlook

The proactive actions taken in the year have improved our financial performance baseline for 2026. While previously announced US export restrictions will reduce sales to China, we expect improved market demand to drive an improved financial performance as 2026 progresses.

Strategic Report

The Strategic Report, comprising the information on pages 10-80, was approved by the Board of Directors on 2 March 2026 and signed on its behalf by:

GAVIN GRIGGS

CHIEF EXECUTIVE OFFICER

2 March 2026

‌OUR STRATEGY

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Target

To release sufficient products to achieve at least 10% organic revenue growth through the market cycle.

Past performance

We have continued to expand our product portfolio, releasing 24 products in the year. We have provided tailored solutions for our customers with more complex power requirements, including the new fully digital FLXPro range

(page 07).

Planned future actions

The release of new product platforms (solutions that are easy to modify and can be reused over multiple sectors and applications). Expand our portfolio of

XP Carbon Rated Products (class-leading efficiency and low standby power).

Sustainability component

We develop products that meet the highest level of safety requirements.

Macro Growth drivers

• Legislation

• Energy efficiency and reliability

  KPIs

• Gross R&D spend: £25.0m (2024: £25.4m)

• Revenue from new products (last three years): £5.9m (2024: £11.6m)

• Proportion of revenue from modified products: 18% (2024: 19%)

Broaden the product portfolio

Our direct sales force is focused on working with customers where we can leverage our capacity to deliver complex solutions, while we utilise our network of distributors to reach a broader range of customers who have less complicated needs. As an example, one of our local sales managers has built a strong relationship with a large metrology institute where we were recently able to add value with a high-voltage power solution. This customer needed to power a measuring station for monitoring, detecting and quantifying ionising radiation. The reliability of the power solution was key in addressing the safety aspect of this application.

The process of defining the problem, determining the solution requirements and providing a solution took around a year. During this time, our sales

and technical engineering teams were in regular contact with the customer. We demonstrated our ability to support the customer through technical issues and demonstrated our ability to deliver the required stability. We leveraged our track record of quality to secure the contract to manufacture and supply this bespoke solution.

Niche markets such as mass spectrometry, semiconductor inspection and analytical instrumentation continue to expand rapidly, driven by demand for higher resolution, faster throughput and improved measurement accuracy. At the same time, equipment manufacturers face rising challenges around noise performance, system stability, space constraints and digital control in increasingly compact platforms.

The new HRF15 sets a high standard within XP Power's high-precision, high-voltage DC-DC portfolio, reinforcing our market leadership and supporting share expansion across core analytical instrumentation markets.

This compact module delivers excellent load and line regulation, low ripple and long-term stability suited to critical noise-sensitive, load-dependent applications. Exceptional programmability enables easy integration across wide-ranging loads. Its digital interface with intuitive UI, advanced monitoring, data logging and multi-unit synchronisation enhances reliability, accelerates development timelines and supports scalable, high-performance system architectures.

Our vision: To be the first-choice power solutions provider delivering the ultimate experience for our customers and our people.

We have maintained a consistent strategy over recent years, which we are confident delivers for our customers, employees and shareholders.

We attract customers by offering market-leading technology solutions. We provide broad, diverse and high-performing solutions to meet the varied requirements of the markets we serve.

Target key accounts where XP can add value

We are proud of the high level of service and support we provide for customers, particularly during the design-in stage, as this enables us to develop deep and enduring customer relationships. Our customers expect excellent quality and reliability to power their mission-critical equipment to meet

the demands of their end markets. We still have a relatively small share of the available business with some of our existing customers. We are working with them to identify more revenue-growing opportunities.

To deliver this growth, we must continually improve the service we provide to our customers, reduce our costs and minimise our environmental impact. Critical enhancements to our supply chain systems and processes will enable these improvements.

Broaden the product portfolio

Target key Drive accounts where penetration XP can add value to grow share

of wallet

Continually enhance our global supply chain

Focus on people Maintain and talent leadership on

development environmental

responsibility

Underpinned by our sustainability strategy

Sustainability is core to our strategy and is important to XP Power and all its stakeholders. Sustainability is not just about doing the right thing; it is intrinsically linked to our ability to drive growth. We strive to minimise our environmental impact and create mutual benefit across our value chain.

Strong corporate social responsibility is important to our customers, employees and the communities in which we operate, including environmental performance, health and safety, treatment of our people and business ethics.

Our employees drive success through their knowledge, insight and customer focus. We strive to make XP Power a workplace where our people can be at their best, ensuring a safe, diverse and inclusive environment that attracts and retains the best talent.

Sustainable Products

Environmental Leadership

People and Workplace

Ethics and Compliance

READ MORE ABOUT OUR SUSTAINABILITY ON PAGES 46-81

Target

Organic revenue growth of more than 10% through the market cycle

Past performance

We continue to take pro-active action to target new customers using our direct sales team and online marketing strategy, enhanced by our website upgrade and new video content. Our network of distributors helps us to access a broader range of customers.

Planned future actions

We will continue to prioritise our resource with customers who fit our value proposition. We de-emphasise customers who may have significant revenue potential but for whom cost is more critical than quality and reliability, or engineering support during the design phase

Sustainability component

We continue to expand our range of Carbon Rated Product solutions, which improves our energy-efficient offering to potential customers.

Growth drivers

• Customer penetration

• Capital equipment

  KPIs

• Proportion of revenue from new customers (last three years): 7.7% (2024: 2%)

• Proportion of project wins with new customers: 13.9% (6.4%)

• Average project value: £0.1m (2024: £0.1m)

24 XP Power Annual Report & Accounts XP Power Annual Report & Accounts 25

OUR STRATEGY

Continually enhance our global supply chain

Target

Organic revenue growth of more than 10% through the market cycle

Past performance

During recent years, we have transitioned to a model where lower complexity accounts are served via distributors, while our sales and engineering teams focus on deepening relationships with major customers who have higher spending potential.

Planned future actions

Enhance customer awareness of XP's offering through digital marketing, thought leadership and targeted meetings with key customers to build creditability and trust and demonstrate our capabilities.

Sustainability component

We work with our customers to understand their needs for power efficiency and provide the required solutions.

Growth drivers

• Innovation

• Capital equipment

  KPIs

• Revenue growth (constant currency): (4%) (2024: (20%))

• Revenue from the top 30 customers: £119m (2024: £114m)

• Average project value: £0.1m (2024: £0.1m)

Target

To achieve a non-production employee turnover at <10% (metric excludes production employees at our manufacturing sites where market forces mean that high levels of employee turnover are the norm for our industry)

Past performance

We continue to evolve and improve the support and development opportunities that we give to our colleagues across the globe. Our "Safety Begins with Me" programme has already yielded significant reduction in lost time injury rates, thereby keeping our colleagues safer.

Planned future actions

Embed global systems and process to support our goals and strengthen organisational capability to deliver effectively into the future.

Sustainability component

We aim to improve the physical and mental health of our employees, provide a safe place to work and create an environment where our people can be at their best.

Growth drivers

• Innovation

  KPIs

• Gender diversity: 51% male, 47% female, and 2% undisclosed (2024: 49%

  male, 49% female, and 2% undisclosed)

• Non-production employee turnover rate: 10.7% (2024: 12.2%)

• Average training time (in days) per employee: 1.5 days (2024: 1.2 days)

Target

To reduce manufacturing costs, freight and logistics, and consistently improve delivery performance

Past performance

Building on prior initiatives, we continued transferring production from the US to Vietnam to improve operational resilience and efficiency and completed the construction of our new facility in Malaysia.

Planned future actions

Adopt a new inventory holding strategy to improve customer service through shortened lead times for high running products. Improve operational efficiency from our facility in Vietnam and fully commission our new facility in Malaysia.

Sustainability component

We focus on minimising the impact that we, and our products, have on the environment and adopt responsible sourcing practices that consider social and environmental impacts.

Growth drivers

• Legislation

  KPIs

• Average customer lead time: 3.2 months (2024: 3.2 months)

• Average inventory days: 178 days (2024: 205 days)

• Gross margin: 41.9% (2024: 39.2%)

Target

To ensure excellent health and safety performance, consistently reduce our

CO2intensity and ensure there are no Code of Conduct breaches

Past performance

Our Company is a full member of the Responsible Business Alliance (RBA), and we follow the RBA Code of Conduct, which addresses important ethical and environmental matters. Our near- and long-term targets for reducing our carbon footprint are approved by the Science Based Target initiative (SBTi). Our Sustainability Council monitors our progress towards our sustainability targets, and we strive to achieve net zero by 2040.

Planned future actions

We will continue to deliver on our Net Zero Plan.

Sustainability component

We will lead our industry on environmental matters by minimising the impact of our operations and our products on the environment and upholding the highest standards of ethics and integrity.

Growth drivers

• Climate change

• Energy efficiency and reliability

  KPIs

• Absolute location-based Scope 1 and 2 emissions reduction: (5%) (2024: 17%)

• % of Group revenue from Carbon Rated Products: 37% (2024: 32%)

• CDP climate score: A (2024: B)

Focus on people and talent development

Maintain leadership on environmental responsibility

An existing customer was experiencing a problem with their current power unit where the cooling fan was pulling dust into the unit, causing high failure rates. The customer was investigating bringing in a separate enclosure around the power unit to solve this issue. Our Technology Services Group presented an alternative option, for a new-generation XP Power product which could be supplied with a bespoke casing, rather than using a separate enclosure.

The bespoke product not only improved reliability over the previous product for the customer, due to the lack of contamination in the power supply, but the new product we provided to the customer also delivered higher efficiency. By working

hand-in-hand with this customer, we were able to provide a solution with no design compromises as the new product was manufactured to their exact specification. Easy integration freed up development resources for the customer, only one part was purchased instead of two and the risk of failure was reduced.

The introduction of "Liberation Day" tariffs in April 2025 introduced significant complexity for managing imports into the US, our largest single market by revenue. We took decisive action to maintain compliance, protect supply chain resilience and ensure continuity for our customers.

Throughout the year, we worked closely with customers to provide transparency around product origin and tariff implications, reinforcing trust and enabling informed decisions. We quickly adapted and strengthened our compliance processes to meet evolving regulations, and partnered with leading freight and logistics providers to access real-time tariff updates and guidance. We shifted manufacturing output from our China plant to our manufacturing facility in Vietnam, where US import tariffs were lower.

Where our customers used manufacturing sites outside of the US to integrate our power

converters into their final products, we supported our customers through changing shipping routes to avoid the additional administration and negative cashflow consequences of import tariffs.

In 2025, we launched a tailored Leadership Development programme in Germany. Building on previous employee feedback, the programme focused not only on traditional aspects of leadership such delegation and organisational management, but also on the interpersonal

core of leadership: trust, clear communication, emotional intelligence and coaching skills.

The challenges of day-to-day operations, cost pressures and varying leadership levels highlighted that traditional, time-intensive training would not be suitable for our local leadership group. We delivered an approach which combined neuroscience-based insights with practical, bite-sized learning impulses. Instead of lengthy seminars, leaders received regular compact inputs - exercises, reflection

cards, videos and scientific articles - which could easily be applied in daily work. We followed this up with an in-person workshop to deepen key concepts, practice skills and consolidate learning.

Our leaders in Germany now have skills to provide vision, empowerment and effective communication to their teams.

CONTINUED

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Drive penetration to grow share of wallet

OVERVIEW

STRATEGIC REPORT

GOVERNANCE

FINANCIALS

CHIEF FINANCIAL OFFICER'S REVIEW

The Group has remained profitable and cash generating in an unprecedented market.

MATT WEBB

CHIEF FINANCIAL OFFICER

‌OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

Statutory Results

Revenue in the year of £230.1m represents a reduction of 7% from 2024, reflecting the impact of continued customer destocking, the clearance of higher order backlog in 2024 and headwinds from a weaker USD. Gross margin improved to 41.9% due to improved efficiency. There was a minor increase in operating expenses of £2.2m primarily due to unfavourable foreign exchange movements in the first half of the year, partially offset by cost saving actions. As a result, operating profit was £0.7m. Loss for the year was £11.3m, compared to £9.4m in 2024.

On an Adjusted basis the Group delivered operating profits of £17.3m and a profit before tax of £9.5m, compared to a profit before tax of £13.8m in 2024. The Chief Executive Officer's Review includes an explanation of revenue performance and an analysis of order trends during the year.

Gross Profit

The Group delivered a gross profit of £96.3m on revenue of £230.1m for the year. This represents a gross margin of 41.9%, 270bps higher than 2024.

Adjusted Gross Margin of 42.7% was 170bps higher than

This strong underlying progress, and the resulting improved margin baseline as we entered 2026, is encouraging and should improve further as market recovery drives higher factory utilisation.

We closely managed the increase to input costs arising from new US tariffs by shifting delivery to customer manufacturing sites outside of the US or fully passing through the costs where necessary. Nearly all of the cost increase is attributable to products made at our facility in Vietnam.

Reported gross margin increased by slightly more than Adjusted Gross Margin in the year due to the release in 2025 of one-off inventory provisions created in 2024 relating to our decision to exit the China semiconductor market, which proved to be partially surplus to requirements.

Operating Expenses

Operating Expenses in 2025 totalled £95.6m, of which

£14.7m were Adjusting Items as explained more fully below. Excluding the impact of these Adjusting Items, Adjusted Operating Expenses for 2025 were £80.9m, a £4.7m (6%) increase from 2024.

The increase was largely driven by the following non-discretionary and accounting items totalling £3.6m:

• Amortisation of capitalised product development costs increased by £0.6m, as a number of significant products were brought to market.

• The capitalisation of product development costs reduced, increasing by £1.0m the amount of development spend

  Adjusting Items

  being charged to the income statement. Only project work at the development stage can be considered for capitalisation, but all of these activities are critical to the success of the business, including testing of existing products against new regulatory requirements.

• We recorded an impairment of £1.2m relating to capitalised product development costs for a customer project which was cancelled due to US export control restrictions (2024: £0.2m).

• Foreign exchange movements increased operating expenses by £0.6m. The weakening of the US dollar resulted in a large foreign exchange cost headwind in the first half of the year. This partly reversed in the second half of the year, benefiting from actions taken to reduce our foreign exchange exposure.

• Share based payment expenses increased by £0.4m from an unusually low base.

  Other cost categories, consisting largely of discretionary items, therefore increased by £1.1m, or 1%, with cost saving actions helping to fund inflationary increases.

  Operating Profit

  Adjusted Operating Profit for 2025 was £17.3m compared to £25.1m in the prior year. The total reduction in Adjusted Operating Profit arose from:

• Revenue volume reduction of £7.0m

• Increase in gross margin % of £3.9m

• Increase in Adjusted Operating Expenses of £4.7m

  Adjusted Results

  2024 and achieved despite the headwind of reduced factory utilisation. Gross margin expanded as the year progressed,

  Items which have been treated as Adjusting and are therefore excluded from underlying operating profit are shown below.

  As in prior years, Adjusted and other alternative performance measures are used in this announcement to describe the

  with the first half of the year at 41.4% and the second half of the year at 43.9%.

  Income / (cost) impact by Income Statement line

  2025 2024

  Group's results. These are not recognised under International Financial Reporting Standards (IFRS) or other generally accepted accounting principles (GAAP).

  Adjustments are items included within our statutory results that are deemed by the Board to be unusual by virtue of their size or incidence. Our Adjusted measures are calculated by removing such Adjustments from our statutory results.

  The Board believes Adjusted measures help the reader to understand XP Power's underlying results and are used by the Board and management team to interpret Group

  financial performance. Note 5 to the Consolidated Financial Statements includes reconciliations of statutory metrics to

  The improvement arose from three main sources: £m

  Restructuring costs	(14)	-	(1.4)	(2.3)	-	(2.3)
  Exit from China Semiconductor market	2.3	-	2.3	(6.7)	-	(6.7)
  Supply chain transformation	-	-	-	(1.6)	-	(1.6)
  Comet legal case	(2.6)	-	(2.6)	(7.6)	-	(7.6)
  Amortisation of acquired intangibles	(2.6)	-	(2.6)	(3.1)	-	(3.1)
  Bid defence costs	-	-	-	(0.2)	-	(0.2)
  Costs relating to RF exit	(8.3)	(0.2)	(8.5)	-	-	-
  Cost relating to China factory closure	(4.0)	-	(4.0)	-	-	-
  Total	(16.6)	(0.2)	(16.8)	(21.5)	-	(21.5)

• Reduction of supply chain overheads, in response to production transfers to more cost-efficient plants and reduced activity levels generally. These actions were announced in our Interim Results and delivered as planned in the second half of the year. They largely impacted our facilities on the US East Coast and in China.

• Negotiated savings on raw materials purchased for our Asia manufacturing operations, totalling c. £1m for 2025.

• Manufacturing efficiency improvements, including from Lean manufacturing techniques in Asia.

  Operating

  profit

  Net finance

  expense

  Profit

  before tax

  Operating

  profit

  Net finance

  expense

  Profit

  before tax

  their Adjusted equivalent and provides a breakdown of the Adjustments made.

  Restructuring costs incurred in the current year of £1.4m comprised of severance payments in respect of headcount reductions which arose primarily in our manufacturing sites in the first half of 2025 reflecting the lower levels of production output during the year.

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  CHIEF FINANCIAL OFFICER'S REVIEW

  CONTINUED

  In late 2024, changes to US trade rules restricted the export of our products to customers in China's Semiconductor Manufacturing Equipment sector which resulted in us deciding to exit this market once existing export licences had expired and led to a provision for all inventory which was solely for use in the China semiconductor market. During 2025, we have fulfilled some additional final orders under licence which had not been anticipated at the end of 2024. As a result, we have reversed the provision as inventory was consumed, with a net benefit of £2.3m.

  In January 2025 the trial judge in the Comet case ruled that plaintiff's legal fees and pre-judgement interest were to be paid by the Group and, as a result, the Group was required to purchase an additional bond (£11.7m cash outflow) in

  respect of this judgement, pending the hearing of our appeal. In September 2025, our appeal was heard by the Ninth District Court. Legal costs for our preparation for the appeal totalled £0.7m. Over the year an additional £1.7m of interest was accrued on the judgements to date while the case awaits an appeal verdict, and we incurred bond management fees

  of £0.2m. Interest of £1.6m was earned by the Group in the year on cash deposited to collateralise the surety bond pledged in this case.

  Currency

  Late in 2025 the Board took the decision to exit the RF market, with an approximately three-year run-off period to ensure that we support current customers as they transition to new supply arrangements. As a result, we recognised additional provisions against inventory which would not be required to fulfil anticipated final orders with an expense of

  £3.1m. We also impaired capitalised product development where the recoverable value was assessed as nil as the related designs would not be used in the run-off period with a total expense of £4.3m (of which £0.2m was capitalised finance costs). We also provided £1.0m for severance costs of current employees, which will be paid out on their leaving dates. Other related costs totalled £0.1m.

  The closure of our manufacturing facility in China led to a one-off severance cost of £3.4m which was fully settled during the year. Much of the production fixed assets and inventory will be transferred to our Vietnam or Malaysia plant, with the remaining assets which were not suitable for transfer resulting in £0.4m expense as they were written down to nil. Other related costs incurred were £0.2m.

  The total cash outflow for adjusting items in 2025 was

  £6.0m, the majority of which was severance costs. During 2024 the total cash outflow was £3.6m.

  Net finance expense

  Adjusted Net Finance Expense was £7.8m (2024: £11.3m).

  During the year, we substantially reduced our net debt from

  £93.5m to £41.5m. This reduction in net debt, together with a reduction in applicable interest rates in the second half of the year resulted in a significant reduction in finance costs related to external borrowings of £3.6m. During the year

  we incurred additional costs in relation to renegotiating our bank facilities, which led to an increase in financing costs of £0.3m.

  Taxation

  Adjusted Tax Expense for the year was £3.3m, with an Adjusted Effective Tax Rate for 2025 of 34.7%. This rate was higher than 2024 largely due to the impact of foreign exchange losses on intercompany balances which were not tax deductible. We took action to settle these intercompany

  balances during the second half of the year which will resolve this tax inefficiency moving forwards. Our Adjusted Effective Tax Rate is expected to reduce to circa 25% with the return to normal market conditions, as the current low profitability causes unrelieved tax losses in some parts of the Group.

  Cash flows

  The reported tax expense of £4.0m includes an additional tax liability of £0.8m for an historical under provision of tax in respect of UK transfer pricing.

  Profit after tax

  The Group reported a loss after tax of £11.3m compared to a loss of £9.4m in 2024. Adjusted Profit for the Year was

  £6.2m compared to £10.4m in 2024. As a result of decisive actions taken during the year, we have been able to protect profitability despite the significant external headwinds explained in the Chief Executive Officer's Review.

  The basic loss per share was 42.0p compared with a basic loss per share of 40.5p in 2024. Adjusted Diluted Earnings Per Share of 22.5p was compared with 42.9p in 2024. The decrease in Adjusted Diluted Earnings Per Share is primarily due to the reduction in Adjusted Profit After Tax and an increase in the number of shares in issue due to the share placement in March 2025.

  We report our results in sterling; however, most of our revenues and costs arise in other currencies. A large proportion of our revenue and costs are denominated in US dollars, so our results are impacted by relative movements in the currencies that the underlying transactions arise in compared to pounds sterling. The effect of foreign currency on the change in our Adjusted Operating Profit is illustrated below:

  Adjusted £m 2025 2024

  Adjusted £m 2024

  Currency impact

  Constant

  Operating profit Depreciation, amortisation & impairment	17.3 17.4	25.1 15.8
  EBITDA Change in working capital Other items	34.7 4.2 -	40.9 25.0 (0.3)
  Operating cash flow	38.9	65.6
  Net capital expenditure - Product development costs	(8.7)	(10.1)
  Net capital expenditure - Other assets	(7.4)	(10.1)
  Net capital expenditure - Government grant	1.5	-
  Net interest paid	(8.1)	(12.1)
  Tax paid	(3.2)	(6.6)
  Other items	(1.9)	(1.5)
  Free Cash Flow	11.1	25.2

  Currency1 2025

  Revenue	247.3	(6.9)	(10.3)	230.1
  Revenue growth %		(3)%	(4)%	(7)%
  Cost of sales	(146.0)	4.8	9.3	(131.9)
  Gross Profit	101.3	(2.1)	(1.0)	98.2
  Gross margin %	41.0%	0.3%	1.4%	42.7%
  Operating expenses	(76.2)	(0.6)	(4.1)	(80.9)
  Operating profit	25.1	(2.7)	(5.1)	17.3
  Operating margin %	10.1%	(0.8)%	(1.8)%	7.5%

  1 The constant currency change is calculated with reference to the prior year amount at current year exchange rates.

  Adjusted Operating Profit decreased by 20% in constant currency, with a 11% impact from currency movements. Currency movements had an overall negative impact on revenue, gross profit and operating expenses, but a positive effect on cost of sales year-over-year.

  OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

  CHIEF FINANCIAL OFFICER'S REVIEW

  CONTINUED

  Adjusted Free Cash Flow remained relatively healthy at

  £11.1m (2024: £25.2m). Adjusted Operating Cash Flow totalled £38.9m, meaning we converted 225% of Adjusted Operating Profit into cash through continued tight control of working capital, particularly inventory. £8.7m was spent on product development costs, £1.4m less than last year as a smaller proportion of our ongoing investment in new products met the accounting threshold for capitalisation. Spending on other fixed assets totalled £7.4m, £2.7m less than last year as we near the end of our recent cycle of investment in infrastructure. Spending in 2025 included

  £6.3m spent on construction of our new manufacturing facility in Malaysia, bringing cash spending on the project to date to £13.0m. While construction is complete, final stage payments of £7.0m are due in the first half of 2026. Spending is shown net of a £0.9m landlord contribution toward leasehold improvements in the US. A grant of

  £1.5m was received from the US government toward the construction cost of our Silicon Valley Customer Innovation Centre. The reduction in net finance costs also led to a reduction in net interest paid of £3.9m. The lower tax paid reflects the weaker underlying financial performance.

  Adjusted Operating Cash Conversion of 225% excludes the effect a one-off customer prepayment of £16.4m for 2026 deliveries.

  Funding position and capital structure

  Our Net Debt reduced from £93.5m at 31 December 2024 to £41.5m at 31 December 2025. We continued to prioritise the strengthening of our balance sheet in the year. This included reducing working capital particularly inventory, which reduced by £14.1m from 2024, and a successful share placing in March which raised net proceeds of £39.6m.

  Our gross cash balance at the end of 2025 was £33.8m (2024: £13.9m).

  At the start of the year, our revolving credit facilities totalling

  $210m matured in December 2026. By the end of the year, following a year of significant debt reduction, we were able to reduce the facility size to $130m and extend the maturity materially, with approximately $100m maturing in June 2028 and $30m maturing in June 2030.

  The reduced facility size continues to offer ample liquidity. At December 2025, total liquidity, combining undrawn headroom in borrowing facilities and cash on deposit, totalled £51.9m.

  The covenants appliable to our borrowing facilities, which are tested at each calendar quarter end, are as follows until maturity of the facility:

• Leverage ratio: Not more than 3.0x (at 31 December 2025: 1.2x)

• Interest cover: Not less than 3.0x (at 31 December 2025: 5.2x)

  The Board is confident that the Group will continue to de-lever as market conditions recover until it enters its target leverage range of 0-1x Adjusted EBITDA.

  The Director's assessment of going concern has involved consideration of the Group's forecast covenant position in various scenarios, including a severe but plausible downside case. The Group is forecast to remain compliant with its covenants and have ample borrowing liquidity in

  all scenarios. Further details can be found in Note 2 of the Consolidated Financial Statements. The Viability Statement is set out on page 42.

  At the end of 2025, net current assets stood at £66.9m compared to £62.8m at the end of 2024. The principal changes in our working capital were the inventory reduction of £14.1m from 2024 due to further efforts taken to lower on hand inventory levels and reduction in inventory following the China factory closure and exit of RF business and the increase in contract liabilities of £16.4m due to the receipt of a large customer prepayment.

  Dividends

  Dividend payments were suspended in 2023. Dividends remain an important part of the Group's long-term capital allocation strategy. However, the Board believes it is in shareholders' long-term interests for debt reduction to be prioritised over shareholder distributions until net debt moves sustainably closer to our long-term leverage target range of 0-1x Adjusted EBITDA. As a result, no dividends have been declared or proposed during, or in respect of, the financial year ended 31 December 2025.

  MATT WEBB

  CHIEF FINANCIAL OFFICER

  2 March 2026

  Malaysia facility ready for commissioning

  32 XP Power Annual Report & Accounts

  for the year ended 31 December 2025

  XP Power Annual Report & Accounts 33

  for the year ended 31 December 2025

  
  
  

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  RISK MANAGEMENT FRAMEWORK MANAGING OUR RISKS

  Objectives

Our vision

Strategic priorities

The Group has well-established risk management processes to identify and assess risks

To be the first-choice power solutions provider, delivering the ultimate experience for our customers and our people

• Broaden the product portfolio

• Target key accounts where XP can add value

• Drive penetration to grow share of wallet

• Continually enhance our global supply chain

• Focus on people and talent development

  Control

Principal Risks

Material Risks

Other Risks

• Maintain leadership on environmental responsibility

The Board acknowledges its responsibility for the Group's internal controls and the review of their effectiveness.

We have an ongoing process for identifying, evaluating and managing significant risks faced by the Group. The Board completes an annual risk assessment to identify the Group's principal risks. The principal risks are mapped onto a risk universe, where risk mitigation or reduction can be tracked and monitored. This facilitates further discussions regarding risk appetite and identifies risks that require

greater attention from the Group. Reporting on specific risks is provided to the Board as required and the management of principal risks is monitored by tracking actions in response to these risks.

Risk assessment

The Board has carried out a robust risk assessment, with actions established to mitigate or reduce identified risks that could undermine the business model, affect performance, compromise solvency or liquidity, or hinder strategic objectives.

2

3

8 4

High

LIKELIHOOD

Low

9 Climate-related risks

Minor

1. Legal & Regulatory

2. People-related risks

9

1. IT/data

2. Funding/treasury

IMPACT

4 Product-related risks

7

6 5

3 Market/customer-related risks

Severe 1

1. Disruption to manufacturing

2. Supply chain risks

Heat map of the identified risks indicating the likelihood and level of impact

Second Line: Group Compliance

Third Line: Internal Audit

Testing of material controls

Monitoring and reporting

The Board identifies emerging risks through regular updates from senior management supported by monitoring of external developments. This includes reviewing publications from professional firms and industry bodies, including external risk surveys. These insights help the Board

proactively identify new or evolving risks and consider appropriate mitigating actions.

The identified key risks and mitigating actions are classified according to:

• the assessment of their impact level to the viability of the business if they occurred - ranging from minor to severe and the likelihood of a risk occurring - ranging from low to high; and

• the direction in which they are trending in (the Assessed Trend) - risks are classified according to whether they are becoming more or less likely to occur, or whether the risk of occurrence remains unchanged.

  Although risk identity attributes are judgemental and qualitative, the Board finds the methodology useful for determining the relative focus for each risk.

  Whilst the risks included in this report do not constitute an exhaustive list, they do include all risks that the Board believes would have a severe or moderate impact on the business if they occurred.

  Risk appetite

  The Board determines the type and extent of risk that the Company is willing to take to achieve its strategic and

  OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

  MANAGING OUR RISKS

  CONTINUED

  Broaden the product portfolio

  1

  
  
  

  2

  
  
  

  Target key accounts where XP can add value

  3

  
  
  

  Drive penetration to grow share of wallet

  Continually enhance our global supply chain

  4

  
  
  

  5

  
  
  

  Focus on people and talent development

  6

  
  
  

  Maintain leadership on environmental responsibility

  Increase to risk Decrease to risk
  
  
  
  

  No change to risk

  operational objectives, with a risk appetite rating applied to each risk.

  The Board's key focus is to minimise the Group's risk exposure in relation to IT & Data, Funding and treasury and Legal & Regulatory matters, as the risk appetite of the Board in these areas is low.

  The Board's risk appetite reflects the experiences and learnings from the pandemic, recent global supply chain disruptions and ongoing transformation initiatives, which strengthen our response to future disruptive events.

  Risk management

  The Group manages the principal and emerging risks identified above through a programme of mitigation and controls and with assurance provided by three lines of defence, outlined below, with oversight provided by the Board and the Audit Committee:

• The first line of defence includes the site's operational and finance teams, who are responsible for the day-to-day management of risks and the implementation of control procedures, supported by Group company managers.

• The second line of defence includes divisional and Group compliance teams with oversight and monitoring from the Executive Leadership Team and Senior Management.

• The third line of defence includes independent assurance from Internal Audit.

Emerging risks

For the current year, the Board has not identified any new Principal Risks. The 'Business Transformation' risk has been

removed as a Principal Risk, as its components are now managed under other Principal Risks.

Explanation of risk

An event that causes the temporary or permanent loss of a manufacturing facility could restrict the Group's ability to sell products to customers.

This could include fire, flood, infectious disease or climate-related events.

Reliance on a single Asian manufacturing site in Vietnam following the closure of our manufacturing plant in China, combined with the commissioning of our new site in Malaysia, may lead to operational disruption, capacity constraints or delays.

Potential impact

As the Group manufactures 80% of revenues, this would cause a short-term loss of revenues and profits, and disruption to our customers, which could cause reputational damage.

Mitigation

• We have disaster recovery plans in place.

• We hold inventory in sales markets to meet short-term demand in the event of disruption.

• We implement epidemic control and prevention measures at all facilities in line with local guidelines and regulations.

• We own key facilities or have long-term leases.

• We have business interruption insurance in place.

  Priorities in 2026

• We will establish a cross-functional commissioning team to ensure the controlled and effective commissioning of the Malaysia manufacturing site.

• We will review and update business continuity and disaster recovery plans to ensure they remain current and effective.

• We will review business interruption insurance annually to ensure cover adapts to evolving risks.

1 2 3 4 5 6

Assessed trend

Link to strategic pillar

Explanation of risk

The success of the Group depends on its ability to retain key suppliers, ensure on-time deliveries and maintain high-quality materials.

The Group's significant use of its Asian manufacturing footprint to supply US and European markets exposes it to global shipping-related risks.

Potential impact

We make most of the products we sell, but are reliant on third-party suppliers for a small number of products.

Some key product components require relatively long lead times, which increases the risk of shortages at the point of manufacture.

Poor supplier conduct or unsuitable contractual commitments could disrupt operations, impact quality, or create financial and reputational exposure.

Mitigation

• We dual source components wherever possible.

• We maintain an appropriate safety inventory of key components, with levels regularly reviewed against demand and lead times.

• We monitor risks to our transport routes, implement contingency plans, and keep customers informed of any issues and their potential impact.

• Our Code of Conduct is issued to our suppliers, who must agree to comply with it.

• Our delegation of authority ensures appropriate review and approval of purchasing decisions.

  Priorities in 2026

• We will adopt a new inventory holding strategy in 2026 to increase component availability and fulfilment service levels.

• We will ensure that dual sourcing is built into new product designs.

• We will continue to monitor and review our demand planning processes and supply chain model.

• We will add to our inventory of critical components whose delivery lead times are known to increase as markets recover.

1 2 3 4 6

Assessed trend

Link to strategic pillar

The assessed risk of disruption to manufacturing has temporarily increased as, following the closure of the Kunshan manufacturing facility, the Group will have a single full manufacturing location in Asia for a short period of time, while the commissioning at the Malaysia site is completed. The Board is satisfied that this risk can be adequately managed due to inventory build prior to the closure, spare capacity currently available in the Vietnam site and the ability to complete short production runs in other manufacturing locations.

The risk related to the use of AI (both inadvertently sharing proprietary data externally and not grasping the

opportunities presented) has been added to the 'IT and data' Principal Risks. During the year, the Group has implemented a new enterprise-grade AI tool, which ensures that any uploaded data is not shared outside of the XP environment and which has been trained on Company-specific documents and standards.

The ongoing impact of climate-related change and severe weather events are assessed through our Sustainability Committee; they are specific areas of focus and are included in our Sustainability Report.

Principal risks

The Board uses the risk management framework, detailed on page 34, to identify the risks most critical to the Group. These risks are highlighted due to their potential to disrupt the achievement of the Group's strategic objectives.

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

MANAGING OUR RISKS

CONTINUED

Broaden the product portfolio

1

2

Target key accounts where XP can add value

3

Drive penetration to grow share of wallet

Continually enhance our global supply chain

4

5

Focus on people and talent development

6

Maintain leadership on environmental responsibility

Increase to risk Decrease to risk

No change to risk

2 3 5 6

Explanation of risk

The semiconductor market represents a significant percentage of Group revenue and is inherently cyclical.

The Group derives a material proportion of its revenue from its largest customers. Gains or losses of business with these customers may impact materially on demand for our products.

Potential impact

Inherent cycles in the Semiconductor Manufacturing Equipment market could significantly impact the Group's revenue, profitability and financial condition, both positively and negatively, leading to unexpected changes in performance.

Losing key customers could materially impact the Group's performance.

Mitigation

• We stay close to our key customers and monitor developments in our markets for early warning signs of changes in demand conditions.

• The Group maintains conservative leverage to accommodate any cyclicality.

• We ensure the business is sufficiently diversified by sector to balance cyclicality in any one sector.

• The Group has developed plans to rapidly add capacity to manufacturing sites if required.

• We focus on retaining key customers through providing excellent service. Members of the Executive Leadership Team conduct a monthly review of customer complaints and non-conformances.

• While customer inventory visibility is limited, our sales teams engage with customers and incorporate this insight into revenue projections.

  Priorities in 2026

• We will continue to refine our forecasting processes at the appropriate level of market/customer detail to ensure the best possible view on future orders and revenue.

• Customer concentration remains a risk due to the Group's focus on key accounts; however, this risk is naturally mitigated through revenue being derived from multiple independent programmes within the same customer and as products are typically integrated for the full life-cycle of end products

• We will continue to deliver excellent service and ensure that our pricing remains competitive.

Assessed trend

Link to strategic pillar

1 2 3 6

Explanation of risk

Products are recalled due to a quality or safety issue.

The Group may fail to develop new products or respond to new disruptive technologies.

Transferring facilities, equipment and processes between factories disrupts production, affects quality and impacts customer deliveries.

Potential impact

A major product recall could seriously impact the business, causing potential cost and reputation damage as a supplier to critical systems.

New products or technologies introduced by third parties could adversely impact the Group's revenue.

Mitigation

• The Group performs 100% functional testing on all its manufactured products and conducts 100% hipot testing, which determines the adequacy of electrical insulation. This ensures the integrity of the isolation barrier between the mains supply and the equipment's end user.

• Regarding contracts with customers, we limit our contractual liability regarding recall costs.

• The Group prioritises investment and works closely with our customers to ensure that our product offering remains market leading.

• The Group implements standardised business processes to ensure consistency, efficiency and compliance across business units.

  Priorities in 2026

• We will continue to enhance our product design processes.

• We will review and optimise our approach to appropriate investment in sustaining activities.

• We will expand supplier quality capabilities.

• We will implement a global quality engagement programme.

Assessed trend

Link to strategic pillar

4

Explanation of risk

The Group is reliant on information technology in multiple aspects of the business from communications to data storage. Data is potentially vulnerable to theft or encryption, and customer channels are vulnerable to disruption.

Potential impact

Any failure or downtime of these systems, or any data theft or encryption, could significantly impact on the Group's reputation or ability to operate.

Incomplete or inaccurate data can lead to poor decision making.

Sub-optimal use of AI could lead to missed opportunities for efficiency and innovation, or introduce new risks, including data quality, bias and compliance issues.

Mitigation

• The Group's defined Business Impact Assessment identifies key information assets, replication of data on different systems or in the Cloud, an established backup process in place and robust cybersecurity protection on our networks.

• The Group uses internally produced training materials to educate users on good IT security practice and promote the Group's IT policy.

• A large proportion of the Group uses a single unified ERP platform with standardised processes, comprehensive training and robust financial reporting controls, supported by an experienced management team and effective governance mechanisms.

• The Group has cybersecurity insurance in place.

• The Group has established a Cybersecurity Steering Committee and a Cybersecurity Roadmap to continually strengthen governance and guide the implementation of additional security initiatives.

  Priorities in 2026

• We will continue to enhance our cybersecurity tools and processes and promote heightened awareness to cybersecurity risks among our people.

• We will continue to improve quality and Group-wide consistency of Master Data.

• We will expand AI governance and broaden staff training to include advanced AI use cases and risk awareness.

Assessed trend

Link to strategic pillar

1 4

Explanation of risk

The Group is reliant on external bank funding and needs to comply with the related covenants.

Changes in interest rates impact interest payments and charges.

Most of the Group's sales and material purchases are in US dollars, which creates a natural transactional hedge. However, a small number of sales and costs in other currencies expose the Group to transactional currency risks.

The Group faces translational currency risk from reporting in sterling.

Potential impact

The Group could breach banking covenants and lose access to its funding. The full viability statement can be found on page 42.

The Group is exposed to foreign currency fluctuations. This could lead to material adverse movements in reported earnings and cash flows.

Mitigation

• The Group sets a clear and conservative leverage policy and performs detailed and regular cash forecasting to ensure leverage targets are met.

• The Group reviews balance sheet and cash flow currency exposures and, where appropriate, uses forward exchange contracts to hedge these exposures.

• The Group restructures intercompany loans to eliminate translation currency risk.

• The Group manages interest costs using an interest rate hedging policy.

  Priorities in 2026

• We will continue regular and detailed reviews of forecast and actual results to ensure maximum visibility of profit, interest, net debt and bank covenant performance, to identify any potential exposures and implement mitigating actions.

• We will continue to improve the funding position by seeking cost savings and maximising cash generation.

• We will continue to review the maturity of our debt facilities, extending as needed to ensure funding continuity.

Assessed trend

Link to strategic pillar

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MANAGING OUR RISKS

CONTINUED

Broaden the product portfolio

1

2

Target key accounts where XP can add value

4 6

Explanation of risk

The Group is exposed to climate-related risks that could have a negative impact on the business.

Potential impact

Severe weather could affect the operations or our upstream supply chain.

Failing to meet net zero targets and sustainability-related customer expectations could cause reputational damage, reduced revenue and significant environmental harm.

Mitigation

• The Group maintains a flexible manufacturing footprint to allow us to respond to single-site disruptions for many of our product lines.

• The Group has dual-sourced supplies for material purchases and conducts regular reviews of safety inventories to ensure there is sufficient stock.

• The Group's net zero transition plan includes relevant policies and KPIs to ensure environmental targets are delivered.

• The Group implements procedures to prevent environmental damage.

  Priorities in 2026

• We will continue to review and respond to areas of single point exposure for manufacturing capability and material sourcing.

• We will engage the entire organisation to meet our net zero targets.

Assessed trend

Link to strategic pillar

1 2 3 4 5 6

Explanation of risk

The Group operates in multiple jurisdictions with applicable trade, company law and tax regulations, which vary by location.

Intellectual property, in terms of product design, is an important feature of the power converter industry.

The Group ships raw materials and finished goods internationally, meaning compliance with import and export laws is critical.

Global trade policies, tariffs and export controls may limit the Group's ability to trade profitably in some locations.

The Group must comply with export and import rules, which may change over time and could directly or indirectly impact its ability to sell.

Potential impact

Failing to comply with local law and regulations could impact the profits and reputation of the Group and its ability to conduct business.

The geographical location of the Group's profits impacts on its effective tax rate. The Group's effective tax rate could, therefore, fluctuate over time and impact on earnings and share price. If an efficient Group tax structure is not maintained, the effective tax rate could also fluctuate.

The enactment of new international trade controls and tariffs may reduce revenue from existing customers and limit the markets in which we can trade profitably.

New export and import rules may limit our ability to serve some customers. Failure to adhere to trade compliance controls could lead to financial penalties

Mitigation

• The Group hires employees with relevant skills and uses external advisers to maintain regulatory compliance.

• The Group uses external specialists to manage tax risk and regulatory compliance. The Group uses global trade compliance software to monitor transactions.

• A co-sourced Internal Audit function provides risk assurance in targeted areas of the business and provides recommendations for improvement.

• The Group establishes a clear Health and Safety Policy and procedures.

• The Group carries out automated due diligence checks for new customers.

  Priorities in 2026

• We will stay current with the latest legislation and ensure our policies and processes are updated to ensure we remain compliant.

• We will provide comprehensive training to all sales staff to highlight the importance of understanding and adhering to export control regulations as they evolve.

• We will continue to strengthen our global health and safety structure, policies and processes.

• We will continue to monitor global developments in trade policy.

Assessed trend

Link to strategic pillar

4 5

Explanation of risk

The Group's future success depends on the continuing services and contributions of its Directors, senior management and other key personnel.

People-related issues may arise from changing workforce dynamics, competition for talent, and evolving expectations around workplace culture and career development.

Potential impact

The loss of key employees could have a material adverse effect on the Group's business.

A decline in employee morale and engagement could have a significant impact on productivity and business performance.

Organisational design may hinder clear ownership and effective decision making.

Fraudulent and unethical behaviour could have negative reputational impact and cause financial loss to the Group.

Mitigation

• The Group undertakes performance evaluations and reviews to help it stay close to its key personnel. Where appropriate, the Group also makes use of financial retention tools, such as share-based compensation.

• The Group focuses on training, upskilling and career progression opportunities for employees.

• The Group holds an annual employee survey to assess engagement and identify improvement actions.

• The Group delivers annual Code of Conduct training

  Priorities in 2026

• We will continue to focus on people management and leadership development.

• We will roll out updated training for line managers.

• We will review the Group's organisational structure and associated incentive plans to ensure they continue to support the Group's long-term strategy

Assessed trend

Link to strategic pillar

3

Drive penetration to grow share of wallet

Continually enhance our global supply chain

4

5

Focus on people and talent development

6

Maintain leadership on environmental responsibility

Increase to risk Decrease to risk

No change to risk

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VIABILITY STATEMENT HOW WE ENGAGE WITH OUR STAKEHOLDERS

In accordance with provision 31 of the 2024 UK Corporate Governance Code, the Directors are required to assess the prospects of the Group over a period longer than the 12 months required by the 'Going Concern' provision.

In accordance with section 172 of the Companies Act 2006, Directors are required to act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in so doing so, have regard to the interests of its wider stakeholders. The Company's statement demonstrating how s.172(1) factors informed Board discussion and decision-making can be found on pages 98-99 of the Governance Report.

Further information on where s.172(1) factors are discussed throughout the Annual Report are set out below.

In making this assessment, the Directors considered the Group's current financial position, its recent and historic financial performance and forecasts, strategy and business model (pages 16-17), and the principal risks and uncertainties (pages 35-41).

The Directors have determined the three-year period to December 2028 to be an appropriate period to assess the Group's viability, as this timeframe is within the Group's strategic financial planning period used to evaluate performance and liquidity, and aligns with the design-in cycle that the Group has visibility of. In making the assessment, the Directors considered a three-year period using the latest available financial forecasts for the Group.

The Group has a business model where its products are designed into numerous applications, with numerous customers, in numerous geographies. The Group's products are all designed into capital equipment, which is generally in production for several consecutive years, resulting in a

revenue annuity. This diversity and revenue annuity are both deemed important factors in mitigating many of the risks that could affect the long-term viability of the Group.

In performing their review, the Board assessed the conservative scenarios against the controls in place to prevent or mitigate the principal risks of the Group.

It also considered them against the Group's current banking facilities, a Revolving Credit Facility (RCF) comprised of

$130m with approximately $100m maturing in June 2028 and $30m maturing in June 2030.

In forming the viability statement, the Directors carried out an assessment of the principal risks and uncertainties facing the Group that could impact the business. The most significant financial risks arise from a downturn in revenue,

either due to general market weakness or the loss of a major customer, or operational disruption, due to temporary loss of a facility or significant supply chain disruption.

The financial model was stress-tested with various downside scenarios. The potential impact of the principal risks was then considered in the context of each of these downside scenarios. Certain subjective assumptions and judgments

were made to achieve this. Each risk scenario occurring in isolation did not breach the Group's borrowing facility headroom or either of its financial covenants. The most severe threats occurring in isolation were found to be a

prolonged closure of a manufacturing facility, or a significant delay in the expected market recovery, particularly in relation to the end of current destocking in our Industrial Technology and Healthcare markets.

In the event that multiple risks were to crystallise at the same time, then breaches of our banking covenants would occur, but in applying a "probability and impact" approach no breaches are identified. In the event that results started to trend significantly below those in the forecast, additional mitigation actions have been identified that would be implemented which are not factored into the current scenario analyses. These include reduction of non-critical capital expenditure and reduction of discretionary spend. Within the Viability Statement timeframe, the current bank facility would need to be renewed, but there is nothing currently to indicate that this would not be achieved.

Based on this assessment, the Directors confirm that they have a reasonable expectation that the Group will continue in operation and meet its liabilities as they fall due for at least a period of three years to 31 December 2028.

S 172(1) factors Further information Page reference

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OUR SUSTAINABILITY STRATEGY OUR STRATEGY IN ACTION

At XP Power, sustainability is a cornerstone of our strategy and driver of growth. It is central to our vision of being a trusted partner for our customers and a recognised leader in sustainability within our industry.

What we've done this year

• We made significant improvements in our health and safety performance with a 64% reduction in Injury Rate (TRIR) and 79% reduction in Lost Time Injury Rate (LTIR)

  Internal Audit Score; and Local Impact Programmes.

  Through the dashboard, we can further identify

  site-specific opportunities to improve our performance and work towards our Net Zero by 2040 target.

  Sustainability guides our efforts to minimise negative impacts on stakeholders and the environment while creating value across our entire value chain. It also reinforces our "Powering Progress" initiatives as well as our Safety and Quality frameworks.

  Our sustainability strategy addresses issues identified as material through our 2021 materiality assessment

  (see page 54 of our 2021 Annual Report) and is reconfirmed through continued engagement with internal and external stakeholders.1

  We group our material issues under four areas: Sustainable Products, Environmental Leadership, People and Workplace, and Ethics and Compliance.

  2. Environmental Leadership

  We minimise the impact that we, and our products, have on the environment. We adopt responsible sourcing practices that consider social and environmental impacts.

  Our sustainable business goal is to lead our industry in environmental matters, and minimise the impact we, and our products, have on the environment.

  Link to

  Material issues

  01 03

  UN SDGs

  
  
  

  4. Ethics and Compliance

  3. People and Workplace

  vs 2024.

• We transformed our Environmental, Health and Safety (EHS) training approach by establishing a global EHS programme that delivered universal standards across all locations, ensuring consistent practices, clear accountability and site-level compliance worldwide.

• In 2025, we reassessed our supplier engagement programme and enhanced it by expanding ESG surveys to manage risks. We launched the process in a pragmatic, value-driven way, with a view to expanding its scope over time.

• We continued to integrate the Product Carbon Rating system launched last year to influence our sales and bring

  2026 plan

• We will develop and implement an action plan that will help us deliver improvements against key rating agencies such as MSCI and EcoVadis.

• We will continue to assess our sales and New Product Development (NPD) against our Carbon Rating Framework with further progression on higher efficiency open-frame products and expansion of framework coverage to include more products.

• We will strengthen sustainability culture by driving meaningful engagement, ensuring leaders and employees connect sustainability goals with their work, and building

  1. Sustainable Products

  We produce quality products that are safe and solve our customers' power problems.

  Our power converters are safety critical elements

  of the end application and provide an isolation barrier between the end user and relatively high-voltage mains electricity.

  Link to

  Material issues

  01 03

  UN SDGs

  
  
  

  We ensure that XP Power is a workplace in which our people can be at their best. We maintain a safe, diverse and inclusive environment, which attracts and retains the best talent.

  Our sustainable business goal is to improve the physical and mental health of our employees, provide them with a safe place

  to work and create an environment in which our people can be their best.

  Link to

  Material issues

  04 05 06 08

  We uphold the highest standards of business ethics and integrity.

  Our sustainable business goal is to have zero breaches of our Code of Conduct and uphold the highest standard of ethics and integrity.

  Link to

  07

Material issues

more efficient products to market. In 2025, we launched 11 product families (2024: 6) in our highest efficiency ratings of Titanium, Platinum or Gold.

• • In recognition of the strength of our climate transparency and action, we received an A in our CDP Climate Change 2025 disclosure, from a B in 2024, placing us in the top 4% of c.20,000 assessed companies.

  • We received EcoVadis Bronze Medal status for our 2025 disclosure, which placed us in the top 30% of businesses assessed. Our overall score improved from 60/100 to 65/100, and we aim to improve further this year.

  • We launched our "Powering Progress" initiative, based on the three pillars of Quality, Sustainability and Safety. The initiative provides a platform for team engagement and internal ambition in 2026.

  • We developed a site-specific Sustainability Dashboard to better monitor site performance against our new KPIs: Energy Efficiency (energy/output); Waste Diversion;

    Our ESG indicators

    Rating agency scores

    a culture of visibility and shared ownership.

• We will implement Responsible Business Alliance (RBA) standards by developing and deploying a scalable management system to meet customer expectations while navigating RBA protocols.

• We will continue our roll-out of solar installations across our estate, driving progress towards our 2040 Net

  Zero target, engaging employees and showcasing our sustainability leadership.

• We will enhance supplier engagement through expanded ESG surveys to manage risks, while selecting a practical tool and launching the process in a pragmatic, value-driven way.

• We will elevate electrical safety as a core risk-reduction focus by standardising practices across sites and engaging employees in hazard identification and elimination goals.

09

ESG Rating:

AA

CDP Climate Change score

Climate Change 2025:

A

(2024: B)

UN SDGs

UN SDGs

We engage with the following rating agencies to assess our sustainability performance and delivery against our sustainability strategy:

Material issues key:

01

02

03

04

Product responsibility (safety and quality) Responsible supply chain

Product solutions and innovation Attracting retaining and rewarding talent

Employee welfare

05

06

07

08

Health and Safety (inc. Occupational) Ethical conduct and compliance Diversity and equal opportunity

Energy efficiency Waste management Emissions

10

11

Our Sustainability Council delivers the XP Power sustainability action plan and, within this, the net zero action plan. The CEO chairs the Council and receives support from sustainability representatives within each business unit, who play an active part in reporting and leading site ESG initiatives. Full details of our sustainability governance model and its responsibilities are outlined in our Climate-Related Risk Report on pages 56-65.

1 More information on our engagement with stakeholders can be found in our Section 172 statement (page 98).

Rating

C

Non-Prime with a decile

ranking of 3 (2024: C, Non-Prime with a decile ranking of 3)

Performance score:

48.05

ESG Risk Management score:

66.7

(Strong)

Ranked 16th out of 303 within the Electrical Equipment Industry

ESG risk rating:

17.6

(Low Risk)

44 XP Power Annual Report & Accounts

for the year ended 31 December 2025

XP Power Annual Report & Accounts 45

for the year ended 31 December 2025

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Sustainability

Report

46 XP Power Annual Report & Accounts

for the year ended 31 December 2025

XP Power Annual Report & Accounts 47

for the year ended 31 December 2025

In the following chapters, we report on our performance in 2025 in

line with our strategic pillars on sustainability.

SUSTAINABLE PRODUCTS ENVIRONMENTAL LEADERSHIP TCFD REPORT

PEOPLE AND WORKPLACE ETHICS AND COMPLIANCE

KEY NON-FINANCIAL PERFORMANCE INDICATORS

48

53

56

66

72

74

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SUSTAINABILITY REPORT

1. SUSTAINABLE PRODUCTS

How this strategic pillar links to the UN SDGs:

UN SDG 9 "Industry, innovation and infrastructure" in promoting sustainable industrialisation, and UN SDG 12 "Responsible consumption and production" in the efficient use of natural resources.

Our R&D investment drives our ambition to be an industry leader on sustainability. We have one of the broadest ranges of efficient products in our industry.

To maintain our leadership position, we recognise a continued need to develop low-carbon products that solve our customers' power problems, optimise energy efficiencies and safety, and remain cost effective.

Link to

Material issues UN SDGs

01 03

The carbon footprint of power conversion products is dominated by their lifetime conversion efficiency. By increasing energy efficiency, we can make a significant reduction to the lifetime environmental impact of a power system and the equipment into which it is installed, while supporting compliance with applicable downstream energy-efficiency criteria.

By developing smaller power conversion products, which consume less physical material and reduce component count, we can also further reduce our carbon footprint and help our customers limit their environmental impact.

Sustainable aquaculture

Sea lice control is a major challenge in salmon and trout aquaculture. Traditional chemical and mechanical

delousing methods can harm marine ecosystems, increase fish stress and contribute to parasite resistance. As the industry moves towards more sustainable practices, optical, laser-based delousing systems are emerging as a low-impact alternative.

XP Power's CCR200, a 200W high-efficiency AC-DC power supply, was selected to power a low-energy laser delousing system deployed in commercial aquaculture. CCR200 delivers stable, efficient power to the system's optical sensors, control electronics and precision laser modules, enabling continuous, unattended operation.

CASE STUDY

High conversion efficiency minimises energy losses and heat generation, reducing overall power consumption and life-cycle emissions. Reliable operation supports non-invasive, chemical-free lice removal, improving

fish welfare while protecting surrounding marine environments.

By combining efficiency, reliability and compact design, the CCR200 series demonstrates how XP Power enables sustainable innovation, helping aquaculture operators reduce environmental impact while maintaining high system performance.

CASE STUDY

FLXPro series

The FLXPro's compact size, high power density and extensive range of user-defined performance parameters reduced application size, complexity and component count while enhancing end application efficiency, addressing application space constraints and the need for increased power. Designed with SiC/GaN technology and a fully digital architecture, the FLXPro achieves efficiencies up to 93%, which reduces system operating

costs and cooling requirements. With these improvements in efficiency versus the fleXPower series, our initial calculations indicate ~20% reduction in carbon emissions.

Additionally, multiple internal temperature measurements enable fast status checks through extensive temperature diagnostics, which drive intelligent fan control and over temperature warnings and alarms.

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SUSTAINABILITY REPORT

1. SUSTAINABLE PRODUCTS CONTINUED

2025 Product Carbon Rating Framework results

During 2025, we revisited the carbon rating for our low voltage DC-DC portfolio and have increased the scope of the Product Carbon Rating Framework (PCRF) to include them, based on conversion efficiency, to identify products with the lowest operational losses. These products are now included in the overall sales data by carbon rating, allowing us to monitor performance across the entire low-voltage portfolio.

Our PCRF divides products into five groups reflecting various efficiency levels - Titanium, Platinum, Gold, Silver and Bronze. This creates an easy and transparent process for customers to identify external and component power supplies with the highest energy efficiency and lowest waste power.

In 2025, 53% of Group revenue (86% of sales volume) were included in the analysis boundary of our Product Carbon Rating Framework.

In 2025, 14% of sales by volume came from Titanium and Platinum products, 33% were Gold products and 25% Silver. From a revenue perspective the percentage of Group revenue from Carbon Rated Products increased from 32% in 2024, after adding the DC-DC portfolio into the 2024 base, to 37% in 2025.

Low Carbon Power Titanium Low Carbon Power Platinum Low Carbon Power Gold Low Carbon Power Silver

Low Carbon Power Bronze

Low Carbon Power Titanium Low Carbon Power Platinum Low Carbon Power Gold Low Carbon Power Silver

Low Carbon Power Bronze

10%

33%

25% 12%

% of total sales revenue 2025

% of total sales volumes 2025

6%

3%

6%

10%

4%

14%

Internally, we can better grade our products and manage our sales towards more efficient products to reduce our Scope 3 downstream emissions. We will not set any public sales targets on these criteria as we need to balance our customers' commercial considerations alongside improving efficiency.

2025 marked a significant improvement over 2024:

• Launched 20 carbon-rated product families, 17 of which were Titanium, Platinum or Gold, which have our highest efficiency ratings.

• Two of our introduced products were Titanium rated.

  Number of products

  Carbon product rating introduced

  Titanium	2
  Platinum	6
  Gold	9
  Silver	3

  Boosting innovation

  We embed environmental considerations in our product development process with "Design for Sustainability" serving as an important area of focus reviewed by our Sustainability Council. Our design process considers energy efficiencies

  in product manufacturing and in the product use-phase, in addition to products' various applications in the broader energy transition. Our New Product Development process is guided by a sustainability policy, which requires the

  development team, where economically feasible, to maximise product efficiency and reduce the component count.

  Emerging indications suggest that customers focus more on in-use efficiency. Interest in our FLXPro power supply

  series is a good example of this, as it boasts a market-leading efficiency of 93%, which helps to reduce our customers' carbon footprints.

  Our product design process considers:

• Energy efficiency - We consistently lead the industry in developing high-efficiency XP Carbon Rated Products in the industrial and healthcare sectors, consuming less electricity in powering the application or on standby,

  resulting in significantly reduced CO2emissions over the lifetime of the customers' equipment (c.7-10 years).

• Novel materials - Where possible, we introduce novel materials into our higher-end products, such as ultra-efficient silicon carbide devices. Future developments in power transistor technology are expected to significantly reduce the size of power converters, which will increase their efficiency in some applications. We will continue to investigate opportunities to reduce this component count.

• Product life-cycle management - Our design process considers the complete product life-cycle of our power

  conversion products from the outset, extending useful product life wherever possible. Characteristics that improve energy efficiency also increase reliability and useful lifetime, as highly efficient products run cooler, which reduces the impact on heat-sensitive components, such as electrolytic capacitors. This year, we started a cradle-to-grave product carbon footprint on two of our products in accordance with the GHG Protocol Product Standard. The goal was to compare carbon performance across the products' life-cycles and identify carbon hotspots. We are finalising the results of the product carbon footprint and will disclose further detail on the results in the coming months.

• Hazardous substances - We avoid the use of hazardous substances in our products, facilitating the recycling at the end of their lifetime and reducing their environmental impact.

• Low-carbon manufacturing - We also consider energy use in the manufacturing process. Post-manufacturing, products traditionally undergo stress testing (burn-in) to eliminate early failures. We actively reduce burn-in where we can and we recycle burn-in power into the manufacturing facility to significantly reduce our carbon footprint.

• Product safety - A power converter is critical to the safety of any electrical system or application as it provides the isolation barrier between the end-user and potentially lethal high-voltage mains electricity. 74% of our sites in 2025 are certified to ISO 9001, and we carry out employee training to ensure product safety.

• Packaging - We need to improve our use of plastics within our product packaging. While most products are shipped using cardboard containers, many items are still packed in plastic or foam. We aim to optimise our packaging to become more sustainable and focus on more renewable materials.

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SUSTAINABILITY REPORT

1. SUSTAINABLE PRODUCTS CONTINUED

   OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

   SUSTAINABILITY REPORT

2. ENVIRONMENTAL LEADERSHIP

Product Responsibility Policy

Our Product Responsibility Policy outlines our commitment to the responsible design, manufacturing and disposal

of products, and their positive impact on individuals, society and the environment. The policy can be found here: corporate.xppower.com/sustainability/policies-and-procedures.

Responsible sourcing and supply chain

We require all suppliers to adhere to our Code of Conduct and Supply Chain Policy, which cover diversity, modern slavery, human trafficking, health and safety, business integrity and ethics, the environment and sustainability. It is vital that our suppliers apply the same principles of value, transparency and respect as we do.

Our supplier qualification and audit programme evaluates suppliers' adherence to our Code of Conduct and Supply Chain Policy and we disengage from those who fail to meet these standards. As part of our commitment to achieving net zero, we will further engage with suppliers and component distributors to address and reduce emissions across our upstream supply chain.

This year, we have reassessed our supplier management strategy, which will help improve information flow between XP and our suppliers, improve transparency and support our broader corporate objective for supply chain resilience. We are currently developing a new ESG Supplier questionnaire, risk assessments, supplier non-conformance procedures, training plans and a new supplier metrics scorecard to track progress. We plan to roll this out during 2026.

XP Power's Code of Conduct and Supply Chain Policy are available at corporate.xppower.com/sustainability/policies-and-procedures.

Conflict minerals

We support initiatives and regulations to avoid the use of any "conflict minerals", or 3TG, which originate from mining operations in the Democratic Republic of the Congo (DRC) and adjoining countries. We only purchase our electronic components from reputable sources, and materials such

as solder are purchased from vendors on the Conformant Smelter & Refiner Lists. We obtain information from our suppliers, concerning the origin of the metals used in the manufacture of our products, to assure our stakeholders that we do not knowingly use conflict minerals.

Our supply chain organisation is responsible for the qualification and ongoing monitoring of our suppliers. We can confirm that 100% of our products' minerals come from verified conflict-free suppliers. XP Power's policy on conflict minerals is set out at xppower.com/company/policies.

Substances of concern

Our use and management of substances of concern in our operations is conducted within the bounds of international regulation and our Environmental Management System.

We are governed by ROHS, REACH and Conflict minerals directives and our main production sites are ISO 14001 approved. With third-party-audited systems in place, we ensure we have appropriate controls in our operations for the management of substances of concern.

Product recall procedure

XP Power has an established product recall system, which assigns responsibilities for recalled products, enabling us to monitor product safety and performance. All customer complaints, field non-conformances and manufacturing defects related to the safety or quality performance of an XP Power product are investigated. The investigation and failure analysis is reviewed by our Quality and Engineering teams. If the return is a potential safety risk or abnormal

field reliability issue, then we initiate and coordinate a Recall Committee team meeting. The CEO is informed immediately if there is a potential safety issue. If it is agreed that a recall is the appropriate action, then a Recovery Plan must be developed by the Recall Committee. Product performance feedback and return data are monitored and documented, and appropriate corrective and preventive actions are implemented as needed.

How this strategic pillar links to the UN SDGs:

UN SDG 13 "Climate action"

XP Power recognises the significance of climate change and aims to reduce its climate impact across all operations by managing and reducing carbon emissions.

Our near-term and long-term targets are approved by the SBTi, and our targets reaffirm our long-term goal of net zero across our value chain by 2040. More detail on our targets and plans for achieving them are included in our Net Zero Transition Plan corporate.xppower.com/storage/reports/XPPower-NetZero2023.pdf.

Our transparency commitments include regular public disclosures of our carbon emissions, collaboration with CDP Climate Change, and reporting against

Link to

Material issues UN SDGs

01 03

TCFD recommendations (page 56), which includes details of our oversight, risk assessment and climate-related strategy.

Sustainability training

In 2025, XP Power expanded its training framework to include sustainability education and launched a dedicated sustainability training video through the LMS as part of its Earth Day initiative. The course achieved 100% completion and significantly increased employee engagement and awareness of XP Power's net zero goals, reinforcing the connection between individual actions and environmental performance.

The success of this initiative strengthened enterprise-wide sustainability awareness and positioned EHS leadership to take on ownership of XP Power's broader sustainability programme, further integrating safety, environmental responsibility and operational excellence across the business.

Managing environmental performance

The Group's comprehensive environmental policy outlines our commitment to continuously improving our environmental performance. We communicate our environmental policy and objectives to our suppliers and employees and encourage their participation in

environmental best practices. Our environmental policy is available at corporate.xppower.com/sustainability/policies-and-procedures.

As part of our environmental commitment and to monitor environmental performance, our main production centres, which account for around 72% of the Group's employees, have an internationally accredited Environmental Management System (ISO 14001). Our ISO 14001-certified management system includes our handling and auditing

of waste and hazardous materials, among other issues. Compliance is ensured through our internal audit process together with external assessments by our registrar, the British Standards Institution (BSI). Our new Sustainability Scorecard ensures all sites are internally audited each year, including environmental audits. The Group has had no environmental fines in the last 12 months (2024: nil).

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SUSTAINABILITY REPORT

1. ENVIRONMENTAL LEADERSHIP CONTINUED

   Update on net zero

   Our net zero targets were approved by the Science Based Target initiative (SBTi) in 2024. This year, we continue to report our progress against our net zero targets in line with the SBTi and Transition Plan Taskforce (TPT) criteria.

   Scope 3

   Our 2025 Scope 3 emissions were 333,445 tCO2e. This reflects a 51% decrease on our base year emissions of 674,968 tCO2e. Our reductions in Scope 3 emissions to date have put us on track to achieve our interim target.

   Energy consumption reduction activities

   Scopes 1 & 2	42% reduction Net zero
   Scope 3	25% reduction Net zero

   XP Power continued its programme of renewable energy installations in 2025, with the replacement of damaged or low-efficiency panels in Vietnam and further plans to extend

   Scope 1 and 2 emissions

   Near-term target (2030)

   Long-term target (2040)

   Scope 3 emissions

   800,000

   700,000

   600,000

   
   
   

   500,000

   the rooftop solar array and scoping of solar installations at other Group sites. In addition, the facility in Rosenheim, Germany benefitted from the installation of a heat pump powered by a solar PV system, which has a peak output of 170 kWh.

   Our 2025 market-based operational emissions were 539 tCO2e. This reflects a 92% reduction on our base-year emissions, which were 6,821 tCO2e. We surpassed our near-term targets largely due to our purchase of Energy Attributable Certificates (EACs) as an interim measure to reduce Scope 2 emissions, which contribute the largest portion of our base-year emissions.

   During 2025, all electrical energy within German operations was procured from renewable sources. For our operations in the UK, USA, Singapore, Vietnam and China, we purchased EACs. This has resulted in the Group having no market-based Scope 2 electricity emissions for 2025. The purchase of EACs will continue to be a temporary strategy until we can purchase green energy directly from the energy provider or increase our own renewable energy generation via solar panels. Our remaining market-based Scope 2 emissions reflect the use of municipal heat in our German operations.

   400,000

   300,000

   200,000

   100,000

   0

   Base-year emissions

   FY24

   emissions

   FY25

   emissions

   2030

   target

   2040

   XP Power Malaysia

   XP Power's new manufacturing facility in Perak, Malaysia demonstrates the Group's strong sustainability credentials and alignment with leading international building standards. Although located outside Singapore, the facility has been developed to align with the Singapore Green Building Index and

   targets BCA Green Mark Gold certification, reflecting XP Power's commitment to energy efficiency and best practice across its global estate.

   The facility performs strongly on energy efficiency. High-performance walls and glazing reduce heat gain while maximising natural daylight, contributing to lower cooling demand. Overall heat transfer through the building envelope is approximately 10% better than Singapore's regulatory maximum. Cooling is provided by a highly efficient, water-cooled air-conditioning system, supported by smart controls that adjust ventilation based on occupancy and enable continuous performance monitoring.

   Water efficiency measures are embedded across the site. The facility incorporates rainwater harvesting for landscape irrigation, alongside water-efficient fittings, sub-metering and leak-detection systems to support effective water management. Landscaping uses drought-tolerant planting to minimise ongoing water demand.

   The facility also integrates measures to reduce wider environmental impacts. Lower-carbon materials have been used where feasible, including cement with reduced clinker content and masonry products containing recycled materials. Recycling facilities and electric vehicle charging points are provided for building users.

   The building has been future-proofed, with a flat rooftop designed to accommodate solar photovoltaic panels in the future. Independent assessment by Singapore's Building and Construction Authority is planned.

target

Scope 1 and 2 emissions (market-based)

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

FY 25 Scope 1 and 2 emissions (market-based)

Scope 2 emissions 17 tCO2e

Scope 1 emissions: 522 tCO e

During 2025, our Scope 3 footprint reduced 8% year on year, with the categories "Use of Sold Products" and "Purchased Goods and Services" remaining the most material, representing 77% and 21% of the footprint, respectively,

in 2025. Use of sold products decreased 12% compared to 2024, reflecting a modest decline in sales volumes,

reductions in grid intensity in the Group's key markets, and an increase in the sales' higher-efficiency products. This counteracted increases to upstream Scope 3 emissions,

in particular increases to Purchased Goods and Services emissions from increased output in China and Vietnam, helping to build product inventory.

Our full emissions data and tables can be found in our non-financial performance indicators section on page 74.

Base-year

emissions

FY24

emissions

FY25

emissions

2030

target

2040

target

2 Energy efficiency initiatives

Energy efficiency initiatives are key to reducing our operational emissions. During 2025, a range of initiatives were implemented that reduced our energy consumption and carbon footprint. These included:

During 2025, absolute location-based Scope 1 and 2 emissions increased 5% year on year. This partly reflects an increase in natural gas combustion at the Group's Rosenheim and Gloucester facilities. An increase to location-based Scope 2

emissions also reflected the increased power usage at our Vietnam facility, reflecting less frequent power cuts in the year and consequently lower reliance on diesel fuel to power back-up generators.

We report our emissions and energy intensity as tonnes CO2e/£m revenue and kWh/£m revenue. Our overall location-based Scope 1 and 2 emissions intensity increased by 9% this year, while our energy intensity increased by 7%. The general energy efficiency measures used to drive energy reductions are discussed in detail below.

• the phasing out of fluorescent/compact lights and installation of energy-efficient LED lights on our premises and on neighbouring street lights;

• enhanced testing for air leakage and the installation of sensor door alarms to prevent loss of air conditioning and the replacement of inefficient air-conditioning units;

• modifications to chillers to set minimum temperatures; and

• relocation of operations in Silicon Valley and Orange County to new facilities that are compliant with the latest building regulations and feature energy-efficient technologies to reduce energy costs and consumption.

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  OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

  This report, in conjunction with our net zero ambition, covers our governance of climate change and demonstrates how we incorporate climate-related risks and opportunities into our risk management, strategic planning and decision-making processes.

  Specific details of our pathway to net zero are outlined in our Transition Plan. We believe the following disclosure is consistent with the TCFD All Sector Guidance and the

  obligations under Listing Rule 6.6.6R(8). Additionally, they fulfil the climate-related financial disclosure requirements outlined in the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. This alignment is further detailed in the TCFD cross-reference and disclosure consistency summary provided above.

  Governance

  Board level

  XP Power has a robust governance structure to manage its climate-related risks and opportunities. The Board of Directors has overall responsibility and oversight of

  climate-related risks and opportunities, all Group policies (including the Environmental Policy) and all matters that impact the strategy, risk management, vision and values of the Group.

  Climate change is a standing item on the Board agenda and is discussed twice a year at scheduled Board meetings and more regularly if anything more urgent is required, such as signing off major capital expenditure. The flow of information regarding climate-related issues occurs within both the strategic and risk functions of the Group. The

  Board monitors the Group's sustainability strategy, progress against key initiatives and performance in relation to the net zero plan, and our sustainability scorecard. This ensures climate-related issues are considered within strategy,

  Board

  Overall climate change responsibility

  Polly Audit

  Williams Committee

  Board Sponsor Reviews risk register

  for Climate Change three times a year

  Sustainability Council

  Cross-functional committee tasked with delivery of net zero action plan

  Site representatives

  Responsible for the monitoring risks and implementing projects at the site level

  budgets, major capital expenditures and business plans. Polly Williams, the Senior Independent Director, supported the Board in this function throughout 2025. Through the risk function, the Audit Committee integrates climate-related issues into the Group's risk management process and is responsible for approving the Group's TCFD disclosure.

  Management level

  Management level

  At management level, the Executive Leadership Team (ELT) meets monthly to monitor progress and key sustainability strategy actions, and reports to the Board. The Sustainability Council supports the ELT with the Group's sustainability objectives. The Sustainability Council, which meets quarterly, is a cross-functional team chaired by the CEO tasked with the formation and successful delivery of our sustainability action plan (including the net zero plan). The Council monitors the policies, processes, objectives, targets and

  KPIs linked to our sustainability issues. By reviewing our sustainability scorecard, the Council determines progress against our plan, resolves issues, mitigates plan risks and creates actions for the ELT, senior management and site

  representatives. In relation to net zero, the sustainability scorecard tracks our Scope 1, 2 and 3 emissions, renewable electricity roll out, low-carbon product introduction, waste reduction and supply chain initiatives.

  Sitting below the Sustainability Council, sustainability reps are appointed within each business unit and play an active part in reporting and leading site-specific ESG initiatives. Each representative is responsible for the regular monitoring and reporting of site-specific sustainability metrics and

  risks, as well as the implementation of site-level corporate projects.

  Risk management

  Our process for identifying and assessing climate-related risks

  Risks, progress and metrics

  Operations/strategy

  Board level

  Our external consultants, CEN Group, assisted in the identification and analysis of climate-related risks and opportunities, which were refined through Sustainability Council consultation. XP Power considers climate-related risks and opportunities in all physical and transition risk categories (current and emerging) whether they occur within our operations, upstream or downstream of the Group. Our stakeholder engagement and desktop review ensure we are aware of relevant or emerging risks. We assess risks within our short-, medium- or long-term strategic planning horizons. Typically, transition risks occur top down and are considered at Group level. As part of operational risk assessments, the Group undertakes site-level environmental risk assessments. Our site-level analysis of physical climate risks enhances the depth of insight into our global operations and, this year, no physical climate-related incidents impacted our operations.

  Climate-related risk management is integrated into the XP Power risk management framework. Risks are assessed

  in the same manner as other Group risks, so their relative significance is comparable. This includes an assessment of likelihood (on a five-point scale, low to high) and impact (on a five-point scale, minor to severe), to ensure the significance of climate-related risks is considered in relation to risks identified during our standard risk management processes. The same process is used to assess climate-related opportunities. Climate-related

  risks are included in the risk register and reviewed by the Audit Committee to incorporate ongoing refinement and risk quantification, and to ensure the register reflects any material changes in the operating environment and business strategy. Further details on each key risk and

  opportunity, such as a quantification of the financial impact, the appropriate strategic response, the cost of the response and the variance of key risks regarding climate-related scenarios, are provided where possible. We combine this with the impact and likelihood assessment to determine

  the treatment of each risk (e.g. mitigation, acceptance or control) to help us prioritise resources to manage the most material climate-related impacts. Other risks that require further analysis are accepted within the Group's business-as-usual risk appetite. This year, we reviewed both our transition and physical risks and opportunities to ensure there was no change in exposure during the year.

  Strategy

  Climate-related risks and opportunities

  The identification of climate-related risks and opportunities underpins our net zero strategy and the management of these dovetails with our Net Zero Transition Plan; the mitigation of climate-related risks and the development of opportunities are effectively integrated into our strategic planning. The analysis has helped focus our strategy towards managing these issues. The time horizons for our

  climate-related risk assessment are as follows:

  Time horizon Rationale

  2026-2028 Short term	In line with the existing risk management time horizon and specific business plan strategy
  2028-2035 Medium term	Encompasses XP Power's near-term emission targets
  2035 Long onwards term	Encompasses the Group's net zero by 2040 target and the UK Government's net zero by 2050 target

  As part of our assessment of climate-related risks and opportunities, we use climate scenario analysis to assess the resilience of the Group's business model and strategy to climate change under different scenarios. Please see the risk

  and opportunities tables on pages 58-62 for the implications of this scenario analysis.

  1 IEA (2025), World Energy Outlook 2025, IEA, Paris https://www.iea.org/reports/ world-energy-outlook-2025, Licence: CC BY 4.0 (report); CC BY NC SA

  4.0 (Annex A)

  In aggregate, our risk assessment and scenario analysis shows that our overall climate risk exposure is moderate. The Group is financially resilient and strategically robust to climate change. We understand that, considering our existing and planned mitigation strategies and net zero action plan, any asset impacts are limited, and risks can be

  accommodated in our business-as-usual activities. We do not foresee any additional fundamental changes to our business strategy or capital expenditure envelopes resulting from climate change or net zero for the foreseeable future. No effects of climate-related matters reflected in judgements and estimates are applied in the Financial Statements.

  We will continue to develop our analysis as new data becomes available, internally and externally, and we will continue to monitor our climate exposures and action plans through the Group's risk management framework. We will continue to develop the opportunities identified in line with Company strategy and objectives.

  Transition risks and opportunities

  We have assessed the risks and opportunities arising from the transition to a low-carbon economy, which may have a material impact on the Group. Risks may carry financial, legal and/or reputational impacts. Our Net Zero Transition Plan helps mitigate transition-related risks. We used the following two International Energy Agency (IEA) scenarios to perform scenario analysis for our transition risks and opportunities.

  Net Zero 2050 (NZE): a narrow but achievable pathway for the global energy sector to achieve net zero CO2emissions by 2050. This scenario meets the requirement for a "below 2°C" scenario and is used as a positive climate pathway.

  NZE also informs the decarbonisation pathways used by the Science Based Targets initiative (SBTi).

  Stated Policies Scenario (STEPS)1: represents projections based on the current policy landscape and is used as a base/ low-case pathway. Global temperatures rise by around 2.5°C by 2100 from pre-industrial levels, with a 50% probability.

  Assumptions

• Scenarios often only provide high-level global and regional forecasts.

• Not all risks are easily subject to scenario analysis.

• Scenario analysis analyses specific factors and models them with fixed assumptions.

• Impacts will be considered in the context of current financial performance and prices.

• Net impacts are assumed to occur with assumptions and reduction initiatives from our Transition Plan to mitigate risk exposure.

• Impacts are modelled to occur in a linear fashion, when, in practice, dramatic climate-related impacts may occur suddenly after tipping points are breached.

• The analysis considers each risk and scenario in isolation, when, in practice, climate-related risks may occur in parallel as part of wider set of potential global impacts.

• Carbon pricing is informed by the Global Energy Outlook 2025 report from the International Energy Agency (IEA).

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Transition risks identified Transition opportunities identified

Response/actions we're taking and how they are managed

Low Scope 1 & 2 exposure, with a 42% reduction target by 2030; near-zero market-based Scope 2 emissions minimise carbon tax impact.

Scenario implications

Carbon prices are expected to rise under NZE and STEPS, impacting operations and supply chain.

Response/actions we're taking and how they are managed

Expanding global solar capacity lowers adoption costs, enabling greater renewable generation; planned Vietnam site installation will supply ~25% of electricity needs.

Scenario implications

Global solar PV capacity is projected to double by 2030 under STEPS and quadruple under NZE.

Risk type

Policy and Legal

KPIs

Scope 1 and 2 emissions

Potential impact on the business

Higher cost of inputs

Time horizon

Medium term

Likelihood

Magnitude of impact

Risk type

Energy source and resilience

KPIs

Scope 2 emissions

% of renewable from total electricity

Potential impact on the business

Reduced direct costs

Time horizon

Short to medium term

Likelihood

Magnitude of impact

Response/actions we're taking and how they are managed

Targeting 25% Scope 3 reduction by 2030 and net zero by 2040; emissions reduced through product

innovation, supplier engagement, logistics and global grid

Scenario implications

Carbon prices are expected to rise under NZE and STEPS, impacting operations and supply chain.

Response/actions we're taking and how they are managed

Non-European sites use EACs, while European sites are supplied via PPAs.

Scenario implications

Global renewable energy investment is projected at $2.5tn by 2030 under NZE versus $1.7tn under STEPS.

decarbonisation.

Risk type

Policy and Legal

KPIs

Upstream Scope 3 emissions

Potential impact on the business

Higher cost of inputs

Time horizon

Medium term

Likelihood

Magnitude of impact

Risk type

Energy source

KPIs

Scope 2 emissions

% of renewable from total electricity

Potential impact on the business

Reduced direct costs

Time horizon

Short to medium term

Likelihood

Magnitude of impact

Response/actions we're taking and how they are managed

Scope 2 emissions are cut via EACs, efficiency and onsite renewables; use-phase emissions improve through

Scenario implications

NZE accelerates policy and technology progress, while STEPS poses higher risk due to slower development.

Response/actions we're taking and how they are managed

Supply routes are assessed to manage transportation emissions

Scenario implications

NZE offers greater opportunities than STEPS due to faster investment, electrification and freight decarbonisation.

product design, and transportation emissions are reduced via freight, travel and commuting initiatives.

Risk type

Transportation

Potential impact

on the business

Reduced costs

Time horizon

Short to medium term

Likelihood

Magnitude of impact

Risk type

Market and reputation

KPIs

Scope 1, 2 and 3 emissions

Potential impact on the business

Lower profit margins through increased costs and lower revenue

Time horizon

Long term

Likelihood

Magnitude of impact

KPIs

Scope 3 emissions -upstream transportation and distribution

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Response/actions we're taking and how they are managed

Market and policy trends are expected to drive the adoption of our low-carbon innovations, e.g. power conversion efficiency legislation and future standards

Scenario implications

NZE expects stronger enforcement of energy standards and higher demand for efficient products, while STEPS anticipates slower developments.

Response/actions we're taking and how they are managed

Site-specific and Group-wide initiatives, including packaging reductions and enhancing energy efficiency.

Scenario implications

NZE provides greater opportunities than STEPS due to increased investment and a focus on energy-efficiency measures.

are anticipated to extend to healthcare and industrial applications.

Risk type

Material efficiency

Potential impact

on the business

Reduced costs

Time horizon

Medium term

Likelihood

Magnitude of impact

Risk type Products and services, market

KPIs

Scope 3 emissions - use of sold products, purchased goods and services

Potential impact on the business Higher revenue

Time horizon

Long term

Likelihood

Magnitude of impact

KPIs

Energy use Scope 1, Scope 2 emissions (location-based) waste generation

Response/actions we're taking and how they are managed

Focus areas monitored to capitalise on opportunities include wind turbines, 5G infrastructure and mobile network densification

Scenario implications

Electrification drives growth in NZE and STEPS, fuelled by electric mobility, heating technologies and market confidence in new technologies.

Response/actions we're taking and how they are managed

We engage with key suppliers to drive material and energy efficiencies, as well as collaboratively develop value-adding products.

Scenario implications

Under NZE, increased regulatory and market pressure is expected to encourage suppliers to engage and improve efficiencies.

Risk type

Market

KPIs

Revenue growth rate

Potential impact on the business Higher revenue

Time horizon

Medium to long term

Likelihood

High

Magnitude of impact

Risk type

Material efficiency and products and services

KPIs

Scope 3 emissions -Purchased goods and services

Potential impact on the business Reduced costs

Time horizon

Medium term

Likelihood

Magnitude of impact

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Physical climate-related risks

We continue to use a location risk analysis tool to better understand the exposure of our sites and develop further mitigation efforts. Our risk assessment evaluates site-specific exposure to natural hazards, and the evolution of climate risks under the scenarios for global temperature rise. The scenarios embedded in the physical risks tool are as follows:

RCP 4.51 : an intermediate scenario, more likely than not to result in global temperature rise between 2°C and 3°C, by 2100. RCP 8.51: a bad case scenario where global temperatures rise between 4.1 and 4.8°C by 2100.

1 https://www.ipcc.ch/report/ar5/syr/.

Metrics and targets

Climate-related metrics

We report on our Scope 1, 2 and 3 emissions. Our carbon footprint is calculated using methodologies consistent with the Greenhouse Gas (GHG) Protocol: A Corporate

Accounting and Reporting Standard, with additional guidance from the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard and the GHG Protocol Technical Guidance for Calculating Scope 3 Emissions, as required. We measure all greenhouse gases as relevant and our targets cover CO2, CH4, N2O and HFCs. Our Scope 1 and

Climate-related targets

Our science-based, net-zero targets ensure that we are aligned to the UK Government's Net Zero Strategy and set out our pathway to reaching net-zero GHG emissions ahead of 2050. Our science-based targets were approved by the Science Based Targets initiative (SBTi) in February 2024.

See the XP Power Transition Plan for further details on our science-based targets and Transition Plan. In line with the SBTi, our targets and Transition Plan do not use carbon credits. While we do not plan such action, we may consider

Response/actions we're taking and how they are managed

Business interruption insurance, flexible production shifts, adjusted working patterns and a new Malaysia site enhance operational resilience.

Scenario implications

Heavy rainfall is expected to be more frequent and intense under RCP 8.5, increasing flood risk.

2 GHG emissions are derived from measured data sources with no estimates. Most of our emissions are represented by our Scope 3 emissions (99% of footprint) and, within that, our downstream Scope 3 emissions associated with the use phase of our products (77%). We calculated all applicable

using offsets to achieve additional emission reductions beyond the science-based targets.

Our aim is to be net zero across Scopes 1, 2 and 3 by 2040 with minimal use of offsets. Our absolute emissions

reduction targets, which have been approved by the Science

Risk type

Acute

KPIs

Approximate revenue contribution

Potential impact on the business Lost production and revenue

Time horizon

Medium term

Likelihood

Medium

Magnitude of impact

Moderate

Scope 3 categories for our 2025 carbon footprint. Five

Scope 3 categories of are not applicable to our business. Four Scope 3 categories (Capital goods, Waste are generated in operations, Processing of sold products and End-of-life treatment of sold products), are excluded from our reporting and our science-based targets as they are negligible and collectively account for under c. 0.5% of our Scope 3 inventory. For more information on our emissions, see Energy and Greenhouse Gas Emissions (pages 74-75).

We monitor additional environmental metrics including emissions intensity, energy use, energy intensity, renewable solar energy generation, freshwater withdrawal and waste

Based Targets initiative (SBTi), are to:

• reduce absolute Scope 1 and 2 GHG emissions by 42% by 2030 from a 2022 base year;

• reduce absolute Scope 3 GHG emissions by 25% by 2030 from a 2022 base year; and

• reach net-zero GHG emissions across the value chain by 2040.

ESG targets are embedded in our Executive Leadership Team's remuneration. Part of this includes climate action.

For more information on our performance against these

Response/actions we're taking and how they are managed

Supplier exposure is mitigated through multiple sourcing, strategic reviews of critical suppliers, and engagement surveys assessing upstream emissions and risks.

Scenario implications

RCP 8.5 projects more frequent extreme weather, increasing risk exposure in key supply chain regions.

management, as reported on page 76. We report on our annual launch products under our Product Carbon-Rating system, designed for a lower-carbon economy, and the lifetime emissions savings from the use of efficient products (in relation to standard products) sold in the year as reported on page 50.

targets, see Energy and Greenhouse Gas Emissions on pages 74-75.

Risk type

Acute

KPIs

N/A

Potential impact

on the business Lost production and revenue

Time horizon

Medium term

Likelihood

Magnitude of impact

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Waste management

Our manufacturing processes produce relatively little waste, but we are committed to reducing both non-hazardous and hazardous waste where possible across our operations.

We have a specific Waste Management Procedure, which outlines our risk prevention measures, how waste should

Waste management data (tonnes)

638

530

Water

We do not consider water to be a material topic for our business. We have a low water intensity in operations and, unlike some of our electronics industry peers, we do not use water in our products' design, manufacture or service. Our water use is almost entirely related to our employees

In 2025, our freshwater withdrawal increased by 7%. Water withdrawal per employee was 24.4 m3, slightly above the 2024 intensity.

Actions to reduce water usage

We established a range of initiatives to reduce our water

be classified, handled, collected, stored and disposed. In case of waste-related emergencies, employees follow the "Emergency Preparedness and Response Control Procedure". Additionally, any employees involved in hazardous waste disposal have appropriate personal protective equipment (PPE) to protect them against environmental and health

and safety accidents. Our People and Organisation

326

276 261

52 46

208

313

254

(amenities, catering and personal consumption). Of our 11 facilities, our Southern California design centre is the only facility in an area of extremely high-water stress1 as identified by the WRI Aqueduct Tool. As an R&D-focused facility, its water requirements are minimal. Our Group's

water policy is available at xppower.com/company/policies.

withdrawal and increase the amount of water recycled and reused. In FY 25, these initiatives included the installation of new water dispensers with flow metres, the separation of

deionised water from other wastewater to avoid unnecessary treatment, and the installation of low-flow faucets and other water-saving adaptations to employee amenities.

(P&O) department supervises annual training on waste management with prompt additional training if procedures or personnel change. Training includes waste management

Total waste recycled

Total waste incinerated

Total waste sent to landfill

Total waste non-recycled

Total waste

Global water metrics and targets

Our global freshwater withdrawal is outlined in the table below. Our full data on water, including regional breakdown,

Biodiversity

We understand the importance of, and are committed to, protecting the natural environment, preserving biodiversity

proficiency, including handling measures in emergency

situations and enhancing environmental awareness.

As part of our RBA-compliance approach, our facilities undergo internal assessments aligned with RBA requirements, applicable local regulations and XP Power standards. These assessments include environmental aspects such as waste management, air emissions and water.

A major waste source is excess solder from wave solder machines, so-called "solder dross", which is recycled into

new solder and reused. In 2025, we sent 9.8 tonnes of solder dross for recycling and received 8.2 tonnes of recycled solder back, which is an 83% recovery rate. We use activated carbon and certain chemicals to clean flux from printed circuit boards. These chemicals and their containers are safely disposed of through a certified, licensed third-party professional. In 2025, we had no reportable spills.

2025 2024

The figure below outlines XP Power's waste by treatment type. Full waste data can be found in our non-financial performance indicators section on page 76. We are still refining our processes for the collection and reporting of waste data. Consequently, we expect some variability in the waste data as coverage of reporting increases across sites.

We aim to reduce our waste intensity (Tonnes/$m) by 10% year on year. However, in 2025, both total absolute waste and total waste intensity increased from 2024 by 20% and 28%, respectively, primarily due to increase operation at our Vietnam site.

are included in the non-financial metrics section on page 76.

2025 2024

1 Assessed using the World Resources Institute's (WRI) Aqueduct Water Risk Atlas tool. Areas of extremely high-water stress, according to the WRI definition, are where human demand for water exceeds 80% of resources.

and, where possible, minimising the potential negative impact that our business may have on the environment. We recognise that climate change, deforestation, land degradation and water pollution each pose a severe threat to the sustainability of important ecosystems, and that

business and industry contribute to this. We do not consider biodiversity to be a material topic for our business. Our biodiversity policy is also available at corporate.xppower. com/sustainability/environment.

CASE STUDY

Vietnam waste and plastic reduction

XP Power implemented on-site segregation of hazardous, recyclable and non-recyclable waste, with all streams managed by licensed contractors. Employees were provided with clear waste classification guidance to support correct segregation at source. The Company also restricted the use of single-use plastics across operations, supporting responsible resource use and reduced environmental impact.

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SUSTAINABILITY REPORT

1. PEOPLE AND WORKPLACE

   
   
   
   
   
   
   

   How this strategic pillar links to the UN SDGs:

   UN SDG 3 "Good health and wellbeing", 5 "Gender equality", 8 "Decent work and economic growth", and 10 "Reduced inequalities"

   People and Workplace
   We ensure that XP Power is a workplace in which our people can be at their best. We maintain a safe, diverse and inclusive environment, which attracts and retains the best talent.
   Our sustainable business goal is to improve the physical and mental health of our employees, provide them with a safe place to work and create an environment in which our people can be their best.

   As a responsible employer, health and safety is of paramount importance. Whether working on site or from home, we strive to safeguard the health, safety and wellbeing of all our people (including contractors).

   Our health and safety programme is driven from the top, with ultimate responsibility sitting with the Board.

   Our corporate health and safety framework defines those who are responsible and accountable at each of our key sites, while our Company procedures define the minimum standards required. These can be summarised as follows:

   • Risk assessments are based on the activities performed at each site, which are reviewed and updated annually.

     Link to

     Material issues UN SDGs

     04 05

     06 08

     
     
     

   • An annual internal audit of health and safety processes is conducted at each site to ensure they are in line with RBA requirements, applicable local regulations and XP Power standards.

   • Health and safety metrics are recorded covering incidents and near misses, and these are reported and analysed. The Board reviews these metrics at each Board meeting.

   • Metrics related to walkthrough safety audits, fire drills and risk assessment updates are recorded and monitored.

   • Consideration is given at each site to ergonomics, laboratory and electrical safety, legal requirements, use of chemicals, use of equipment and tools, facility preparedness and evacuation, and slips, trips and falls.

We are committed to maintaining a healthy and safe working environment to minimise the number of occupational accidents, diseases and illnesses, and ultimately achieve an accident-free workplace. We have enhanced health and safety at XP Power through improved product safety tracking, and the use of health and safety consultants, advisers and Auditors. XP Power's Health and Safety Policy is available on our website at xppower.com/company/policies.

All our employees have role-appropriate health and safety training. The number of employees trained on health and safety standards within 2025 is 2,336 (2024: 2,465), which gives us a training completion rate of 99%.

Our full list of employee-related data can be found in our nonfinancial performance indicators section on pages 77-79.

Safety performance

We keep safety front of mind in everything we do and ensure that employees actively recognise and manage risks to keep everyone safe, with the ultimate aim of achieving no injuries across our operations.

The safety of XP Power employees is paramount, and we do everything we can to protect them. We have established

safety policies to ensure hazard control systems are effective and to achieve our no injury goal. Our health and safety performance this year highlights how our "Safety Begins with Me" approach has strengthened engagement, empowered individuals at every level, and further embedded a proactive, people-focused safety culture across XP Power.

We ended 2025 with a global TRIR of 0.15, representing a 64% reduction compared to 2024 (0.42 to 0.15). This

significant improvement reflects the continued maturation

of our EHS framework, stronger site-level engagement and increased focus on hazard identification, training and prevention. The sustained downward trend throughout the year demonstrates meaningful progress in reducing overall injury frequency. Our LTIR closed at 0.04, a 79% reduction from 2024 (0.19 to 0.04). This result highlights

continued improvement in preventing more serious injuries and reinforces the effectiveness of our controls, training and leadership engagement across sites.

Absolute injury counts show a clear and sustained improvement over time, with the most significant reductions occurring in 2025. First Aid/Record Only cases declined sharply from 55 in 2024 to 18 in 2025, while Medical Treatment cases dropped from 11 to four. Lost Time injuries were reduced to a single case in 2025, compared to five in 2024 and nine in 2023. These improvements were achieved despite an increase in total hours worked compared to 2024, confirming that the reductions reflect meaningful improvements in safety performance.

This year, we will continue to strengthen governance and evolve our safety culture to ensure every employee goes home safe each day.

Our health and safety statistics are reported below. The figures cover all employees and contractors.

Health and safety LTIR1 and TRIR2 table

2025 2024

1 Lost-time Incident Rate (LTIR) is defined as total number of lost time incidents in a year, divided by the total number of hours worked, multiplied by 200,000. We define a lost time incident as an incident that occur when a worker sustains a lost time injury that results in time off from work, or loss of productive work

Board of

Directors

Reviews health and safety

performance

CEO

Responsible for health and safety

programme at XP Power

Site leaders across 17 different sites Responsible for health and safety at the site and that appropriate resources are available

Site health and safety representatives

Responsible for day-to-day health and

safety programme through a cross-functional team

2 Total Recordable Incident Rate (TRIR) is defined as total number of medical injuries, divided by the total number of hours worked, multiplied by 200,000.

CASE STUDY

OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

SUSTAINABILITY REPORT

1. PEOPLE AND WORKPLACE CONTINUED

   Health and wellbeing

   We encourage our employees to have active lifestyles, and we provide facilities and programmes designed to improve wellbeing. These include sports facilities (e.g. basketball courts), shower facilities on site and group events (e.g. softball leagues and yoga sessions). At XP Power, the wellbeing of

   our people is vital. Examples of initiatives run by our sites to promote health and wellbeing amongst our employees are set out below:

   • Our comprehensive Employee Assistance Programme (EAP) provides confidential expert advice and compassionate guidance 24/7, online or by phone. The programme offers a complete support network, is delivered in the relevant languages, and covers a wide

     range of topics and resources for our employees and their families.

   • Alongside the EAP, we offer a cycle-to-work scheme within the business, which is beneficial for both employees and employers through tax savings, health improvements and environmental contribution.

   • We held our third European Fitness Challenge this year, which encouraged a significant increase in physical activity and the active collaboration of teams across the region.

   • In Vietnam, all employees completed a medical check-up in Q4 2025.

   • Throughout the year, we focused on facilitating access to mental health services and reducing the associated stigma, with the appointment of four mental health first aiders, flexible working arrangements for staff where required, and team-building activities around culture and

     staff wellbeing. At our German locations, we implemented wellness initiatives such as a wellness pass, which provides access to a wide range of fitness, health and relaxation offerings, a health day offering services such as health checks, ergonomic advice, and prevention workshops, and team activities to support social and mental health.

     Our people

     We look after our employees, support their training and development, recognise cultural differences, respect their human rights and promote a fair working environment with equal opportunities for all. As a global business, we capitalise on our cultural differences and strive to make XP Power a fulfilling workplace.

     Engagement

     Our vision is to deliver the ultimate experience for our stakeholders. Through workforce engagement, our Board listens to employees' views and these are discussed when decisions are made. Pauline Lafferty is the designated Non-Executive Director responsible for workforce engagement. As a former Chief People Officer, she is passionate about employee engagement.

     We use several methods to engage our people but derive high value from our Gallup engagement survey, first conducted

     in 2020. We use the survey to drive further employee programmes and enhancements to our engagement and retention. Participation rates were excellent again in 2025, at 93% (2024: 92%). This year, our engagement score was 4.15 out of 5.001 (2024: 4.03), putting us at the 54th percentile in the Gallup database. We compare our year-on-year results to observe consistent significant improvements in the

     engagement levels of the people within our organisation. This improvement is driven by engagement initiatives such as the provision of monthly engagement calendars, opportunities

     to provide feedback on GALLUP, and virtual and in-person meet-ups to connect and check in with colleagues. Our goal is to offer a consistent employee experience globally and observe the current spread in results. We distribute newsletters, hold townhalls and update the intranet to

     further engage our employees and keep them informed of our progress and sustainability-related information, such as plastic reduction initiatives.

     CASE STUDY

     Safety Begins with Me - Global Safety Day video contest

     In 2025, XP Power built on the strong foundation established in 2024 to further advance our global Environmental, Health and Safety (EHS) programmes. Following the launch of the Safety Begins with Me programme, we implemented a unified global EHS standard, strengthened governance and continued evolving our safety culture to ensure every employee goes home safe each day. Throughout the year, initiatives were scaled, global processes were standardised and consistent safety best practices were reinforced across all regions.

     To drive engagement and celebrate site-level success, XP Power launched its first-ever Global Safety Day video contest. The contest showcased creativity, collaboration and a proactive safety mindset across our global sites, bringing the Safety Begins with Me programme to life through real employee experiences. Teams demonstrated how safety ownership, leadership commitment, and employee involvement translated into meaningful actions on the shop floor and beyond.

     The contest reinforced the impact of the Safety Begins with Me programme by highlighting shared accountability for safety and encouraging peer-to-peer learning across regions. In parallel, 2025 also marked the global rollout of the Safety Begins with Me observation programme and dashboards, which provided employees with practical tools to identify, report and address safety risks. Together with the Global Safety Day campaign, these initiatives strengthened engagement, empowered individuals at every level, and further embedded a proactive, people-focused safety culture across XP Power.

1Results exclude Vietnam and China employees.

Labour

We are committed to the fair treatment of our employees. We recognise the importance of work-life balance and offer flexible working arrangements to allow employees to balance their work and other priorities. The Group aims to eliminate excessive working hours and respect national legislation and industry-referenced maximum working hours standards.

Diversity and equality

Becoming a truly diverse and inclusive company is crucial to supporting business growth and innovation, attracting and retaining talent, and engaging customers. Different experiences and perspectives allow us to explore options

and decisions more widely, which generates better outcomes for the business and its stakeholders. We recognise the cultural differences that exist in our global operations and acknowledge that a diverse workforce reflects our markets and will help us be successful.

We are committed to non-discrimination and offer equal opportunities in all our employment practices, procedures and policies. When hiring, promoting or considering business partners, we choose the best candidate, irrespective of

age, race, national origin, disability, religion, gender, gender reassignment, sexual preference, social background, political opinion, marital status or membership/non-membership of any trade unions.

We support initiatives that promote inclusion, engagement and representation across the organisation. During 2025, foundational work was completed to design a Women Employee Resource Group (ERG), including defining its purpose and structure. The ERG will formally launch in North America in 2026 as a pilot programme and will provide a platform for connection, development and engagement aligned with business priorities.

In 2025, XP Power increased focus on International Women's Day through employee engagement activities across sites in North America. This included an internal leadership interview that highlighted the experiences of our North America Controller, employee-submitted stories celebrating inspirational women, and site-wide

participation to raise visibility and foster connection. We shared activities, internally and externally, on social media to reinforce engagement. During a year focused primarily on restructuring rather than hiring, XP Power conducted appropriate reviews to ensure workforce actions did not

disproportionately impact women or other underrepresented groups. These efforts reflect our continued commitment to fairness, equity and responsible people practices.

We have promoted inclusivity through initiatives such as structured mentorship programmes, which enable more experienced employees to share knowledge with junior employees, multilingual communications and town halls, cross-site workshops and visits, and flexible working arrangements.

Our employees receive annual training on diversity through our Code of Conduct training. Employees in the UK and Europe receive bi-annual training on Equality, Diversity and Inclusion. This course is CPD accredited and IIRSM and Citation approved. In 2025, 59 employees completed this training (2024: 57).

We will:

1. • create an environment in which individual differences and the contributions of all team members are recognised and valued;

   • create a working environment that promotes dignity and respect for every employee;

   • not tolerate any form of intimidation, bullying or harassment, and will discipline those that breach this policy;

   • make training, development and progression opportunities available to all employees;

   • promote equality in the workplace, which we believe is good management practice and makes sound business sense;

   • encourage anyone who feels they have been subject to discrimination to raise their concerns so we can apply corrective measures; and

   • regularly review our employment practices and procedures to maintain fairness.

     The Group is supportive of flexible working, including working from home, part-time and flexible hours according to the requirements of the position. This commitment to flexible working ensures that we recruit from a wider pool of candidates with different personal circumstances. The Group employs contract and temporary workers across many locations to fill local requirements, sometimes for short periods. We do this, particularly, in our manufacturing

     facilities globally, to ensure we meet customer requirements. Many temporary staff choose to become permanent employees.

     In the UK, we pay employees who have more than two years of service maternity or adoption leave for three months at 100% of salary compared to the statutory six weeks at 90% of salary. We also provide two weeks of paid paternity leave at 100% of salary compared to statutory paternity leave of two weeks at £151 or 90% of usual pay if lower.

     We recognise the importance of pay equality and undertook analysis around gender representation to help understand our gender pay gap. We report our UK gender pay gap, even though we have fewer than 250 employees in the UK and are exempt from gender pay gap reporting. For 2025, our mean gender pay gap is 43.8% and our median gender pay gap is 43.8% (2024 mean: 36.4%, median 38%).

     The Board oversees the Company's Diversity Policy, which is embedded in our Code of Conduct at corporate.xppower.com

     OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIALS

     Talent and career management

     Global	Average number of employees	2,062	2,303
     	Average number of temporary or contract employees	187	263
     	Percentage of temporary or contract employees to permanent	9%	11%

     Global	Average number of employees	2062	2,303
     	Voluntary leavers	656	870
     	Voluntary turnover	32%	38%

     We have a wealth of talented individuals working across the business and recognise the importance of supporting and developing the skills, knowledge and experience of our teams. From our structured onboarding process, during which managers identify a day-one buddy and build a detailed initial training plan, to career conversations as part of the annual review process, we commit to promoting training and career development.

     Developing our talent is key to our ongoing success. As a key leadership responsibility, our line managers identify

     high-potential employees, create development opportunities and support internal progression. Talent management and succession planning for the Executive Directors and Senior Leadership team is reviewed and discussed at Board level.

     We agree personalised people and organisation plans, aligned with the attainment of the Group's strategy, with all our executive leaders.

     We aspire to ensure that all XP Power employees receive regular performance feedback. We run this alongside

     our formal performance review process, through which objectives are set, aligned and measured against our Core Values and key business priorities. In most cases, employees receive performance reviews twice or more in a year. 100% of employees receive a performance review at least once a year. We operate various bonus schemes, and all non-sales commissioned employees are eligible to participate in our general or executive bonus scheme. Healthcare benefits and life assurance are provided according to the customs in the regions in which we operate.

     During the year, we launched a Leadership Programme for Germany, which is designed to support our leaders and strengthen their leadership capabilities. The programme focuses on developing skills in areas such as people management, communication and change management, with the goal of enhancing team performance and overall engagement.

     In 2025, we had 18 apprenticeships and 43 interns (2024: 18 apprenticeships and 31 interns), and ran programmes in areas such as finance, human resources, information technology and logistics.

     Average training time (in days) per employee

     2025 2024

     Global	Average number of employees	2,062	2,303
     	Total hours	24,591	21,971
     	Hours per employee	12	10
     	Days per employee	1.5	1.2

     Freedom of association

     We allow our employees to freely associate with any relevant unions. The number and percentage of employees covered by collective agreements in 2025 was 923 and 44.8%

     (2024: 818 and 35.5%). See page 79 for a full breakdown of employees covered by collective bargaining agreements by region.

     Community partnerships

     We believe that we should give back to the communities we work in as they are an integral part of our lives.

     We encourage all employees to get involved in local environmental and community activities and we provide every employee with a day's paid leave so they can contribute to a charitable or worthy cause in the community.

     In June and July, we encouraged our employees to use their volunteering day at a local charity called Greenshoots. The charity serves to provide rehabilitation and training for adults with recurring mental ill health or learning disabilities. We help on site with general maintenance, such as painting, weeding and building sheds.

     Employees are encouraged to use their volunteering day to support other charities that are close to their hearts. During the year, XP Power supported Macmillan Cancer Support, Breast Cancer Awareness and Crisis, which the Group supported through coffee mornings, raffles, bake offs and "Wear it Pink" days.

     The Group and its employees made donations to local charities totalling £8,860 in 2025 (2024: £4,003).

     XP Power Annual Report & Accounts 71

     for the year ended 31 December 2025

     Gender diversity statistics

     Male Female

     17%

     23%

     38%

     63%

     48%

     51%

     47%

     51%

     83%

     74%

     Board

     Executive Management

     Management

     All other

     Total

     1,028

     Employees by gender and region as of 31 December 2025

     272

     336

     1,390

     1,998

     165

     209

     654 736

     Male Female Unknown Total

     935

     86

     113

     21

     Europe

     14

     North America

     Asia

     35

     Total

     OVERVIEW

     STRATEGIC REPORT

     GOVERNANCE

     FINANCIALS

     SUSTAINABILITY REPORT

     3. PEOPLE AND WORKPLACE CONTINUED

     Our workforce in numbers

     This page provides a workforce summary. Full data can be found in our non-financial performance indicators on pages 77-79.

     Number and percentage (%) of contract or temporary workers to total employees

     Full-time employee voluntary turnover percentage (%)

     2025 2024 2025 2024

     Of the members of our Board, 38% are women, including in roles such as Chair of the Remuneration Committee, Senior Independent Director and Designated Director for Workforce Engagement.

     70

     XP Power Annual Report & Accounts

     for the year ended 31 December 2025

     
     
     

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     SUSTAINABILITY REPORT

2. ETHICS AND COMPLIANCE

How this strategic pillar links to the UN SDGs:

UN SDG 16 "Peace, justice and strong institutions" through internationally promoting the rule of law and reducing corruption and bribery in all forms

Link to

Material issues UN SDGs

02 07

It is Company policy to conduct all business in an honest and ethical manner. "Integrity" is the first of five core values embedded into our culture, as well as our Code of Conduct and the policies outlined in the following sub-sections.

To ensure our employees are aware of and understand the Code of Conduct, we use our learning management system (LMS) to monitor all employees on their annual Code of Conduct training. In 2025, employee compliance with the annual Code of Conduct training was 93% (2024: 96%).

suppliers, who must comply with its provisions. In 2025, Executive Management and the Board were not aware of any instances of bribery and corruption.

Our UK and EU employees also conduct biennial training on anti-bribery, which is CPD accredited and IIRSM approved. In 2025, 49 employees conducted Anti-Bribery training (2024: 79), 64 conducted Insider Dealing training and 308 conducted Fraud training.

Modern slavery

The Board reviews and publishes an annual statement, which sets our relevant and supporting policies to prevent slavery or human trafficking in our own business and supply chains. A copy of the latest Modern Slavery Statement is available on the Company's website at corporate.xppower.com

Human rights

Human rights are at the heart of sustainable business. We are committed to respecting human rights in accordance with international principles, including the UN Guiding Principles on Business and Human Rights, the UN Universal Declaration of Human Rights, and the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work. Employees are trained on Human Rights through our annual Code of Conduct training. No human rights violation incidents were reported during 2025

(2024: 0). Our Human Rights Policy is available here:

corporate.xppower.com/ about-us/corporategovernance

various processes, software and hardware prevent data security breaches and unauthorised access to the Group's systems and data. The Group holds regular cybersecurity training and awareness to ensure that our employees remain alert to threats. During 2025, the Group experienced no cyber incidents (2024: 1).

Tax transparency

The Group is compliant with all applicable tax laws and regulations in all areas in which it operates or is required to make filings. All required tax filings are made accurately and on time with the relevant authorities. It is Group policy to not engage in any aggressive tax planning or tax avoidance schemes.

We prohibit tax avoidance through transfer pricing. All intra-group transactions are priced on an arm's length basis in accordance with the Group's internal transfer pricing policies, which reflect internationally accepted transfer pricing standards and local tax laws. We commit to not

transferring value created to low tax jurisdictions and not use tax structures intended for tax avoidance.

Government contracts

The Group has no direct relationships with any government entity through which it sells products or services.

Whistleblowing

We provide an environment in which open, honest communications are expected. Employees should feel comfortable bringing forward any concerns regarding violations of policies or standards and know that their concerns will be taken seriously. They should be aware that, when they have acted in good faith, we will protect them from adverse repercussions and/or detrimental treatment, as set out in our Code of Conduct. An independent whistleblowing service is available to employees who cannot raise issues of concern with their line manager or superior. Our confidential whistleblowing programme "Speak Up" is administered through an independent third party, which is available 24/7. Speak Up runs in each operational country and is available in each local language. This guarantees

that employees' experiences of legal or ethical misconduct, such as discrimination, are heard and acted upon quickly. Concerns can be raised anonymously online or by phone.

The Audit Committee is responsible for monitoring whistleblowing, and compliance matters are regularly reviewed by the Board. A whistleblowing report is automatically distributed to the Chair of the Audit Committee by the independent third-party provider. It is then reviewed and assigned to management or an independent

third party for further investigation and response as required. Whistleblowing and Fraud is a scheduled agenda item at Audit Committee meetings. The Company takes appropriate action regarding all upheld qualifying disclosures. In 2025, there were two whistleblowing reports (2024: five), relating to discrimination. Both reports were investigated and closed. While the reports highlighted that effective processes for handling concerns were established, they indirectly led to the re-launch of the Ethics & Speak Up process, and updates to the formal reporting process through NAVEX to ensure that all employees had knowledge of the process. We provided counselling for managers to ensure that issues are raised promptly, with a review of expectations and training for line managers to manage issues quickly and sensitively.

Anti-bribery and corruption

XP Power has a zero-tolerance approach to bribery and corruption, and is committed to acting professionally, fairly and with integrity in all business dealings and relationships, enforcing effective systems to counter bribery. Our policy on anti-bribery and corruption is embedded in our Code

of Conduct, which includes numerous examples to ensure employees understand what is and is not acceptable. Our Code of Conduct requirements are communicated to our

Information systems and technology

The Group has appropriately robust and secure information technology (IT) systems but acknowledges that no IT system can be completely secure. The Group IT Director is responsible for the integrity and security of the IT systems and communications network. The Group has penetration testing, data back-up and recovery processes in place and

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KEY NON-FINANCIAL

PERFORMANCE INDICATORS

Environmental data

Emissions and energy

The Group has prepared this section for the reporting period 1 January 2025 to 31 December 2025. The Group defines its organisational boundary using an operational control approach with no material omissions from within the organisational boundary of the Group. We report on all material GHG emissions sources and GHG emissions have been calculated from business activities in accordance with the principles and requirements of the World Resources Institute (WRI) GHG Protocol: A Corporate Accounting and Reporting Standard (revised version) and Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements (March 2019). The information in this section and tables in our key non-financial performance indicators on pages 74-79 address our requirements under Part 7 of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 and under the UK's Streamlined Energy and Carbon Reporting (SECR). In line with the Greenhouse Gas Protocol, we continue to review our reporting considering any changes in business structure, calculation methodology and the accuracy or availability of data. We have verified our Scope 1, 2 and 3 emissions for 2024 in accordance with the requirements of "Limited Assurance" procedures by Carbonology. The verifications were performed in accordance with ISO 14064-1: 2019 and may represent minor differences to those reported in the 2024 Annual Report. Please see https://www.xppower.com/company/certification for more information.

Environmental data continued

2025 2024

2025 2024

1 All electricity consumed is either covered by EACs, generated by solar or purchased from renewable contracts

Waste generation (tonnes) 2025 2024

Waste Treatment/disposal (tonnes) 2025 2024

1 Transferred to treatment contractor for recycling.

Full-time employee voluntary turnover percentage (%) 2025 2024

Number and percentage (%) of contract or temporary workers to total employees 2025 2024