Avon Technologies plc

Annual Report

and Accounts 2025

Strong

plaorm.

Expanding

horizons.

2

Avon Technologies plc

Annual Report and Accounts 2025

Protecting lives

Avon Technologies plc is a world leader in

mission-critical protective equipment.

Every day, all over the world, over four million

service personnel, law enforcement and first

responders rely on our cutting-edge respiratory

and ballistic systems to keep them safe and help

them do their difficult and essential work.

Mission-critical

protection

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Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

North America

Growing investment in border

and homeland security. Increased

domestic civil unrest driven by

political polarisation, immigration

enforcement and emerging

digital protest tactics.

NATO

Substantial growth in defence

spend expected with NATO

target of at least 3.5% GDP.

Russian CBRN attacks in Ukraine

recognised as a key strategic risk

for militaries. Growing awareness

of underwater threats.

Rest of World

Heightened regional unrest

with increased focus on defence

and security spend. Middle East

conflict and increasing tensions

between India/Pakistan and

China/Taiwan.

Our world is changing, with

increasing conflict and new

threats. From chemical warfare to

urban conflict, from underwater

missions to the frontlines of

Ukraine and the Middle East,

the defence landscape has

shifted dramatically.

The challenges faced today

are more complex and more

unpredictable, with a greater

need for personal protection:

Our mission is clear:

To enhance personal protection not just for the worst-case scenarios, but for the most

likely ones. Whether it’s supporting operator lethality or ensuring mission-readiness,

our job is to keep users one step ahead of the threat.

We’re proud of our reputation for quality, innovative design and specialist materials expertise.

Most of all, though, we’re proud to protect the lives of the people who protect us.

Our largest customers

UK Ministry

US Department

of War

NATO nations via the

NSPA framework contract

Australian

Defence Force

UK Ministry

of Defence

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Avon Technologies plc

Annual Report and Accounts 2025

Getting better

every day

We know how important our work is:

lives literally depend on it. That’s what

motivates us, every day, to keep doing it better.

Together, we’ve built a culture of continuous

improvement (CI) – where individuals at every

level are empowered to call out opportunities

and create meaningful change.

It’s what drives our product innovation and

our skills development. And what makes

our facilities and processes as safe,

efficient and enjoyable as possible.

So that, every day, we get a little better

at protecting the people who protect us.

Chief Executive’s strategic review

p18

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Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

#

FIERCE

about putting our customers first

about winning

about growth

about experimentation

about respecting our people

What is continuous

improvement?

Continuous improvement (CI) is straightforward:

assemble cross-functional teams to address

top priorities with focused effort. While many

CI tools exist, the essential idea is to collaborate

and fully dedicate attention to solving key

problems. By building the right culture and

capabilities we believe we can unlock significant

opportunities that will result in a company

where employees can learn and thrive, and a

business that can outperform our competition.

Unlike most other companies, who view

CI as tactical, we consider it strategic and

a key part of our future success: consistently

delivering high-quality products on time

to customers, with lower inventory than

competitors, will lead to success.

What makes us different

Our FIERCE culture is distinctive and powerful.

It enables our people to be the best version

of themselves.

FIERCE are the values and behaviours we

encourage, the standards we hold ourselves

to and the characteristics we display when

we’re at our best.

There are five behaviours that sum up how

we show up as a business. They are the

standards we expect from ourselves and

each other and the benchmark we use to

inform decisions and measure performance.

Read more:

Our culture

Expanding

horizons

Our ambition is to be the leading military

and law enforcement PPE specialist.

Each year, we use our STAR framework to

set priorities, focus our strategy and align

around shared goals. STAR has four key pillars

that shape how we work and grow. It is

the backbone of everything we do.

6

Avon Technologies plc

Annual Report and Accounts 2025

STAR strategy

p19

7

Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

Embedding a culture of continuous improvement

2023

Where we are now

Footprint optimisation and programme

management excellence projects complete.

Functional excellence 75% complete and

commercial optimisation 50% complete.

2026

Continued focus on operational excellence,

generating cash to drive growth through

investing in sales and marketing, R&D,

product development and people.

Our STAR strategy

The STAR strategy was launched in 2023 and sets out the

strategic priorities required to achieve our medium-term goals

of at least 5% revenue CAGR, adjusted operating profit margins

of 14-16%, ROIC of more than 17% and cash conversion of

80-100% (see Adjusted Performance Measures on page 111

for more information).

Our STAR strategy comprises four focus areas:

1.

Strengthen through continuous improvement

to drive

sustained competitive advantage:

Every day, at every level

of our organisation, people are making small changes that improve

our people’s safety, our product quality, our delivery to customers

and inventory reduction. All while also improving productivity.

We call this our Strengthen System.

2.

by creating solid foundations for growth:

Continuous

improvement generates cash by reducing inventory and increasing

productivity. We reinvest that cash in growth, building operations

and supporting functions that enable the business to grow faster.

3.

the business through organic growth:

From growing

and defending our core and nurturing emerging opportunities to

developing new revenue streams, we can grow our core business

organically – we call this our Advance programme.

4.

use research, partnerships and acquisitions

to augment our growth:

And by leading the market with new

products, new materials and disruptive innovation we can

build a business for the long term.

Where we are now:

Strengthen

and

:

Our Strengthen System has become a powerful engine for

operational improvement. We see clear opportunities to

further improve our operational KPIs, increasing cash and

capacity to invest in growth opportunities.

Our transformation activity and associated risk will reduce

significantly during FY26, with focus moving to our most

ambitious new product development programme yet.

Increasing our focus on organic investment to drive growth,

including: expanding sales and marketing, accelerating R&D,

improving product development processes and investing in

our people.

Investing in long-term growth opportunities, including our new

product pipeline, market expansion, geographic expansion and

M&A to support organic growth through ‘bolt-on’ acquisitions.

Our STAR strategy is delivering. With strong momentum behind us,

we have a packed pipeline of initiatives for 2026.

Protecting lives...

Our mission is to provide

unparalleled protection for

those who protect us.

...better every day

Together we’ve built a culture

of continuous improvement

where everyone is empowered

to create meaningful change.

8

Avon Technologies plc

Annual Report and Accounts 2025

Contents

Strategic report

02

Introduction and highlights

10

At a glance

12

Our Investment Case

14

Chair’s statement

16

Business model

18

Chief Executive’s strategic review

26

Market review and trends

28

Key performance indicators

32

Financial review

38

Strategic Business Unit review:

Avon Protection

42

Strategic Business Unit review:

Team Wendy

46

Risks and uncertainties

54

Sustainability

66

TCFD

72

Section 172(1) statement

Governance

77

Our Board

79

Our Executive Team

80

Chair‘s Introduction to Governance

82

Corporate Governance Report

86

Nomination Committee Report

88

Audit Committee Report

91

Remuneration Committee Report

100

Annual Report on Remuneration

108

Directors’ Report

111

Adjusted Performance Measures

Financial statements

116

Independent Auditor’s Report

123

Consolidated Statement of

Comprehensive Income

124

Consolidated Balance Sheet

125

Consolidated Cash Flow Statement

126

Consolidated Statement of

Changes in Equity

127

Accounting Policies and Critical

Accounting Judgements

132

Notes to the Group Financial Statements

155

Parent Company Balance Sheet

156

Parent Company Statement of

Changes in Equity

157

Parent Company Accounting Policies

159

Notes to the Parent Company

Financial Statements

Shareholder information

161

Notice of Annual General Meeting

167

Glossary of Abbreviations

168

Shareholder Information

Forward-looking statement:

This Annual Report contains

certain forward-looking statements with respect to the

operations, strategy, performance, financial condition,

and growth opportunities of the Group. By their nature,

these statements involve uncertainty and are based on

assumptions and involve risks, uncertainties and other

factors that could cause actual results and developments

to differ materially from those anticipated. The forward-

looking statements reflect knowledge and information

available at the date of preparation of this Annual Report

and, other than in accordance with its legal and regulatory

obligations, the Company undertakes no obligation to

update these forward-looking statements. Nothing in this

Annual Report should be construed as a profit forecast.

Operational highlights

Excellent progress towards medium-term financial goals:

• Addressable markets currently outpacing the previous forecast

annual growth rate, now 3–4.5%

• Revenue, ROIC, cash conversion and leverage goals all achieved

two years earlier than targeted

• On track to achieve operating margin within the target range of

14–16% in FY26

Continuous improvement driving operational improvements:

• Transitioned all production lines from batch to flow manufacturing –

layout improvements across every factory

• Irvine, California, site closed: on course to deliver savings from FY26

• Demonstrated ability to hit planned rate on key DoW NG IHPS

and ACH Gen II programmes

• 24% global scrap reduction, showcasing CI-led operational

improvements

• Sustained CI freeing up cash and resources to reinvest into technology,

talent, sales and marketing, and disruptive technologies

Delivering organic growth through strategic wins and

strengthening customer base:

• Delivered FM54 masks to the Australian Defence Force

• NSPA (NATO Support and Procurement Agency) contracts for FM50

and boots and gloves now reached $100m of orders across 16 countries

• Grew US commercial law enforcement helmet sales by 15%

• US DoW orders totalling $64m for ACH Gen II and NG IHPS helmets

• Record order book of $263m, giving confidence in FY26 and beyond:

>

$131m US DoW order backlog for NG IHPS and ACH Gen II helmets

>

Turkish MoD initial delivery and follow-on order for full CBRN ensemble

system including suit, boots, gloves, mask and powered air respirator

>

Canada and two European Navy rebreather contracts won and

orders placed

Increasing investment in long-term growth opportunities,

supported by product innovation:

• Launched RIFLETECH helmet and MITR half mask and powered

goggle with strong pipelines and excellent customer feedback

• Contracted on nine Programs of Record with US DoW

• Investment in strengthened commercial sales team

A robust and repeatable business improvement system:

• Continuous improvement-led Strengthen System driving structural

improvement in the business, creating a higher-performing platform

capable of supporting greater scale

• On track to have met or exceeded our key targets in 2026

• Confident in continuing to deliver sustained growth and improved

returns over the long term

• Focus turning to accelerating growth while continually improving

operational execution

Performance highlights

2025

2024

Growth

Closing order book

$262.8m

$225.2m

16.7%

Revenue

$313.9m

$275.0m

14.1%

Adjusted EBITDA

$51.5m

$43.4m

18.7%

Adjusted operating profit

$40.3m

$31.6m

27.5%

Statutory operating profit

$19.2m

$10.7m

79.4%

Adjusted profit before tax

$34.9m

$25.3m

37.9%

Adjusted basic earnings

per share

91.2c

69.9c

30.5%

Total dividend per share

24.6c

23.3c

5.6%

Net debt excluding

lease liabilities

$50.1m

$43.5m

15.2%

Nearly two years ago, we set bold ambitions for the

business which could only be achieved by significant

change. This year, in particular, required enormous

tenacity and dedication from our employees. That

effort is paying off. Adjusted EPS has grown by over

100% since 2023, the balance sheet now provides

a strong foundation and strategic optionality, and

we’ve launched several exciting new products which

will support future growth.

As we near the completion of the first phase of our

strategy, our shiſt to a continuous improvement

culture is delivering real results and has been

fundamental to dramatically increasing the

production run rate within Team Wendy and

expanding our market share in Avon Protection.

We are now a stronger business with more

growth opportunities than ever, underpinned by

disciplined investment and relentless operational

improvement. None of this would be possible

without our exceptional team, and I’m deeply

grateful for their hard work and commitment.

Jos Sclater

Chief Executive Officer

9

Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

protection systems.

Our products are trusted to protect

service personnel and first responders

in over 70 markets around the world.

Our largest customers include the

US Department of War (US DoW),

NATO nations via the NSPA framework

contract, UK Ministry of Defence

(UK MoD) and the Australian Defence

Force (ADF).

We have two Strategic Business

Units (SBUs), specialising in different,

but complementary, areas of

protective equipment:

Avon Protection is a leading provider of innovative protective equipment,

specialising in the design, development, testing and manufacturing of integrated

protective systems for land and sea.

Product portfolio

Our products fall into four categories:

CBRN

Respiratory

Non-CBRN

Respiratory

Integrated

CBRN

Underwater

Respiratory

FY26–30 addressable market size

$446m

*

3–4% CAGR

Revenue

$168.8m

Sales growth

16%

Adjusted operating profit

$33.6m

Adjusted operating profit margin

19.9%

Employees

450+

Competitive advantages

• User-centric design

• Moulding and materials knowledge

• Leading quality processes

• Vertically integrated supply chain

• Field-proven pedigree

• Leading market certifications

• Underpinned by long-term patents

and contracts

At a glance

We are an organisation with one shared purpose:

Protecting lives, every day

Strategic report

Governance

Financial statements

injury research.

Product portfolio

Ballistic

Helmets

Bump

Helmets

Liner and

Retention Systems

FY26–30 addressable market size

$591m

*

3.5–4.5% CAGR

Revenue

$145.1m

Sales growth

12%

Adjusted operating profit

$6.7m

Adjusted operating profit margin

4.6%

Employees

500+

Competitive advantages

• Leader in composite material processing

for ballistic protection

• Long-term relationship with US DoW

and technology partners

• Agile design, prototyping and

testing resources

• In-house tool and process

equipment machining

• Innovative design solutions

and integration

• Novel shell-forming and

moulding processes

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Avon Technologies plc

Annual Report and Accounts 2025

Team Wendy

Avon Protection

FY25 closed with another record order book,

up 16% to $263m. Avon Protection’s order

book grew by $45m, with well-diversified

demand across customers and product

lines. Team Wendy’s order book declined

by $7m, reflecting accelerated US DoW

helmet deliveries, a reduced 40% share

(at a higher price) of the latest NG IHPS

award, and shorter lead times for police

and first responder orders, resulting in

fewer outstanding deliveries.

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Avon Technologies plc

Annual Report and Accounts 2025

Continuous improvement culture driving

high returns

• Culture of continuous improvement builds credibility,

competitive advantage, margin improvement and

cash to reinvest in growth

• Low-capital business model with long-term ROIC

growth opportunity

Positive key growth drivers*

Previous

trend

Future

trend

Underlying defence trends

Increasing total

defence budgets

Rising geopolitical

tension, escalation risk,

fraying alliances

Number of military

and first responder 

personnel

War readiness,

deterrence, response

to civil unrest

Equipment-specific trends

Increased CBRN

threat level (Avon

Protection only)

Higher CBRN capabilities

from hostile actors,

use in recent wars

Growing domestic

security threats

Rising domestic

terrorism, immigration

control, civil unrest

Growing soldier

lethality needs

Need for light,

tactical gear

Heightened focus

on soldier protection

(Team Wendy only)

Rising conflict risk, new

weaponry, increased

duty of care spend

Higher equipment

specifications and

modernisation

Higher budgets to

replace old gear

Increased stockpiling

Planned surge in recruits,

greater war readiness

and donation

Increasing market share in growing markets

• Well positioned to grow above underlying markets

• Core addressable markets growing at 3–4.5% CAGR

• Global instability and conflicts driving demand

• Increasing CBRN threats driving defence and homeland

security investment

Our Investment Case

Building a business that can compound for

shareholders through our scalable business model

Our business model

Annual ballistic

helmet demand $m

0

100

200

300

400

500

600

FY26–30

FY19–25

Military

Law enforcement

Annual respirator

demand $m

0

100

200

300

400

500

FY26–30

FY19–25

Strong competitive moat

• World-leading, innovative and certified technology

• Deep material science, product design and manufacturing capability, aligned to customer priorities and future threats

• Over 100 years’ experience protecting lives of NATO militaries and first responders

• Contracted on nine US DoW Programs of Record (a formally approved major acquisition programme officially recorded

in the budget with plans for development, procurement and sustainment)

Military product lifecycles provide long-term visibility and create barriers to new entrants

Programme lifecycle

Total patent numbers:

Avon Protection

Team Wendy

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Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

A repeatable business model

• Proven business system that builds capability and culture to deliver local continuous improvement actions

• Track record of successfully transforming and strengthening existing business units

• Disciplined capital allocation framework which drives high returns:

Capital allocation framework... expanding to include value-accretive acquisitions

Stable revenue base, well-underpinned growth

• Low revenue volatility with valuable recurring revenue

base and stable aftermarket

• Sole sourced or primary sourced on long-cycle

programmes of record

• Long history of partnering with customers on

breakthrough technologies

Need

determination

1 year

Detailed design

2 years

granted

patents

patents

pending

design

registrations

granted

patents

patents

pending

design

registrations

Excess cash deployed through

disciplined

capital allocation

Contract win typically results in role on programme for entire lifecycle

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Avon Technologies plc

Annual Report and Accounts 2025

FY25 has laid the groundwork.

The transformation is largely

complete. What lies ahead is the

opportunity to compound value

– through disciplined execution,

strategic clarity and a culture

that continues to challenge itself.

Bruce Thompson

Chair

FY25 has been a defining year for the Group.

We set out to transform not just our operations, but

our trajectory – and we’ve done so with conviction.

The progress made is a testament to the resilience

and ambition of our people. We’ve re-entered the

FTSE250, a milestone that reflects our growing

relevance in the industrial and defence sectors.

Our mission remains unchanged: to protect

those who serve. But we also recognise the

broader responsibility we carry – to support the

families and communities behind every uniform.

That sense of purpose drives us forward.

Strategic progress

The Group has undergone significant change, and we’ve emerged

stronger. Our transformation programme has delivered results,

not just in financial terms, but in how we operate and think. We’ve

streamlined our footprint, sharpened our focus and built a culture

that embraces improvement.

The STAR business system continues to underpin our progress.

It’s not just a framework – it’s a mindset. It enables us to unlock

resources, invest in innovation and respond with agility to evolving

threats and customer needs.

Governance and culture

We’ve strengthened our governance foundations. Our financial reporting

is quicker and more transparent, and our business objectives are now

better aligned with strategic priorities.

Culture remains central to our success. This year, we introduced new

behaviours aligned with our FIERCE values. These are not slogans –

they are lived experiences across our sites. From kaizen events to open

forums, we’ve seen teams step up, challenge norms and drive change.

Operational excellence

Continuous improvement is now embedded across our global

footprint. Our facilities have been reconfigured for flow, waste

has been reduced, and inventory managed with greater discipline.

These changes are not cosmetic – they reflect a deeper shift in

how we deliver quality and reliability.

We’ve also invested in our people. Training, leadership development

and open dialogue have created an environment where ideas are

welcomed and execution is owned at every level.

Looking ahead

The opportunities before us are substantial. Our pipeline is strong,

our customer engagement is deepening and our innovation agenda

is ambitious. We are well positioned to grow organically and, where

appropriate, through targeted acquisitions.

FY25 has laid the groundwork. The transformation is largely complete.

What lies ahead is the opportunity to compound value – through

disciplined execution, strategic clarity and a culture that continues

to challenge itself.

Closing

I want to thank our teams across the Group. Their commitment,

adaptability and belief in our mission have made this year possible.

We are building a business that is not only stronger, but more resilient,

more innovative and more aligned with the needs of those we serve.

Bruce Thompson

Chair

Chair’s statement

Operational

transformation

in Cadillac, US

At the Cadillac facility, a series of kaizen initiatives delivered

a step change in operational efficiency and space utilisation.

The first streamlined mask configuration fulfilment. Previously,

accessories were packed on the assembly line, causing frequent

disruptions and a build-up of inventory. By relocating final configuration

to the warehouse, the team freed the assembly line to focus solely on

producing standard masks, while a dedicated delivery value stream

team completes configurations using a purpose-built U-shaped cell

that allows for flow. This shift reduced lead times, lowered inventory

levels and improved responsiveness – especially for custom orders.

This directly enabled the second project: a full-scale reconfiguration of

the warehouse. With final configuration now occurring in the warehouse,

safety, space and efficiency became critical. A detailed review revealed

over 225 unused pallet spaces due to inefficient double-deep storage.

The team rotated racking by 90 degrees, eliminated double-deep pulls

and reorganised inventory based on pull frequency. Frequently accessed

items were moved closer to the shipping dock, dramatically improving

operator speed and safety. Inventory once scattered across the factory

floor now resides entirely in the warehouse, governed by a kanban

replenishment system.

Together, these initiatives have not only streamlined production

and packing, but also unlocked valuable space and enhanced

inventory control – positioning the Cadillac site for continued

operational excellence.

15

Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

Case study

Strengthen through

continuous improvement

4,644

ft2 saved

15%

Capacity improvement

What we do

16

Avon Technologies plc

Annual Report and Accounts 2025

Business model

Medium-term goals:

Growth:

≥5%

revenue CAGR

Adjusted

operating margin:

14–16%

ROIC:

>17%

(currently above our goal)

Cash conversion:

80–

100%

Leverage:

1–2x

net debt/EBITDA

(currently below 1x)

Where we compete:

Military and law enforcement PPE specialist

Offering focus:

Personal protective equipment (PPE) –

integrated respiratory systems and head

protection systems.

How we’re structured:

Independent Strategic Business Units

(SBUs) with targeted coordination:

SBUs operate independently in most

areas, but collaborate in selected domains

(e.g. innovation, shared customers, critical

materials) to leverage group scale and capabilities.

Lean central support functions:

Empowering the businesses, giving them

the resources they need to achieve strategy

other than where there is a compelling

reason to do something different.

How we compete:

We improve our SBUs through our Business

System, a repeatable model that drives

improvement and can be used for future

M&A. This creates clear strategies, translates

them into achievable actions, motivates

our people and continuously improves

our processes.

How we generate value…

…a scalable business model

Continuous improvement

frees up cash by:

• Reducing waste

• Increasing productivity

• Releasing working capital

by reducing inventory

• Shortening lead times

• Boosting operational

efficiency

Which can be

reinvested into:

• Technology

• Talent

• Sales & marketing

• Research & development

• M&A

Driving growth in:

Sales:

Improved customer

satisfaction through quality

and delivery

ROIC:

Increased capital

efficiency through

lower inventory

Margin:

Lower cost base by

improving productivity and

reducing scrap and rework

A winning business

Investment

Happy customers,

employees,

suppliers and

shareholders

Strategic report

Governance

Financial statements

The STAR business system is built

on four interconnected pillars:

Our Business System is our operational framework; it ensures we deliver

our ambitions consistently and sustainably. It’s how we turn ambition

into action, strategy into results, and values into everyday behaviours.

Together, these elements form a system that’s more than a framework

of how we work: it’s a mindset – a repeatable model that improves

businesses and a recipe for success that empowers every one of

our people to contribute to our combined success.

Our Business Improvement System –

how we do it

17

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Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

Strategy

Clear and

compelling

Actions

Effective

every day

Process

Continually

improving

People

Talented and

motivated

Our values:

#FIERCE

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Avon Technologies plc

Annual Report and Accounts 2025

Our core markets are currently expanding faster than the long-term

growth expectation we had previously set out, now growing at 3–4.5%

CAGR. This has been driven by rising defence budgets, particularly in

Europe, and increased focus on CBRN (chemical, biological, radiological

and nuclear) protection amid elevated threat levels. The strategic impact

of CBRN attacks in Ukraine on force mobility was a key driver for this and

we are now also seeing armed forces shifting focus towards ‘war-fighting

readiness’. The market for law enforcement protective gear also continues

to grow in response to civil unrest and greater demands for police and first

responder protective equipment.

Group revenue at constant currency rose 13.8% to $313.9m (FY24: $275.0m),

with Avon Protection up 16%, driven by NATO (including Ukraine) and

Australian Defence Force sales, and Team Wendy up 12% due to increased

DoW helmet production, alongside increased commercial sales to law

enforcement and accessories sales.

Adjusted operating profit rose 30.8% at constant currency, lifting

Group operating margin to 12.8% (FY24: 11.5%). Avon Protection delivered

a strong margin of 19.9% (FY24: 18.3%), driven by sales mix, operational

gearing and improved productivity. Team Wendy’s margin increased to

4.6% (FY24: 3.9%). The accelerated production output in Team Wendy in

Q4 enabled the Group to exit the year with a run rate operating margin

approaching our target range of 14–16%. FY26 will focus on sustaining

this Q4 operational improvement in Team Wendy, enabling us to reduce

ramp-up costs through the first half, delivering margin benefit through

increased operating leverage and productivity gains.

Adjusted basic EPS grew by 35.1% at constant currency, reflecting the

uplift in operating profit. Net debt increased to $50.1m (FY24: $43.5m).

This is primarily due to increased receivables from Team Wendy’s DoW

shipments in Q4, which have now unwound. Our bank leverage ratio at

the end of the year remained comfortably below 1x, at 0.86x (FY24: 0.91x).

Cash conversion was strong at 90%, driven by the expected inventory

unwind in H2 in Team Wendy and improved working capital efficiency,

with average turns increasing to 5.19x (FY24: 4.52x).

Return on invested capital rose significantly to 18.6% (FY24: 13.7%),

exceeding our medium-term 17% target, reflecting higher operating

profit and reduced working capital.

This is a business with a lot of potential.

During the first phase of our transformation,

we right-sized the business and executed

bold transformation projects. We are now

coming to the end of these transformation

programmes and are seeing a pipeline

of exciting growth opportunities for the

Group. We will use our Strengthen System

to drive improvement, delight the customer

and generate cash to invest into more

growth initiatives.

Jos Sclater

Chief Executive Officer

Financial summary

Following a period of exceptional commercial momentum, FY25 closed

with another record order book, up 16% at constant currency to $263m

(FY24: $225m). Avon Protection’s order book grew by $45m to $117m,

with good diversification of demand across customers and product

lines. Even excluding $13m in Ukraine-related orders, the order book

continues to strengthen. Team Wendy’s order book declined by $7m

to $146m, reflecting the acceleration of DoW helmet deliveries, the

reduced 40% share (at a higher price) of the latest NG IHPS award,

and shorter lead times for police and first responder orders, resulting

in fewer outstanding deliveries.

Chief Executive’s strategic review

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Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

Executing our STAR strategy

Since we launched the Strengthen System at mid-year, it has become

a powerful engine for operational improvement. We’re seeing clear

opportunities to further enhance safety, quality, delivery, inventory

turns and productivity across every site.

During the year we trained every employee on our Strengthen System,

developed 20 proprietary courses for the STAR Academy and took

30 of our senior people to Japan for an intense continuous improvement

training course. We also regularly share learning across the Group from

STAR kaizen events, which are cross-functional projects that take at least

a week. Last year we completed two STAR kaizen per month, which

illustrates the intensity of the change.

Operational KPIs improving:

We set targets of a 35% productivity

increase, a >60% scrap reduction and inventory turns of more than

five in the medium term. Versus H1 2023, when we launched these

targets, productivity has improved by 28%; scrap has reduced by 62%;

and year-end inventory turns have improved by 46% to 3.3x. Average

inventory turns, stripping out the effect of a strong Q4 in 2025, have

improved from 2.8x to 3.0x over the same period.

This year: Average productivity, using the average number of employees

during the year, increased by 8% year on year, demonstrating that we are

delivering sustained improvements in efficiency of direct employees while

materially growing the business. Year-on-year productivity improvement

was broadly flat due to recruitment towards the end of the year to support

growth in 2026. We expect to see further improvement in 2026.

We continue to reduce our scrap rates across the business, with a

24% reduction this year. Avon Protection has significantly reduced

historically high scrap rates in boots, gloves and visors. Team Wendy has

improved quality by training the operators to inspect quality on the line,

encouraging stronger autonomy and problem-solving, providing an

immediate feedback loop if there is a workmanship issue, and avoiding

making lots of products before a defect is found. Quality, operator

capability and throughput all improved.

Average inventory turns improved by 5% to 3.0x in the year. Year-end

inventory turns rose 8% to 3.3x, reflecting our focus on increasing output.

We expect further improvement in 2026, but the first half is likely to

be a mixed picture, with finished good value increasing until the US

Government shutdown ends. This will be partly offset by a reduction

in raw materials as we run down excess stock from the Irvine closure.

Team Wendy DoW production increase:

At our FY25 Interim Results

we highlighted the operational risk in Team Wendy associated with the

ramp-up of our DoW helmet programmes. In Q4, production tripled to

meet this ramp-up requirement. Our primary goal in H1 2026 is to sustain

this improved level of output ahead of driving further growth, but we

exit FY25 with confidence that we will see higher revenue and improved

operational gearing in 2026. We will seek to further improve quality and

productivity on the NG IHPS helmet line and increase production on the

ACH Gen II line by a further 50%.

Strengthen through

continuous improvement

Operational summary

Strengthen through continuous improvement

to drive sustained competitive advantage

Every day, at every level of our organisation, people are making

small changes that improve our people’s safety, our product quality,

our delivery to customers and inventory reduction. All while also

improving productivity. We call this our Strengthen System.

Continuous improvement generates cash by reducing inventory

and increasing productivity. We reinvest that cash in growth,

building operations and supporting functions that enable the

business to grow faster.

From growing and defending our core and nurturing emerging

opportunities to develop new revenue streams, we can grow our

core business organically – we call this our Advance programme.

And by leading the market with new products, new materials,

disruptive innovation and M&A, we can build a business for

the long term.

20

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Annual Report and Accounts 2025

Chief Executive’s strategic review

continued

In Cleveland, the US DoW helmet lines faced a major

challenge: tripling output in two months against a

background of frequent downtime, missed takt time

and inconsistent quality. To overcome this, the team

deployed the Strengthen System, our structured approach

to continuous improvement focused on operational

excellence and organic growth.

Understanding the current state

The Strengthen System starts with deeply understanding the current

state of the manufacturing lines. Various tools from the Strengthen

System were used to visualise the bottlenecks and priorities on each

line, measuring the cycle time of each process using line balancing

charts. This understanding was used to focus cross-functional teams

on kaizen projects concentrated on improving quality, reducing re-work

and removing bottlenecks. As the team took steps forward, they gained

clarity on what the next steps were. This mindset helped the team

adapt, prioritise, and stay aligned on achieving flow and takt time.

Applying the

Strengthen System

to unlock flow and

meet takt time

Case study

Prioritising high-impact actions

The Strengthen System emphasises taking the highest-impact steps

first. In Cleveland, this meant starting downstream to boost output

and quality and then moving upstream – an approach that delivered

immediate results.

Mobilising cross-functional teams

Progress came from two to three STAR kaizen projects weekly,

with cross-functional teams aligned through daily stand-ups.

These kaizens targeted fast, high-impact wins.

Supporting them were Newspaper items – daily-tracked tasks that

ensured longer-term follow-through. While STAR kaizens broke

the back of each project, Newspaper items often delivered half the

total impact.

Results and learnings

In two months, the Cleveland team made significant strides towards

tripling production and achieving customer demand. Flow improved,

takt time performance improved and quality stabilised. The Strengthen

System’s iterative approach proved its value – acting fast and learning

as you go unlocks rapid, lasting gains.

Key takeaways:

• The Strengthen System is powerful when we show our people how

to use it to drive improvement. Leadership from the front is critical.

Nobody ever improved a factory from the office.

• Teams can go faster than they think they can. Fourteen projects were

completed over eight weeks.

• Employee buy-in is vital. We invested time on training people on the

Strengthen System and setting clear expectations.

• A line that flows can only run as fast as its slowest operation. To speed

up a line you must deeply understand each process and tackle the

biggest bottlenecks one at a time.

• Flowing a line reveals issues. It is important to build a team with strong

problem-solving capability.

Cleveland’s DoW helmet lines have made significant progress towards

meeting takt time and SQDIP (Safety, Quality, Delivery, Inventory

and Productivity) targets. There is still a lot more to do to ensure we

sustain our operational KPIs, but it is clear that the Strengthen System

is providing a framework for ongoing improvement.

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Avon Technologies plc

Annual Report and Accounts 2025

Strategic report

Governance

Financial statements

Most of the previously announced transformation initiatives are now complete. Total investment in FY25 came in a little higher than planned at $15.4m

(FY24: $13.0m) and $1.2m of capital expenditure (FY24: $1.7m) as we deployed additional resources to meet the required production rates in H2 2025.

Workstream

2027 goals

Progress in FY25

Footprint

optimisation

• 50% improvement in

revenue/sq ft

• 10ppts improvement in

Team Wendy gross margin

Since FY24 we have increased revenue per square foot of utilised space by 43% across the Group.

We have reduced the number of Team Wendy locations from three to two. This makes it simpler to run

the business, gets us out of our high-cost California site and creates the platform for future growth.

We also exited the off-site warehouse in Avon Protection and have freed up around 9,000 square feet

of total factory space across the US and UK to support future expansion ambitions.

Operational

excellence

(plant

transformations)

• 35% productivity

improvement

• >60% scrap improvement

• Inventory turns >5

We have transformed every site from batch to flow manufacturing and continue to deliver improved

operating metrics while increasing output and introducing production lines for new products.

This was a major undertaking. It is not an exaggeration to say we have moved almost every piece

of equipment across the entire Group.

Functional

excellence

• Roll-out of SBU functions

We’ve restructured our HR team, including changing our recruitment strategy in Cleveland, which is

improving recruitment and retention rates.

We’re on track to remove our SAP system from the Group at the end of this calendar year, with a $2m

investment in FY26, expected to save over $1m a year.

We’ve also added a project to optimise our IT function with a view to creating a function that is more

cost-effective and can better support our lean transformation.

Commercial

optimisation

• Complete screening

of product portfolio,

identifying potential

improvements

Our new VP of Sales has developed a strategy to improve our sales capability and we have a record

amount of bid activity.

In 2026, we will invest in expanding our sales capabilities to accelerate our North American and

international growth across both business units.

In Team Wendy, we aim to increase our direct sales through the newly launched e-commerce site,

elevate the brand with a new website, and hold more marketing events where we arrange for our

law enforcement customers to shoot our helmets so they can see how effective they are.

Transformation-related costs will reduce to around $6m in FY26. The new IT optimisation programme referenced above will deliver a compelling payback,

with the investment being returned in lower operating costs within the first two years.

While the transformation programme will finish at the end of 2026, the Strengthen System will continue:

kaizen is forever.

Transform by creating solid foundations for growth

To support a threefold increase in DoW helmet production, Team

Wendy hired over 250 employees in two years. Initially reliant on

temporary agency staff, high turnover prompted a strategic shift:

•

Direct hiring model:

We moved away from agencies, hired 60+

employees directly, launched a referral programme and removed

language requirements – unlocking access to a broader talent pool

and improving retention. Permanent staff rose from 50% in April to

70% by October 2025, targeting 80%.

•

Structured onboarding:

A consistent induction programme and

dedicated trainer accelerated integration and improved retention.

•

Meaningful incentives:

We introduced attendance and performance

bonuses, raised base pay and created career paths for grade 1 roles.

•

Operational support:

We translated work instructions, added supervisory

layers and relocated engineers to the floor to boost engagement.

•

Data-driven action:

Retention insights guided targeted actions to

reduce churn.

Operator turnover is still above our 15% target but is improving each

month as we reduce our reliance on temporary workers. We still

have more to do, but we have already seen improvements towards

a stronger, more stable workforce.

Building a resilient

workforce in Cleveland

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Avon Technologies plc

Annual Report and Accounts 2025

Our Advance pillar is about delivering innovative products in the short and medium term, driving increased sales, orders and pipeline. In FY25 we

launched nine new products across the Group, further driving growth.

Advance the business through organic growth

Chief Executive’s strategic review

continued

Order book

Avon Protection’s order book is well diversified across customers and

product lines, with orders under a critical UK defence programme,

rebreathers, spares and accessories. Strong demand under our NATO

framework contract has led to a total of $100m of orders for respirators,

boots and gloves across 16 countries since the contract started,

supporting future recurring revenue. Even excluding $13m in

Ukraine-related orders, the order book continues to strengthen.

Beyond the order book, our largest pipeline of opportunities is bigger

than ever:

• The next DoW filter order is still to be issued, but we are hopeful we

will receive it in