DELIVERING A CULTURE OF

CONTINUOUS

IMPROVEMENT

ANNUAL REPORT AND

ACCOUNTS 2024

OUR STRATEGY:

STAR sets out our strategic priorities to

deliver sustainable andprofitable growth:

STRENGTHEN THROUGH CONTINUOUS IMPROVEMENT

toalways deliver quality products on time while using capital

efficiently and improving productivity

Read more on page 18

Our values spell FIERCE, a mnemonic that

sums up how passionate we all feel about

theoutcomeof our work.

We are

#FIERCE

about Protecting Lives

Fearlessness

We seize opportunities and take

calculated risks.

Integrity

We do what’s right, using good

judgement to ensure we always do

things we can be proud of.

Excellence

We passionately strive to protect life

through innovative solutions,

people andprocesses.

Resilience

No matter the circumstances, we

exhibit a will to live.

Collaboration

We believe in the power of teams,

across the business and with our

customers, to become stronger.

Execution

We have fun, are high impact and

are empowered to make a difference.

OUR VALUES:

Our core beliefs are the things that are most important to us as

a business and as individuals: thebehaviours we want to

encourage, the standards we hold ourselves to and the

characteristics wedisplay when we’re at our best.

Welcome to

OUR STAR STRATEGY

PROTECTING LIVES,

EVERY DAY

WE ARE AN ORGANISATION OF OVER 900 PEOPLE WITH ONE SHARED PURPOSE:

Protecting Lives. It’s why we come to work – and it’s what motivates us, every day,

to do the best work we can.

OUR VISION:

is for heroes to survive and thrive –

whatever their mission. In other words, we want to keep

pushing ourselves to create solutions that are more effective,

easier to use and easier to get into the hands of the people

whoneed them.

OUR MISSION: is to provide unparalleled protection

for those who protect us, giving them the confidence to tackle

challenging situations and helping them get home safe.

Military US

Military Europe

Military Rest of World

Commercial US

Commercial Europe and Rest of World

OUR TOP CUSTOMERS:

OUR END MARKETS:

REVENUE BY

DIVISION AND

CUSTOMER

27%

23%

28%

18%

64%

22%

53%

47%

US Department

of Defense

NATO Support and

Procurement Agency

Joint Program

Executive Office CBRN

UK Ministry

of Defence

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

2025 STRATEGIC

PRIORITIES

STRENGTHEN THROUGH

CONTINUOUS IMPROVEMENT

1) Processes – improving safety, quality, on-time

delivery, inventory turns and productivity by

moving from batch to flow manufacturing and

removing waste from our processes.

2) People – an empowered, engaged workforce

which has the capability to improve our processes

and build competitiveadvantage.

TRANSFORM

3) Programme management – footprint

optimisation and functional excellence projects

completed on time and to budget.

ADVANCE

4) Execution – excellent delivery, successfully

ramping up production of new products.

REVOLUTIONISE

5) Innovation – ensuring the long-term future

ofthe Group by developing new and enhanced

products to deliver growth through increased

internal and externally funded research and

development (R&D) programmes.

Read more about our STAR strategy on page 13

MEDIUM-TERM

FINANCIALGOALS

As a result of the progress made during the year, we see the potential to reach our medium-term margin

andROIC guidance target ranges a year early, in 2026. These would be delivered against an expected

backdrop of revenue growth exceeding 5% per annum and continued strong cash generation.

We aim to deliver

strong returns over the

medium term, driven

by above-market

growth, execution

andtransformation.

Growth

Adjusted

operating

profit margin ROIC

Cash

conversion Leverage

Medium

term (by 2027)

At least 5% 14–16% Above 17% 80–100%

1–2x net debt/

EBITDA

Overview

Avon Technologies plc Annual Report and Accounts 2024

CONTENTS

Overview

IFC Our Vision, Mission, Strategy andValues

02 2025 Strategic Priorities

02 Medium-Term Financial Goals

Strategic Report

05 Highlights

06 At a Glance

08 Our Investment Case

10 Chair’s Statement

12 Strategic Update

20 Our Business System and Business Model

24 Market Overview

26 Our Strategic Business Units

27 Group Product Portfolio

32 SBU Reviews

36 Financial Review

42 KPIs

46 Stakeholder Engagement

48 Section 172

50 Corporate Social Responsibility

50 Corporate Social

ResponsibilityStrategy

52 People

56 Process

60 Product

62 Governance

64 TCFD

70 Risk Management

76 Non-Financial and Sustainability

Information Statement

Governance

78 Board of Directors

80 Executive Committee

82 Chair’s Introduction to Governance

84 Maggie Brereton – NED Interview

85 Corporate Governance Report

89 Nomination Committee Report

92 Audit Committee Report

96 Remuneration Committee Report

114 Directors’ Report

Adjusted Performance Measures

118 Adjusted Performance Measures

Financial Statements

125 Independent Auditor’s Report

132 Consolidated Statement of

Comprehensive Income

133 Consolidated Balance Sheet

134 Consolidated Cash Flow Statement

135 Consolidated Statement of Changes

inEquity

136 Accounting Policies and Critical

Accounting Judgements

141 Notes to the Group Financial Statements

168 Parent Company Balance Sheet

169 Parent Company Statement of Changes

in Equity

170 Parent Company Accounting Policies

172 Notes to the Parent Company

FinancialStatements

175 Notice of Annual General Meeting

182 Glossary of Abbreviations

IBC Shareholder Information

Strategic Update

Market Overview

Group Product Portfolio

Corporate Governance

Stakeholder Engagement

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.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Strategic Report

05 Highlights

06 At a Glance

08 Our Investment Case

10 Chair’s Statement

12 Strategic Update

20 Our Business System and

BusinessModel

24 Market Overview

26 Our Strategic Business Units

27 Group Product Portfolio

32 SBU Reviews

36 Financial Review

42 KPIs

46 Stakeholder Engagement

48 Section 172

50 Corporate Social Responsibility

50 Corporate Social

ResponsibilityStrategy

52 People

56 Process

60 Product

62 Governance

64 TCFD

70 Risk Management

76 Non-Financial and Sustainability

Information Statement

CONTENTS

STRATEGIC

REPORT

Avon Technologies plc Annual Report and Accounts 2024

It is now 18 months

since we launched

the STAR strategy

and we are making

good progress. This is

demonstrated by our

much stronger financial

performance, improving

operating metrics and a

fast‑growing order book.

Jos Sclater

Chief Executive Officer

Read more on page 26

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Our Investment Case

AVON IS WELL POSITIONED

TO DELIVER EXCEPTIONAL

VALUE TO SHAREHOLDERS

Superb execution through our

STAR business system driving

returns and cash flow

• An empowered workforce which can

apply a continuous improvement culture

to build competitive advantage

• Transformation plan to deliver mid-teen

margins, improved ROIC and high cash

flow in progress

Growing addressable markets,

driven by global threats

• Growing markets at 2–4% CAGR

• Global instability and current conflicts

driving demand and emphasising

the importance of soldier and first

responderprotection

Strong competitive moat

driving above market growth

• World-leading, innovative technology

• Deep material science, product design

and manufacturing capability, aligned to

customer priorities and future threats

• Decades of experience protecting the lives

of NATO militaries and first responders

• Brands represent trust and reliability

Stable revenue base and

well-underpinned growth

• High visibility of future growth with

valuable recurring revenue base and

stableafter-market revenue

• Sole sourced or primary sourced on key

Programs of Record

• Long history of partnering with customers

on break-through technology

MID-TERM (BY 2027)

OPERATIONAL GOALS

>60%

Scrap reduction

35%

Productivity increase

Inventory turns

MID-TERM (BY 2027)

FINANCIAL GOALS

≥5%

Revenue CAGR

14–16%

Operating profit margin

80–100%

Cash conversion

>17%

ROIC

1–2x

Net debt/EBITDA

Avon Technologies plc Annual Report and Accounts 2024

3. The ACH GEN II automated paint line is an under-utilised capability

that is critical for full rate production. The automated paint line

overall footprint was reduced in size by approximately 30%, and

rotated so the product entry point is closest to the ACH GEN II

production line and exit is nearest to assembly.

4. ACH GEN II and NG IHPS shell finishing lines have been

redesigned and laid out in accordance with DOD policy. These

lines are the most advanced in the facility, being supported with

real-time data displays.

5. EPIC, EXFIL and SL shell finishing lines were previously a single cell

that was congested, disorganised and without flow or directions,

causing a 14-day lead time and over 1k parts in work in progress

(WIP) valued at more than $1.4m. Shift production targets averaged

at 40 shells per shift with over nine operators in the cell. The cells

were laid out in a L-shaped pattern, shift crew size was reduced

to three operators each and shift delivery targets were increased

to 56% (28% increase). Multiple processes were redesigned or

removed completely. As a result there was a 23% improvement

on overall cycle time. The inclusion of a standardised work

‘playbook’ enables flexibility within the cell as evidenced by a 101%

improvement in productivity since January 2024.

Focused on exponential growth in 2025 and 2026 with the

inclusion of the US DOD programme and commercial growth,

the Cleveland leadership team set out to transform the Ballistic

Manufacturing Plant into a flow state with 4M (man, method,

material and machine) support by product and value streams.

‘Project Osprey’, the official name of the Cleveland transformation

project, leveraged a ‘Yes If’ mentality as the plant underwent

rigorous planning and course of action development with

an ideal state designed to assimilate Ballistic and Soft Goods

Manufacturing and office staff in a single Team Wendy campus.

The ideal state is designed to be fully implemented in 2026 and

supported by process flow, kanban and supermarkets/stores, with

operational value stream support and metrics that will support

a significant forecast ramp-up in DOD and commercial ballistic/

non-ballistic helmet sales.

Current state:

Cleveland’s Ballistic Manufacturing Plant has undergone extensive

change since Q3 2024, focused primarily on the layout and

design of the shop floor, ACH GEN II and NG IHPS production

introduction, implementation of standardised work, lean

manufacturing principles and a suite of operational metrics to

fully support the tactical and strategic growth of the business.

The team, supported by CI experts, has systematically focused

on Kaizen activities to support the Project Osprey transformation.

These activities have included:

1. A cutting machine process Kaizen designed to improve

overall equipment effectiveness from 52% to 74%. Kaizen

delivered a production schedule, area organisation, 5S (Sort,

Set, Shine, Standardise, Sustain) and material handler standard

work to ensure adequate and timely material flow. The

cutting machines and material racking were consolidated,

rotated and moved to be closer to the Kitting and Forming

area to reduce transportation waste.

2. A Kitting and Forming Kaizen designed to promote flow

within the cell by focusing on feed rates and consumption of

processes.

The growth and expansion of Team Wendy

in Cleveland is significant and exciting.

Thecultural empowerment to make change,

facilitate growth, learn, adapt and share with

leadership and peers alike is addictive. New

lighting, new floors, new offices, new products

and growth have all been introduced and

accepted and are the new norm. The bar is

high and the Cleveland team will succeed.

Andy Hosey

Head of Continuous Improvement at Team Wendy

CASE STUDY

MOVING CLEVELAND

FROM BATCH TO FLOW

MANUFACTURING

Commercial shell finishing

Cleveland’s Ballistic Manufacturing Plant

is a batch manufacturing facility that

does not support pull or single piece

flow, adequate inventory management,

standardised work, or area readiness and

organisation. Machines and processes are

co-mingled with one another, and work

areas are crammed and disorganised, with

inadequate information and material flow.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

A RECIPE

FOR SUCCESS

Chair’s Statement

Our 2024 results clearly demonstrate the substantial

value created by our STAR strategy and the shift

towards a continuous improvement culture. This

impact is evident not only in financial terms, with

an increase of more than 70% in adjusted basic

earnings per share, but also operationally, as

we have achieved significant milestones in our

transformation programmes, operational KPIs and

strategic priorities.

Over the past year, we have been working to

embed our new vision, mission and FIERCE values

throughout the organisation. This year, we also

introduced our STAR business system (see page 20),

which we consider our recipe for success and the

way we will win as a business. Together with our

talented people and strong leadership, this positions

us well for future growth.

I am very pleased with the considerable

progress made during the year. Our

STAR strategy is delivering a more

resilient, capable and innovative

organisation which is delivering value

for all our stakeholders.

Bruce Thompson

Chair

1. A clear and compelling strategy

We have developed a clear and compelling strategy that ensures we

prioritise the right initiatives that enable us to win in the market. This

year has seen considerable progress for our Group, with the focus on

strengthening the fundamentals of our business. Having fixed these

fundamentals, we are evolving the ‘Strengthen’ pillar of our STAR strategy

to focus on ‘Strengthen through continuous improvement’, enabling

us to continue building on the operational and financial improvements

already made.

2. Effective everyday actions

Effectively translating strategy into achievable but stretching goals and

actions is an area in which few businesses excel. I have been impressed

with the way that the Executive team has used the objective and

key results (OKR) framework to shape its Strategic Business Unit (SBU)

strategies and measure progress against key objectives - the transparency

of the process has been especially useful for the Board.

We have also applied this methodology to our corporate social responsibility

(CSR) strategy which was reframed to focus more on our employees and

align with the STAR strategy and business system this year (see pages 50

to 63.) We recognise that delivering a purposeful, well-aligned CSR strategy

offers substantial benefits to all our stakeholders.

3. Talented and motivated people

I am very proud of the inclusive, collaborative and non-hierarchical culture

that is being developed at Avon. Our new continuous improvement

culture empowers everyone to be involved in improving our business

every day, demonstrating that the best ideas come from all levels of our

business. The engagement I have seen with this cultural shift and the

energy around our Kaizen events – exceeding 300 this year – has been

particularly pleasing.

To support our new cultural change, we have implemented a new KPI

framework across all manufacturing sites focusing on Safety, Quality,

Delivery, Inventory and Productivity (SQDIP). During the Board visits this

year we saw how this new focus is motivating our teams and equipping

our newly appointed Value Stream Managers with a clear, consistent way

to track daily progress.

Avon Technologies plc Annual Report and Accounts 2024

Our employee engagement score declined this year by 7%, which, though

disappointing, was anticipated and reflects the significant changes we

have implemented over the last year. Meeting with our employees, it is

clear we are developing a unique culture and I believe that our unifying

purpose, improving results and commitment to continuous improvement,

will help us boost employee satisfaction and engagement in the

coming year.

On behalf of the Board I would like to thank all our employees for their

contribution to delivering our strong performance this year.

4. Continually improving process

Our commitment to continuous improvement is focused on making

every process 100% value-adding to ensure we avoid tasks that do not

create value for our stakeholders. This continuous improvement mindset

is evident not just in our large transformation programmes but also in

the processes we complete every day across all functions. I have been

impressed by how this has touched every part of the organisation, not just

on the shop floor, and how effectively this has supported the delivery of

our transformation.

Outlook

The past two years have brought substantial change for the Group and

there is still much to do as we work to further enhance our processes

and facilities. FY25 will be a year of execution, particularly in Team Wendy

where the site consolidation programme is expected to complete and

generate significant financial and operational benefits. I am encouraged

by how quickly our cultural change has taken place and our people have

embraced a new business structure, way of working and leadership style

and the benefits are being seen earlier than we were originally expecting.

Bruce Thompson

Chair

19 November 2024

CASE STUDY

WHAT IS CONTINUOUS IMPROVEMENT

AND WHY IS IT SO IMPORTANT TO US?

The whole aim of continuous improvement is to move

things from batch to flow and from push to pull.

Batch to flow means that once one of our products comes out of the

moulding machines, it does not stop moving until it is packed and in the

boxes for the customer.

Push to pull is for assembly to set the ‘beat’ for the production line. The

‘beat’ is what the customer actually needs, so that we only make products

once there is an order from a customer. We call this takt time. If the takt

time is set to what the customer wants, then the assembly line (which is

at the end of the process) can pull from the upstream processes, rather

than the upstream processes trying to push material that the downstream

cannot use.

This, of course, is going to cut down the lead times for the customer and

improve customer satisfaction. This will give us more work, which will

enable us to grow and create more jobs. At Avon, we really believe that

continuous improvement is the key to a virtuous circle of success!

We seek to set ambitious goals which we achieve through lots of small

steps, which we learn from as we go. So, although the six-month ambition

is big, a week’s ambition is actually small. We want people to take small

steps every single week, and as we take steps we get visibility on what the

next step should be.

There are skills that we can teach and there are tools that help improve

processes, but the main thing is for people to learn by doing. Each ‘Kaizen’

event is a form of experimentation. We are giving people the power to

experiment with improving their business.

What matters is that people learn by experimentation. It is curiosity

that will take this business forward and we believe that everyone in this

business can help improve our processes.

Through continuous improvement we are all making our business stronger

for the future.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

CEO

REVIEW

Strategic Update

I am most excited by the

ability of the organisation to

change and translate strategy

into action.

Jos Sclater

Chief Executive Officer

FINANCIAL SUMMARY

We closed the year with a record $225.2m order book, a 64.3% increase

vs last year, reflecting the benefits of our new operating structure,

strategy and excellent demand for Avon Protection and Team Wendy’s

market-leading products. This strong order intake was predominantly

driven by growth in Team Wendy Next Generation Integrated Head

Protection System (NG IHPS) and second generation Advanced Combat

Helmet (ACH GEN II) orders from the US DOD and accessory sales. We

also saw the order book at Avon Protection double this year (up 101.1%)

with UK GSR (General Service Respirator) MOD orders, US DOD M50 and

accessory orders, FM54 order from Australia and demand from Germany

and New Zealand for rebreathers. In addition, we continue to see excellent

visibility of orders from our recurring and aftermarket revenue base.

The current geopolitical situation continues to support demand for both masks

and helmets. We are seeing evidence of higher numbers of on-the-ground

personnel, higher personal equipment specifications and a rise in perceived

threat levels including chemical, biological, radiological and nuclear (CBRN)

attacks, along with continued equipment modernisation programmes,

all driving budget requests within NATO countries. In the US first responder

market, the prevalence of both guns and drugs supports demand for ballistic

helmets and respiratory protection. We are also seeing West Coast police

forces re-capitalising in preparation for the FIFA World Cup and the Olympics.

Group revenue, at constant currency, grew 12.2% to $275.0m (FY23:

$243.8m). This was driven by a 48.9% increase in Team Wendy, partially

offset by the expected 7.2% decline in Avon Protection due to timing of

filter orders from the US DOD.

Adjusted operating profit increased by 53.4% at constant currency,

resulting in operating profit margin increasing to 11.5% (FY23: 8.7%). Avon

Protection experienced a slight decline in operating margin to 18.3%

(FY23: 18.7%) with the significant manufacturing efficiency improvements

made within the year, positive product sales mix and a more disciplined

approach to pricing offset by lower revenue. Team Wendy delivered an

increase in operating margin to 3.9%, reflecting improved operating

leverage as the division grows, which is pleasing to see ahead of the

consolidation of our facilities in the US in 2025.

Adjusted basic EPS increased by 80.2% at constant currency, reflecting

the growth in operating profit and a reduction in finance charges due

to lower net debt through the period. Adjusted earnings also benefited

approximately 4 cents per share from a lower than forecast effective tax

rate driven by one-off items which are not expected to recur in 2025.

We have built a culture where improving processes

is becoming the Avon way of life, we have much

more capable people and the pace of change

isaccelerating.

Avon Technologies plc Annual Report and Accounts 2024

We delivered a year of very strong cash generation, with cash flows from

operations of $63.7m (FY23: $3.4m), mainly due to improved receivables and

an increase in average working capital turns to 4.52x (FY23: 3.71x). We ended

the year with a significant decrease in our bank leverage ratio to 0.91 times

net debt leverage (FY23: 1.94 times).

Return on invested capital increased to 13.7% (FY23: 8.7%), reflecting

higher operating profit and the reduction in working capital.

OPERATIONAL SUMMARY – EXECUTING

OUR STAR STRATEGY

Our STAR strategy was launched in 2023 and set 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%. As a result of progress made during the

year, we now see the potential to reach our operating margin and ROIC

target ranges a year early, in 2026. We are increasingly confident in the

benefits and payback of our transformation and continuous improvement

programmes. As a reminder, our STAR strategy comprises four focus areas:

STRENGTHEN THROUGH CONTINUOUS IMPROVEMENT

to always deliver quality products on time while using capital

efficiently and improving productivity.

TRANSFORM the cost base to increase margins through a

programmatic approach to transformation.

ADVANCE organically by growing the core and scaling up

emerging opportunities.

REVOLUTIONISE by developing the next generation of products

to drive long-term growth.

1. STRENGTHEN THROUGH CONTINUOUS IMPROVEMENT

Now we’ve fixed the foundations of the business, we’re evolving

our ‘Strengthen’ pillar to become ‘Strengthen through continuous

improvement’, reflecting the value we see in continuous improvement

and a desire to see it as a central part of our strategy.

We believe that CI will:

• increase employee happiness and motivation;

• free up cash to invest into the business, funding our transformation

programmes and R&D;

• improve productivity, which generates wealth; and

• help grow the business by enabling us to reliably deliver quality

products with short lead times.

How are we doing it?

On the shop floor we aim to dramatically improve our production

processes to:

• achieve one piece flow;

• make product to customer demand (‘takt time’);

• connect our customers to the shop floor through a pull system;

• establish standard work; and

• remove waste from the processes and sustain gains.

Off the shop floor we aim to:

• remove waste in the product development process; and

• identify waste in the office-based processes and remove it

through Kaizen.

Progress so far:

All our sites have a long history of batch manufacturing and our previous

structure on our manufacturing floors was based around equipment type.

We needed to break up these functional silos and move to a structure

based around value-adding activities. We have now changed most of our

DOD helmet lines, commercial helmet lines and mask manufacturing lines

from traditional batch manufacturing to flow, improving inventory turns,

quality, lead times and productivity.

We have reorganised every major factory into value streams and every

line now has visible metrics showing progress by the hour to reduce

inefficiencies, cut down on waste and ensure each step adds value.

We now also have digital data on our most important lines showing

productivity, scrap and rework real time.

We have recently developed a new process called the “Plant Preparation

Process” that we are using to transform three of our facilities. This process

creates the plan for the whole plant, which is then implemented through

Kaizen. We carried out over 350 Kaizen activities last year. By involving

everyone from operators to senior leaders, we’re making sure these

improvements are sustainable and benefit the entire operation.

Operational KPIs improving:

• Safety – Making our workplace a safer place to work, measured as our

lost time incident rate

• Quality – Reducing scrap and rework and further improving

customerconfidence

• Delivery – Radically reducing lead times and improving on-time delivery

• Inventory – Growing while freeing up significant cash from inventory

• Productivity – Reducing costs and increasing capacity for further

growth by improving efficiency.

We set targets of a 25% productivity increase, a 60% scrap reduction and

inventory turns of more than 5 in the medium term.

We have made such good progress that we have stretched our

productivity and scrap targets from where they were at the Capital

Markets Day in February 2024 to a 35% productivity increase and a >60%

scrap reduction.

Versus FY23, at a Group level:

• productivity has improved by 21%;

• scrap has reduced by 54%; and

• inventory turns have improved by 7%.

This is pleasing progress but we still have a significant number of improvement

projects in the pipeline, including training the new employees hired in Cleveland

ahead of full rate production, and solving some material-related scrap

issues in the first batch of ACH made in Cleveland which will significantly

reduce scrap rates at that facility.

The improvement in inventory turns has freed up $19m of cash since the middle

of 2023. We now believe this inventory release will largely generate enough

cash to pay for the transformation project’s total operational expenditure.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Strategic Update continued

OPERATIONAL SUMMARY – EXECUTING OUR STAR STRATEGY CONTINUED

2. TRANSFORM

Our transformation projects remain focused on reducing costs to improve margins and free up resources to invest into growth. Our existing

transformation programmes remain on track with a total investment in FY24 of $13m (FY23: $2.9m) and $1.7m of capital expenditure.

Workstream Goal Progress in 2024

Footprint

optimisation

50%

improvement in

revenue/sq ft

10ppt

improvement

in Team Wendy

grossmargin

Our largest transformation project is the consolidation of our helmet manufacturing sites which includes:

• moving IHPS moulding to Salem and IHPS finishing to Cleveland and closing Irvine, while also improving

immature processes in parallel;

• increasing production of ACH from 0 to a run rate of over 60,000 helmets a year;

• stabilising and shortening lead times on the commercial helmets, particularly EPIC and EXFIL; and

• moving both Salem and Cleveland from batch to flow and from end of line testing to in line testing,

significantly reducing WIP and improving productivity at the same time.

This project remains on track and we are making good progress in obtaining approval from the US DOD

to finish the IHPS helmet and make the ACH GEN II helmet in Cleveland. We still expect to close the

plant by the middle of the 2025 calendar year and we expect to start seeing the financial benefit of this

programme in FY26.

With a goal to improve productivity and reduce inventory and footprint, our UK site has also started a

transformation to move from batch to flow manufacturing which is progressing rapidly. Since the beginning

of 2024 we have already reduced our footprint by over 25% through Kaizen activities which have started to

flow each production line.

Operational

excellence (plant

transformations)

35%

productivity

improvement

>60%

scrap

improvement

inventory turns

We are now part way through major plant transformations at three factories: Cleveland, Salem and

our UK site.

All our manufacturing sites have moved to a value stream model, where Value Stream Managers are

responsible for product families and delivering against our operational targets. We have now appointed the

Value Stream Managers and are embedding the new structure and culture.

We have moved all our DOD helmet lines, commercial helmet lines and mask manufacturing from traditional

batch manufacturing to flow, improving inventory turns, quality, lead times and productivity. We have

ambitious plans to flow more lines this year, including our rebreather line and the new MITR (Modular

Integrated Tactical Respirator) line.

We are also investing in new technology to make manufacturing more efficient and improve quality and

reliability in our Cleveland site. This includes better moulding, tooling, kitting and painting equipment. This

investment will not only improve consistency but also support our strategic objective to deliver the higher

production output needed as we ramp up production in the coming 12 months.

Functional

excellence

Roll-out of

SBUfunctions

Finance excellence – The restructure of this function is now complete, generating savings of c.$1m p.a.

Weare also currently planning the removal of SAP from our Salem plant, which could save over $1m a year.

HR excellence – New dedicated HR teams are now in place at SBU level and a Global HR Director has

been appointed to lead the restructure of this function, set strategic direction and support our move to a

continuous improvement culture.

Programme management – Over 100 employees have now been trained on our newly created programme

management approach and process. We have appointed programme leaders to drive our US footprint

optimisation project, who will also lead other programmes of significance including the new product

introduction process as the footprint optimisation project completes in FY26. We have, however, won a lot

of DOD Programs of Record and have two new helmets to design and ramp up in Team Wendy, so will need

even more to strengthen our programme management capability.

Sales excellence – During 2025 we have more to do to strengthen both the processes and organisation of

our sales teams, although we have now established an operating model for our North American commercial

sales team and international sales team.

Commercial

optimisation

Complete

screening of

product portfolio,

identifying

potential

improvements

We have reviewed the product portfolio and have addressed pricing opportunities where appropriate.

Work has begun to improve the pipeline management with our US and International sales teams and

understanding of how we can partner with customers to better predict orders and delivery expectations.

Wehave also standardised common bid and programme management processes and rolled out professional

sales and negotiation training in Team Wendy and are focused on building out our sales team to focus more

on delivering international and new market growth in both SBUs.

We continue to strengthen our e-commerce platform. We have also taken a more market-based approach

topricing, which contributed to the 370 basis point improvement in gross margin year on year.

We have several additional opportunities currently in the appraisal and planning stages of our transformation funnel and anticipate that FY25 transformation

spend will be at similar levels to FY24. Transformation costs are still expected to fall sharply in 2026 as the programmes end. The expected payback on our

portfolio of projects and progress achieved to date means that we have the potential to realise our medium-term operating margin and ROIC goals a year

earlier than originally expected.

Avon Technologies plc Annual Report and Accounts 2024

Current state:

The GSR was built in batch, with in-house moulded components (valves,

nose cups, face blanks and visor bonding) processed in separate cells

before final assembly in the GSR cell.

At each point, the parts were passed through quality checks before being

held in the store with no min./max. quantities. When we started the Kaizen

we were not in full production, and yet still held $220k+ in inventory.

Additionally, the production team had a large amount of travel around the

site to collect various parts – this was measured at approx. 1,900 metres of

travel per unit produced.

The total number of operators involved in the GSR mask was 18, spread

across the various cells and sub-assembly areas.

Kaizen activity:

The Kaizen team was formed from across different functions, with senior

leadership and members from operations departments.

The team began by drawing a current state spaghetti diagram (as per

image) where it was clear that there was a huge amount of travel for

people and parts; it was also clear that quality inspections were creating a

bottleneck and that nearly the whole site was utilised to build the GSR.

It was also clear that the site was laid out by process type rather than

product type, a common occurrence in manufacturing sites but also a

large contributor to the excessive inventory cost.

The Kaizen team looked at introducing one piece flow to the assembly

cell – currently the operators built one mask completely from start to

finish and with three heads they would bottleneck around the test station.

Applying the process balancing method that was simulated during

training, the team timed all the individual workstations using standard

work combination sheets and plotted these against takt time. Takt time

had been calculated previously by the team by understanding customer

demand and timeframe – ensuring that we only build what the customer

requires when they require it.

Arranging the processes to one piece flow took several attempts, and

using the PDCA (Plan, Do, Check & Act) method the team would analyse

the times, try by doing, check the balance and then either rework, or,

once balanced, create standard work for the operators to follow. A further

benefit from this process was that it identified that the overall assembly

time of the mask could be reduced; with alignment of the product family

some of the assembly work could be done during ‘dead time’ in the

upstream process, ultimately reducing the cycle time by 104 seconds.

A future state map was designed (as per image) where the moulding

presses and visor bonding were brought into the assembly area. After

some trials and a lot of marking out on the floor, it was realised that the

whole GSR process could be accommodated in the area previously used

just for assembly.

The store’s moulded component inventory could be eliminated,

quality controls could be brought into processes, removal of batch

manufacture could be realised though introduction of flow and

standard work in progress (SWIP), footprint could be drastically

reduced and, finally, productivity could be increased due to fewer

touch points.

Improvements:

Overall, the benefits realised from moving from batch to flow production

for the GSR were significant, with some new and additional benefits

realised by the team in the form of easier management due to fewer

leaders needing control, fewer booking inputs and quicker reaction to

quality concerns.

The team also managed some fantastic results:

GSR before

GSR after

CASE STUDY

UK GSR KAIZEN

GSR is the General Service

Respirator, built in the UK and

supplied to the UK MOD. The GSR

has been built at our UK site for the

past five years using a batch build

method, with a high inventory

of in-house moulded parts and

bought in plastic components.

43%

reduction in

operationalfootprint

70%

reduction in inventory

21%

productivity improvement

operators

(reduced from 16)

104 second

decrease in cycle time

c.£200k

WIP/inventory reduction

91 min

lead time

(reduced from approx. 4 weeks)

10m

travel

(reduced from 1,855m)

This model and method for the

Flow Kaizen have been carried

across into other cells in our UK

manufacturing facility where

results were similar or exceeding

those of the GSR.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Strategic Update continued

OPERATIONAL SUMMARY – EXECUTING

OUR STAR STRATEGY CONTINUED

3. ADVANCE

Our Advance pillar is about delivering innovative products in the short and

medium term, driving increased sales, orders and pipeline.

Avon Protection

We have strong demand for masks from NATO countries and excellent

demand for both rebreathers and supplied air products.

During the year we won several strategic contracts within Avon Protection:

• UK MOD – £38m four-year contract for General Service Respirator;

• a seven-year Swedish police C50 contract;

• one-year extension to the M53A1 US DOD contract

• a five-year DRSKO contract for Self-Contained Breathing Apparatus;

• FM54 contract win with Australian Defence Force; and

• rebreather contracts in Germany and New Zealand.

We saw winning the GSR contract as important to defending our

commanding position as the respirator provider of choice across NATO

and the Five Eyes, so we were pleased to win this long-term contract

with the MOD.

Our position as the market leader in CBRN protection was further

strengthened by winning the contract to supply the Australian

Defence Force. This is a three-year deployment contract with follow-on

replenishment. Wenow supply the Australian military with both masks

and helmets and see this win against a long-established incumbent as

cementing our position as the mask supplier of choice to the Five Eyes.

As mentioned at the half-year, demand for masks from the DOD has

picked up slightly. We have strengthened our relationship with our DOD

programme office during the year and continue to work on improving

forecast demand.

Our rebreather continues to be the system of choice across NATO.

Wehavefurther rebreather opportunities in the pipeline and remain of the

view that we have a technological advantage over our competitors which

improves diver safety and mission effectiveness. The US Navy cancelled

its procurement for rebreathers but we have good current demand and

still see considerable opportunity with both US Special Forces and the US

Navy. We are working with both and believe we are well positioned for any

future prospects.

We are planning to launch the MITR-M1 Half Mask this financial year with

a groundbreaking goggle set and adaptable helmet integration clips to

be released by the end of 2025. We are also starting to get some traction

in chemically resistant suits and earlier this year we introduced the

EXOSKIN-S1 suit, offering advanced protection against chemical warfare

agents for up to 24 hours. We have made our first sales of EXOSKIN; whilst

modest, they demonstrate the customer need for the integrated CBRN

protection packages that we can now offer.

Team Wendy

During the year we announced two DOD orders for ACH GEN II of

$19.5m and $14.2m and orders for NG IHPS totalling $42m. We have now

successfully delivered seven lots of ACH GEN II to the DOD and continue at

run rate on our NG IHPS with no lot failures. Our focus now is on meeting

ACH GEN II customer demand for 2025 of over 50,000 helmets per year. We

are also making good progress on our discussions with the DOD to extend

our NG IHPS programme into sustainment post-2028 and an extension has

been indicated for the ACH GEN II helmet programme.

We have continued our strong partnership with the US Navy supplying our

EXFIL LTP bump helmets to US Naval Air Systems Command (NAVAIR) with

a $6.7m order this year. Our EPIC helmet, ideal for first responders, has also

been popular with US police forces, but sales in 2024 were hindered by

long lead times caused by raw material shortages. We are making progress

with our suppliers to solve this issue.

In pads, we had good success with the DOD, which has chosen our

Cloudline pad system as an accessory to the NG IHPS helmet.

We plan to increase US commercial sales by offering faster lead times

and expanding our growing EPIC customer base, launch a new rifle rated

helmet to meet customers’ needs in the US commercial and international

markets, refresh our EXFIL range and develop a new bump helmet.

Avon Protection’s first direct-to-consumer sales began in July 2023

with the C50 and FM50 on the Team Wendy online store. Following

this successful roll-out and healthy uptake from the market, the Avon

Protection-branded e-commerce site was launched within the US

ahead of Black Friday 2023.

This is a growing market adjacent to Avon Protection’s key military

and first responder markets, with demand driven by a global interest

in high-end CBRN protection among civilian groups. According to

a Finders report $11 billion a year is currently spent on emergency

preparedness across the US and Europe, with respiratory protection

solutions, emergency food supplies and survival kits all numbering

among the most in-demand items for customers in this user base.

The development and deployment of the e-commerce platform reflects

Avon Protection’s pivot toward sprint processes under the STAR strategy.

A key part of agile and scrum methodologies, sprint processes help our

teams deliver high-quality work faster and more efficiently. With the

benefit of these changes, the e-commerce platform was launched in

just eight weeks, from conception to the opening of online sales.

The launch of the platform also highlights Avon Protection’s drive

to adapt strategy to support user groups through their individual

marketing, acquisition and support journeys. We have put significant

emphasis on understanding how this pathway differs from that of our

traditional user groups and have adapted our strategies to ensure each

end user experiences the high level of customer satisfaction we are

known for across the government, military and first responder markets.

These continuous improvement efforts have played a significant role

in the success of our products in this B2C market segment and give us

confidence in adapting further as we roll-out into new markets.

With the success of the first-year sales into the B2C market in the US,

our focus for 2025 is on expanding this offering to new international

markets. We anticipate new launches in the Spring of 2025 and look

forward to expanding the number of end-users who can access our

world-leading CBRN protection products.

CASE STUDY

BUILDING B2C SUCCESS: ONE YEAR

OFE-COMMERCE

We are approaching the first-year anniversary of the launch of the

Avon Protection e-commerce platform, through which we sell a

selection of market-leading respirators direct to consumers in the US.

Avon Technologies plc Annual Report and Accounts 2024

Here are some key takeaways shared by the team from their Kaizen experience...

The Kaizen tools used

provided a common way to

view problems, regardless

of your familiarity with the

operations being observed.

It’s great to be able to

contribute to make a process

better even when it’s not

inmy area ofexpertise.

There is always room for

improvement. We look to

improve the process, not

blame the people.

I never realized how much

product was on the floor all

at once. We don’t need it all!

Standardized work will

give us an immediate

understanding of the current

state and speed upour

abilityto do Kaizen.

CASE STUDY

KAIZEN EVENT ON FILTER LINE MATERIAL HANDLING

Explore how a team in Cadillac implemented Kaizen principles when it focused

on introducing standardised work within the filter value stream.

Recommendations

The team’s recommendations created a framework for standardised work.

• Creating dedicated material spaces to create a standard amount of inventory and location.

This reduces walking distance and around 56 hours of forklift movement a year.

• Standardising workstation box quantities reduces the material variability found in the current

state and creates a standard amount of inventory in the system and time for which that

inventory will be consumed.

• Lastly, an additional Kaizen event was born, showing CI never stops. It was found that the

material replenishment process needed to be optimised to ensure the filter value stream

always has what it needs on hand, when it is needed.

Decreased material movement,

dedicated floor space

andtimesaved

As a result, material movement was

significantly reduced, eliminating the need

for forklift use to restock the workstation

and saving an estimated 56 hours of

material handler time annually.

Additionally, 20 racking spaces were

physically eliminated, further contributing

to a more efficient and organised workspace.

The team was also able to decrease

material movement by dedicating

floor spaces near the workstation in

which the material is consumed. Some

immediate impacts of implementing these

dedicated locations can save upwards

of three minutes when replenishing

oneworkstation.

Analysis

The team began by observing a material

handler during a routine cycle, which

allowed them to generate a spaghetti

diagram that revealed significant excess

movement within the process. They

looked at the maximum level of inventory

the workstations could hold, which

indicated what needed to be replenished

depending on the daily run rate.

Current situation

A Kaizen event took place to address

inefficiencies in material handling at a filter

line in Cadillac, where operators frequently

left their workstations to manage

material-related issues due to the lack of

standardised work.

The objective was to establish a standardised

process for material replenishment at the

workstation, ensuring that the necessary

elements – such as time, sequence and

standard quantities of tools and materials

–were in place.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

OPERATIONAL SUMMARY – EXECUTING

OUR STAR STRATEGY CONTINUED

4. REVOLUTIONISE

Revolutionise is about driving long-term growth by using our powerful

customer relationships to increase co-funding and develop innovative

products for the future. We are continuing to invest in long-term research

and development (R&D) with $11.4m invested in R&D (FY23: $10.2m).

We made further progress on several US DOD programmes and are

expanding our portfolio of co-funded new product programmes,

these include:

• three new DOD development programmes for a new Hood Mask

Interface programme;

• DOD-funded programmes to deliver next generation filters that

enhance user protection;

• development of a new diving mask with funding from the Defence,

Science and Technology Laboratory;

• expansion of helmet performance capabilities and pad systems while

minimising weight and maximising protection; and

• integration of head and respiratory protection, which we are currently

seeking funding for.

RISKS AND OPPORTUNITIES

We aim to reduce our risks through excellent programme management

and improved people capability but the current main risks, as we see

them, are:

1. The ramp-up of the IHPS programme and the ramp-up of ACH and

EPIC following the closure of Irvine will be challenging. We will need

to work hard to control scrap and rework and to ensure we have the

raw materials we need.

2. Recruiting and retaining good operators remains a challenge, though

we are making progress here.

3. We do not currently have an order for filters from the DOD. We remain

hopeful that this will come, but for now DOD filter demand is very low.

4. We have recently seen increases in US healthcare costs and Employer

National Insurance contributions in the UK. These are real costs for

us and will impact margins if we cannot offset them through our

CIinitiatives.

There are, however, several additional opportunities which are not

currently factored into our strategic plan, which include:

1. accelerated international growth, particularly in commercial markets;

2. increased US DOD demand in both SBUs; and

3. additional unplanned cost reductions and operational efficiencies

through continuous improvement.

SUMMARY AND OUTLOOK

We have made excellent progress creating a high-quality growing business

and this year demonstrated:

• We have developed a recipe for success that is driving growth, margin,

cash generation and ROIC.

• Our transformation programme remains on schedule, and the progress

made to date can already be seen in our strategic and financial KPIs.

• We have a record closing order book which gives us excellent visibility.

• We have a stable recurring revenue base, which will grow further as we

deploy rebreathers, masks into Australia and helmets into the US police

and SWAT teams.

• Our leading technology and long-term contracts provide us with a

strong competitive moat which we continue to believe will support

strong margins and returns on capital.

We therefore remain confident that Avon is well positioned to deliver

exceptional shareholder value:

• Our focus on CI is already delivering results, with the total cash costs of

transformation operational expenditure now expected to be covered

through lower working capital.

• Further transformation activities are in the planning and execution

stage, driving acceleration of operational and financial returns.

We expect continued growth in FY25, alongside consistent returns

as weimplement the key actions in footprint and manufacturing

optimisation programmes.

These factors give us increased confidence and we now see the

potential to reach our medium-term operating profit margin

and ROIC targets earlier, in 2026, a year earlier than expected.

These would be delivered against a backdrop of revenue growth

exceeding 5% per annum and continued strong cash generation.

Jos Sclater

Chief Executive Officer

19 November 2024

Strategic Update continued

Avon Technologies plc Annual Report and Accounts 2024

CASE STUDY

KAIZEN EVENT ON NH15 HOOD

PRODUCTION PROCESS

A team at our Melksham facility undertook

a Kaizen event to optimise inventory

management, reduce WIP and enhance

productivity. The event served as an

opportunity to introduce team members to

the Kaizen principles, particularly focusing on

the concepts of batch vs flow production,

inventory reduction benefits and process

balancing. During the week‑long Kaizen,

the team reviewed each step of the NH15

hood production process, timing both

manual and automatic operations to gain

a comprehensive understanding of the

time required to build one unit. This

analysis helped identify bottlenecks, such

as instances where a short process was

followed by a significantly longer one,

disrupting the production flow.

Armed with this data, the team designed a future state that

supported one piece flow, aiming to streamline the process

and reduce inefficiencies. By reorganising some offline

processes and creating a flow within the production line, the

team successfully established a single piece flow sub-cell.

This cell could integrate into the existing production line,

leading to significant improvements.

The Kaizen event resulted in a 43% reduction in floor

space, a 20% boost in productivity, and a 32% decrease

in inventory and WIP, demonstrating the effectiveness

of the improvements and the value of continuous

processoptimisation.

Here are some key takeaways shared by the

team from their Kaizen experience…

I was surprised by how much we were

able to do in such little time. Outside

of a Kaizen event I could see this

taking months to complete. However,

with a small team fully focused for a

whole week, we have made significant

progress and have hopefully

improved the line significantly for the

foreseeable future.

My highlight was at the end of the first

day when we made a small change

that brought the final packing back

into the cell, it previously having

been set aside as an offline process.

Putting product into the customer

packaging, ready to ship, in the cell is

a real step forward.

My biggest surprise was how much

things migrate away from the original

intention over time. It was commented

that several ‘changes’ we made were

putting the cell back to how it was

originally set up. None of the team

were around when the cell was set

up over 15 years ago, but it just shows

how our thinking was aligned with the

original set-up.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Our Business System and Business Model

STAR BUSINESS

SYSTEM

Our STAR business system is the way that we win as a business.

There are only four elements to it:

OUR STAR BUSINESS SYSTEM...

...TRANSLATES STRATEGY INTO ACTION

#FIERCE

about

Protecting

Lives

First, it is about having a strategy that ensures we focus

on the right things that enable us to win in the market.

It is about translating that strategy into concrete actions

and actually doing what we say we are going to do.

To deliver those actions we need amazing people. That

means we need to attract and retain great people. Most

importantly, we need to develop our own people to be

brilliant. We believe in empowering our people to decide

on the actions that they need to carry out to deliver on

the strategy.

Finally, it is about continuously improving our processes

with the aim that they are 100% value-add so we do not

spend time doing things that the customer does

not value.

One of the great things about Avon Technologies is that it has a

very important purpose of protecting people’s lives, and the

business system gives us the strength to enable us to do that.

If we do these four things well, then this is a business

that will win.

And if it wins, we will save people’s lives.

Clear and

compelling

STRATEGY

Continually

improving

PROCESS

Effective

everyday

ACTIONS

Talented and

motivated

PEOPLE

Avon Technologies plc Annual Report and Accounts 2024

STRATEGY

The way we do strategy is we actually teach people how to think strategically.

This contrasts to other organisations, which typically impose the strategy

top down.

We boil down all the available best practice relating to strategy development

and embed it in the strategy process we follow. We then take about 30

or 40 people in each SBU through that strategy process and work across

the business to develop the strategic priorities for the next five years. We

then refine that every year, and we give it a bit of a nudge on the tiller

every three months when we do the quarterly business reviews, because

if things aren’t working or need to speed up, then we will react at that

point in time.

The way we want people to think strategically is in three horizons: a

near-term horizon, a medium-term horizon and a long-term horizon.

Then,on top of that, there is a foundational level of activities that

canenable us to grow over those time horizons.

We’ve called the furthest horizon the ‘Revolutionise’ part of the strategy.

Thefoundational part we’ve actually split into the continuous improvement

activities, which we’ve called Strengthen, and the big projects that are big

step changes we’ve called the Transform part ofthe strategy.

Strategy is all about the choices that we need to make as a business. We

choose our strategic priorities, and each one of those has a priority owner.

Then, each strategic priority will be made up of a number of initiatives.

We then expect each function and each individual to look at the strategic

priorities and initiatives that are relevant to them and set their own

strategic initiatives that they can focus on in the year ahead, so that

everybody has clarity on what they need to be working on to help deliver

our strategy.

ACTION

We think our real strength is coming up with a good strategy and then

delivering on it brilliantly. It’s the delivery that really matters; we need

to translate our strategic priorities into action, which is where most

businesses fail.

Making things happen on the shop floor, in the functions and across our

teams is the most difficult element of strategy. To help ensure that we do

that successfully, we’ve implemented what we call the OKR process, or

objectives and key results. This is an important process because it requires

each business to define their objectives for the year ahead and also define

the outcomes that they’re expecting to get. We then fully empower

our businesses to work on those objectives and to carry out the actions

necessary to achieve them.

Then, at every quarter we look at how we are getting on. If we need to,

we course correct a bit. The philosophy behind quarterly reviews is really

continuous improvement.

We regard each quarter as an experiment and plan what we are going to

do for the quarter. We set ourselves some measurable key results and at

the end of the quarter we look back on what we achieved and what we

expected to achieve. If we didn’t achieve what wanted, then we learn. If we

did, what does that mean for the next quarter? In light of that learning, we

set the objectives and the key results for the following quarter.

PEOPLE

There are lots of skills that we can teach people about how to improve a

business and we’re going to do that through an academy called the STAR

Academy. We’re going to teach people how to improve processes and

how to experiment, and we’re going to train people on how to develop

strategy and drive action.

We absolutely know that not everything will work out. In fact, if things are

not failing, then we’re not experimenting enough. So we want people to

try new things and learn.

What we need to do is harness all 900 people across the organisation. We

need everybody to be a leader and decide how they can help improve

this business and translate that into action. We believe in empowering our

people. We want our people to create their own actions and their own

initiatives to make this business great.

PROCESS

At its simplest a business is all about people and processes, and we want

those processes to create as much value as possible. We don’t want our

employees taking time on things that don’t really add value.

We can use continuous improvement to look at our processes through

fresh eyes. As our people learn to see in a new way, they find the waste in

our processes. By taking that waste out, we can focus more on the things

that really matter.

Curiosity is a very important part of continuous improvement. We want

people to be curious about what happens if they do something to try and

make the business better. We want our people to keep experimenting.

We want them to go back to that fundamental human instinct of

experimenting all the time and seeing what will happen, because that’s

how we learn as human beings.

Kaizen literally means make things better, and that’s really what continuous

improvement is all about; it is trying to make our processes better. At the

start of the Kaizen, you have a hypothesis or a charter of what you’re trying

to achieve. Then you go straight into doing and you actually try and put

into practice your idea, and then you see whether your idea had the effect

you wanted it to have.

If it works, then fantastic, you go on to another step, and if it doesn’t work,

you still learn something new. Kaizen is not just about what was done and

achieved, it’s also about the learnings we get out of it.

It’s that experimentation and learning we really need to embed in the

organisation. It is great to see teams coming together and people really

collaborating on how we improve business processes, because it’s the

people doing the work that will have the best ideas.

We’re seeing real capability being built amongst our employees through

Kaizen. People are learning new things. Like all skills, the more you do it,

the better you are at it and that’s one reason why we’re so keen for there to

be so many Kaizens. Our goal is one Kaizen per week, per plant across all of

the business. If we can get that pace of learning, then we are going to be a

great business.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Our Business System and Business Model continued

OUR BUSINESSMODEL

Our business model demonstrates how our STAR strategy and business

system deliver value for all our stakeholders.

The extra resources generated through our continuous improvement activities fund our

transformation plans which directly increase our profit margins. This allows us to invest more cash

into our technology, people and functions, delivering growth, ROIC and margin improvements.

DELIVERING FOR OUR STAKEHOLDERS

Happy customers, employees

and shareholders

Technology

Sales and

marketing

People

capability

Disruptive

technology

STRENGTHEN

by continuously improving:

• Safety

• Quality

• Delivery

• Inventory

• Productivity

TRANSFORM

through key programmes

CASH

INVESTMENT

WINNING AS A BUSINESS

Growth

ROIC

Margin

Customer satisfaction

through quality and delivery

Capital efficiency through

lower inventory

Lower cost base by

improving productivity

and reducing scrap

and rework

Avon Technologies plc Annual Report and Accounts 2024

CASE STUDY

TRANSFORMING EXFIL HELMET

FINISHING LINE WITH KAIZEN

A team in Cleveland undertook a Kaizen

on the EXFIL helmet finishing line, having

identified inefficiencies within the EXFIL helmet

production line, including poor process flow,

imbalanced workloads and overproduction.

The current state of the EXFIL finishing was captured to understand cycle

times, inventories and lead times. In this current state, there were 1,970

helmets in work in progress (WIP) with a 20-day lead time and 12 operators

on the line.

During the Kaizen, the team rearranged the EXFIL helmet line,

moving workstations and equipment that had been in their original

place for over five years to achieve a single piece flow and decrease

transportation distance.

In the planned ideal state, work in progress can be reduced by 99% to

9 helmets, and the number of operators reduced from 12 to 6 with a

16-minute lead time.

99%

WIP reduction

99%

lead time reduction

CASE STUDY

REVOLUTIONISE: THE FUTURE OF

INTEGRATED HEAD PROTECTION

The US DOD military’s integrated head

protection strategy has evolved significantly

with the introduction of the Next Generation

Integrated Head Protection System (NG IHPS).

This advanced helmet system is designed to provide

enhanced ballistic and fragmentation protection while being

40% lighter than its predecessors. The system also includes a

novel retention and suspension system, a helmet cover, and

a night vision bracket that integrates with other protective

gear like mandible protectors and hearing protection.

This comprehensive approach ensures that soldiers are

better protected against modern battlefield threats while

maintaining mobility and comfort.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Market Overview

OUR CORE

MARKETS

The US defence budget growth is

predicted to be high due to inflation, the

Ukraine war and the Israel-Palestine

conflict and with equipment

procurement growing fast with an

aggregate 2024–2028 CAGR across

helmets and respirators estimated at

4%. Market drivers include:

1. Number of personnel

Increasing threat environment, particularly

in Central Eastern Europe after the invasion

of Ukraine and due to the Israel-Palestine

conflict has seen the number of

personnel increase.

2. Higher personal

equipmentspecifications

There is an increasing need for replacements

of the latest specification products with

higher protection levels. The US defence

market is entering the next investment

cycle, with a focus on upgrading legacy

conventional warfare equipment.

3. Rise in perceived threat

levels including CBRN

There is a rise in significant terror attacks

and conventional military threats, with

more frequent geopolitical disputes.

TheChemical and Biological Defense

Program (CBDP) is a department of the

DODthat protects US forces from chemical

and biological threats. It emphasises the need

for modernised chemical andbiological

defences due to the increasingly complex

threat environment and sophistication of

chem-bio weapons, as well as increased

competition with major foreign powers.

Theoverall CBDP budget has grown in

recent years, including on the procurement

and research, development, test and

evaluation of protective ensembles, but

the FY23 request was cut by Congress by

~$135m. There is growing pressure for the

CBDP budget to be significantly increased.

US DOD

The aggregate 2024–2028 CAGR

across helmets and respirators for

US law enforcement markets is

estimated at between 3 and 4%.

Driversinclude:

1. Number of personnel

The number of law enforcement officers in

the US rose by 4% between 2016 and 2020,

with the majority employed at the local

level. Federal law enforcement officers

comprise around 16% of the total in the

US, and often focus on more premium

offerings.

2. Rise in perceived

threat levels

Gun violence in the US nearly doubled

between 2014 and 2021, increasing the

need for ballistic protection for law

enforcement and other first responders.

Events such as the US election, FIFA World

Cup and Olympics will also drive further

need to replace and increase protection

equipment for law enforcement.

There is also significant growth in

non-US and NATO markets for

military helmets and respirators

with markets expected to grow

from c.$345m (2019–2023) to

c.$380m (2024–2028).

In the commercial markets, demand for

helmets and respirators is expected to

grow from c.$134m (2019–2023) to $159m

(2024–2028). Drivers include:

1. Increasing total defence

budgets with a notable global

uplift across most regions

(esp. in Europe and Asia)

Global defence budgets are expected to

grow at ~3% p.a. over 2023–2028, driven by

geopolitical disputes, NATO pledges and

modernisation programmes. Central and

Eastern European nations in particular are

continuing to scale up personnel numbers

given the perceived threat from Russia. In

light of increasing global threats, defence

spending in non-US markets is expected

to outstrip inflation over the next five years.

2. Continued equipment

modernisation programmes

In particular, NATO countries are seeking

to catch up, given the historical

underinvestment.

3. Commercial Rest of World

Further elevations in perceived CBRN,

terror and armed threat levels, both

domestically and abroad, drive greater

demand for protective products. For

example, as part of a UK Government

manifesto commitment, the Police Uplift

Programme recruited 20,000 new police

officers by March 2023 from a baseline

of 128,500.

2 3

COMMERCIAL AMERICA

UK & INTERNATIONAL

Avon Technologies plc Annual Report and Accounts 2024

With the launch of MITR, Avon Protection

reinforces its position as world leader in

respiratory protection for users across the full

law enforcement, military and first responder

spectrum. In addition to our range of high threat

CBRN full‑face respirators, we can now offer

a much‑needed solution for those needing

always‑ready protection in fast‑developing

environments where seconds count.

MITR embodies the integration‑led design ethos

of our range of personal protective equipment,

fitting seamlessly into existing tactical gear

ensembles, allowing the wearer to get on

with the job in comfort and get home safely

every time.

Steve Elwell

President, Avon Protection

MITR-M1 has been designed to fill a critical capability

gap between standard N95 masks and traditional

full-face respirators. It gives operators a low burden,

ever-ready solution that can be always carried on their

person and quickly donned in tactical and fast-evolving

situations where respiratory threats may be present.

With a lightweight and low profile half-face design,

MITR-M1 can be carried in cargo pockets or gear

pouches, and quickly clipped onto the user’s helmet

rail in seconds, giving the wearer scalable protection

against a variety of respiratory hazards.

MITR-M1 is the first phase of a new tactical ensemble

(or MITR system) that will grow in 2025 to include

innovative, adaptable helmet integration clips and a

power-sealed goggle apparatus to allow users to scale

their protection as required.

CASE STUDY

AVON PROTECTION TO

LAUNCH NEW MITR-M1

HALF MASK IN 2025

Avon Protection is getting ready

to launch the newest addition to

its portfolio of market-leading

personal protective equipment

in 2025. The MITR-M1 half mask

has been designed to protect

special operation, law enforcement

and first responder personnel

operating in low to mid-level

threatenvironments.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Our Strategic Business Units

OUR STRATEGIC

BUSINESS UNITS

Our two Strategic Business Units, Avon Protection

and Team Wendy, supply our respiratory and

head protection portfolio to customers across the

globe from our manufacturing sites in the UK and

North America.

Our leading range of CBRN

and respiratory protection

includes respirators, powered

and supplied air systems,

filters, spares and accessories,

as well as underwater systems

and CBRN protective wear.

Our head protection portfolio

is focused on next generation

ballistic and bump protection

helmets, as well as helmet

liner and retention systems.

Respirators: Avon

Protection’s range of

respirators are built

on advanced, leading

technologies that provide

CBRN and non-CBRN

protection for diverse

global customer needs.

The 50 Series, including

the M50 and FM50, offers

military-grade comfort,

usability and maximum

CBRN protection. The

GSR is designed to

the UK MOD’s precise

specification and ensures

high performance filtration

for UK service personnel.

Powered and supplied

air systems: Designed for

specialised applications,

the complementary

subsystems extend

operational capability.

The range of Powered

Air Purifying Respirators

(PAPR), Self-Contained

Breathing Apparatus

(SCBA) or a combination

of the two (CS-PAPR) can

be deployed with our

respirators to provide

clean, breathable air.

Underwater systems:

The MCM100 (Mine

Counter Measures) is

a fully closed circuit,

electronically controlled,

mixed gas rebreather

suitable for a range of

specialist military or

tactical diving disciplines,

such as mine clearance or

explosives disposal.

CBRN protective wear:

Avon Protection’s EXOSKIN

range includes the CBRN

suit, boots and gloves to

provide a low burden,

lightweight, integrated

defence solution against

vapour, liquid and

particulate chemical

warfare agents, toxic

industrial chemicals and

biological threats.

Ballistic helmets: Team Wendy’s

ballistic helmets feature a high

strength shell that safeguards against

ballistic threats while ensuring

comfort and stability during intense

operations. Ballistic helmets include

the EXFIL Ballistic, EXFIL Ballistic SL,

NG IHPS, ACH GEN II and EPIC range

of helmets.

Bump helmets: Team Wendy’s

bump helmets provide impact

protection and a stable, comfortable

platform for mounting accessories.

The range includes the EXFIL LTP,

EXFIL Carbon, SAR Backcountry, SAR

Tactical and Adventurer helmets.

Liner and retention systems:

Team Wendy’s range of liner systems

are designed to provide protection

against impact and provide maximum

comfort, whilst the retention systems

stabilise the weight of the helmet

by distributing light, even pressure

around the head. Liner and retention

systems include the CAM FIT

Retention System, the Zorbium Action

Pad (ZAP) 7-Pad NSN Liner System, the

EPIC Air Liner System and the EXFIL

Maritime Liner System.

Avon Technologies plc Annual Report and Accounts 2024

Our customers carry out vital work in life-threatening situations – often to protect the

wider community. They can safely perform with confidence knowing that we protect

withour products and services.

In the following section, we provide a breakdown of a selection of key products designed

and manufactured by each SBU, organised by the user types they serve.

Please see our glossary on page 182 for detail on acronyms used on the following pages.

Group Product Portfolio

SPECIALISED RESPIRATORY

AND HEAD PROTECTION FOR

AGLOBAL CLIENT BASE

MILITARY

Our deep understanding of the unique requirements of the modern warfighter and tactical operator means our

products are designed to protect users in the most extreme environments. Avon Protection has been supplying

protection solutions to the UK MOD and other allies since the 1920s and has been a primary supplier of integrated

protective equipment to NATO and the US DOD for over a decade. Team Wendy has been supplying the United States

Army and Marine Corps with proven liner systems for their standard issue helmets and is now the leading provider to

the US DOD for ballistic helmets.

Read more on page 28

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Group Product Portfolio continued

COMMERCIAL/FIRST RESPONDERS

HMK150

The HMK150 is a

helmet-mask system

for CBRN and riot

control, integrating

the HM50 respirator

with the Schuberth

P100N helmet.

ST54

The ST54 Tactical

Operator SCBA,

optimised for

demanding tactical

operators, is a

state-of-the-art,

multi-mission

respiratory

protection system.

NH15

The NH15 CBRN

escape hood is the

most compact NIOSH

and CE-approved

CBRN protection.

MI-TIC S

This high performance

firefighting thermal

imaging camera

offers clear image

in extremely high

temperatures.

C50

The C50 is ideal for battlefield,

first responders, corrections

andcounterterrorism.

PC50

The PC50 is the mask of choice

for correctional officers, riot

control and non-CBRN use.

FM54

The FM54 provides specialist

operators with protection

against CBRN threats.

EPIC Protector

Designed for field operators,

the EPIC Protector is lighter than

the ACH GEN II helmet with

CAM FIT BOA retention and EPIC

Air liner.

EXFIL LTP

Trusted by the US Navy and

Coast Guard, the EXFIL LTP

bump helmet offers superior

impact protection and

accessory mounting capability.

EPIC Specialist

A specialist helmet that delivers

high performance for tactical

operators, offering superior

comfort with an NVG shroud,

CAM FIT BOA retention and EPIC

Air liner.

Adventurer

The Adventurer helmet is for

true adventurers, featuring a

glass-reinforced polycarbonate

shroud with mounting capabilities.

SAR Backcountry

This helmet features

a glass-reinforced

polycarbonate shroud.

SAR Tactical

Team Wendy SAR helmets are

purpose built for search and

rescue, meeting key standards.

Leveraging our military

experience, we provide proven

protection solutions to first

responders worldwide.

Avon Technologies plc Annual Report and Accounts 2024

FM50

The FM50 is a CBRN full-face

mask engineered for NATO

forces, against modern

war, anti-terrorism and

peacekeeping threats.

M50

The M50, selected by the

US DOD, offers exceptional

protection with twin

conformal filters.

GSR

The standard issue mask for UK

Army, Navy and RAF, chosen by

the UK MOD.

EXFIL Ballistic

The EXFIL Ballistic is the general

issue helmet for the Australian

Defence Force.

ACH GEN II

The Advanced Combat Helmet

Generation II (ACH GEN II) is

a new lighter weight version

of the US military’s general

issue ballistic helmet, making

it more comfortable for the

user to wear.

NG IHPS

The Next Generation Integrated

Head Protection System (NG

IHPS) is one of four major

components of the US Army’s

Soldier Protection System. The

NG IHPS provides lightweight

and high performance head

protection to US soldiers.

MI-TIC 320

This lightweight firefighter

thermal imaging camera

features a 2.7” screen and

five-year warranty.

MILITARY

Our deep understanding of the

unique requirements of the

modern warfighter and tactical

operator means our products are

designed to protect users in the

most extreme environments.

EXOSKIN

The EXOSKIN range includes

the CBRN suit, boots and

gloves to provide a low

burden, lightweight, integrated

defencesolution.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Group Product Portfolio continued

SPECIALIST USERS

M53A1

The M53A1 is designed for

Special Mission Units and

combination systems.

FM54

The FM54 Air Purifying Respirator

provides specialist operators with

protection against CBRN threats.

EXFIL Ballistic

The EXFIL Ballistic features a hybrid

composite shell with unique

geometry for optimal fix, offering

complete stability.

EXOSKIN

The EXOSKIN range includes the CBRN suit, boots and gloves to provide a

low burden, lightweight, integrated defence solution.

EXFIL Ballistic SL

This helmet offers NIJ III-A

protection with a 15% lighter

shell, improved accessory rails,

lightweight NVG shroud, CAM FIT

retention and Zorbium foam liner.

MCM100

The MCM100 rebreather provides

over four hours of operation at

extreme work rates and depths. It

features advanced electronics, easy

breathing, operational flexibility

and stealth technology, making

it ideal for various military diving

disciplines. CE tested to 100m.

CORE INTELLIGENCE

UNDERSUIT

The Core Intelligence Undersuit

is a heated garment designed to

prevent non-freezing cold injuries

in air, land and sea environments.

We provide protective

solutionsacross both

Avon Protection and Team

Wendy fora number

of different specialist

users that are developed

specifically for applications

where the user needs to

respond to ever-changing

operationalconditions.

CS-PAPR

The CS-PAPR integrates

with the FM53 and ST53

SCBA, allowing the

user to switch between

APR, PAPR and SCBA

modes dependent on

the threat.

ST54

The ST54 Tactical

Operator SCBA is a state-

of-the-art, multi-mission

respiratory protection

system and is optimised

for demanding tactical

operators.

C50

The C50 is ideal

for battlefield, first

responders, corrections

and counterterrorism.

FM53

The FM53 mask, based

on the US M50/JSGPM,

was designed for

specialist operators.

Avon Technologies plc Annual Report and Accounts 2024

SPARES AND ACCESSORIES

Avon Protection offers service

support to global customers

through replacement filters,

spares, accessories and

communication systems,

providing through-life support

to our products. Through the

line of combat helmet liner and

retention systems, Team Wendy

offers a host of options for

accessorising helmets to ensure

the helmet is purpose built for

every mission.

The Team Wendy

Cloudline System

Utilises our softest Zorbium foam, which is used

in strategically placed hexagon-shaped comfort

pads designed to prevent hot spots while

maintaining ultimate protection.

The ZAP 7-Pad NSN Liner System

The ZAP 7-Pad is the standard issue system

authorised for use in all US Marine Corps and US

Navy ground combat helmets.

The CAM FIT Retention System

Utilises lock sliders for one-handed adjustment

and secure fit.The BOA Fit System stabilises the

weight of the helmet by distributing a light, even

pressure around the head.

The Maritime Liner System

Uses sealed pads to resist water exposure, is quick

dry to reduce weight, features Zorbium foam for

superior impact protection and comfort, and

includes a fit adjustment pack.

Filters

A range of CBRN and non-CBRN filters, ensuring

optimal performance and reliability. Our products

are designed to enhance the functionality of

filtration systems, providing essential support for

safety and protection in hazardous environments.

Outserts

Outserts provide impact and scratch resistance

and there are options for UV light protection, laser

protection and improved weapon sighting.

Communications

For enhanced communications, an optional Voice

Projection Unit with internal microphone is easily

connected to the respirator.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

SBU Reviews

AVON PROTECTION

– SBU REVIEW

Where we are today is

substantially more stable

as a baseline from where we

were a year ago. That stability

undoubtedly now drives our ability

to create, implement and invest in

an exciting growth strategy.

Steve Elwell

President, Avon Protection

Avon Protection is an innovative capability provider

specialising in the design, development, testing and

manufacture of integrated protective systems.

52.9%

of Group revenue

FINANCIAL SUMMARY

FY24

($m)

FY23

($m) % change

Orders received 181.8 132.4 37.3%

Closing order book 72.0 35.8 101.1%

Revenue 145.6 156.9 (7.2%)

Adjusted operating

profit 26.6 29.3 (9.2%)

Adjusted operating

profit margin 18.3% 18.7% (2.1%)

ORDER BOOK

• Record 101.1% increase in order book to $72m (FY23: $35.8m)

• Exceptionally strong order intake of $175.7m during the year, including

UK GSR, US DOD M50 orders, Australian FM54 and rebreather orders

• Continuing to see excellent visibility of orders from our recurring and

aftermarket revenue base

FY24 PERFORMANCE SUMMARY

• Exceptionally strong order intake with our closing order book doubling,

including key strategic wins with UK GSR, Australian FM54, DRSKO and

Germany MCM100

• Revenue slightly down due to timing of US DOD filter and

accessories sales

• Slight margin decline with significant manufacturing efficiency

improvements and positive pricing increases offset by lower revenue

• Business restabilised leading to more predictable performance and a

platform for growth

• Improvements in our gross margin as we stabilised a number of major

contracts and delivered value-based pricing

• Further strengthening our competitive moat as we secured the HMI

programme with the US DOD and accelerated our strategy to be the

CBRN integration and ensemble lead

• New SBU structure is driving accountability, with aligned

objectives in place

• Further efficiency improvements planned in FY25 and a growing

confidence in our underlying base business

FY25 STRATEGIC FOCUS AREAS

• Operational excellence – Optimise our site space, reduce scrap and

inventory, and improve productivity

• Commercial excellence – Improve our gross margin by streamlining

the distribution network, increasing US commercial sales whilst

maintaining high forecast accuracy

• Functional excellence – Generate supply chain savings by a reduction

of material held, with increased on time to promise

• Retain #1 global market lead – Launch MITR half mask, secure key

programmes and introduce enhanced communication systems with

zero commercial losses

• Build a leading rebreather business – Secure major contracts across

multiple countries with intentions to grow sales in heated suit offerings

and achieve success in key UK selection processes

• Grow through adjacent markets – Deliver US DOD projects,

expand civilian market sales, win international contracts and improve

e-commerce performance

Avon Technologies plc Annual Report and Accounts 2024

CASE STUDY

GSR WIN

We were delighted to announce

that Avon Protection had secured a

significant contract with the UK Ministry

of Defence for the ongoing supply of

the General Service Respirator (GSR) and

associated in-service support.

CASE STUDY

EXOSKIN-S1: THE FINAL PIECE

OFTHECBRN ENSEMBLE

With the launch of the EXOSKIN-S1 CBRN suit

in February 2024, Avon Protection has become

the first global provider to offer full-body CBRN

protection as an integrated ensemble, including

the suit, the EXOSKIN boots and gloves, and a

range of respirators. It is the first time a single

company has taken responsibility for the entire

CBRN protection ecosystem, taking control of

the design, integration and performance of all

components needed to keep military and first

responder personnel safe in complex CBRN

threatenvironments.

Avon Protection has taken this innovative approach in order to solve an

identified gap in the market: the challenge faced by users being forced

to rely on equipment that is designed and manufactured by a range

of suppliers. In this case, the onus is on the end user to ensure that all

systems integrate effectively without risking liquid/vapour/aerosol leaks

at the point where different systems meet, such as at the wrist where the

glove meets the suit sleeve, or where the suit hood meets the respirator.

In these instances, no matter how advanced the technology of each

individual piece is, the overall ensemble will not function the way its users

need it to.

In building a family of systems designed to integrate seamlessly with

each other, Avon Protection is freeing its customers from the hassle and

expense of ensuring all systems work together – and setting new standards

for the safety of those operating in complex CBRN environments.

Integration has been built into every aspect of the EXOSKIN-S1’s design.

Itis engineered with a cotton poly outer layer and activated carbon inner

lining, and features an integrated hood with a double elasticated aperture

for a secure seal around the wearer’s respirator. Hook and loop adjustable

tabs on the lower legs and an inner leg gaiter with stirrup prevent ingress

at the ankle, and a unique smart layer design with a thumb loop prevents

ingress at the wrist. The suit also features two jacket zip designs with hook

and loop fastening for improved integration with body armour.

As the same focus on integration has been taken throughout the design

of the whole EXOSKIN family, users can rely on a whole body ensemble

that will allow them to complete the mission safely, every time.

Avon Protection will draw on its expertise in integration as part of its

work on the US DOD’s Advanced System for Protection and Integrated

Reduction of Encumbrances Hood Mask Interface (ASPIRE HMI) programme.

This contract, valued at up to £38m over four years, included the

possibility of five additional 12-month extension periods.

The GSR is a vital piece of equipment for all UK service personnel in

the British Army, Royal Air Force and Royal Navy, providing essential

protection in CBRN environments. Designed and manufactured to

meet the UK MOD’s stringent specifications, the GSR ensured high

performance protection for its users.

Since first being awarded the contract in 2018, Avon Protection

had delivered over 90,000 GSRs to UK MOD personnel from our

UK site. This new contract continued to support numerous highly

skilled jobs and sustained the UK-based supply chain.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

TEAM WENDY

–SBUREVIEW

As we go into 2025, I’m excited

by the fact we have a large

order book, we have the people

in place and we can now

focus on delivery, execution

and creating capacity for

commercial growth over the

next 12 months.

James Wilcox

President, Team Wendy

Team Wendy develops leading-edge products that

serve to protect against serious and potentially

life-threatening impact-related injuries. With Team

Wendy’s commitment to thoughtful design from

the inside out, its products allow the wearer to focus

on their mission, not their helmet – whether that be

combat, rescue oradventure.

47.1%

of Group revenue

ORDER BOOK

• Record order book includes $58m of NG IHPS orders and $58m

ofACHGEN II orders

• Growing pipeline for international markets with revised structure

andstrategies implemented

FY24 PERFORMANCE SUMMARY

• Strong DOD orders, maintained NG IHPS deliveries and ACH GEN

II ramp-up

• Significant profitability improvement through continuous improvement

and cost-cutting measures:

• Rapid reduction in scrap and margin improvements

• Value streams now implemented and single piece flow embedded

• Enhanced SBU structure, improve=d talent acquisition, OKR discipline

and stable management foundation for the future

• New product launches planned in FY25 with accelerated product expansion

• Programme management capability embedded

FY25 STRATEGIC FOCUS AREAS

• Footprint optimisation – Successful transition to two world-class,

high volume manufacturing sites by FY26

• Commercial excellence – Build the Team Wendy brand to deliver market

segment growth, supported by customer experience improvements

• Functional excellence – Ensure successful product launches and

ramp-up in manufacture, with world-class programme management

andinnovation

• Maximise and extend the DOD process – Seamless delivery of our DOD

contracts along with reduction in scrap and embedding lean manufacturing

• Become leading US commercial brand – Become helmet of choice

for first responders seeking ballistic protection and specialist users

seeking rifle protection. Launch leading bump helmet range

• International expansion – Expand international product portfolio

and optimise international sales team and channel partnerships

SBU Reviews continued

FINANCIAL SUMMARY

FY24

($m)

FY23

($m) % change

Orders received 182.6 126.3 44.6%

Closing order book 153.2 100.0 53.2%

Revenue 129.4 86.9 48.9%

Adjusted operating

profit 5.0 (8.1) -

Adjusted operating

profit margin 3.9% (9.3%) -

Avon Technologies plc Annual Report and Accounts 2024

This new product offering has provided great stability to our

leading ballistic helmet portfolio, allowing us to compete for

new opportunities. The EPIC helmet range has accounted for

approximately 40% of the commercial ballistic helmet unit sales

and 15% of the commercial revenue. It leverages ballistic helmet

technology that was developed to compete and win the US DOD

ACH GEN II programme.

The new helmet series features lightweight high-performance

material paired with the Team Wendy liner systems for premium

comfort. Multiple shell cuts are available for each of the helmet

models for ultimate flexibility. All EPIC models feature the best-in-class

performance to weight ratio.

CASE STUDY

EPIC BALLISTIC HELMET RANGE

The EPIC ballistic helmet range has gained

tremendous market penetration in 2024.

The team has successfully delivered a number of key milestones, including

standing up ACH GEN II finishing capabilities in Cleveland and submitting

First Article Test (FAT) for ACH GEN II moulding expansion capabilities. In

Cleveland, we continue to set up Building 5 and have installed new offices,

lighting and a great deal of proprietary process equipment in anticipation

of our volume increase and strong order book. Meanwhile in Salem, we

successfully optimised our layout and installed a new press and laminate

cutting machine. We have made great progress across all workstreams

and remain on track to deliver significant benefits to the business by

FY26. We continue to look for additional opportunities to improve and

have held Kaizen events across all three sites in support of our continuous

improvement efforts.

CASE STUDY

US SITE CONSOLIDATION PROJECT

Project Unity refers to Team Wendy’s transformation

programme to optimise the manufacturing

footprint, consolidate production and turn

our Cleveland, OH, site into a world-class, lean

manufacturing facility, and as an approved

place of performance for US DOD deliveries.

Thisincludes standing up capabilities for:

i)ACH GEN II helmet moulding and finishing

expansion; ii) NG IHPS helmet finishing;

and iii)EPIC and EXFIL helmet moulding

(commercial) and finishing. Italsoincludes

standing up NG IHPS helmet moulding

production at our Salem, NH, site, to allow

forthe restoration and exit of the Irvine, CA, site.

In addition to this project we have also commenced a project to

incorporate the outputs of the Kaizen events hosted in Cleveland

which aim to transform existing plant manufacturing in Cleveland to a

continuous improvement model. This will establish a pull manufacturing

system and includes work to takt time, creates standard work and

builds quality into the process along with one piece flow. This will set

up Building 5 in Cleveland to deliver 200,000+ helmets per annum

(ACHGEN II, NG IHPS, EPIC, EXFIL LTP and SAR) while minimising

inventory. This improved flow is expected to generate additional

manufacturing labour savings as well as working capital improvements.

The improved layout includes setting up dedicated lines for each

product. Production will no longer be done in batches and will instead

move to single-piece flow. In addition to the anticipated labour savings

and inventory reduction, this is also expected to improve production

agility and responsiveness to demand, while ensuring that there is no

overproduction as operators’ efforts will be linked to customer demand

takt time. Lastly, this will improve the quality of the product as it is

embedded in the process via standard work.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Financial Review

SIGNIFICANT

GROWTH OPPORTUNITY

We delivered a very strong financial performance

with significant growth in revenue, margin, ROIC and

free cash flow. This, combined with good operational

progress through the year, has highlighted the

potential to achieve our operating margin and ROIC

target ranges in 2026, a year earlier than expected.

It has been a strong year for us with order intake up more than 40%

compared to 2023, and a record closing order book of $225.2m, an increase

of over 64%. Revenue increased by 12.2% on a constant currency basis to

$275.0m (2023: $243.8m) with a full-year run rate of NG IHPS helmets and

initial deliveries against the ACH GEN II contract. Adjusted operating profit

increased by 53.4% on a constant currency basis to $31.6m (2023: $21.2m),

with the operational gearing effects of increased revenue within Team

Wendy more than offsetting a small decline in Avon Protection. Adjusted

operating profit margin improved to 11.5% (2023: 8.7%).

Our focus on continuous

improvement is already

delivering results, with the total

cash costs of transformation

now expected to be covered

through lower working capital.

Rich Cashin

Chief Financial Officer

Order intake for the Group of $364.4m (2023: $258.7m) was up 40.9%

(40.1% constant currency), with strong growth in both businesses. Avon

Protection order intake was up 37.3% with strong wins for our underwater

rebreather, an increase in international orders, and higher US DOD

orders following a weak prior year comparator. Team Wendy order intake

was up 44.6%, with continued orders under our two primary US DOD

contracts including $42m of NG IHPS orders and $34m against the ACH

GEN II contract, combined with strong order intake for the associated

pad systems.

The closing order book of $225.2m reflects an increase of 65.8% (64.3%

constant currency) over the prior year. Team Wendy closed the year with

$153.2m in the order book, an increase of 53.2%, which includes $58m of

orders for NG IHPS and $58m for ACH GEN II. The Avon Protection closing

order book of $72.0m reflects an increase of 101.1%, including $15m of

rebreather orders.

Revenue for the Group totalled $275.0m, an increase of 12.8% (12.2%

constant currency) compared to the prior year of $243.8m.

Avon Protection revenue totalled $145.6m, a decline of 7.2% compared

to $156.9m in 2023. Sales to the US DOD saw a decline of 41.0%,

predominantly driven by two years’ worth of M61 filter demand being

delivered in 2023. This was paired with a reduction in accessories and

powered air revenue, partially offset with an increase in mask sales.

Commercial Americas revenue grew by 34.1%, with an increase in mask

and supplied air sales, whilst UK & International revenue increased by

9.8% primarily from growth in sales of our rebreathers and CBRN boots

and gloves.

Team Wendy revenue totalled $129.4m, an increase of 48.9% over the prior

year of $86.9m. US DOD revenue grew by 95.5%, with a full run rate of

NG IHPS deliveries from the start of the year, and the commencement of

deliveries under the ACH GEN II contract. Commercial Americas revenue

grew by 11.9% with strong sales of the EPIC helmet range, which was

partially offset by a 7.5% decline in UK & International revenue.

Avon Technologies plc Annual Report and Accounts 2024

30 September

2024

30 September

2023 Change

Organic

change

(constant

currency)

Continuing operations

Orders received $364.4m $258.7m 40.9% 40.1%

Closing order book $225.2m $135.8m 65.8% 64.3%

Revenue $275.0m $243.8m 12.8% 12.2%

Adjusted

operating profit $31.6m $21.2m 49.1% 53.4%

Adjusted

operating profit margin 11. 5% 8.7% 280bps 310bps

Adjusted

net finance costs $(6.3)m $(7.2)m (12.5)% (12.5)%

Adjusted

profit before tax $25.3m $14.0m 80.7% 88.8%

Adjusted

taxation $(4.4)m $(1.9)m

Adjusted

profit after tax $20.9m $12.1m

Adjusted

basic earnings per share 69.9c 40.3c 73.4% 80.2%

Total dividend per share 23.3c 29.6c (21.3)%

Net debt excluding lease liabilities $43.5m $64.5m (32.6)%

Cash conversion 157. 8% 7.0%

Return on invested capital

13.7% 8.7%

Statutory results

Operating profit/(loss) from continuing operations

$10.7m $(12.6)m

Net finance costs $(8.4)m $(7.6)m

Profit/(loss) before tax from continuing operations $2.3m $(20.2)m

Taxation $0.7m $3.8m

Profit/(loss) after tax from continuing operations $3.0m $(16.4)m

Profit from discontinued operations - $2.0m

Profit/(loss) for the period $3.0m $(14.4)m

Basic profit/(loss) per share 10.0c (48.0)c

Net debt $65.4m $85.4m

1. At 30 September 2023 Armour operations were fully closed. Armour was therefore classified as a discontinued operation in the prior period.

2. The Directors believe that adjusted measures provide a useful comparison of business trends and performance. Adjusted results exclude exceptional items and discontinued operations. The term

adjusted is not defined under IFRS and may not be comparable with similarly titled measures used by other companies.

3. Reported operating profit includes $6.2m amortisation of acquired intangibles, transformational costs of $13.0m, and a $1.7m impairment of non-current assets. See the Adjusted Performance

Measures section for a full breakdown of adjustments and comparatives.

4. Constant currency measures are provided in the Adjusted Performance Measures section.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

US DOD Commercial Americas UK & International

Team Wendy

Revenue by market

$129.4m

(FY23: $86.9m)

Avon Protection

Revenue by market

$145.6m

(FY23: $156.9m)

Financial Review continued

Adjusted operating profit was $31.6m (2023: $21.2m). Revenue growth

contributed $6.3m additional adjusted operating profit in the year, with a

$10.9m improvement in Team Wendy partially offset by a $4.6m reduction

in Avon Protection reflecting the 7.2% decline in revenue. Operational

gearing within Team Wendy resulted in a further $6.4m improvement,

while scrap was $4.1m lower as maturity of Next Generation IHPS

production progressed. The right-sizing activities within Avon Protection

at the beginning of the year resulted in a further $4.9m improvement.

These were then partially offset by increased discretionary compensation

payments of $7.0m following achievement of financial and operational

targets at a group and SBU level, and lower capitalised R&D represented

a further headwind of $3.9m. The overall increase in profitability resulted

in an adjusted operating profit margin of 11.5% (2023: 8.7%), up 280bps

(310bps constant currency).

Statutory operating profit from continuing operations of $10.7m (2023: loss of

$12.6m) reflected exceptional items in the period which are summarised below.

The Adjusted Performance Measures section contains a full breakdown

and explanation of adjustments.

2024

2023

Statutory operating profit/(loss) 10.7 (12.6)

Amortisation of acquired intangibles 6.2 6.3

Impairment of goodwill and other

non-currentassets

1.7 24.6

Transformational, restructuring and

transition costs

10.8 2.9

Acceleration of depreciation and

amortisation – transformational

2.2 –

Adjusted operating profit 31.6 21.2

Adjusted net finance costs decreased to $6.3m (2023: $7.2m) mainly due to

lower average net debt through the period.

After an adjusted tax charge of $4.4m (2023: $1.9m), the Group recorded an

adjusted profit for the period after tax of $20.9m (2023: $12.1m).

Adjusted basic earnings per share increased to 69.9c (2023: 40.3c), reflecting

the growth in operating profit and a reduction in finance charges due to

lower net debt through the period. Adjusted earnings also benefited from a

lower than forecast effective tax rate driven by one-off items which are not

expected to recur in 2025. These one-off tax items increased adjusted basic

earnings per share by approximately 4 cents per share.

Return on invested capital increased to 13.7% (2023: 8.7%), reflecting

higher adjusted operating profit and lower invested capital.

Statutory net finance costs of $8.4m (2023: $7.6m) include $2.1m (2023: $0.4m)

net interest expense on the UK defined benefit pension scheme liability.

Statutory profit before tax from continuing operations was $2.3m (2023:

loss of $20.2m) and, after a tax credit of $0.7m (2023: credit of $3.8m), the

profit for the period from continuing operations was $3.0m (2023: loss

of $16.4m).

Transformation costs

2024

Footprint optimisation

10.4

Operational excellence 1.3

Commercial optimisation 0.0

Functional excellence 1.0

Programme management excellence 0.3

Total transformation costs 13.0

1. Including $2.2m for acceleration of depreciation and amortisation charges related to legacy

ERP systems and assets held in Irvine, California.

Spend within our transformation initiatives has been ahead of our

originally communicated expectations, with an acceleration of investment

relating to footprint optimisation following the site consolidation plans

announced earlier in the year. Estimates for total investment related to the

projects identified last year remain unchanged, and as a result we expect

transformation costs in FY25 to be at a similar level to FY24.

Segmental performance

2024 2023

Avon

Protection

Team

Wendy

Total

Avon

Protection

Team

Wendy

Total

Orders received 181.8 182.6 364.4 132.4 126.3 258.7

Closing order book 72.0 153.2 225.2 35.8 100.0 135.8

Revenue 145.6 129.4 275.0 156.9 86.9 243.8

Adjusted operating profit 26.6 5.0 31.6 29.3 (8.1) 21.2

Adjusted operating profit margin 18.3% 3.9% 11.5% 18.7% (9.3)% 8.7%

Avon Technologies plc Annual Report and Accounts 2024

A 7.2% decline in revenue within the Avon Protection business resulted in a reduction in operating profit to $26.6m (2023: $29.3m), although margin

decline was limited to only 40bps to 18.3% (2023: 18.7%) reflecting significant cost reduction activities undertaken at the start of the year.

Team Wendy profitability moved meaningfully forward this year, turning positive for the first time with an operating profit margin of 3.9%, compared to

a loss of 9.3% in FY23. This was largely driven by the near 50% increase in revenue, and we are also starting to see the early benefits of our continuous

improvement and operational efficiency initiatives. We continue to expect margins in the Team Wendy business to reach the target levels we have

set, much of the improvement for which will come from the consolidation of our Irvine, California, facility into our other Team Wendy sites, which was

announced earlier in the year.

Research and development expenditure

Total investment in research and development (capitalised and expensed) was $11.4m (2023: $10.2m), in line with the prior period as a percentage of

revenue. Excluding amortisation and impairment, we have seen an increase in costs expensed to the P&L and lower levels of capitalisation following

completion of NG IHPS and ACH Gen II helmet development.

2024

2023

Total expenditure 11.4 10.2

Less customer funded (1.6) (1.2)

Group expenditure 9.8 9.0

Capitalised – (3.1)

Income statement impact 9.8 5.9

Amortisation and impairment of development expenditure 4.3 4.3

Total income statement impact 14.1 10.2

Revenue 275.0 243.8

R&D spend as a % of revenue 4.1% 4.2%

Avon Protection expenditure has primarily focused on completing the development of the Modular Integrated Tactical Respirator (MITR), whilst Team

Wendy expenditure has been focused on development of RifleTech, a new ballistic helmet model. Spend on these projects has been expensed following

assessment of technical progress and evidence for commercial viability.

Net debt and cash flow

2024

2023

Adjusted continuing EBITDA 43.4 35.7

Share-based payments and defined benefit pension scheme costs 4.4 1.7

Working capital 20.7 (34.9)

Cash flows from continuing operations before exceptional items 68.5 2.5

Transformational, restructuring and transition costs paid (9.7) (2.3)

Cash flows from continuing operations 58.8 0.2

Cash flows from discontinued operations 4.9 3.2

Cash flows from operations 63.7 3.4

Payments to pension plan (9.1) –

Net finance costs (6.7) (6.6)

Net repayment of leases (3.3) (3.0)

Tax received (0.7) 3.7

Capital expenditure (11.2) (11.0)

Discontinued operation disposals, investing and financing cash flows – 6.6

Purchase of own shares – Long Term Incentive Plan (5.0) –

Dividends to shareholders (6.8) (13.4)

Foreign exchange on cash 0.1 –

Change in net debt 21.0 (20.3)

Opening net debt, excluding lease liabilities (64.5) (44.2)

Closing net debt, excluding lease liabilities (43.5) (64.5)

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Financial Review continued

Net debt and cash flow continued

Cash flows from continuing operations before exceptional items were

$68.5m (2023: $2.5m) with the movement principally due to working

capital inflows of $20.7m, compared to outflows of $34.9m in the prior

year. Working capital inflows were driven by a $17.2m decrease in

receivables due to sales phasing (2023: $26.2m increase in receivables).

Dividends were $6.8m (2023: $13.4m), with the change reflecting the rebased

level of distribution under our capital allocation policy. Our first priorities

remain organic investment into R&D and transformation followed by a

progressive dividend targeting between 2.5x and 3x EPS cover through

the cycle. We have amended our policy this year, in light of the significant

reduction in net debt in FY24, such that excess cash will be deployed in an

EPS enhancing way, either through M&A or alternative shareholder returns.

The purchase of own shares to satisfy future exercises of options granted

to employees under the Long Term Incentive Plan was $5.0m (2023: $nil),

hedging potential cash costs.

Net debt was $65.4m (2023: $85.4m), which includes lease liabilities of

$21.9m (2023: $20.9m). Excluding lease liabilities, net debt was$43.5m

(2023: $64.5m).

Defined benefit pension scheme

The Group operated a contributory defined benefits plan to provide

pension and death benefits for the employees of Avon Technologies plc

and its Group undertakings in the UK employed prior to 31 January 2003.

The plan was closed to future accrual of benefit on 1 October 2009 and

has a weighted average maturity of approximately eleven years. The net

pension liability for the scheme amounted to $17.2m as at 30 September

2024 (2023: $40.2m). The decrease was mainly due to deficit contributions

of $9.1m, and a $13.4m favourable actuarial gain reflecting a change in

accounting estimate to the use of detailed member-by-member calculations.

The gain is included within 2024 actuarial experience adjustments.

In accordance with the deficit recovery plan agreed following the

31March2022 actuarial valuation, the Group will make payments in FY25

of £4.3m, FY26 of £4.7m and FY27 of £5.1m in respect of deficit recovery

and scheme expenses.

Foreign exchange risk management

The Group is exposed to translational foreign exchange risk arising

whenthe results of sterling denominated companies are consolidated

into the Group’s presentational currency, US dollars. The Group’s policy is

not tohedge translational foreign exchange risk. Due to the translational

effect, a 1c increase in the value of the US dollar against sterling would

have decreased revenue by approximately $0.2m and increased operating

profit by approximately $0.2m for FY24.

Financing and interest rate risk management

On 14 May 2024, the Group signed a new $137m RCF, together with a $50m

accordion replacing the previous facility. The new RCF was agreed with a

syndicate of four lenders and is available until May 2027, with two further

one-year extension options taking it out to May 2029.

RCF borrowings are floating rate priced using the US Secured Overnight

Financing Rate (SOFR). The Group hedges interest rate exposure using

swaps to fix a portion of SOFR floating rate interest. The notional value of

active interest rate swaps at 30 September 2024 was $30.0m (2023: $30.0m),

expiring on 8 September 2025. The Group also has additional interest rate

swaps in place with a notional value of $20.0m starting on 8September

2025 and expiring on 8 September 2026 (2023: $20.0m). The net financial

value of interest rate swaps at 30 September 2024 was $nil (FY23: $0.9m).

Dividends

The Board has proposed afinal dividend of 16.1c per share (2023: 15.3c).

The final dividend will be paid in pounds sterling on 7 March 2025 to

shareholders on the register at 7 February 2025. The final dividend will be

converted into pounds sterling for payment at the prevailing exchange

rate which will beannounced prior to payment.

2025 financial guidance

We expect continued growth in FY25, alongside consistent returns, as

weimplement the key actions in our footprint and manufacturing

optimisation programmes, albeit with a cost headwind due to increase US

healthcare costs and Employers National Insurance contributions in the UK. As

previously communicated, FY25 will be a year of transition, as we complete

the execution of the facility moves within Team Wendy, and the

manufacturing optimisation programme within Avon Protection. As such,

we expect:

• mid-single-digit revenue growth;

• full-year run rate of ACH driving Team Wendy growth;

• return to modest growth in Avon Protection;

• operating profit margin broadly flat year on year;

• transformation costs in line with FY24 (we continue to expect a sharp

drop in FY26 as large programmes are mostly completed in FY25); and

• cash conversion of over 80%, before exceptional cash costs.

Rich Cashin

Chief Financial Officer

19 November 2024

We expect continued growth in

FY25, alongside consistent returns

as we implement the key actions

in footprint and manufacturing

optimisation programmes.

Avon Technologies plc Annual Report and Accounts 2024

In selecting the MCM100 Multi-Role

Rebreather, the New Zealand Defence

Force is equipping its military divers

with world-leading technology

to enhance the safety and

effectiveness of their increasingly

diverse operations. We look forward

to working with the New Zealand

Defence Force as this system enters

service and we continue to support its

operations over the coming years.

Kevin Gurr

Avon Protection, Underwater Systems Director

Initially developed and deployed with global militaries and specialist user

groups, the MCM100 delivers enhanced diver safety and extended mission

duration for military divers across the spectrum of shallow and deep-

water diving operations, including explosive ordinance disposal, mine

countermeasures, Special Forces, covert subsurface infiltration, submarine

release and infiltration, and crewed underwater vehicle operations.

The electronically controlled, closed-circuit MCM100 uses advanced digital

oxygen sensors and a native decompression algorithm to manage the

oxygen and decompression risk. System and mission information is fed to

the diver via a wrist or console-mounted handset display and a heads-up

display, maximising system usability and allowing the user to focus on

the mission rather than the equipment. Additionally, automated pre-dive

sequencing reduces mission readiness time and enhances safety.

The MCM100’s modular design ensures a future-proofed capability for the

underwater operator, providing users with flexibility in how and when

they integrate new technologies as they become available or as their

mission envelope changes.

New Zealand joins a user community that includes other key NATO nations

and partner navies.

CASE STUDY

AVON PROTECTION’S

MCM100 UNDERWATER

REBREATHER CHOSEN

BYNEW ZEALAND

DEFENCE FORCE

The MCM100 Multi-Role

Rebreather has been selected

by the New Zealand

Defence Force to equip its

navy divers. This significant

contract includes the supply of

MCM100 systems, spares and

accessories, and a multi-year

supportprogramme.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

KPIs

HOW WE MEASURE

FINANCIAL KPIS

Driving operational improvements, not just financial outcomes.

CLOSING ORDER BOOK

$225.2m

+65.8%

What is it?

Orders received but not yet fulfilled.

How are we doing?

Excellent order intake for the year has

contributed to a record-high closing order

book, which includes $58m of NG IHPS

orders, and $58m of ACH GEN II orders.

Associated risks

Defence sector concentration

Geopolitical

Relevance to executive

remuneration

Strategic objectives criteria

$225.2m

$135.8m

$120.9m

FY24

FY23

FY22

ORGANIC CONSTANT CURRENCY REVENUE GROWTH

12.2%

+1,970bps

What is it?

Growth in revenue at constant

exchange rates.

How are we doing?

Growth in Team Wendy revenue was

partially offset by a small expected decline

inAvonProtection.

Associated risks

Bid and contract

Relevance to executive

remuneration

Long Term Incentive Plan criteria

12.2%FY24

FY23

FY22

8.6%

(7.5)%

ADJUSTED OPERATING PROFIT MARGIN

11.5%

+280bps

What is it?

Operating profit excluding exceptional items

and discontinued operations as a percentage

of revenue.

How are we doing?

Significant improvement in Team Wendy

margins largely driven by operational

gearing, slightly offset by small decline in

Avon Protection due to lower revenue.

Associated risks

Bid and contract

Manufacturing

Supply chain

Relevance to executive

remuneration

Long Term Incentive Plan and annual bonus

FY24

FY23

FY22

11.5%

8.7%

8.9%

• We are more actively overseeing performance of the

businesses, with greater operational oversight driving

operational performance, not just outcomes.

• As a result, we will focus on the KPIs below in 2025 to support

our long-term goals.

• Each SBU reports against both its financial and operational

metrics each month.

• Our first capital allocation priority is re-investment into

innovation through technology, people and capabilities to

ensure we meet our purpose of innovating for a safer tomorrow.

• Each of the KPIs highlighted below directly impacts and is

a key measure of the success of our STAR strategy. This year

we have changed our operational KPIs to reflect our Safety,

Quality, Delivery, Inventory and Productivity (SQDIP) KPIs that

are used daily on our production sites. Other KPIs including

Gender Diversity and Supplier Quality are key focus areas for

the Executive team but are at beginning stages of creating an

action plan around how to develop and improve.

Avon Technologies plc Annual Report and Accounts 2024

PRODUCT DEVELOPMENT PERCENTAGE OF REVENUE

4.1%

-10bps

What is it?

Research and development as a percentage

of revenue.

How are we doing?

We continue to invest in the next generation

of products, with an increase in total

expenditure of $31m vs 2023, although

this is outweighed by the larger increase in

revenue growth.

Associated risks

Delivery of new product programmes

Strategy execution

Sustainability

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

FY22

4.1%

4.2%

4.1%

ADJUSTED EARNINGS PER SHARE

69.9c

+73.4%

What is it?

Adjusted profit after tax divided by the

weighted average number of shares in issue.

How are we doing?

With a consistent number of shares, the

growth in earnings per share follows the

growth in profits.

Associated risks

Financial controls and reporting

Complianceand internal controls

Relevance to executive

remuneration

Long Term Incentive Plan

FY24

FY23

FY22

69.9c

40.3c

54.7c

RETURN ON INVESTED CAPITAL

13.7%

+500bps

What is it?

Adjusted operating profit over average

invested capital.

How are we doing?

Both the increase in operating profit and

reduction in invested capital from lower debt

levels resulted in strong improvements in

return on invested capital.

Associated risks

Bid and contract

Strategic execution

Compliance and internal controls

Supply chain

Relevance to executive

remuneration

Long Term Incentive Plan

FY24

FY23

FY22

13.7%

8.7%

9.0%

CASH CONVERSION

157.8%

+150.8%

What is it?

Cash flows from continuing operations

before exceptional items as a percentage of

adjusted EBITDA.

How are we doing?

Cash conversion in the period was strong,

primarily driven by a decrease in receivables.

Associated risks

Financial controls and reporting

Complianceand internal controls

Relevance to executive

remuneration

Strategic objectives criteria and annual bonus

FY24

FY23

157.8%

7.0%

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

KPIs continued

HOW WE MEASURE

OPERATIONAL KPIS

Continuous improvement is measured

through our SQDIP operational KPIs.

EMPLOYEE ENGAGEMENT

60%

-700bps

What is it?

Overall employee engagement score

achieved in our global employee

engagement survey.

How are we doing?

Our engagement score declined by 7%,

which was expected due to the significant

amount of change undertaken, but we have

a clear action plan to improve next year.

Associated risks

Recruiting and retaining talent

Sustainability

Security, safety and cyber

Relevance to executive

remuneration

Strategic objectives criteria

60%

67%

55%

FY24

FY23

FY22

SAFETY

-57%

What is it?

Health and safety lost time incidents per

1,000 employees.

How are we doing?

This metric is now reported daily by each

production line through SQDIP, which lists

safety as the most important metric followed

by quality. We have seen an improved trend

over the year.

Associated risks

Manufacturing

Sustainability

Recruiting and retaining talent

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

FY22

ON-TIME DELIVERY

93%

-200bps

What is it?

Measured as the percentage of orders

whichare delivered on time to our

customers’ expectations.

How are we doing?

Although we have seen a small decline, we

continue to deliver a high rate of on-time

deliveries to our customers who rely on our

life-saving products.

Associated risks

Manufacturing

Strategy execution

Supply chain

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

FY22

95%

93%

82%

QUALITY (SCRAP)

1.6%

-190bps

What is it?

Measured as rolling 12-month scrap value

over rolling 12-month revenue.

How are we doing?

Scrap continues to decline with a 54%

decrease vs last year. Our goal is to reduce

scrap by more than 60% (vs 2023) by 2027.

Associated risks

Manufacturing

Sustainability

Delivery of new product programmes

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

1.6%

3.5%

Avon Technologies plc Annual Report and Accounts 2024

AVERAGE WORKING CAPITAL TURNS

4.5

+21.6%

What is it?

Calculated as the ratio of the 12-month average

month-end working capital (defined as the

total of inventory, receivables and payables

excluding lease liabilities) to revenue.

How are we doing?

The increase in revenue, in addition to a

decrease in working capital from reduced

receivables, and a focus on inventory levels

has resulted in a strong improvement in

average working capital turns.

Associated risks

Manufacturing

Supply chain

Financialcontrols and reporting

Relevance to executive

remuneration

Strategic objectives criteria

Annual bonus

FY24

FY23

FY22

4.5

3.7

5.5

PRODUCTIVITY

$510k

+21.4%

What is it?

Measured as rolling 12-month revenue over

direct headcount.

How are we doing?

We have seen an improvement in

productivity from both increased revenue

and a reduction in headcount from the right-

sizing actions taken within Avon Protection.

Associated risks

Manufacturing

Financial controls and reporting

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

$510k

$420k

FY22

CARBON EMISSIONS

21.6%

-25%

What is it?

Scope 1 and 2 carbon emissions per $m

of revenue.

How are we doing?

Supported by our footprint optimisation

activities, we have exceeded our corporate

responsibility target to achieve a 25%

reduction by 2028.

Associated risks

Sustainability

Manufacturing

Supply chain

Relevance to executive

remuneration

Strategic objectives criteria

FY24

FY23

FY22

21.6%

28.7%

24.5%

REWARD

Avon Technologies’ Directors’ Remuneration Policy is designed to

encourage delivery of the Group’s STAR strategy and the creation of value

in line with our purpose, vision and values. The main elements of the

Remuneration Policy are:

Fixed pay

Base salary levels are reviewed annually by the Remuneration Committee,

taking into account Company performance, individual performance, levels

of increase for the broader population and market pay conditions.

Annual bonus

Annual bonus performance measures include: absolute Group profit

(50%), average working capital turns (30%) and strategic objectives (20%).

Thesestrategic objectives include a range of specific, measurable targets

aligned with our strategy and focused on delivering our strategic priorities

set for the year.

Long Term Incentive Plan (LTIP)

The LTIP measures are: EPS (70%) and ROIC (30%). Performance is measured

over three years. Vested LTIP awards are subject to clawback.

Shareholding targets

Executive Directors are required to build and maintain a shareholding in

the Company with a value of two times salary. This encourages further

alignment with shareholders.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Stakeholder Engagement

WORKING WITH OUR

STAKEHOLDERS

The Board acknowledges that positive interaction with all stakeholders is key to

underpinning positive engagement and helps to inform the decision making on

material issues. The table below sets out how we engage with our key stakeholders.

2024 focus areas

Embedding our vision, mission,

values and empowering

and building capabilities to

take part in our continuous

improvement journey.

Key 2025 measures

• Engagement score

• Voluntary turnover

• Kaizens per month

• Safety performance

How we engage

• Daily shop floor

update meetings

• Engagement survey including

follow-up actions engagement

with all employees

• Newsletters and Sharepoint

• Townhall sessions

• Site visits

• President Kaizens

Board engagement

• Received detailed engagement

survey results, discussed

feedback and resulting

action plan

• Board engagement with

employees during site visits

• Executive team Kaizen events

• Larger group of employees

invited for Board presentations

• Anti-bribery and corruption

and Code of Conduct training

andawareness

Read more about our people on

page 52

2024 focus areas

Delivering on our promises

through excellent execution of

ourstrategy.

Key 2025 measures

• Order book

• Sales growth

• Return on invested capital

• Adjusted operating profit

• Inventory turns

• Scrap levels

• Productivity

• On-time delivery

How we engage

• Capital Markets Event held in

February 2024 with over 200

attendees

• Results roadshows with CEO,

CFO and Investor Relations

• Ad-hoc meetings organised

with CEO, CFO and Investor

Relations as requested

Board engagement

• Chair meetings with

shareholders on request and

as part of the remuneration

update in FY24

• Private and institutional investor

meetings organised with

Directors as requested

Read the Strategic Report on

page 12

SUPPLIERS

COMMUNITIES

INVESTORS

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Section 172

Section 172 of the Companies Act 2006 requires the Directors to take into consideration the interests of the stakeholders in

their decision making. The Directors have regard to the interests of the Company’s employees and other stakeholders, including

the Company’s impact on the community, the environment and its reputation, when making their decisions. The Directors

consider what is likely to promote the success of the Company for its members in the long term in all their decision making.

This statement should be read in conjunction with the Corporate Governance Report on pages 85 to 88.

KEY BOARD

DECISIONS

Further information on how section 172 has been applied by the Board can be found as follows:

a) The likely consequences of any decision in the long term

STAR Strategy on page 13

b) The interests of the company’s employees

STAR Business System on page 20

People on page 52

c) The need to foster the company’s business relationships with suppliers, customers and others

Our Strategy on page 13

Governance on page 62

Stakeholder Engagement on page 46

d) The impact of the company’s operations on the community and environment

Corporate Social Responsibility on page 50

e) The desirability of the company maintaining a reputation for high standards of business conduct

Audit Committee Report on page 92

f) The need to act fairly between members of the company

Stakeholder Engagement on page 46

The following are some of the decisions made by the Board during the year which demonstrate how section 172 matters have been taken into account as

part of Board discussions and decision making:

Board decision Section 172 factors Key factors considered

Employee Opinion

Survey (EOS): The

Board supported the

recommendations

and actions as

a result of the

engagement survey

a) The likely long-term

consequences of

the decision

• A highly engaged workforce is more likely to contribute positively to the Company’s long-term

success and the Board was supportive of putting in place actions to improve engagement.

b) The interests of the

company’s employees

• The Board reviewed the EOS results which showed an overall decline in engagement of 7%.

Although this is typical for a Group undergoing such a significant amount of change, the

Board agreed the root causes of this decline needed to be identified and improved upon.

• A programme of workshops and round tables was conducted which identified where

we could do better. This included completing more actions and increasing the level of

communication on progress against the actions.

• The Board determined a limited number of actions for the Group, SBUs, sites and departments

to focus on ensuring actions are achievable and easy to communicate to employees.

f) The need to act fairly

between members of

the company

• The Board was particularly interested in the scoring of the engagement survey broken down

by gender. Women at shop floor level were happier than men, but at a more senior level

women were unhappier than men. As a result, the HR team was asked to lead a workshop

with senior women to understand the reasons behind this. A female leadership employee

resource group (ERG) has since been founded to ensure this group has the opportunity and

channel to raise concerns and improvement suggestions to the Executive Committee and

the Board.

Outcomes The Board approved four high level objectives that were considered to have the largest impact on engagement:

1)development of a learning and development programme linked to career progression; 2) improvements to the Group

recognition programme; 3) enhancements to Paid Time Off (PTO) allowances in the US; and 4) a bonus programme for

production employees, read more on page 53.

Avon Technologies plc Annual Report and Accounts 2024

Board decision Section 172 factors Key factors considered

Team Wendy site

optimisation: The

Board approved

the transfer of

the remaining

manufacturing at

the Irvine site to

Cleveland and Salem,

which involved

the consolidation

of our helmet

manufacturing sites

from three into two

and will involve the

closure of the Irvine

site during 2025.

a) The likely long-term

consequences of

the decision

• Site optimisation is a key pillar of the Transform element of our STAR strategy. The consolidation

is expected to significantly reduce operational costs, increase production efficiency, and

streamline logistics across the remaining two sites.

• While this decision involves the closure of one site, the long-term impact will strengthen our

ability to invest in innovation quality and sustainability initiatives, positioning the Company

for future growth.

b) The interests of the

company’s employees

• The wellbeing of our employees, particularly at the closing Irvine site, was a primary

objective which the Board was keen to understand and support. Retention packages for all

Irvine employees were included in the project budget and have since been rolled out.

• The Team Wendy leadership team engaged at an early stage with impacted employees to

explain the decision and confirm the support available. Some employees have been given

the opportunity to relocate to Cleveland and all employees have been offered training and

development as an additional retention incentive, to improve their chances of securing

employment after the site closes in 2025.

c) The need to foster

business relationships

with suppliers, customers

and others

• The Board noted the plan to work closely with our customers to ensure that the transition

would not impact quality or delivery. Customers are expected to benefit from improved lead

times and more consistent product quality.

• The Board considered the impact on new and existing supplier relationships and the need

to communicate appropriately to ensure minimal disruption. The consolidation of operations

is expected to enhance relationships with key partners, providing more predictable demand

and stronger collaboration. There are no changes to suppliers as a result of the project.

d) The impact of the

company’s operations on

the community and the

environment

• The Board acknowledged the potential negative impact that the closure of the site may

have on the local community in Irvine. Set against this was the benefit of increased

investment in the remaining sites, particularly Cleveland where local jobs are being created

in a deprived area of the city which has high unemployment.

• The consolidation will reduce the Company’s carbon footprint by centralising operations

across two sites. Not only will two sites need to be run and maintained vs three,

transportation of part finished product between sites will be dramatically reduced, cutting

down on transportation emissions. The project also represents an opportunity to improve

the Cleveland building and manufacturing processes as part of the transfer to reduce

emissions and generate efficiencies.

e) The desirability of the

company maintaining

a reputation for

high standards of

business conduct

• The Board received multiple formal presentations proposing the site optimisation project

before it was approved and has received regular formal written updates direct from Team

Wendy leadership at Board meetings since it commenced. In October 2024 the Board visited

the Cleveland site, toured the facility, met many of the employees implementing the project

and received a detailed presentation on project progress.

Outcome After detailed consideration of both the short and long-term consequences of the decision and the impact on various

stakeholder groups, the Board was comfortable approving the site optimisation project to consolidate the helmet business

from three sites into two.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Corporate Social Responsibility

CORPORATE SOCIAL

RESPONSIBILITY

STRATEGY

VISION

We want Avon to be a positive force for good.

We recognise the benefits that come with delivering a comprehensive

corporate social responsibility (CSR) strategy to our employees, customers

and communities in which we operate. CSR can generate value for all our

stakeholders – if we do it with purpose.

MISSION

To inspire small actions which, together, make a meaningful difference.

Our CSR strategy can generate lasting impact if we embed it into the way

we do things. Encouraging small steps helps generate habit. Over the

coming year embedding a culture of continuous improvement will be

a key lever to engaging employees in CSR as it empowers employees to

make improvements to their everyday.

OUR APPROACH

We regularly review our CSR strategy and its relevance to our key

stakeholders. During FY22 we undertook a materiality assessment to

identify material environmental, social and governance issues to help in

the development of our strategy. Visit our website for more information

where you can find details on our approach to materiality and our

materiality matrix in greater detail. This year we have reframed our strategy,

to be more engaging for our employees, recognising the important part

they have to play in the success of our CSR strategy.

Our approach to CSR is focused on three pillars. Within each pillar we have

clear focus areas for the coming years which will help us to achieve our

medium-term targets.

• People: Our people pillar is about ensuring we attract and retain the

very best employees. We have identified three focus areas to work

on which we have identified as important in the motivation and

engagement of our employees.

• Process: Efficient businesses can reduce costs, improve profitability and

generate lasting sustainable processes. A key focus of this pillar will be

continuing to embed the CI mindset across the business to deliver these

incremental improvements which together make us moreefficient.

• Products: Innovation is key to our success. We are focused on

developing products that achieve excellence in customer satisfaction,

meet environmental and social responsibilities, and improve

manufacturing efficiency.

Our pillars are underpinned by governance, which ensures we do business

responsibly and ethically.

Progress

• During 2024 we reframed our CSR strategy to focus more on our

employees and to also align it with the STAR strategy and our

business model.

• The Executive team has identified six focus areas for CSR over the

coming years.

1 2 3 4 5 6

PEOPLE

GOVERNANCE

Conduct business in a responsible and ethical manner

Medium-term targets

PROCESS

PRODUCT

STAR

Academy

Provide

learning and

development

opportunities

Culture

Provide a

safe and

positive work

environment

Community

benefit

Support

community

actions

Product

development

Innovate

to protect

more lives

Quality

Deliver high

quality products

and services

Operating

sustainably

Maximise operational

efficiencies for

environmentalbenefit

• Improve our employee engagement score by 2.5%

year-on-year

• Goal of zero harm

• Undertake diversity, equity and inclusion (DEI) activities

aligned to our Group DEI programme

• Support local community causes

• Reduce scrap by 60% by 2027

• Improve revenue per square

foot by 50% by 2027

• Reduce scope 1 and 2

carbon emissions by

25% by 2028

• Screen our top 40 suppliers

against sustainability

criteria by 2025

• Attain 4–7% R&D expenditure yearly

• Increase revenue from new products

Avon Technologies plc Annual Report and Accounts 2024

• We undertook our first assessment of social value which has helped us

recognise opportunities for improvement. The consideration of social

value to help us maximise value to all stakeholders is now a key element

within our CSR strategy which helps us do things with greater purpose.

• We have made great progress towards our carbon emissions target and

have identified further strategic priorities in the short term which will

support us on our net zero journey.

SOCIAL VALUE

Social value is the long-term, sustainable improvement for

society thatcan be gained by promoting positive social,

economic and environmental impact. By understanding the

relative importance people place on this, we can ensure the

decisions we make generate lasting positive impacts for our

employees, communities and environments.

Our vision is to be a positive force for good, where we seek to optimise

the value of our work for our stakeholders, and we do this by embedding

social value considerations throughout our sustainability strategy.

Our social value approach is employee-led through employee committees

and ERGs. Their role is to identify causes and associated partnerships

where we can have the greatest positive impact.

Our charitable giving programme is a key social value activity which

engages our employees and community; we hope to develop this further

over the coming year.

United Nations Sustainable Development

Goals (UN SDGs)

The UN SDGs are a collection of 17 global objectives adopted by the

United Nations in 2015 to eradicate poverty, protect the planet and build

a peaceful and prosperous world. We continue to contribute to the UN

SDGs through our approach to CSR and have identified four UN SDGs

which closely align with the objectives of our strategy and social value

consideration. These have been identified by reviewing the underlying UN

SDGs targets against our own.

Decent work and economic wealth: We are working

towards a comprehensive learning and development

programme built around CI, allowing fundamental skills

in resource efficiency to be developed at all levels of

the business.

Industry innovation and infrastructure: We are

consolidating operations through our footprint optimisation

workstream which aims to transform our manufacturing

output and reduce inefficiencies.

Responsible consumption and production: This forms

part of our operational excellence workstream, with a focus

on building in incremental improvements, making us more

efficient and reducing waste in all its forms.

Climate action: This focuses on making progress on our net

zero commitment and supplier engagement and developing

our understanding of climate-related risk.

13 teams, representing the explosive ordnance disposal community,

veterans, defence contractors and local businesses, took part in the event

which raised a total of £20,000 for the Felix Fund.

Our Avon Protection crew led by Rob Midgley, Continuous Improvement

Leader, competed in knock-out heats. Even with challenging weather

conditions the team went on to secure third place.

The Felix Fund aims to assist with the wellbeing of individuals within

the explosive ordnance disposal community across all British military by

providing welfare support and financial assistance to serving personnel,

veterans and their dependants.

CASE STUDY

FELIX FUND CHARITY BOAT RACE

In July, Avon Protection entered a team of 11

employees in a charity boat race, an opportunity

for us to support a military cause whilst engaging

our employees, customers and communities.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

PEOPLE

Our people pillar is about ensuring we attract

and retain the very best employees. We have

established three focus areas to work on

which we have identified as important in the

motivation and engagement of our employees.

STAR ACADEMY

We believe our employees thrive when they can work on their

personal development and enhance their skill set. We recognise

it’s important to provide a combination of on-the-job training,

self-led learning and live training sessions.

Our Global Performance Management Process ensures employees’ career

aspirations and development needs are being discussed and reviewed

quarterly. It also ensures all employees are working towards objectives and

key results aligned with our strategy.

We offer early careers opportunities, giving those at the beginning of their

career journey help and support that they need to establish a successful

and fulfilling career through work experience, internships, placement years,

apprenticeships and graduate programmes.

For individuals looking to take the next steps in their career we run an

annual professional development programme.

In 2023 our mentoring programme was developed following feedback

that employees wanted to see more career development opportunities.

The programme is open to all and ensures mentoring is taking place at all

levels of the business.

In FY25 we plan on launching Star Academy a learning development

programme that will help us teach people how to improve processes

through CI.

WE RUN TWO FLAGSHIP YEAR-LONG

DEVELOPMENTPROGRAMMES:

• The Professional Development Programme (PDP), which aims

to identify and support the next generation of internal talent

to contribute to the business beyond the scope of their current

roles. Participants set personal development targets and work

with a mentor from our leadership team, who is a source of

advice during the year.

• The mentoring programme, which connects a mentee with a

mentor, who can support their development and provide advice

to work towards their career aims; this is open to all employees.

employees on our PDP

employees on our

mentoring programme

INTRODUCTION

Medium-term

targets How we measure

FY24

performance

Progress

made

against

target

Improve our

employee

engagement

score by 2.5%

year on year

Change in EOS

favourability score for

engagement against

prior year

-7%

We anticipated a lower engagement score due to the

high levels of restructuring that occurred around the

EOS launch. We have refocused our CSR strategy on our

people to help address this going into FY25.

Support local

community

causes

Total charitable donations

$108.5k

During the year we supported local causes, nominated

by employees, with the help of our employee-led

committees.

Goal

of zero harm

Lost time incidents per

1,000 employees

Safety has been reinforced with the introduction of the

SQDIP daily management tool and improved reporting.

Undertake

DEI activities

aligned to our

Group DEI

programme

Number of DEI activities

We completed two Company-wide webinars on DEI-

related issues. Developing our DEI programme is a key

focus area for next year.

YEAR AHEAD FOCUS AREAS

• Launch STAR Academy, our new learning and

development programme.

• Review our community programme to increase

employee engagement and opportunities for strategic

partnerships.

• Improve our employee engagement and channels

for feedback.

LINK TO UN SDGs

Corporate Social Responsibility continued

Avon Technologies plc Annual Report and Accounts 2024

In support of this, our colleagues in the UK had a selection of

wellbeing activities to take part in during the week including

the outdoor space hopper challenge, meditation, fresh fruit

giveaways and origami. Activities encompassed the key pillars

mental health: nutrition, sleep, exercise, relaxation and connection.

CULTURE

Values

Our core values are the things that are most important to us as a business

and as individuals: the behaviours we want to encourage, the standards

we hold ourselves to and the characteristics we display when we’re at

our best. In 2023 we launched our new vision, mission and FIERCE values

which were developed with inputs from employee feedback.

Health and safety

Our goal is zero harm and we actively promote a safety culture. We have

mandatory training and policies in place for all production employees on

workplace safety and provide safety and environmental training tailored to

their specific roles.

In 2024, we relaunched new operational metrics linked to our vision.

They recognise everyone’s responsibility for SQDIP. The order of SQDIP

is important because it is the order of our priorities, safety being

number one.

We enhanced the reporting of safety and established key performance

indicators which each site reports against monthly to allow greater insight

and comparability of safety data across our business.

The table below shows the Group’s observations, lost time incidents and

lost time injury rate. We place importance on observation and near miss

reporting to prevent accidents and encourage employees to report unsafe

incidents. We use observation cards to report safety and environmental

issues; these issues are then fixed (Find, It Fix It). During the year we

implemented a barcode system at one site which enables observations

tobe reported via computers, mobiles and kiosks; this has proven to be

afast, easy way to collect feedback from employees in real time.

In 2024, there were no work-related employee or contractor fatalities and

no major injuries (serious/life changing).

2024

Observation/near miss

934

Lost time incidents

1. Observation/near miss – includes suggestions made by employees that are fixed or a work-

related incident with no injury or illness occurs, but which has the potential to cause these.

2. Lost time incidents – an injury sustained by an employee that results in them being unable

to perform their regular duties, leading to them missing at least one full day (or shift) of work

following the day of the injury.

Wellbeing

The health and wellbeing of our employees is important to us and

throughout the year we share resources with them on how to look after their

mental and physical wellbeing. This year we ran a menopause awareness

campaign across the Group and launched the campaign with a Company-

wide webinar, ‘Let’s talk about menopause’, ran by a guest speaker.

Employee feedback is important to us as we continue to develop our

wellbeing offering. We have an employee-led resource group focused

on mental health wellness that makes recommendations and supports

site activities to raise awareness. The Mental Health Ally Network is

comprised of dedicated individuals from across all our sites. They are also

trained employees who have volunteered to be available to anyone in the

organisation who would like a confidential one-to-one conversation.

Mental Health Allies are familiar with policies and procedures and signpost

those who need it to further resources within and outside our business.

CASE STUDY

MENTAL HEALTH

AWARENESSWEEK

This year the theme of mental health

awareness week was ‘movement’, which

helps raise awareness of the benefits of

physical exercise and time outdoors on

mental wellbeing and happiness.

The production bonus was developed as part of our commitment

to building a culture of recognition, excellence and continuous

improvement. By aligning rewards with key business outcomes

– such as waste reduction and productivity increases – we aim

to empower every employee to contribute to the success of the

Company and foster a sense of ownership and involvement in the

Company’s growth.

The bonus programme is designed to reward actions, ideas

and initiatives that contribute to continuous improvement,

particularly through methodologies like Kaizen. Every member

of our production team can have a real impact on operational

objectives, and will share in the success.

CASE STUDY

INTRODUCING A PRODUCTION

BONUS TO DRIVE CONTINUOUS

IMPROVEMENT AND RECOGNITION

During FY24, we introduced a new

production bonus designed to reward

production employees for their contributions

to improving operational efficiency and

reducing scrap. We believe that when our

operations succeed, all employees should

share in thoseachievements.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

CULTURE CONTINUED

Wellbeing continued

Employees also enjoy participating in sports activities and events

supported by Avon. For example, this is the third year employees have

taken part in the Cleveland Corporate Challenge. Through this they have

entered numerous team events, such as softball, volleyball and races. We

have also partnered with local sports facilities to offer employees crossfit,

badminton, football and discounted gym membership.

Diversity, equity and inclusion

We are committed to the fair treatment and full participation of all people

and recognise diversity provides a better culture for all. The Group’s Code of

Conduct sets out our expected behaviours including our zero tolerance of

harassment, bullying or discrimination in any form, our human rights policy

and our processes for raising concerns. We conduct mandatory training on

the Code of Conduct annually.

During 2024 we continued to make progress on addressing gender

diversity, reaffirming our pledge to improve the balance of female to male

employees. We relaunched our female leadership employee-led resource

group (ERG) which provides a platform for female leaders within our

organisation to discuss pertinent issues, network and foster personal and

professional development.

This year we celebrated International Women’s Day with a Company-wide

presentation exploring the theme ‘equality vs equity’. We were joined by

guest speakers from Forces Wives Challenge, who took part in the ‘Ride

to Freedom’ expedition, which we sponsored last year. One of the first

speakers from the Forces Wives Challenge, Steph, was the first wheelchair

user to horse ride across the Pyrenees. This helped to start conversations

around disability awareness.

We recognise the opportunity to expand our focus beyond just gender and

have been working with a DEI expert to assess our next steps. In 2025, we

plan to launch a DEI programme and undertake further DEI activities.

Our US sites report equal employment opportunities data annually to the US

Government and to the State of California under pay equity requirements.

Affirmative action plans are also in place which outline goals for women and

minorities, veterans and people with disabilities by establishment.

In accordance with the Equality Act 2010 (Gender Pay Gap Information)

Regulations 2017, Avon publishes its Gender Pay Report. In 2024 we

reported an increase in the gender pay gap for UK employees from 36.4%

in 2023 to 45.9%. The primary driver behind the gender pay gap is the

relatively small proportion of women among our senior employees.

Gender pay gap: difference in hourly rate pay

Mean

45.9%

2024

36.4%

2023

Median

23.3%

2024

19.6%

2023

Employee engagement

Maintaining high levels of communication with all employees is a focus

across the Group. Throughout the year our Executive Committee has

regularly visited all sites and hosted townhalls to provide an update on

performance, strategy and future focus areas.

In 2024, 84% of employees took part in our annual Employee Opinion

Survey (EOS), up 10% from 2023. The survey provides employees with the

opportunity to provide anonymous feedback and suggest improvements

on aspects such as leadership, communication, employee engagement,

team culture and the work environment.

Proportion of men and women within each quartile

(by hourly rate)

100

LMQ

UPQ

LMQ

UPQ

65.8

42.1

46.1

19.7

57.1

37.1

35.7

20.0

2024 2023

1. Lower quartile. 2. Lower middle quartile.

3. Upper middle quartile. 4. Upper quartile.

Male Female

Read more about our gender pay gap data on our website

Corporate Social Responsibility continued

PEOPLE CONTINUED

The table below shows the Group’s Board, Executive Committee

and operational management by gender. Across all employees,

we have achieved a ratio of 44% female representation (401

female; 514 male). Female representation across our Executive

Committee has improved with the appointment of three females.

Female representation in direct reports is 27% which we are

committed to improving in the future.

Male Female

All employees 56% 44%

Leadership team which reports

directly to the Executive team 73% 27%

Executive team 63% 37%

Board 67% 33%

Above: The Cleveland Corporate Challenge is an athletic competition

promoting employee wellness; the winning teamsgetdonations to their

chosen local charity.

Avon Technologies plc Annual Report and Accounts 2024

Using Avon Protection’s expertise in rubber compound, she

has been able to develop specialised racing gloves that meet

her unique requirements. We were also able to provide Mel

with a donation, through our charitable giving programme,

to go towards equipment in preparation for Paris.

AMAZING EMPLOYEE ACHIEVEMENTS

OVER THE YEAR!

$108.5k

Our total charitable giving programme and corporate

donations in 2024

50+

Unique charities and community causes supported by

our charitable giving programme

40%

Over 40% of our donations this year have gone to

causes that support armed forces andveterans

CASE STUDY

MELISSA NICHOLLS

During the year Avon Protection has been

supporting Melissa Nicholls in her journey

totheParalympics.

Results from these surveys are presented to the leadership teams to enable

the teams to develop Group, SBU, department and site-level actions.

Throughout the process we give feedback to employees.

The Group’s overall engagement score was 60%, which was a decrease

against last year’s score of 67%. In response to this we have introduced

Coffee Talks at low scoring sites as an opportunity to voice concerns and

ask questions to our leadership in an informal setting. These encourage

open dialogue to gather valuable employee feedback, to supplement our

annual EOS to ensure we stay on track with implementing our actions.

COMMUNITY BENEFIT

Across our sites, our employees demonstrate incredible

generosity and dedication to making an impact in our local

communities. Throughout the year our employees have taken

part in sporting fundraisers, organised community events,

supported food collections and attended career days. We

support employees who contribute to community initiatives

and have a charitable giving programme in place through

which employees can request donations or match funding.

Thisprogramme enables us to provide donations to local

causes that matter to our employees.

During the year we made a corporate donation to Team Forces Foundation,

a charity that provides financial grants to help make sport and adventure

more accessible to those who serve in the British Armed Forces and is

endorsed by the MOD. As a bronze sponsor we support it in its mission to

improve the lived experience for the armed forces community through the

power of sport, challenge and adventure. In 2025 we plan on seeking further

opportunities to partner with stakeholders for greater social value.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

PROCESS

Efficient businesses can reduce costs, improve

profitability and generate lasting sustainable

processes. A key focus of this pillar will

be continuing to embed the continuous

improvement mindset across the business

to deliver these incremental improvements

which together make us more efficient.

CONTINUOUS IMPROVEMENT

During 2024 we have been building continuous improvement

into everyday culture and everything we do. This is a core

element of our STAR strategy and key to the delivery of many of

our targets including our GHG emissions target in the delivery

of carbon emission reductions. Our aim is to empower every

employee, across functions and at every grade, to consider

small incremental or transformative improvements to their

everyday. We plan to further encourage this behaviour through

the STAR Academy, our learning and development programme

and reward and recognition programme.

If we truly embed a CI enterprise we will nurture a culture where everyone

is accountable for SQDIP. We can also generate benefits that will make our

business stronger for the future and improve our CSR performance by:

• providing training opportunities linked to career development;

• increasing job satisfaction and employee engagement;

• ensuring a positive, safe work environment for all;

• reducing environmental impact through improved use of resources; and

• encouraging collaboration with suppliers and customers which

generate improvements across our value chain.

Net zero journey

In 2021 we committed to being net zero by 2045 by achieving an absolute

reduction in scope 1 and 2 carbon emissions. We have since reaffirmed

this commitment with a short-term target to reduce our scope 1 and 2

carbon emissions by 25% by 2028 (as a percentage of revenue) against a

baseline of 2023. In 2024 we reviewed our carbon reduction plans in all

our manufacturing sites to achieve our target and to align them with our

five-year planning process.

Our strategy is to reduce our carbon emissions by improving efficiency.

We plan on meeting our short-term carbon emissions target through the

following activities:

• We will generate scope 1 and 2 reductions by reducing heating, cooling

and lighting by optimising our footprint and consolidating sites. We also

anticipate scope 3 reductions by reducing intercompany business travel

and transportation.

• We will generate scope 1 and 2 emission improvements through facility

and equipment upgrades that make them more efficient.

• We will promote a culture of continuous improvement and undertake

regular Kaizens at each of our sites to help identify further opportunities

to generate improvement through efficiencies.

• We will monitor the market for emerging technologies and related

investment cases for renewable alternatives to support scope 1 and 2

emission reductions.

INTRODUCTION

Medium-term

targets How we measure

FY24

performance

Progress

made

against

target

Reduce

scrap by

60% by 2027

Reduction in scrap (as a

percentage of revenue)

against 2023 baseline

54%

Throughout the year we have seen significantly lower

scrap costs, which has been supported by increased

monitoring and tracking of scrap across our sites.

Reduce

carbon

emissions

by 25% by

2028 (as a

percentage

of revenue)

Reduction in scope 1

and 2 carbon emissions

against 2023 baseline

25%

Positively impacted by footprint optimisation activities.

Changes made this year are expected to be fully

realised in FY25 and support us on our net zero journey.

Improve

revenue

per sq ft by

50% by 2027

Increase in revenue

per sq ft against

2023 baseline

17%

We closed the Cadillac warehouse during the year and

have been preparing for the closure of Irvine in FY25.

Screen

our top 40

suppliers

against

sustainability

criteria

by 2025

Percentage of top

40 suppliers that

have responded

33%

During the year we launched our sustainability survey

within Avon Protection suppliers. We plan to launch

with Team Wendy later in the year.

YEAR AHEAD FOCUS AREAS

• Complete the closure of Irvine

• Reduce emissions and scrap through CI

LINK TO UN SDGS

Corporate Social Responsibility continued

Avon Technologies plc Annual Report and Accounts 2024

CERTIFICATION

We use environmental management systems

to monitor, control and continuously improve

environmental performance across our sites.

During the year we commended our teams on sustaining ISO

14001 accreditation, something that we have achieved at three of

our five sites. This achievement demonstrates that management

and employees remain engaged on implementing and

maintaining best environmental practices.

Initiatives in 2024

During 2024 we have made excellent progress on our carbon emission

target and achieved a 15% absolute reduction in scope 1 and 2 emissions

(location) against 2023 by pursuing energy efficiencies across our business.

1) We have consolidated equipment from Irvine into Cleveland and Salem

as we steadily wind down production in Irvine.

2) We have removed autoclaves associated with legacy business processes,

which has resulted in reductions in natural gas use.

3) We have improved power factor correction capabilities to reduce load

demand on power supply and increase efficiency.

4) We have purchased a hybrid company car and installed electric vehicle

charging points, available for employees to use.

5) Kaizens have continued at all sites throughout the year which are likely

to have resulted in additional energy consumption improvements by

eliminating waste in all its forms.

6) We have completed LED lighting upgrades in Cleveland.

7) We have installed upgrades to heaters in our UK meeting rooms to

reduce energy use while rooms are not in use.

Energy use and carbon disclosures

A representative at each of our sites has responsibility for the reporting of

energy use throughout the year. The monthly collection of data allows us

to monitor and report on carbon emissions.

Our energy consumption in FY24 was 8,424 MWh; of this, the UK accounted

for 38% of global energy use. This year we are reporting a 19% decrease in

the Group’s energy use.

In FY24, we reported that our carbon emissions amount to 5,928 tonnes

e (location-based); of this, the UK accounted for 28%. We achieved a

15% reduction in location-based scope 1 and 2 emissions. Our market-

based scope 2 emissions reflect the impact of our sourcing decisions.

With a revenue of $275m our emissions intensity figure has reduced

by 25% from 28.7 tonnes CO

e per $m of revenue (for scope 1 and 2

emissions) to21.6 tonnes CO

Greenhouse gas emission date (Tonnes CO

FY24 FY23 FY22

Scope 1

UK 793 942 905

Outside UK 1,172 1,418 1,120

Total 1,965 2,360 2,025

Scope 2 (location)

UK 869 1,280 1,294

Outside UK 3,094 3,347 3,129

Total 3,963 4,627 4,423

Scope 2 (market)

UK 1,099 1,366 1,465

Outside UK 2,716 3,173 3,139

Total 3,815 4,539 4,604

Total gross scope 1 and 2

(location)

UK 1,662 2,221 2,199

Outside UK 4,266 4,765 4,249

Total 5,928 6,986 6,448

Intensity measure

Tonnes CO

e (scope 1 and 2

location based) per £m of

revenue 21.6 28.7 24.5

Energy consumption scope

1and 2 (MWh)

UK 8,424 11,393 11,648

Outside UK 13,472 15,665 13,764

Total 21,896 27,058 25,412

1. Market-based emission factors only include CO

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

CONTINUOUS IMPROVEMENT

CONTINUED

Corporate Social Responsibility continued

Scope 3 emissions

In FY23, we assessed the most relevant and influenceable elements of

our scope 3 emissions. We conducted a screening exercise, considering

factors such as ability to influence, anticipated size, sector guidance and

data accessibility, which identified several exclusions not relevant to our

business model: category 14 franchises and category 15 investment. We

identified categories which were not expected to significantly contribute

to total scope 3 emissions, where reporting would be impractical and

difficult to calculate: category 10 processing of sold products, category

11 use of sold products and category 12 end of life treatment of

soldproducts.

Based on this work and the use of EEIO modelling, purchased goods are

understood to be the largest contributor to our footprint. We will work

towards improving our disclosure of material scope 3 categories and will

disclose this in full by 2025.

In 2024, we have expanded the collection of a subset of scope 3 emissions

to include emissions from waste generated in operations.

Category (tonnes COe) 2024 2023 2022

Fuel and energy-related activities

1,533 1,768 1,766

Waste generated in operations

144 – –

Business travel

910 1,207 382

Total 2,587 2,975 2,148

1. Fuel and energy-related activities (average data method) – calculated using natural gas,

electricity and fuel consumption collected in scope.

2. Waste generated in operations (waste type-specific method) – using invoices and

consignment notes for waste and water.

3. Business travel data (distance-based method) – calculated using distance and class reported

by our travel management companies for air only.

For more information, please see our methodology statement available on

our website

Environmental data

During 2023 we centralised the reporting of water and waste, allowing

us to report on Group totals for the period 1 October to 30 September.

We are now able to report on total annual waste produced from all

our manufacturing sites, starting with FY24 . Each site is responsible for

updating this information monthly.

FY24 FY23

Water usage (m

)

15,174 22,452

Total waste (tonnes)

941 578

1,2

Hazardous waste (tonnes) 36 37

1. Includes data from two manufacturing sites.

2. Restated to include weight from hazardous waste disposal in our UK facility.

3. This figure excludes our Salem facility where the data is not available but considered small.

4. Total waste includes the reported production and non-production-related hazardous and

non-hazardous materials that are sent off site for disposal, treatment, reprocessing, recycling or

reuse by others. Only solid waste is taken into consideration.

PROCESS CONTINUED

METHODOLOGY

Data has been compiled according to the ‘operational

control’ approach in the Greenhouse Gas Protocol

Corporate Accounting and Reporting Standard and

aligns to Streamlined Energy and Carbon Reporting.

Data covers a 12-month period in line with our financial

reporting period from 1 October to 30 September.

Overall consumption has been calculated using invoice data

for the reporting period. Estimated data is used where invoice

data is not available within the timeline for consolidation of year

end data. One small office uses estimated emissions based on

Carbon Risk Real Estate Monitor data for heating and electricity

consumption per square foot.

Emissions factors for most of scope 1 and 2 (UK only) have been

calculated using 2022, 2023 and 2024 UK Government carbon

Conversion Factors, and methodologies published by the

Department for Business, Energy and Industrial Strategy. The most

up-to-date EPA eGRID conversions are used for US electricity. For

2024 reporting the most recent electricity US factors are 2022.

We have applied the carbon protocol data hierarchy to the

market-based method. We have obtained emissions factors for

the relevant tariff and/or supplier for the applicable year. If sites

consume carbon-free electricity this has been applied to the

calculations. Where these are not available in the US, we use the

US Green-e Energy Residual Mix Emissions Rate or location-based

emission factors in the absence of contractual information.

The carbon-free generated energy is verified via emission-free

energy certificates. The certificates are managed and cleared by

third party PJM Environmental Information Services’ Generation

Attribute Tracking System. They ensure veracity by creating

standards which verify no double selling of the same certificate.

Avon Technologies has purchased certificates to cover 100% load

at one location which started in June 2023.

Scope 1 and 2 sources (location based) have been divided by the

annual revenue to provide the intensity ratio (tCO

e per $m).

Avon Technologies plc Annual Report and Accounts 2024

14%

Percentage of total electricity purchased during 2024

that was low emission

32%

Reduction in water usage

7,280 m

Reduced water usage

Environmental incidents as defined by the UK or US

environment agencies at any of our sites or in relation

to our supply chain

Water usage

We collect this information from invoices and meter readings for the

supply of municipal and drinking water. Water usage is limited to mainly

domestic use, for drinking, sanitary disposal and landscaping and this year

we can report that across four manufacturing sites we used 15,174m

water. We have reduced our water usage at several sites; at one site we

reduced water usage through the introduction of a new irrigation line.

In FY23 we identified a water leak at our Irvine facility through regular

monitoring; after fixing this we have seen the water usage half.

Where water discharges do occur due to product testing, they are

disposed of in line with local government procedures.

Waste

We monitor different waste streams by destination for all manufacturing

sites. This year we can report across five manufacturing sites that we

disposed of 941 tonnes of waste.

During the year continuous improvement has helped us to become more

efficient with the resources we use and reduce waste in all its forms.

Undertaking frequent Kaizens has helped us to improve our operational

KPIs including to reduce scrap rate. It has also helped us to identify

opportunities to reduce and reuse packaging.

We continue to work with our waste carriers to understand our waste

disposal opportunities and improve our assessment of associated

carbonemissions.

Any hazardous waste generated, as defined by the Control of Substances

Hazardous to Health and US Environmental Protection Agency, is disposed

of in line with local guidelines.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

PRODUCT

Innovation is key to our success.

We are focused on developing products that

achieve excellence in customer satisfaction,

meet environmental and social responsibilities,

and improve manufacturing efficiency.

PRODUCT DEVELOPMENT

We develop mission-critical personal protection which protects

and ensures the safety of the end user in extreme and harsh

environments. We protect those who protect us, including

special forces, soldiers, first responders and civilians, with our

innovative solutions.

Innovation is a key element of our STAR strategy and we drive it through

our Revolutionise strategic priority. By being innovative we ensure the

long-term future of the Group by developing new and enhanced products

to deliver growth and continue to meet the stringent requirements that

our customers expect from us.

We use the new product introduction process (NPI) as a framework

tohelp us streamline the different stages of product development;

wearecurrently revamping our existing process.

INTRODUCTION

Medium-term

targets How we measure

FY24

performance

Progress

made

against

target

Attain 4–7%

R&D

expenditure

year on year

R&D expenditure as a

percentage of revenue

Stayed on track throughout the year.

Increase

revenue from

new products

Number of new

product launches

Limited new product launches this year which includes

the EPIC ballistic helmet range, nape guard and face

shield. Launching MITR and RifleTech in January 2025,

which will progress this target.

YEAR AHEAD FOCUS AREAS

• Rolling out NPI more broadly in 2025

• Holding QFD training across engineering, design

andproduct management

LINK TO UN SDGs

CASE STUDY

ESTABLISHING A ROBUST

NPIPROCESS

Within our engineering excellence

workstream we have created a new Group

project to revamp the following processes

as part of new product introduction (NPI):

1) Front End of Innovation (FEI) in the early

screening and refining of new product

concepts; 2) Quality Functional Deployment

(QFD) to ensure we’re focused on customer

needs; and 3) Design for Manufacture (DFM)

to ensure that new products are ready to be

scaled and produced efficiently.

In total our NPI framework is made up of seven stages; Envision,

Explore, Frame, Develop, Scale, Launch, and Continuous

ProductImprovement.

The first three stages are included in the FEI process, demonstrated

to build an effective innovation funnel. In total our NPI framework

is made up of seven stages: Envision, Explore, Frame, Develop,

Scale, Launch and Continuous Product Improvement. Together,

these stages will deliver products that align with our strategic

priorities, serve attractive markets and provide strong competitive

advantages. On leaving the Frame stage to enter stage 4, Develop,

each programme will be well validated and have a clear justification

and scope, enabling the Develop stage to deliver it to the market

rapidly. This stage will also incorporate QFD and DFM principles that

will streamline the efforts into the next stages of Scale and Launch,

ensuring a smooth transition into production. Lastly, a final stage of

Continuous Product Improvement will focus on lean principles and

utilise a Kaizen funnel to keep innovating, both in product features

and manufacturing processes, to maintain leadership in the market.

Critically, the NPI process will be cross-functional from the

earlieststages. This will ensure alignment of the full organisation

todeliver products that achieve excellence in customer

satisfaction,environmental and social responsibilities, and

manufacturing efficiency.

The FEI stages are currently running in a pilot form and we will be

rolling them out more broadly in 2025 which will be accompanied

by employee training. We aim to assess the process so it can be

refined and formalised into our ISO 9001 procedures.

Corporate Social Responsibility continued

Avon Technologies plc Annual Report and Accounts 2024

QUALITY

Product safety and quality are at the core of all our business

practices. We have put in place a variety of tools to prevent,

detect and manage quality issues including internal quality

audits, supplier audits, root cause analysis and our ISO

9001:2015 certified quality management system (QMS), which

we are certified to at all five manufacturing sites. We also

expect suppliers to meet minimum requirements in

qualitymanagement.

Many of our products are approved to customer industry safety standards

which involves rigorous testing such as NIOSH and CE. Our production

employees receive mandatory product safety training, and all our products

undergo internal safety and quality testing programmes. Where standards

require, external safety audits are conducted on our products.

Customer feedback

We maintain close relationships with customers and receive feedback from

them throughout the product development process. We use feedback to

understand customers’ future requirements and ensure these are factored

into the design of the product. We use multiple channels to receive

feedback from our customers including voice of customer, user testing

and feedback forums.

CASE STUDY

TRANSFORMING USER

FEEDBACK INTO INNOVATION

In its goal to create products from the

outside in, Team Wendy has initiated

official voice of customer (VOC) sessions

for upcoming products, involving end

users who utilise our products daily.

Collaborating with over a dozen end

users, Team Wendy facilitated the use

of its products during field operations

and training exercises to gather crucial

insights for future product development.

Once the end user tested the product, they were asked to fill out a

questionnaire that was shared with the broader engineering team.

The valuable feedback obtained from these VOC sessions will play

a pivotal role in guiding Team Wendy’s engineering team to create

products that precisely cater to the needs of the end users, thereby

enhancing their safety and wellbeing.

100%

of our sites are ISO 9001:2015 certified

Launched

e-commerce

Avon Protection launched a number of products and

accessories to the US civilian market

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

GOVERNANCE

Our pillars are underpinned by governance,

which ensures we do business responsibly

and ethically.

Code of Conduct

Our Code of Conduct (‘the Code’) is a Company-wide policy that defines

the standards of behaviour for everyone who acts for or on behalf of Avon.

The Code requires all our representatives to comply with the laws and

regulations in the countries in which we operate. This Code is subject to

periodic review. This year we refreshed the Code and this will be included

in our upcoming mandatory employee training. We understand that

implementing the Code across all the markets we do business in can

be challenging given the potentially complex differences. We therefore

assess and manage any risks and the processes behind these to ensure

we maintain the highest ethical standards. To support employees, we

have launched annual Code of Conduct training to raise awareness and

cover key areas of the Code such as protecting and handling Company

resources, conflicts of interest and bribery, diversity and inclusion and

being alert to unsafe scenarios. We encourage everyone to report any

behaviour which may be a breach of the Code, or is unethical or illegal,

through our confidential ‘Speak Up’ system.

To ensure we only work with third parties whose standards are consistent

with our own, all agents and distributors are obliged by written agreement

to comply with the standards set out in the Code.

Read more about our Code of Conduct on our website

Anti-bribery and corruption

We take a zero-tolerance approach to bribery and corruption and are

committed to acting with integrity in all our business dealings and

relationships. We are committed to conducting business fairly, impartially

and in compliance with local laws and regulations and to acting with

integrity and honesty in our business relationships. Our anti-bribery and

corruption policy sets out our responsibilities, and for those working for us,

it provides guidance on recognising and dealing with common situations

where bribery and corruption can arise.

During 2024 we launched mandatory anti-bribery and corruption

trainingand sought to raise awareness of the risks and consequences

of non-compliance. Additionally, we strengthened our due diligence

processes for all intermediaries and strengthened the anti-bribery and

anti-corruption provisions in our contracts.

Human rights and modern slavery

We are fully committed to respecting the human rights of all those

working with or for us. We do not accept any form of child forced labour

and we will not do business with any party who fails to uphold these

standards. We are committed to ensuring slavery and human trafficking

do not exist in either our business operations or our supply chain. We

have a zero-tolerance approach to modern slavery and are committed to

acting with integrity in all business dealings and relationships. Our policies

reinforce this; during the year we have refreshed our Code of Conduct and

Supplier Code of Conduct to include clearer messaging on human rights

and modern slavery.

Find our Modern Slavery Act Statement on our website

Whistleblowing

Ensuring our employees can speak up without fear of retaliation is

vital. We encourage employees to voice concerns when they arise and

communicate a number of different ways for employees to seek help

and raise concerns. Employees can talk to a manager, contact a relevant

supporting function such as local site management where appropriate, or

use our ‘Speak Up’ facility to report anonymously.

The ‘Speak Up’ platform is designed for all employees to report any

behaviour which may be a breach of the Code or our supporting policies,

or is considered unethical or illegal. The Board retains oversight of all

matters raised through Speak Up, with regular reports submitted to the

Audit Committee. All concerns are investigated with the support of local

site management, HR and legal, where appropriate.

Supply chain

During the year we have reviewed and updated our Supplier Code of

Conduct which sets expectations on responsible, ethical and sustainable

behaviour. It defines a minimum set of requirements for our suppliers to

adhere to, including the requirement to have in place an environmental

management system and quality management system. Suppliers who

do not meet the requirements must present plans to do so, and will be

subject to increased auditing.

We encourage suppliers to implement their own code of conduct for their

employees and to cascade this throughout their supply chain. If suppliers

have concerns regarding any matters covered in the Code, we expect

them to bring these to our attention.

Corporate Social Responsibility continued

Avon Technologies plc Annual Report and Accounts 2024

Data and cybersecurity

The risks associated with data privacy and emerging technologies are

increasing every year, which is why data and cybersecurity are critical

pillars of our operations and strategic initiatives.

Our Chief Information Security Officer (CISO) is responsible for our

information security programme of work which has recently transitioned

to the updated version of the National Institute of Standards and

Technology (NIST) Cyber Security Framework 2.0 (CSF). The programme

continues to deliver at a pace that both prioritises current and emerging

risks and considers sustainability of both business processes and their

continued efficiencies. The CSF controls reviews and conducts cyber

risk assessments quarterly, while its supporting policies and procedures

are reviewed at least annually. Our cybersecurity incident response

plan is annually tested with all the required stakeholder participation,

ensuring continuous improvements are made. The plan also considers our

compliance reporting requirements.

Being responsible for the integrity and confidentiality of sensitive

customer information, the programme also ensures existing and new

compliance requirements are met, Cyber Essentials Plus and Cybersecurity

Maturity Model Certification (CMMC 2.0) being the most significant.

Internal and external assessments are conducted on these annually.

In April 2024, the Defense Contract Management Agency (DCMA) and

Defense Industrial Base Cybersecurity Assessment Center (DIBCAC)

performed a high assessment of our systems to verify overall compliance

with the Defense Federal Acquisition Regulation Supplement (DFARS)

clause 252.204-7012, ‘Safeguarding Covered Defense Information and

Cyber Incident Reporting’, and to verify the enterprise implementation

of NIST Special Publication (SP) 800-171. We received a high level of

confidence from the DIBCAC. We remain on schedule to be ready for our

CMMC 2.0 assessment in time for its anticipated inclusion in the awards of

new contracts. The target for CMMC assessment readiness is Spring 2025.

The actual assessment date will be notified by the assessor but is expected

to be in Spring 2025.

The cultural change required to become a more security aware

organisation is taken seriously and supported across the business.

Various awareness campaigns are delivered throughout the year. Annual

mandatory training must also be completed for cybersecurity, critical

information and the Code of Conduct.

The management of third parties who are either the custodians or

service providers of our data is also becoming an increasing focus in our

information risk management processes. Our main providers are now

assessed annually.

SUPPLIER ENGAGEMENT

In 2024 we launched a supplier sustainability

questionnaire to gather enhanced information

on our suppliers’ sustainability performance.

The questionnaire included questions on environmental, social

and governance topics to support the development of our CSR

strategy and set a baseline for future initiatives.

We also used this activity to encourage future collaboration by

asking suppliers to suggest initiatives. In 2025 we plan to review

the responses and engage suppliers on some of these initiatives.

JOSCAR MEMBERSHIP

We are a member of JOSCAR, an accreditation

system which ensures companies only use

products and solutions of the highest quality

and comply with best practices.

This membership is a collaborative tool used by the aerospace,

defence and security industry to act as a single repository for

pre-qualification and compliance information. Using JOSCAR can

determine if a supplier is ‘fit for business’.

Sustainability Steering Committee

The Sustainability Steering Committee chaired by Rich Cashin, CFO, is

comprised of leaders from across the business, including members of

theExecutive Committee, Risk Steering Group and sustainability team.

TheCommittee is responsible for overseeing the delivery of our CSR

strategy and making recommendations to the Board.

The Committee meets quarterly to discuss pertinent environmental, social

and governance risks and opportunities, including those relating to climate

change. This year the Committee reviewed our net zero commitment to

confirm that it remained appropriate and achievable. TheCommittee was

also involved in the reframing of our strategy including the development

of key focus areas for 2025.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

OUR APPROACH TO

THE CLIMATE-RELATED

RISKSANDOPPORTUNITIES

TCFD

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD) REPORT

We recognise that climate change poses a growing challenge to society. As a business we have a responsibility to our

stakeholders to assess the physical and transitional risks and opportunities associated with climate change and where

feasible ensure we are contributing to a low emission society. This is the third year we have used the TCFD framework

to facilitate this assessment and make climate-related financial disclosures.

TCFD COMPLIANCE STATEMENT

In accordance with the Listing Rule 9.8.6 R(8), we confirm Avon

has made climate-related financial disclosures consistent with the

four Task Force on Climate-Related Financial Disclosure (TCFD)

recommendations and 11 recommended disclosures. This includes

consideration of section C of the TCFD Annex entitled ‘Guidance for

all sectors’ excluding full scope 3 disclosure due to limitations in our

data, and we only disclose cross-industry climate-related metrics

that are deemed relevant

; in 2025 we will continue to monitor

the relevance of material cross-industry climate-related metrics

and build capabilities in data collection to enable disclosure of

full scope 3 emissions in our Annual Report for the period ending

30September 2025.

1. We have reviewed the relevance of cross-industry climate-related metric categories

shown in Table A2.1 and concluded that the following are currently not applicable to

our organisation: transition risks, physical risks, climate-related opportunities, capital

deployment and internal carbon prices.

GOVERNANCE

Climate change is embedded into the governance structure of

the Group with distinct reporting and informing pathways

which are described in more detail in the following section.

Board oversight of climate-related risks and opportunities

The Board, working with the Audit Committee, oversees and has overall

responsibility for our Group risk framework including the management of

climate-related risks and opportunities and delivery of our CSR strategy.

Our CFO, Rich Cashin, is the Executive Director with responsibility for overseeing

our CSR strategy across the business, which includes climate-related risks

and opportunities.

The Audit Committee reviews our Group risks and opportunities twice

per year and approves the principal risks presented on pages 70 to 75. This

includes an annual review of our climate-related risks and opportunities

and the Group’s disclosures relating to TCFD.

Once a year the Board is presented with the complete set of emissions

data, performance against targets and proposed changes to our CSR strategy

and targets, where relevant, for review and approval to publishexternally.

Some specific CSR oversight, including climate change, is delegated to

itsCommittees, as follows.

Audit Committee

The Audit Committee is principally responsible for overseeing our

Group risk framework including the effectiveness of the management of

climate-related risks and opportunities.

Remuneration Committee

The Remuneration Committee reviews policies and packages, including

considering the suitability of establishing climate and CSR targets in the

executive remuneration structure.

Management’s role in assessing and managing

climate-related risks and opportunities

Steering Committee

To ensure a centralised approach to CSR a Sustainability Steering

Committee (‘the Steering Committee’) was established in 2022, chaired

by our CFO. The Steering Committee is comprised of leaders from

across the business, including members of the Executive Committee,

Risk Steering Group and sustainability team, and has oversight of all CSR

activities including managing and assessing climate-related risks and

opportunities. The Steering Committee is responsible for: overseeing the

delivery of a CSR strategy (which is the organisational structure that hosts

our climate related activities); making recommendations to the Board and

Board Committees; and communicating with the Board, its Committees

and management teams to ensure they are updated regularly on all key

matters relevant to climate-related issues.

Risk Steering Group

The Risk Steering Group provides an internal review of the Group

risk framework, reporting to the Audit Committee quarterly, and

coordinates with the senior leadership team to identify principal risks

which the Group is exposed to. The Risk Steering Group maintains the

Group risk register including climate-related risks and opportunities,

making recommendations to the Audit Committee on process updates

whererelevant.

Senior leadership team

The senior leadership team is responsible for overseeing the execution

of our CSR strategy through strategic priorities including our carbon

reduction plan to meet our emission targets. The senior leadership team is

also responsible for overseeing divisional integration of risk management

into each strategic priority including the consideration of climate-related

risks. It is responsible for assessing, managing and mitigating SBU risks

through periodic risk reviews, which are reported on twice a year including

specific climate-related risks and opportunities. It also supports the annual

review of the Group’s climate risk register providing divisional insight.

Sustainability team

The sustainability team has day-to-day oversight of climate matters.

The team is responsible for ensuring data such as our greenhouse gas

emissions is collected and reported and attends the Steering Committee,

providing updates at every meeting.

Avon Technologies plc Annual Report and Accounts 2024

BOARD OF DIRECTORS

Our Board Committees

Remuneration Committee

Meets quarterly)

Sustainability Steering Committee

Meets four times a year)

Senior leadership team

Meets monthly)

Audit Committee

Meets quarterly)

Risk Steering Group

Meets quarterly)

Sustainability team

Overall responsibility

Review and make recommendations

to the Board

Day-to-day monitoring and delivery

Informing

Reporting

STRATEGY

The consideration of risks and opportunities associated with

climate change are reflected in our strategic priorities.

Climate-related risks and opportunities identified over

the short, medium and long term

We determine climate risks that could have a material financial impact

through our Group risk management framework, see page 70, and

a separate but integrated bottom-up climate risk review, completed

annually. Our decentralised approach to Group risk management means

each SBU identifies its own risks and opportunities including those relating

to climate change, which has the benefit that risk management and the

assessment of climate change are then part of all management.

We utilise the outputs of divisional risk registers as well as relevance to

strategic priorities to help determine the materiality of climate-related

risks and opportunities across the Group. These risks and opportunities

undergo further analysis within our climate risk register which helps to

determine financial impact across our selected time horizons, under

different climate scenarios.

Avon uses time horizons for assessing climate-related risks and

opportunities; they are short (2025 to 2029), medium (2029 to 2039) and

long (2039 to 2050). The basis for the time horizons was to align with

financial and planning periods, short being five-year business planning,

medium being alignment with multi-year contracts and long aligning to

Avon’s commitment to be net zero by 2045 by reducing absolute scope 1

and 2 carbon emissions: ‘our net zero commitment’.

Principal risk

Manufacturing (supply chain resilience and

manufacturing quality)

Strategy execution (Cleveland transformation)

Recruiting and retaining talent (key person dependency)

Defence sector concentration/cycle (DOD)

Bid and contract (delivery of sales growth)

Financial controls and reporting (DB pension)

Delivery of new product programmes

Security, safety and cyber

Compliance and internal control (business continuity)

Sustainability

Our climate-related risks and opportunities, shown on the following

page, are relevant to the Group but consider inputs from both SBUs. The

results of the assessment indicate that the Group’s material risks remain

unchanged from 2023.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

TCFD continued

Category Description Potential financial impact Strategic response

TRANSITIONAL

Policy and legal

(Risk) Carbon

pricing

and taxation

The introduction of taxes

or other costs associated

with carbon emitting

fuels and operations may

result in increased cost

of products and services

both purchased and

sold by Avon.

Primary potential financial

impact: Increase in operating

costs via taxes and levies for energy

and fuel use.

Short: Insignificant

Medium: Low/medium

Long: Medium/high

Scenario with greatest financial

impact: <2˚C

See page 68 for details on our climate

scenarios analysis.

We are committed to meeting our net zero commitment

and have introduced short-term carbon emission targets

to ensure we stay on target and reduce our exposure to

this risk.

We recognise that responsibility sits with our supply chain

to manage its own carbon emissions. We request energy

use and carbon emissions information from key suppliers

to increase visibility and influence our suppliers to take

appropriate steps to mitigate risk. We also negotiate fixed

price protection and price escalation clauses to ensure

we remain profitable over the duration of contracts with

suppliers and customers, where appropriate.

(Risk) Regulation

and policy burden

and exposure to

litigation

ESG policies, strategy

and performance are

considered by external

stakeholders. Failure to

manage stakeholder

expectations relating to

climate-related issues

may result in fines and

reputational damage

and limit our access to

investment.

Primary potential financial

impact: Greater regulatory

requirements result in additional

operating costs.

Short: Insignificant

Medium: Low

Long: Low

Scenario with greatest financial

impact: <2˚C

We continue to monitor emerging policy and regulations

and utilise experts in sustainability and climate matters to

advise our team where additional support is required. We

are committed to meeting our sustainability targets and

our continued progress towards them will prevent any

negative impact in access to debt or equity funding.

Technology

(Risk) Shift to

low carbon

technologies

Decarbonisation of our

operations may require

additional investment to

transition equipment and

infrastructure to lower

emission technologies.

Primary potential financial

impact: Capital expenditure required

to reduce emissions and switch

energy sources.

Short: Insignificant

Medium: Low/medium

Long: Low/medium

Scenario with greatest financial

impact: <2˚C

A key objective of our transformation strategy is to increase

the utilisation of our sites, and optimise our existing

operations. At each site we have a carbon reduction plan

and target which helps us to monitor progress against

our strategy. Efforts to eliminate and reduce energy use

through consolidation of operations, facility upgrades

and continuous improvement activities will reduce our

exposure when we come to seek alternative ways to

decarbonise our operations.

We continue to monitor the market for emerging technologies

and related investment cases for renewable alternatives.

Market

(Risk) Changing

customer

requirements

Government policies and

climate change awareness

are beginning to alter the

bid and tender processes.

Changing customer

preferences and sensitivity

to environmental factors

could mean our existing

technology is unable to

meet requirements set in

new bids or contracts.

Primary potential financial

impact: Shift in customer

requirements results in loss of

revenue and early retirement

of products.

Short: Insignificant

Medium: Medium

Long: Medium

Scenario with greatest financial

impact: <2˚C

We maintain close relationships with customers, including

working collaboratively on research and development

programmes, to understand customers’ future

requirements and ensure these are factored into product

development at the earliest stage. We have secured

long-term contracts within both divisions for our existing

products and services, which means the impact on our

short-term strategy and financial planning is insignificant.

STRATEGY CONTINUED

Avon Technologies plc Annual Report and Accounts 2024

Category Description Potential financial impact Strategic response

TRANSITIONAL CO NTINUED

Resource efficiency

(Opportunity)

Continuous

improvement

Improvements in energy

efficiency and reduction

in waste will generate

savings in raw materials

and energy costs and

reduce carbon emissions.

Primary potential financial

impact: Reduced reliance on fossil

fuels and material consumption

efficiencies result in reduced

materials and production costs.

Short: Low

Medium: Low

Long: Medium

Scenario with greatest financial

impact: <2˚C

Continuous improvement is at the heart of our business

model and key to our strategy. We are embedding a

culture of continually improving processes and encourage

all employees to take part in continuous improvement

training. We have stretch goals in place at all sites to ensure

delivery of our strategy and challenge our team to achieve

efficiency gains and reduce waste through innovative solutions.

Physical – acute and chronic – changing weather patterns and extreme weather events

(Risk) Disruption to

operations

Operational exposure to

extreme weather events

such as heatwaves, fires,

high winds and flooding

varies depending on the

particular hazard and

site. Extreme weather

may reduce productivity

and/or result in costs to

repair damage.

Primary potential financial

impact: Loss of revenue whilst sites

are not fully operational and higher

insurance premiums to mitigate

potential loss of profit or repair costs.

Short: Low

Medium: Low/medium

Long: Low/medium

Scenario with greatest financial

impact: >2˚C

All sites comply with and adhere to local climate-related

public instruction and guidance, and have suitable

insurance cover. We monitor the sites’ exposure to extreme

weather events and update business continuity planning;

see page 69 for more details. Several of our sites have storm

shelters and undertake drills.

(Risk) Disruption to

supply chain and

access to materials

Our supply chain could

become susceptible to

climate-related disruption

which may impact our

access to raw materials

and ability to deliver

against orders.

Primary potential financial

impact: Loss of revenue through

delays to production and increased

costs when obtaining alternative

supplies of material.

Short: Insignificant

Medium: Low

Long: Low

Scenario with greatest financial

impact: >2˚C

There is a low risk that climate change could disrupt our

supply chains in certain locations or disrupt our ability to

source products. However, we continue to put in place

alternative sources for raw materials used in key products

to mitigate risk from the loss of critical suppliers and look to

dual source as part of new product approvals.

(Opportunity)

Increased demand

Increased occurrence

and severity of natural

hazards associated with

climate change may

impact the global security

environment and demand

for our range of protective

equipment within existing

and new markets.

Primary potential financial

impact: Increased sales

opportunities for our existing

products with new and existing

customers.

Short: Low

Medium: Medium

Long: Medium/high

Scenario with greatest financial

impact: >2˚C

We believe there are opportunities for increased demand

within both climate scenarios and continue to invest in

research and development so we are well placed to deliver

innovative solutions that meet customer requirements.

We see an opportunity within a >2˚C scenario for our

enhanced protection solutions as a result of a shift to

more levels of people working in dangerous environments

such as search and rescue. We also recognise there is an

opportunity to lead innovation through the development

of lower impact products, where these do not compromise

on performance or capability particularly under a

<2˚C scenario.

Overall, the Group has assessed the potential impact of climate change to be low in the short term (to 2029). Beyond 2029, although there are potential

costs associated with climate change, these are balanced with significant opportunity for increased demand for our protective products in a changing

global security environment.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

TCFD continued

STRATEGY CONTINUED

The impact of climate-related risks and opportunities

on the organisation’s businesses, strategy and

financial planning

Our climate-related risks and opportunities identified in the table are

reflected in our strategy and financial plans.

We have made a commitment to be net zero and set targets which we

publish annually. We plan on meeting our initial carbon reduction targets

through the consolidation of operations, facility upgrades and continuous

improvement activities which will be delivered through our STAR strategy.

The Transform element of our STAR strategy includes our footprint

optimisation initiative which will be a key lever for carbon reductions. The

optimisation of our two business units including the consolidation of our

helmet sites from three sites into two allows us to seize opportunities to

generate efficiencies and reduce exposure to climate-related risk.

Climate change is considered in the overall view of our current assets

and infrastructure and the assessment of climate-related metrics would

be undertaken in any future acquisition and divestment targets where

material and relevant information is available.

Financial planning process

We carried out an impact assessment for climate risks and opportunities

on the Group, considering inputs from SBUs. This identified the related

primary financial metric and impact thereon, as summarised in the table

on page 66. We recognise that climate-related risks and opportunities can

have a financial impact on revenues, costs and expenditures. The related

impact on financial reporting estimates and judgements is summarised

on page 140.

Resilience of the organisation’s strategy, taking into

consideration different climate-related scenarios,

including a 2

C or lower scenario

Approach to scenario analysis

TCFD recommends the use of climate scenarios to assess the resilience

of businesses to climate change. This is the third year Avon has used

scenario analysis to assess potential risks and opportunities related

to climate change, and their resulting impact on Group strategy and

financial planning.

In 2022, we received technical advice to help select appropriate climate

scenarios and have since applied these to our climate-related risks and

opportunities to assess their impact on key financial metrics. In 2024

we continue to embed the use of climate scenarios to help with our

understanding of the business’ resilience to climate change and look for

opportunities to refine our approach.

Our climate scenarios

Our two climate scenarios align with TCFD guidance, and use economic

constraints associated with the International Panel on Climate Change’s

(IPCC) Shared Socioeconomic Pathway 2 middle of the road scenario:

• >2°C informed by RCP

8.5 is an extreme physical risk scenario.

Under this scenario there is no additional action policy or regulatory

intervention which leads to global temperatures rising between 4.1 and

4.8°C by 2100.

• <2°C informed by RCP

2.6 is an extreme transitional risk scenario. Under

this scenario, early action is taken to rapidly reduce greenhouse gas

emissions and limit global warming to 2°C or lower by 2100.

1. The IPCC adopted the Representative Concentration Pathway (RCP) to provide plausible

descriptions of how the future may evolve with respect to a range of variables including socio-

economic change, technological change, energy and land use, and emissions of greenhouse

gases and air pollutants.

We have made the following assumptions:

• Avon Technologies’ business activities will be static over time. This

means impacts have been considered for the existing operating model,

current locations and product portfolio.

• Mutual exclusivity has been assumed for each risk and scenario when in

reality they may occur in parallel (aggregated) or offset each other.

• No action has been taken by Avon Technology to mitigate or limit the

impacts of each risk.

Resilience statement

The output of forward-looking scenario analysis indicated that transitional

risks could have a greater impact in a 2°C or lower scenario. The Group’s

focus on streamlining processes, optimising resources and embracing

innovative solutions through the Transform element of our STAR

strategy will help the business build resilience to the effects of policy,

legal, technology and market risk. This will also provide Avon with the

opportunity to maximise potential cost savings.

The potential impact of physical risks could be more pertinent in the >2°C

scenario. Each site is sufficiently insured for the physical risks they are

exposed to.

We have strong relationships with customers and are well positioned to

maximise opportunities in increased demand offered by both scenarios.

The impact of climate change on costs is not expected to be material,

after considering the strategic response we have in place and the potential

opportunities which manifest under both scenarios. We recognise that

scenario analysis will develop over time and we will continue to monitor

and update as understanding evolves.

RISK MANAGEMENT

We review and update our Group risk register twice a year,

including a separate but integrated bottom-up climate-related

risk review, which considers scores from divisional risk registers

to help determine materiality across the Group.

Processes for identifying, assessing and managing

climate-related risks

An extensive list of climate-related risks and opportunities relevant to

Avon is identified using data sources such as climate change and relevant

sector literature, peer review and TCFD guidance. In 2022, we worked with

a sustainability consultant to initially support us in identifying climate-

related risks and opportunities. Taking into account changes in the

regulatory environment, customer preferences and government policies,

these sources are revisited and the list is updated where required.

SBU leadership teams identify and assess their own risks and opportunities

in line with the Group’s methodology including climate-related risks and

opportunities; see page 70. They generate a likelihood and impact score

for each risk using bespoke financial and non-financial impact measures.

This is a measurement of net risk and considers the effectiveness of

existing mitigations.

We utilise the divisional risk scores, in addition to considering relevance to

strategic priorities, to determine climate-related risks and opportunities to

undergo climate scenario analysis. This helps determine materiality. These

risks and opportunities are included in our climate risk register where they

undergo annual climate scenario analysis.

Our overall approach ensures Avon prioritises resources in managing the

most material climate-related impacts relevant to Group, whilst still having

oversight of the impact across our two divisions.

Avon Technologies plc Annual Report and Accounts 2024

Integration of process for identifying, assessing and

managing climate-related risks into the organisation’s

overall risk management framework

Since 2022, climate-related risks and opportunities have been reported

as a Group principal risk (under the name sustainability) and have been

integrated into our divisional risk registers. This ensures climate-related

risks are identified, managed and integrated throughout the Group’s

overall risk management framework.

Principal risks are reviewed by the Board and Audit Committee twice a

year; see page 70.

METRICS AND TARGETS

Scope 1, scope 2 and, if appropriate, scope 3 greenhouse

gas (GHG) emissions and the related risks

We report our scope 1 and 2 with aspects of scope 3 emissions, in

compliance with Streamlined Energy and Carbon Reporting which can be

found on page 57. We continue to progress our scope 3 calculations using

our screening exercise undertaken in 2023 to determine the most relevant

and influenceable elements and report where viable.

We have considered cross-industry climate-related metrics and

determined the disclosure of carbon emissions as described in table A2.1

of the 2021 TCFD report to be the most applicable to our business. Our

disclosure can be found in full on page 57.

Physical risks assessment, by site

We have considered the susceptibility of all of our operations to physical

risks arising from climate change focusing our analysis on our five

manufacturing sites located in the UK and US. Sites are routinely audited

against five natural hazards, which identified low flooding exposure, and

no significant wind, hailstorm or fire exposures across all our sites (though

wildfire mapping is currently limited). We have supplemented this analysis

with water stress analyses (based on the Aqueduct Water RiskAtlas)

covering all our manufacturing sites which align with our climate scenarios.

We have reviewed our exposure to tornadoes using the National Oceanic

and Atmospheric Administration’s (NOAA) National Weather Service Storm

Prediction Center 25-year average number of tornadoes per state per

month. The location of our sites in the Northeast and West states of the US

means we experience less tornadoes annually than those in central US, but

there is limited research on how this may change over time under different

climate scenarios. We have in place storm shelters where appropriate and

drill emergency procedures.

One of our sites has been identified as being located in an area of very

high water stress which was present under both climate scenarios. This site

is also susceptible to earthquakes which is factored into its insurance and

business continuity planning and earthquake drills are undertaken. In FY23

we announced that we will be consolidating helmets into Cleveland and

Salem and plan on closing our facility in Irvine during 2025.

Our scenarios anticipate the occurrence of extreme weather events will

change over time and we will continue to monitor sites’ susceptibility and

update methodologies for assessing resilience.

Country Site Water stress Earthquake

UK Melksham, Wiltshire

Cadillac, Michigan

Irvine, California X X

Cleveland, Ohio

Salem, New Hampshire

Metrics used to assess climate-related risks and

opportunities

Targets used to manage climate-related risks and

opportunities and performance against targets

The below table illustrates the metrics we have selected to measure our

climate-related risks and opportunities. We have selected these as the data

is readily available, comparable and relevant to the climate-related risks

and opportunities facing Avon.

We continue to develop other environmental metrics such as water and

waste in line with stakeholder expectations which can be seen on page 58.

In 2023 the business agreed short-term sustainability targets which was

an important step in addressing climate-related risks and opportunities.

These targets also support our long-term target of being net zero by 2045

by reducing absolute scope 1 and 2 GHG emissions. We have developed a

carbon reduction plan at each site and have set appropriate targets which

enable us to monitor progress.

Our STAR strategy sets clear accountability for our Executive Committee

and its leadership team by establishing strategic priorities, the delivery

of which is incentivised through our bonus scheme. Sustainability and

climate-related objectives are embedded within our strategic priorities,

such as footprint optimisation, rather than being stand-alone. Note, a

portion of Executive Director bonus this year is attributed to the delivery

ofESG targets as set out on page 101.

Climate-related target Target Progress in 2024 Metric Link to material climate risk

Reduce scope 1 and 2 carbon

emissions by 25% (% of revenue)

2028 (base year 2023) 25% Reduction in scope 1 and 2

carbon emission against

baseline

Carbon pricing and taxation

Regulation and policy burden and

exposure to litigation

Net zero carbon emissions

(scope 1 and 2)

2045 (base year 2021) 5,928 Tonnes CO

e scope 1 and 2

(location based)

Reduce scrap by 60% 2027 (base year 2023) 54% Reduction in scrap (as a

percentage of revenue)

Continuous improvement

Screen our top 40 suppliers

against sustainability criteria

2025 33% Percentage of top 40 suppliers

that have responded

Disruption to supply chain and

access to raw materials

1. Top 40 suppliers based on 2023 Group spend.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

HOW WE IDENTIFY

ANDMANAGE RISK

Risk Management

Assessing risk is an essential element of the

management of our organisation, and risk

management is embedded within the business

units and functional teams.

Each risk is assessed using likelihood and impact scoring based on both

financial and non-financial impacts which are set relative to the size of

the SBU. Scoring takes account of existing mitigation and controls and so

represents a net risk score. Additional mitigating actions are developed in

response to high scoring risks where appropriate.

The highest scoring risks within the SBU risk registers are reviewed and

combined with the highest scoring functional risks to build a Group level

view of the principal risks which is discussed by the Executive Committee

before being presented to the Audit Committee.

Assurance

We base our approach to managing risk on the three lines of defence

model where the first line is management control, represented by SBU

andfunctional leadership, which own and manage risk on a day-to-day

basisunder the Group’s internal control framework.

The Risk Steering Group, alongside the Executive Committee, monitors

and oversees these activities as a governance and compliance activity.

Thisinternal assurance is our second line of defence.

The third line is independent assurance, which has been provided by our

Internal Audit Manager during the period.

Annual review of internal controls and riskmanagement

We have made the following enhancements to our risk management

process during the year:

• the Group’s principal risks were specifically considered as part of this

year’s strategy refresh process and each of the strategic priorities

contains a risk assessment which is reviewed and updated quarterly; and

• the Internal Audit Manager is a member of the Risk Steering Group

and has ensured the internal audit programme takes account of –

and is in part focused on addressing the issues driving – the Group’s

principal risks.

Commentary on the review of the Group’s system of internal control is

contained in the Audit Committee Report on page 95.

Risk management responsibilities

The Board, working through the Audit Committee, has overall

responsibility for the Group’s risk management framework, ensuring

the risk management process is robust and continuously improved. The

Board’s role includes promoting a culture that emphasises integrity at

all levels of business operations and setting the overall policies for risk

management and control. The Board is also responsible for setting risk

appetite, considering the balance between risk and reward.

The Audit Committee monitors the effectiveness of the Group’s risk

management process and, through this, the principal and emerging risks

at a Group level.

The senior leadership teams within the SBUs are responsible for assessing,

managing and mitigating SBU risks through periodic risk reviews, which

include the identification of emerging risks. Risk management is also

embedded into the annual strategy process and there is a risk assessment

for each SBU strategic priority.

A Risk Steering Group coordinates the risk management activities across

the Group, working with SBU leadership teams and the functional leaders

in the IT, finance and legal teams to review the output from their risk

reviews in order to confirm the principal risks which the Group is exposed

to. A report on this is put to the Executive Committee twice a year prior to

being submitted to the Audit Committee.

Our approach

The Risk Steering Group maintains a list of principal risks and controls

which are tailored to the Group. This taxonomy serves as a platform for the

risk assessments, enabling the consolidation of output from bottom-up

SBU and functional risk assessments. This taxonomy is reviewed annually

to ensure it remains current.

The SBU-led risk assessments identify the leading risks specific to the

SBU by reference to the taxonomy to ensure common terminology/

categorisation. The SBUs identify changes to risks and identify any

emerging risks, which may be existing Group risks noted in the taxonomy

or brand new. These are risks which are expected to increase in the

coming year.

Avon Technologies plc Annual Report and Accounts 2024

PRINCIPAL RISKS

Principal risks are those that would threaten the Group’s

business model or future performance. They have

been identified based on likelihood of occurrence and

potential impact on the Group, by reference to both

financial and non-financial measures.

The chart shows the Group’s principal risks by likelihood

and impact resulting from the year end risk assessment.

The Group’s principal risks remain unchanged since our

2023 Annual Report, but with geopolitical risk dropping

out of the principal risk list. The scoring and the position

of the remaining principal risks on the chart have

changed, as has the emphasis of some of the risk themes

within the principal risks. The following pages describe

each principal risk in detail and include commentary on

how the risk has developed during the period.

Our principal Group risks are:

Manufacturing (supply chain resilience and

manufacturing quality)

Strategy execution (Cleveland transformation)

Recruiting and retaining talent (key person dependency)

Defence sector concentration/cycle (DOD)

Bid and contract (delivery of sales growth)

Financial controls and reporting (DB pension)

Delivery of new product programmes

Security, safety and cyber

Compliance and internal control (business continuity)

Sustainability

Trend in the risk score over the year

No change

Increasing

Decreasing

Link to strategy

Strengthen

Transform

Advance

Revolutionise

Link to Corporate Social Responsibility

People

Process

Product

2024 PRINCIPAL RISKS

Likelihood

Impact

Low

High

Likelihood Impact

Likelihood of

occurrence

Operational

impact (e.g.

revenue,

EBITDA, cost)

Employee

impact

Reputational

impact

>60% High

Multiple leavers/loss of

key person/significant

risk to short and

medium term delivery

Significant long term

reputational impact

impacting growth

prospects

40–60% Medium

Some leavers/

heightened risk to

short term delivery

Heightened

reputational risk/short

term impact

20–40% Low to medium

Typical leaver risk and

some day to day risk of

disruption to delivery

Typical day to day

reputational risk

<20% Low

Low leaver risk and no

risk to delivery

Little or no

reputational risk

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

STRATEGY EXECUTION

Risk appetite: Medium

Trend

Strategy

CSR

Business risk

• Strategy execution risk

• Execution of transformation

programmes

Impact on

• Strategy delivery

• Sales, costs and profitability

• Employee recruitment,

retention and morale

Mitigation

• Strategy model and approach defined, agreed

andcommunicated

• Strategic projects clearly identified, agreed and

resourced for delivery with specialists

• Effective programme management team, tools and

reporting to ensure projects are delivered on time

and benefits are realised

Comment and outlook

This risk relates to our ability to deliver the transformation

programme in Team Wendy which will see the transfer

of production of US DOD helmets from our Irvine factory

to Cleveland and Salem: specifically, the dual risk of

being unable to meet customer demand in 2025 and

an inability to deliver improved margins through the

redesigned Cleveland factory and implementation of lean

processes. In mitigation the business has strengthened

its programme management capability, implemented a

value stream methodology and invested in its continuous

improvement team.

Risk Management continued

MANUFACTURING

Risk appetite: Low

Trend

Strategy

CSR

Business risk

• Supply chain shocks impact

our ability to source key

materials and the cost of

manufacturing (due to

sole source dependency,

pricing, availability, quality

orefficiency)

• Poor quality and late delivery

• Inventory locks up

working capital

Impact on

• Sales, costs and profitability

Mitigation

• Supply chain strategy targets improvements

• Robust supplier audit and relationship

management, with alternative sources identified

• Robust manufacturing/quality processes and

effective enterprise resource planning (ERP) systems

• Strong site leadership and engaged and motivated

production workforce

• Insurance and effective business continuity

planning in place

• Prioritisation of workforce health and safety

Comment and outlook

At Avon Protection we have been focused on the MCM100

supply chain, where certain components are sole sourced.

To ensure the business can deliver MCM100 orders on

time, the number of critical sole source suppliers has been

reduced and a new procurement lead is reviewing the

remaining supply chain. During the year, a materials quality

issue was identified impacting certain components used

in the supplied and powered air product range. Internal

risk management processes quickly and efficiently scoped

the impact of the defective material, with remediation

underway and expected early in FY25 for ongoing

production. All customers with potentially impacted

product from historic sales have been contacted.

Although the risk of a widespread quality failure on any

product is considered to remain low, a global review of

the quality function is underway to ensure our quality

process remains fit for purpose for newly introduced and

existing products. Across both SBUs, the teams are also

undertaking ad-hoc supplier due diligence in response to

PFAS and upcoming EUDR regulations.

Team Wendy’s sourcing strategy for single and critical

technology sources aims to ensure sufficient stock and

material are available for production to meet (mainly

commercial) delivery schedules without maintaining large

inventory holdings. The new product introduction process

includes a requirement for approving two sources of

material to avoid creating future sole supplier dependency

risk. Manufacturing of our more complex products remains

technically challenging and there is a heightened quality

risk at Cleveland while the transformation project – which

involves improving our shell moulding – is delivered.

Avon Technologies plc Annual Report and Accounts 2024

BID AND CONTRACT

Risk appetite: Medium

Trend

Strategy

CSR

Business risk

• Programmes with lower

margins than expected

• Sales targets not delivered

• Loss of major bids/tenders

• Competitors increase market

share at Avon’s expense

Impact on

• Sales and profitability

• Strategy delivery

Mitigation

• Product portfolio and certifications meet

customerrequirements

• Market and channel strategies agreed and in place

• Capable and professional sales team, correctly

remunerated and engaged

• Competitive pricing

• Robust bid approval process and well resourced bid

programme teams

• Intimate customer relationships with regular

contact and programmes of record/multi-year

commitments agreed where possible

• Competitor monitoring and

counter-competitorstrategies

Comment and outlook

Avon Protection has recruited a Head of Business Winning

to review and improve the bid process and the Group’s

level of internal commercial expertise. Revenue can

sometimes be lumpy, which can impact our ability to

plan and run a ‘steady state’ production, though we are

meeting customer demand through an improved sales,

inventory and operations planning (SIOP) process.

Team Wendy’s dedicated international sales team is being

built to successfully bid international opportunities and

deliver pipeline growth in FY25 for sales in FY26 and

beyond. International sales efforts could be restricted by

US political changes, competitive or indigenous sources

limiting sales and if technology offerings are not valued by

the customer.

RECRUITING AND RETAINING TALENT

Risk appetite: Medium

Trend

Strategy CSR

Business risk

• Inability to recruit and

retain employees

Impact on

• Strategy delivery

• Sales, costs and profitability

• Employee morale and culture

Mitigation

• Succession planning and effective performance

management processes

• Effective training and development strategy

andactivities

• Appropriate organisational structure with clear lines

of authority and communication

• Maintaining a positive and supportive culture,

supported by values, employee engagement

activity and initiatives

• Retention through competitive remuneration

andbenefits structure and outcomes

Comment and outlook

As a smaller company with a broad range of specialist

technical expertise we run some key person dependency

risk, for example in areas such as software engineering and

rubber injection moulding. Some of our processes in these

areas could be documented in more detail. Additional

hires are planned but the training and development

of existing staff and succession planning also have a

role to play in mitigating the risk represented by these

criticaldependencies.

DEFENCE SECTOR

CONCENTRATION/CYCLE

Risk appetite: Medium

Trend

Strategy CSR

Business risk

• US DOD customer

concentration risk

• Government defence

spending cyclical fluctuation

Impact on

• Sales and profitability

Mitigation

• Strong US DOD/customer relationships and insight

• Understand future capability requirements and

investment in technology to deliver the products

the customer requires

• Maintain diversification via other markets, e.g. the

US first responder market and geographies

• Strategy targets diversification of global military

customer base

Comment and outlook

There is significant reliance on the US DOD customer in

both SBU strategic plans. Revenue in the outer years of the

strategy will be impacted if the US DOD delays decisions

on purchasing the new products now in development

or adds additional suppliers. In mitigation the sales team

are focused on maintaining a close relationship with the

customer to understand future requirements. Having

a broad portfolio of exposure to US DOD programmes

spreads risk and reduces reliance on single programmes.

At Team Wendy, the capacity of the US DOD’s testing

laboratory is a potential constraint on our ability to ship

at the required rate and so reduce US DOD programme

inventory and increase overall inventory turns, particularly

as monthly volumes increase. The Team Wendy Ceradyne

team has engaged proactively with the customer on

support for potential alternative lot testing options

and are piloting a streamlined change review and

approval process.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Risk Management continued

SECURITY, SAFETY AND CYBER

Risk appetite: Low to medium

Trend

Strategy CSR

Business risk

• Business interruption/cash

cost of cybercrime and fraud

• Compliance with US DOD

and UK MOD security

requirements

• IT system continuity event

• Health and safety incident

results in employee

injury, plant closure and

prosecution/fines

Impact on

• Ability to ship products

• Financial loss

• Reputational damage

• Sales, costs and profitability

Mitigation

• IT and information security strategies prioritise

these requirements

• IT and cybersecurity resourced with specialists to

ensure compliance and continual risk assessments

• Robust IT and information controls with policies,

plans, and procedures

• Cyber insurance and IT and information security

disaster recovery plans

Comment and outlook

Cyber attacks are becoming increasingly common and

complex as bad actors increase capability. At Group

level we continue to manage and mitigate our cyber

security risks using the NIST cybersecurity framework and

a rigorous programme of work to achieve the required

outcomes. We implement Cyber Essentials Plus and meet

the requirements of NIST SP 800-171. This will transition

into CMMC in Spring 2025 in readiness for new US DOD

contracting rules which are expected to be introduced

by the end of the year. Cyber incident response planning

remains a high priority and we have completed our

second tabletop exercise across the organisation during

the year. Maintaining a security minded culture is also a

high priority. Through training and awareness activities

we are seeking to reinforce the mindset that cybersecurity

and physical security are as important as personal

security and safety. This is a particular challenge at the

Cleveland factory given the high level of physical change/

construction, which has also increased the health and

safety risk at this site.

DELIVERY OF NEW PRODUCT PROGRAMMES

Risk appetite: Medium

Trend

Strategy

CSR

Business risk

• Failure to identify and

implement new products

Impact on

• Strategy delivery

• Sales and profitability

• Reputation

Mitigation

• Future product/technology road mapping and

funding strategy in place

• Effective new product introduction process which

delivers new products into production at factories

• Sustaining engineering resource at factories

sufficient to support new product introductions

• Intellectual property protection considered and

implemented where necessary

• Sufficient level of interaction with major customers

and regulatory bodies to anticipate future

productrequirements

Comment and outlook

At Avon Protection this risk has been mitigated by the

recruitment of a dedicated programme manager for

NPI and programme management training. Non-viable

programmes have been discontinued.

At Team Wendy the risk is that slow or under investment

caused by the current focus on transformation projects

causes a delay in the introduction of new products,

potentially limiting the growth of US and international

commercial sales or the speed of response to competitor

products. The team has assessed and prioritised new

technology and products to ensure the business is focused

on the right opportunities under its relaunched NPI process.

FINANCIAL CONTROLS AND REPORTING

Risk appetite: Low

Trend

Strategy

CSR

Business risk

• DB pension funding

requirement restrictions

• Poor quality financial

reporting and business

information

• Insufficient overhead controls

• Tax exposure not mitigated

• Currency fluctuations reduce

the value of receipts or

increase costs

• Insufficient debt capacity

Impact on

• Costs and profitability

• Reputational damage

Mitigation

• Robust internal financial control and reporting

procedures (monthly reporting, business reviews,

strategy/budgeting process) supported by robust

internal audit function

• Appropriate overhead structure

• Bank facilities committed and of sufficient duration

with alternative providers scoped and ready

to step in

• Bank covenant compliance and reporting

• Tax strategy in place with advisor support

• Long-term pension strategy in place with deficit

recovery plan agreed and reviewed every

three years through triennial valuations, with

professional advice

• Effective currency hedging strategy

Comment and outlook

There have been some notable improvements made to

our internal financial controls framework during the period.

Many of these stem from the new Internal Audit Manager

who has championed improvements to the accountability

and effectiveness of our internal control framework. Risks

associated with the funding and management of the

defined benefit pension scheme have been mitigated

by the appointment of a professional trustee and a new

investment sub-committee. The funding deficit is reducing

but remains a material amount in the context of the Group

and is closely monitored.

Avon Technologies plc Annual Report and Accounts 2024

SUSTAINABILITY

Risk appetite: Medium

Trend

Strategy CSR

Business risk

• Cost and delay in

implementing net zero

plan and progressing the

CSR strategy

• Customer requirements shift

to more sustainable products

that we do not offer

Impact on

• Reputational damage

• Sales, costs and profitability

Mitigation

• Maintain strong relationships with customers,

supply chain and technology partners

• Sufficient focus on sustainability at all levels of the

business and within key processes

• CSR plan and targets agreed

• Sufficiently resourced operations to complete

necessary projects

Comment and outlook

There have been some notable delays to climate reporting

regulations during the year, including the Federal Supplier

Climate Risks and Resilience Rule. As a Group we remain

focused on delivering against our medium-term CSR

targets which will help us to prepare for future regulations.

During the year, we reframed the CSR strategy to place

greater focus on our people to increase employee

engagement. The Executive Committee requested

a review of our commitment to achieve net zero by

2045, and a bottom-up assessment of upcoming

projects confirmed this target remained appropriate for

the business.

Avon Protection undertook its first assessment of social

value as part of a bid process, which has helped it

recognise opportunities for improvement. Consideration

of social value is now a key element of Group CSR strategy,

helping us to do things with greater purpose.

COMPLIANCE AND INTERNAL CONTROL

Risk appetite: Low

Trend

Strategy CSR

Business risk

• Failure to comply with

export controls

• Bribery and corruption risk

• Breach of contract/law leads

to investigation, prosecution,

litigation or fines

• Defence contract compliance

• Failure to comply with the

requirements of the Special

Security Agreement

• Lack of business

continuity planning

Impact on

• Ability to ship products

• Financial loss

• Reputational damage

Mitigation

• Effective export control policy supported

by training

• Effective Anti-Bribery and Corruption Policy

supported by training

• Embedded and effective Code of Conduct

• Effective internal legal and internal control/

audit function

• Effective government contract

specialist knowledge

• Clear policies defining working practices between

Avon and the security cleared entity Avon

Protection Ceradyne

• Plan to introduce and test more business

continuity plans

• IT and cybersecurity resourced with

specialists to ensure compliance. Policies and

procedures inplace to ensure compliance with

cybersecurityrequirements

Comment and outlook

Working in the defence sector requires us to maintain

strong compliance controls and to ensure we have plans in

place to deal with unexpected events which may restrict

our ability operate. These can range from regulatory

and compliance matters to more traditional business

disruption events. Business continuity plans exist locally

at the factories and within IT as part of disaster recovery

processes. A revised business continuity plan will be

developed for Cleveland given it will become a single

location business continuity risk. These plans will be drawn

together into a Group level continuity plan and tested.

We expect to achieve certification under CMMC in 2025

so we are in a position to comply with future US DOD

contract requirements.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Non-Financial and Sustainability Information Statement

The table below illustrates where stakeholders can find information in respect of non-financial and sustainability matters, as required by the Companies

Act 2006. We disclose non-financial information in the CSR section and throughout the Strategic Report as well as other referenced pages.

We have a range of policies and guiding principles, some of which are published on our website, www.avon-technologiesplc.com, or summarised within

our Code of Conduct.

Topic Our policies and guiding principles Where to read more

Environmental matters and climate-

related disclosures

• Corporate Social Responsibility Strategy

• Health and Safety Policy

Page 50 Corporate Social Responsibility Strategy

Page 52 People

Page 56 Process

Employees

• Code of Conduct

• Careers Policy

• Gender pay gap reporting

• Employee engagement

• Speak Up

• Health and Safety Policy

Page 46 Stakeholder Engagement

Page 52 People

Page 62 Governance

Respect for human rights

• Code of Conduct

• Modern Slavery Statement

Page 52 People

Page 62 Governance

Anti-corruption and bribery matters

• Anti-Bribery and Corruption Policy

• Gifts and Hospitality Policy

• Supplier Code of Conduct

Page 62 Governance

Social matters

• Charitable Giving Policy

• Code of Conduct

Page 52 People

Business model

Page 20 Our Business System and Business Model

KPIs

Page 42 KPIs

Principal risks

Page 70 Risk Management

1. Available to employees via Avon Technologies plc intranet but not published externally.

2. Published on Avon Technologies plc website and available to employees.

Avon Technologies plc Annual Report and Accounts 2024

GOVERNANCE

Governance

78 Board of Directors

80 Executive Committee

82 Chair’s Introduction

toGovernance

84 Maggie Brereton –

NEDInterview

85 Corporate Governance Report

89 Nomination Committee Report

92 Audit Committee Report

96 Remuneration

CommitteeReport

114 Directors’ Report

CONTENTS

Conducting our business with

integrity is one of our #FIERCE

values. Integrity for Avon

Technologies plc means that

we do what’s right, using good

judgement to ensure we always

dothings we can be proud of.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

A BOARD WITH

EXPERIENCE

Board of Directors

Board membership key

Audit Committee

Nomination Committee

Remuneration Committee

Chair

Independent Director

Board gender diversity

Female Male

Independence

Executive (including CFO)

Non-Executive (excluding Chair)

Our business is led by our

experienced Board of Directors,

which supports management

to execute against the

Group’sstrategy.

Avon Technologies plc Annual Report and Accounts 2024

1. Bruce Thompson

Chair

First appointed: March 2020

AppointedChair: December 2020

Career and experience:

Bruce joined the Board in March 2020.

During his executive career, Bruce was

CEO of Diploma PLC, the FTSE 100

specialised technical products and

services business, for over 20 years.

Prior to joining Diploma, Bruce was

a Director with the technology and

management consulting firm Arthur

D. Little Inc., both in the UK and the

US. Bruce is also currently the Chair

ofdiscoverIE Group plc.

Committee membership:

2. Jos Sclater

Chief Executive Officer

First appointed: January 2023

Career and experience:

Prior to being appointed CEO in 2023,

Jos spent three years as Group CFO

at Ultra Electronics plc, where he led

a value creating profit improvement

programme. Prior to that he was Group

CFO at Castrol Lubricants. Jos also spent

seven years at GKN plc in various roles,

including Group CFO and Director

of Corporate Finance & Strategy. He

started his career as a qualified solicitor

and held in-house legal and M&A roles

at ICI plc, AkzoNobel N.V. and GKN plc.

3. Rich Cashin

Chief Financial Officer

First appointed: April 2022

Career and experience:

Before joining Avon Technologies

plc, Rich was President, Strategy and

Corporate Development for Ultra

Electronics plc. Prior to this, Rich was

Group Head of Investor Relations and,

subsequently, a divisional Finance

Director for Meggitt PLC and held a

number of investment and finance

roles at Rolls-Royce plc and UBS AG.

4. Bindi Foyle

Senior Independent Director

First appointed: May 2020

Career and experience:

Bindi has been Group Finance Director

of Senior plc, a manufacturer for the

aerospace, defence, land vehicle and

power and energy markets, since July

2017, having served as an Executive

Director since May 2017. She joined

Senior in 2006 as Group Financial

Controller before becoming Director

of Investor Relations and Corporate

Communications in 2014. Prior to

joining Senior, Bindi held senior finance

roles at Amersham plc and General

Electric, having previously worked with

BDO Stoy Hayward.

Committee membership:

5. Maggie Brereton

Non-Executive Director

First appointed: April 2024

Career and experience:

Maggie is the Co-founder and CEO

of EOS, a specialist provider of deal

advisory services. Prior to founding EOS,

Maggie was Head of UK Transaction

Services at KPMG where she also

served as a board member, chairing

the audit committee and sitting on

the risk and remuneration committees.

Maggie stepped down from her role at

KPMG in 2019.

Committee membership:

6. Victor Chavez CBE

Non-Executive Director

First appointed: December 2020

Career and experience:

Victor has over 30 years of experience

in the defence and security

sectors. His early career focused on

telecommunications and software

before joining Thales UK in 1999. Victor

was appointed Chief Executive in 2011,

retiring in 2020 having successfully

integrated and grown the business

during this period. In recognition of

his services to defence and security for

the UK and France, he was appointed

a CBE in 2015 and a Chevalier of the

Legion d’Honneur in 2020.

Committee membership:

7. Zoe Holland

General Counsel and

Company Secretary

First appointed: November 2024

Career and experience:

Zoe took on the role of General Counsel

and Company Secretary in November

2024. Zoe joined the Group in October

2012 as Legal Counsel and was

appointed Deputy General Counsel

and Deputy Company Secretary in

2017. During her time at Avon, Zoe

has provided legal, compliance, M&A

and governance support for all of the

Group’s business units and is currently

a member of the Avon Protection

leadership team. Before joining Avon,

Zoe trained and qualified as a solicitor

with TLT Solicitors.

Board skills, experience and diversity

Sector Geography Experience

Defence

UK and

Europe

North

America

Rest of

World

Finance

and legal

Capital

markets

and public

companies

Public

sector and

procurement

Leadership

in large

organisations

Operations/

production

Executive Directors:

Jos Sclater X X X X X X X X X

Rich Cashin X X X X X X X X X

Non-Executive Directors:

Bruce Thompson X X X X X X X

Bindi Foyle X X X X X X X

Victor Chavez X X X X X

Maggie Brereton X X X

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Executive Committee

OUR

EXECUTIVETEAM

Jos Sclater

CEO

See page 79

Rich Cashin

CFO

See page 79

Zoe Holland

General Counsel and

Company Secretary

See page 79

Avon Technologies plc Annual Report and Accounts 2024

5. Paul Hamilton

President, Operational Excellence &

Continuous Improvement

Joined: March 2023

Career and experience:

Paul was appointed as President, Operational

Excellence & Continuous Improvement in

March2023. Before joining the team, he held

multiple operations leadership roles and

built over 25 years of lean manufacturing and

operations management experience, most

recently in Smith + Nephew where he was

responsible for operations across 16 plants.

Priorto this, Paul was at Ultra Electronics,

responsible for implementing excellence

programmes that were designed to be aligned

with business capacity and capability.

3. Gabby Colley

Corporate Affairs Director

Joined: April 2024

Career and experience:

Gabby has over 15 years of investor

relations, financial PR, corporate and internal

communications experience. Prior to Avon,

Gabby was SVP of Investor Relations &

Communications at Ultra Electronics plc

whereshe headed group communications

during the rebrand and relaunch of Ultra which

ultimately led to the £2.6bn acquisition by

Advent International. Gabby also spent time as

Head of Investor Relations and PR at Majestic

Wine PLC and Deputy Head of Investor Relations

at Just Eat PLC where she built skills in investor

relations and corporate communications

strategies, corporate and consumer PR, and

internal, digital and crisis communications.

Gabby started her career in financial PR where

she supported multiple IPOs, M&A transactions

andfundraisings.

2. Steve Elwell

President, Avon Protection

Joined: April 2021

Career and experience:

Prior to Steve’s appointment as President, Avon

Protection in March 2023, he held the role of

Vice President, UK & International for two years.

Steve joined Avon Protection from Teledyne

Technologies where he was Vice-President and

General Manager for the RF Power organisation,

providing strategic and operational leadership

of the business across its global footprint.

Prior to his role in Teledyne, Steve worked in

a variety of strategic and business leadership

roles at both QinetiQ and BAE Systems where he

developed new and innovative approaches to

business growth as well as delivering on major

international campaigns.

4. Kate Vizmeg

Group HR Director

Joined: September 2023

Career and experience:

Kate joined the Group in September 2023 as HR

Director for Team Wendy and was appointed

Group HR Director in November 2024. Kate

has over 15 years of HR/Business Operations

experience and joined Avon Technologies

plc from Redwood Living, a high growth real

estate company, where she was EVP of Human

Resource and Continuous Improvement.

1. James Wilcox

President, Team Wendy

Joined: March 2007

Career and experience:

Prior to his appointment as President, Team

Wendy in 2023, James was Chief Technical

Officer and a member of the Executive

leadership team. James joined the Group in

2007 and has held several roles overseeing

engineering, marketing, business development

and sales and product category management.

Prior to his time at Avon, James worked at Dyson

Ltd, responsible for new product development

and transfer to overseas operations.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

A STRONG

TEAM

As a Board we recognise the

fundamental importance of

ensuring robust governance

practices are implemented and

followed in order to promote the

long-term sustainable success

of the Company, generate value

forshareholders and contribute

towider society.

Bruce Thompson

Chair

The Board is committed to achieving high standards

of governance designed to protect the long-term

interests of all stakeholders, while promoting

the highest standards of integrity, transparency

andaccountability.

Dear Shareholder

I am pleased to present our Corporate Governance Report. This report

describes our governance structures and procedures, summarises the work

of the Board and its Committees and explains how the Board evaluated

its effectiveness in 2024. As a Board we recognise the fundamental

importance of ensuring robust governance practices are implemented

and followed in order to promote the long-term sustainable success of the

Company, generate value for shareholders and contribute to wider society.

Company name change

On 31 July 2024, the name of the Group was changed to Avon

Technologies plc to improve clarity and ensure there is no confusion

between the Strategic Business Units and the wider Group. This new

name recognises Avon’s heritage while embracing the next stage of its

development – accelerating growth through innovation in technology.

Stakeholder engagement

The Board recognises its obligation to ensure effective engagement

with its stakeholders, to understand their different perspectives and to

ensure their interests are considered in Board discussions and decision

making. While we understand the importance of balancing all stakeholder

views, this year we have sought to increase the mechanisms under which

we engage with and receive feedback from our employees, including

additional in-person townhall meetings and site visits. As Chair, I have also

engaged with our major shareholders at various points during 2024 to

Chair’s Introduction to Governance

understand their views and have ensured that these are communicated to

the Board. Details of stakeholder engagement activities during the period

are outlined on pages 46 and 47.

Purpose and culture

We are an organisation made up of over 900 people based in six locations

around the UK and North America. Our people come from a wide

variety of backgrounds and work on a diverse range of products sold in

a number of different markets. The thing we all have in common – the

thread that binds us together – is our shared purpose: Protecting Lives.

This underpins everything we do, including our culture and values. The

Board understands the importance of its role in setting the right tone

from the top and embedding it throughout the Group. In addition to the

Board, the Executive Committee has responsibility to ensure the policies

and behaviours set at Board level are effectively communicated and

implemented throughout the Group.

Our Code of Conduct reflects our purpose and our values, and sets out

the standards of behaviour and business conduct expected from anyone

working for or on behalf of the Group. All employees were asked to

complete training on our Code of Conduct during the year.

Governance, evaluation and the Board

The Board currently comprises two Executive Directors, three independent

Non-Executive Directors and me as Chair. The Board regularly reviews its

composition to ensure it has the necessary breadth and depth of skills and

experience to support the development of the Group. We give a warm

welcome to Maggie Brereton, who joined the Board in April 2024 as Non-

Executive Director. Maggie has strengthened the Board with considerable

experience in identifying value creation opportunities which has been

incredibly valuable so far. I would also like to thank Chloe Ponsonby for her

considerable contribution over the past seven years. Chloe stepped down

from the Board in April 2024 having been our Senior Independent Director

and Chair of the Remuneration Committee.

Avon Technologies plc Annual Report and Accounts 2024

During the period we completed an evaluation of the Board and

its Committees. The 2024 evaluation was internally facilitated using

questionnaires, led by the Company Secretary and me. It concluded

that the Board, its Committees, the individual Directors and the Chair

performed effectively during 2024, both individually and as a collective

unit. It was felt that the clearer strategy, organisation and performance

reporting had made it easier for the Board to challenge and contribute

during FY24 and the Directors believed that the Board members had the

appropriate complementary skills and experience, strengthened by the

appointment of Maggie Brereton. Further details can be found on page 83.

Corporate Social Responsibility

Given its significance, the Board has retained responsibility for the

development and oversight of our CSR strategy directly, rather than

establishing a specific Board-level committee. During the period, the

Board has approved our CSR mid-term targets and focus areas. At the

management level, Rich Cashin, our CFO, is the Executive Director with

responsibility for overseeing the delivery of our CSR strategy across the

business and chairs our Sustainability Steering Committee. This Committee

reports to the Board on progress. Further details on the remit of the

Steering Committee can be found on page 63.

Dividend

The Board is recommending a final dividend of 16.1c per share which,

together with the 7.2c per share interim dividend, gives a total dividend

for the year of 23.3c. The Board has reviewed our dividend policy in line

with our capital allocation policy, which we have updated following our

significant reduction in net debt this year. Our first priorities remain organic

investment into R&D and transformation followed by dividend payments

between 2.5 and 3x EPS cover through cycle, but with emphasis that any

excess cash will then be deployed in an EPS enhancing way, either through

M&A or alternative shareholder returns.

Annual General Meeting

The 2025 AGM of Avon Technologies plc will be held at Hampton Park

West, Semington Road, Melksham, Wiltshire SN12 6NB, at 10.30 am on

Friday 31January 2025. Further details, including the resolutions to be

proposed to our shareholders, can be found in the Notice of Meeting on

page 175. The result of the votes on the resolutions put forward at the

AGM will be publicly announced to the stock exchange and published on

our website as soon as possible following the conclusion of the meeting.

I will be in attendance at the AGM and will be very happy to take any

questions you may have regarding the operation of the Board during

the period.

We look forward to seeing you there.

Bruce Thompson

Chair

19 November 2024

Compliance with the UK Corporate Governance Code

The Company reports against the Financial Reporting Council’s (FRC’s)

UK Corporate Governance Code 2018 (‘the Code’), which is available

at www.frc.org.uk. The Board has applied all principles and complied

with all provisions in the Code for the year ended 30 September 2024.

Furtherdetails on how the Company applied the principles of the Code

during the period can be found as follows:

See page

Board leadership and Company purpose

Long-term value and sustainability IFC, 50

Culture 85

Shareholder engagement 46

Employee engagement 46

Other stakeholder engagement 47

Conflicts of interest 115

Division of responsibilities

Role of the Chair 85

Division of responsibilities 85

Non-Executive Directors 85

Composition, succession and evaluation

Appointments and succession planning 91

Skills, experience and knowledge 79

Length of service 79

Evaluation 86

Diversity 90

Audit, risk and internal control

Audit Committee 92

Integrity of financial statements 92

Fair, balanced and understandable 92

Internal controls and risk management 95

External auditor 94

Principal and emerging risks 70

Remuneration

Policies and practices 99

Alignment with purpose, values and long-term strategy 99

Independent judgement and discretion 104

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Maggie Brereton – NED Interview

Q&A

We were thrilled that Maggie joined the Board as

Non-Executive Director in April 2024. Maggie is

Co-Founder and CEO of EOS, a specialist provider

of deal advisory services. Prior to founding EOS,

shewas Head of UK Transaction Services at KPMG

where she also served as a board member.

Maggie brought extensive and valuable experience in identifying value

creation opportunities to the Board. She has a deep focus on connecting

plans with financial measures and a specialisation in analysis and the

development of change programmes. We had a chat with Maggie to hear

about her first impressions and focus areas since joining the Avon Board.

WHY DID YOU JOIN AVON?

I’ve have always respected and enjoyed the way Jos approaches

business challenges. When I was contacted about joining the Board

I was excited about the opportunity to be working with him and

his team.

Avon is an interesting company with great potential. It’s an

important business that provides critical infrastructure for the UK

MOD and US DOD. The transformation and the cultural changes

that are being made by Jos and the rest of his team are also a real

privilege to be part of.

From a personal perspective, I’ve been working with businesses

undergoing change (through M&A or not!) for over 20 years and it’s

a remarkable opportunity to be able to experience this one from

the other side of the table!

HOW WOULD YOU DESCRIBE

AVON’S CULTURE AND MOVE TO

CONTINUOUS IMPROVEMENT?

It has been very interesting to meet many colleagues across the

business and I have seen a real sense of openness to the new CI

approach.

There has been some very creative solutions to problems, including

utilising existing machinery in a different way and changing the

layout of the manufacturing lines.

As the teams start to see the benefits from the changes they are

making, more and more colleagues are getting on board – a sign

that this is here to stay and we’re not going back.

HOW WOULD YOU DESCRIBE THE

DYNAMICS OF THE AVON BOARD

AND YOUR COMBINED ROLE

IN BALANCING INTERESTS OF

DIFFERENT STAKEHOLDERS?

It’s a good diverse Board with different backgrounds, a range of

skill bases and a very experienced Chair. There is a very open and

clearly strong relationship between the NEDs which is positive to

be part of.

We’re all very aware that we’re on a journey after several years being

very inward focused and as we start to change and grow there will

be a greater level of stakeholder management expected.

WHAT ARE YOUR KEY FOCUS AREAS

AND HOW WILL YOU LEVERAGE YOUR

SKILLS AND EXPERIENCE?

I enjoyed taking part in the strategy review sessions this summer.

They were an open forum to challenge, discuss and develop the

leadership teams’ current plans and we’re expecting some exciting

things coming up over the next year! I think bringing a fresh pair

of eyes to the strategy and my experience from working across a

different range of businesses in different industries were helpful

for the team. I also look forward to our next phase of growth and

starting to look at M&A again.

I’ve also been following with interest the progress the team is

making in diversity, equity and inclusion (DEI) including in closing

the gender pay gap. I work in a predominantly male industry and

the defence sector has similar challenges, so the DEI programme

has become something very important to me personally. These

discussions have been welcomed and it is great to see actions are

being taken to move it forward.

Avon Technologies plc Annual Report and Accounts 2024

Corporate Governance Report

CORPORATE

GOVERNANCE

REPORT

Introduction

In the year under review, the Company was required to apply the main

and supporting principles of good governance set out in the UK Corporate

Governance Code issued in 2018 by the Financial Reporting Council (‘the

Code’). This Corporate Governance Report, along with information in the

Strategic and Remuneration Reports, explains how the principles and

provisions of the Code have been applied. We are pleased to confirm

that the Company was in compliance with the provisions of the Code

throughout the year ended 30 September 2024.

Board leadership

The Board comprises two Executive Directors and four Non-Executive

Directors (including the Chair, Bruce Thompson). Chloe Ponsonby stood

down from the Board on 31 March 2024 following an increase in her

executive responsibilities. Chloe was replaced by Maggie Brereton on

1 April 2024; details of the recruitment process followed are disclosed

on page 91. The Board regularly reviews its composition to ensure it has

the necessary breadth and depth of skills and diversity to support the

development of the Group. We believe the Board continues to have a

strong mix of experienced individuals who provide a unique perspective

on Company matters and bring specific skills to the Board.

Biographical details for each member of the Board can be found on page

79 of this Annual Report. All Directors will stand for re-appointment by

shareholders at the 2025 AGM.

Company purpose

The Company purpose is stated on the inside front cover of this Annual

Report. The Board recognises its role in establishing the purpose, values

and strategy of the Group and ensuring these are embedded throughout

the business.

Our culture

The Board clearly recognises the importance of culture and its link to

delivering our purpose and strategy. Assessing and monitoring our culture

are important to ensure we retain a successful culture as we grow. Through

our employee engagement initiatives, explained in more detail on page

46, the Board has sought to maintain a good level of engagement with

the workforce. The Board considers the most effective way of achieving

this engagement is via a Global Employee Advisory Forum, which was

established in 2021.

Division of responsibilities

There was a clear division of responsibility between the running of the

Board by the Chair and the running of the Group’s business by the CEO.

The Chair is responsible for the leadership of the Board and ensuring its

effectiveness in all aspects of its role. The CEO manages the Group and

has the primary role, with the assistance of the Board, of developing and

implementing business strategy. When necessary the Chair ensures that

meetings of Non- Executive Directors take place without the Executive

Directors present.

Rules concerning the appointment and replacement of Directors of the

Company are contained in the Articles of Association. Amendments to the

Articles must be approved by a special resolution of shareholders. One of

the roles of the Non-Executive Directors, under the leadership of the Chair,

is to undertake detailed examination and discussion of strategies proposed

by the Executive Directors, so as to ensure that decisions are made in the

best long-term interests of shareholders and take proper account of the

interests of the Group’s other stakeholders.

The Non-Executive Directors are appointed by the Board on terms

which allow for termination on three months’ notice. Copies of Executive

Directors’ service contracts and terms and conditions of appointment

for Non-Executive Directors are available for inspection at the

registered office.

How the Board operates

The Chair ensures, through the Company Secretary, that the Board agenda

and all relevant information are provided sufficiently in advance of

meetings and that adequate time is available for discussion of all agenda

items, in particular strategic issues. The CEO and the Company Secretary

discuss the agenda ahead of every meeting. At meetings, the Chair

ensures that all Directors are able to make an effective contribution and

every Director is encouraged to participate and provide opinions on each

agenda item. The Chair always seeks to achieve unanimous decisions of

the Board following due discussion of agenda items.

The Non-Executive Directors fully review the Group’s operational

performance and the Board as a whole has, with a view to reinforcing its

oversight and control, reserved a list of powers solely to itself which are

not to be delegated to management.

This list includes appropriate strategic, financial, organisational and

compliance issues, including the approval of high level announcements,

circulars, the Annual Report and Accounts and certain strategic and

management issues, which include:

• approval of the annual operating budget and the three-year strategic plan;

• the extension of the Group’s activities into new areas of business and/or

geographical areas (or their cessation);

• changes to the corporate or capital structure;

• financial issues, including changes in accounting policy, the approval of

dividends, bank facilities and guarantees;

• changes to the constitution of the Board;

• the approval of budgeted project spend of over $5m or any capex or

R&D expenditure which exceeds budget by more than 10%;

• the approval of bid/sales proposals where the estimated total contract

value exceeds $10m or a duration of five years for high risk proposals

(or$20m for low risk proposals);

• the approval of any agency commission which exceeds 10% on a

customer contract; and

• consideration and approval of all proposed acquisitions and mergers.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

How the Board operates continued

Each Director has full and timely access to all relevant information and

the Board meets regularly with appropriate contact between meetings.

All Directors receive a tailored induction to the Group from the Company

Secretary on joining the Board. When appointed, Non-Executive

Directors are made aware of and acknowledge their ability to meet

the time commitments necessary to fulfil their Board and Committee

duties. Procedures are in place, which have been agreed by the Board,

for Directors, where necessary in the furtherance of their duties, to take

independent professional advice at the Company’s expense and all

Directors have access to the Company Secretary.

The Company Secretary is responsible to the Board for ensuring that all

Board procedures and governance requirements are complied with. The

removal of the Company Secretary is a decision for the Board as a whole.

Committees of the Board

Of particular importance in a governance context are the three

Committees of the Board, namely the Remuneration Committee, the

Nomination Committee and the Audit Committee. Each Committee

operates under clear terms of reference, copies of which are available on

our website. Details of the operation of each Committee are provided

within the relevant Committee report.

Bindi Foyle is Chair of the Audit Committee. The Board is satisfied that

Bindi has recent relevant financial experience and her profile appears

on page 79.

Bruce Thompson is Chair of the Nomination Committee but, in accordance

with the Committee’s terms of reference, is not permitted to chair

meetings when the Committee is dealing with matters relating to the

Board Chair’s position.

Victor Chavez took over as the Chair of the Remuneration Committee

from Chloe Ponsonby on 1 April 2024. The Remuneration Committee’s

principal responsibilities are to decide on remuneration policy on behalf

of the Board and to determine remuneration packages and other terms

and conditions of employment, including appropriate performance-related

benefits for the Executive Directors and other senior executives. The

Remuneration Committee also has regard to the remuneration of the

wider workforce. More details of the activities of the Remuneration

Committee are set out in the Remuneration Report on pages 96 to 113.

Composition, succession and evaluation

The Nomination Committee is responsible for leading the process

for Board appointments and making recommendations to the Board,

putting in place plans for succession and regularly reviewing the Board’s

structure, size and composition. The Committee takes into account the

challenges and opportunities facing the Group and the skills, knowledge

and experience needed by the Board and makes recommendations

to the Board with regard to any changes. Further information and the

activities of the Nomination Committee during the period are detailed on

pages 89 to 91.

Performance evaluation

The Board continually strives to improve its effectiveness and conducts

an annual review of its performance and that of its Committees and the

individual Directors to enhance overall Board effectiveness. This year

the Board continued the practice of completing an internally facilitated

performance review using questionnaires.

The Chair and the Company Secretary agreed the scope of the evaluation.

The Board evaluation questionnaire, completed by all Board members

and the Company Secretary, was structured to provide Directors with

the opportunity to express views on a variety of topics including Board

remit and responsibilities, skills and dynamics of the Board, meetings and

content, Group strategy, internal control and risk management, decision

making and communication.

A discussion of the findings from the performance evaluation and actions

to be implemented took place at the September 2024 Board meeting.

Overall, the evaluation concluded that the Board, its Committees, the

individual Directors and the Chair performed effectively during 2024,

bothindividually and as a collective unit. The clearer strategy, organisation

and performance reporting made it easier for the Board to challenge

and contribute during FY24 and the Directors believed that the Board

members had the appropriate complementary skills and experience,

strengthened by the appointment of Maggie Brereton.

Attendance at meetings

All Committee and Board meetings held in the year were quorate. Directors’ attendance during the period ended 30 September 2024 was as follows:

Board

(7 scheduled)

Audit Committee

(4scheduled)

Remuneration Committee

(4 scheduled)

Nomination Committee

(3 scheduled)

Bruce Thompson 7 (7) – 4 (4) 3 (3)

Bindi Foyle 7 (7) 4 (4) 4 (4) 3 (3)

Chloe Ponsonby

4 (4) 3 (3) 2 (2) 1 (2)

Victor Chavez 7 (7) 4 (4) 4 (4) 3 (3)

Maggie Brereton

3 (3) 1 (1) 2 (2) 1 (1)

Jos Sclater 7 (7) – – –

Rich Cashin 7 (7) – – –

The maximum number of meetings which each Director could have attended is shown in brackets.

1 Chloe Ponsonby stepped down from the Board on 31 March 2024.

2 Maggie Brereton was appointed to the Board on 1 April 2024.

Corporate Governance Report continued

Avon Technologies plc Annual Report and Accounts 2024

The following areas were identified by the Board as areas of focus for 2025

and beyond:

• continuing development of the Group’s longer-term strategy;

• development of the Group’s strategy process to include increased focus

on the outer years;

• further increasing the level of interactions between the Non-Executive

Directors and the Executive Committee members outside of scheduled

Board meetings; and

• enhancing the Board’s approach to risk management.

Audit, risk and internal control

The Board has an established framework of internal controls covering

both financial and non-financial controls. In addition, there is a process for

identifying, evaluating and managing significant business risks, including

emerging risks, faced by the Group. This process was in place throughout

the 2024 financial year.

The Code requires that Directors establish procedures to manage risk,

oversee the internal control framework and determine the nature and

extent of the principal risks the Company is willing to take in order to

achieve its long-term strategic objectives.

The Board, through the Audit Committee, reviews the effectiveness of

the Group’s system of internal controls on a continuing basis. The scope

of this review covers all controls including financial, operational and

compliance controls, as well as risk management. The Audit Committee

has responsibility to review, monitor and make policy recommendations to

the Board upon all such matters.

The Audit Committee keeps this system under continuous review and

formally considers its content and its effectiveness on an annual basis.

Such a system can provide only reasonable, and not absolute, assurance

against material misstatements or losses. The section on internal

control in the Audit Committee Report on page 95 and the following

paragraphs describe relevant key procedures within the Group’s systems

of internal control and the process by which the Directors have reviewed

theireffectiveness.

Systems exist throughout the Group which provide for the creation of

five-year plans and annual budgets; monthly reports enable the Board

to compare performance against budget and to take action where

appropriate. Procedures are in place to identify all major and emerging

business risks and to evaluate their potential impact on the Group. These

risks are described within the Strategic Report on pages 70 to 75.

Risk management

Risk is managed by the business unit and functional leadership teams,

supported and overseen by the Risk Steering Group, which is led by the

Company Secretary. The risk management process has remained the same

during the period but a more detailed summary of the risk management

process and the output from this year’s reviews are set out in more detail in

the Principal Risks and Risk Management section on pages pages 70 to 75.

The Audit Committee carried out six monthly reviews of the key risks

facing the Group and risk management activities undertaken during the

period, following the risk reviews conducted by the Risk Committee with

the business leadership. The Risk Committee also carried out an annual

assessment of the major business risks and emerging risks affecting the

Group, including macro risks.

Internal control

There is a clearly defined delegation of authority from the Board to the

business units, with appropriate reporting lines to individual Executive

Directors. There are procedures for the authorisation of capital expenditure

and investment, together with procedures for post-completion appraisal.

The internal control framework has been updated to align with the

Strategic Business Units (SBUs). SBUs hold Quarterly business reviews with

the Group Executive team; business performance is reviewed against

budget, the delivery of strategic priorities is reviewed against agreed

timelines, core business metrics are reviewed (safety, quality, operational

efficiency, sales and business development) and any required corrective

action plans are documented through the review process. An enhanced

controls manual, aligned with the SBU structure, has been developed and

will be rolled out through 2025. During the year the Group Internal Audit

Manager has implemented a programme of internal audits focused on

testing the control framework, with the output and recommendations for

improvement presented to the Audit Committee.

The Board has issued a Code of Conduct, reviewed annually, which

reinforces the importance of a robust internal control framework

throughout the Group. The Board recognises that an open and honest

culture is key to understanding concerns within the business and to

uncovering and investigating any potential wrongdoing. The Code of

Conduct sets out the procedure whereby individuals may raise concerns

in matters of financial reporting or any other matter of concern with

management or directly with the Chair of the Audit Committee, or

anonymously through our ‘Speak Up’ process, to ensure independent

investigation and appropriate follow-up action. All employees complete

training on the Code of Conduct to ensure they have read and

understood it.

Although the Board itself retains the ultimate power and authority in

relation to decision making, the Audit Committee meets at least four

times a year with management and the external auditor to review specific

accounting, reporting and financial control matters.

This Committee also reviews the interim, preliminary and annual

statements and has primary responsibility for making a recommendation

on the appointment, re-appointment and removal of the external auditor.

Relations with shareholders

The Directors regard regular communications with shareholders as

extremely important. All members of the Board receive copies of analysts’

reports, of which the Company is made aware, and receive an investor

relations report at every Board meeting. The Board reports formally to

its shareholders in a number of ways, including via regulatory news

announcements, press releases, routine reporting obligations, a detailed

Annual Report and Accounts and, at the half year, an interim report.

Regular dialogue takes place with institutional shareholders, including

presentations after the Company’s preliminary announcements of the half

and full year results. The Board receives comments from analyst meetings

and shareholder meetings after both interim and final results and at other

times during the period. The AGM includes a presentation by the CEO on

aspects of the Group’s business and shareholders have the opportunity

to both ask questions and leave written questions with the Company

Secretary for the response of the Directors. Directors also make themselves

available after the AGM to talk informally to shareholders, should they wish

to do so, and respond throughout the year to any correspondence from

individual shareholders.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Special Security Agreement

On 8 December 2020, our US subsidiary Avon Protection Ceradyne, LLC

(APC) and the Company entered into a Special Security Agreement with

the US Department of Defense (US DOD). The SSA was entered into in

support of the US DOD contracting and product development elements

of the then ballistic protection business and permits APC to perform

classified US defence contracts. There are a number of specific protocols

that the Company and APC are required to comply with under the

SSA, including the appointment to the APC Board of two independent

outside Directors approved by the US Government. The SSA imposes

certain restrictions on the degree of influence the Company can exert

over APC and it is therefore important that the Company maintains a

strong relationship with the APC Board, in order to ensure that we are

fulfilling our own governance obligations. James Wilcox, President of Team

Wendy, is an inside Director on the APC Board. We anticipate continued

engagement with APC and the outside Directors in the coming year under

the governance of the SSA to support synergy opportunities across APC’s

product portfolio for the benefit of Team Wendy. During the year, APC

changed its name to Team Wendy Ceradyne, LLC.

Disclosure and Transparency Rules (DTR)

Disclosures in respect of the DTR requirements under DTR 7.2.6 are given in

the Directors’ Report on page 116 and have been included by reference.

Going concern

The Directors have prepared a going concern assessment covering the

12-month period from the date of approval of these financial statements.

The assessment indicates that the Group will have sufficient funds to meet

its liabilities as they fall due for that period.

The Group has a committed RCF of $137m to May 2027. Related loan

covenants include a limit of 3.0 times for the ratio of net debt, excluding

lease liabilities, to bank-determined adjusted EBITDA (leverage), and a

minimum limit of 3.5 times for the ratio of bank-determined adjusted EBITDA

to interest payable on bank loans and overdrafts. At 30 September 2024

leverage was 0.91 times (2023: 1.94 times). Bank-determined adjusted

EBITDA is calculated excluding certain items.

As part of the going concern assessment, the Directors considered the

sensitivity of financial covenants and liquidity headroom to a reverse

stress test to determine the deterioration against the base case forecast

required to break even with covenant levels. This demonstrated substantial

headroom, with the downside movement required not considered plausible

given the secured order book and mitigating actions available to reduce

future cash outflows or expenses within management’s control.

On this basis, the Directors are confident that the Group and Company

will have sufficient funds to continue to meet their liabilities as they fall

due for at least 12 months from the approval of these financial statements.

Accordingly the Group and Company continue to adopt the going

concern basis in preparing their financial statements.

Viability statement

The Directors have assessed the viability of the Group over a five-year

period to September 2029, taking account of the Group’s current position

and potential impact of the principal risks documented in the Strategic

Report. Based on this assessment, the Directors have a reasonable expectation

that the Group will be able to continue in operation and meet its liabilities

as they fall due over the period to September 2029.

In making this statement, the Directors have considered the resilience

of the Group, taking account of its current position, the principal risks

facing the business in severe but plausible downside scenarios, and the

effectiveness of any mitigating actions. This assessment has considered

the potential impacts of these risks on the business model, future

performance, solvency and liquidity over the period. As set out in the

TCFD section the potential financial impact of climate change for the

next five years has been assessed as low, with no material impact on

viability expected.

In making their assessment, the Directors have taken account of the

Group’s RCF which provides financing until May 2027. The Directors have

areasonable expectation that broadly similar financing could be obtained

at the end of the current RCF, supporting continuing operations. During

the period the Group has complied with all covenant requirements

attached to its financing facilities.

The Directors consider the five-year lookout period to be the most

appropriate as this aligns with the Group’s own strategic planning period.

The Group has an annual business planning process, which comprises

a strategic plan, a financial forecast for the current year and a financial

projection for the forthcoming five years. This plan is reviewed at least

annually by the Board as part of its strategy setting process. Once

approved by the Board, the plan provides a basis for setting all detailed

financial budgets and strategic actions that are subsequently used by the

Board to monitor performance. The forecast performance outlook is also

used by the Remuneration Committee to establish the targets for both the

annual and long-term incentive schemes.

Corporate Governance Report continued

Avon Technologies plc Annual Report and Accounts 2024

Nomination Committee Report

LETTER FROM

THE CHAIR

We were delighted to welcome

Maggie Brereton as a Non-Executive

Director following the process to find

a successor for Chloe Ponsonby, who

departed during the year.

Bruce Thompson

Chair of the Nomination Committee

Attendance at Nomination Committee meetings

During the period, the Nomination Committee held three

scheduled meetings. Attendance of the members of the

Committee is recorded in the table below:

Scheduled meetings Attended

Eligible

to attend

Bruce Thompson (Chair) 3 3

Chloe Ponsonby

1 2

Bindi Foyle 3 3

Victor Chavez 3 3

Maggie Brereton 1 1

1 Chloe Ponsonby stepped down from the Board on 31 March 2024.

The Nomination Committee comprises all the Non-Executive Directors.

Main responsibilities

The main responsibilities of the Committee are as follows:

• to regularly review the Board’s structure, size and composition,

taking into account the challenges and opportunities facing

the Group and the skills, knowledge and experience needed

by the Board and to make recommendations to the Board with

regard to any change;

• to put in place and periodically review succession plans for

Directors and, more generally, senior executives; and

• to lead the process for Board appointments and make

recommendations to the Board.

The Committee’s terms of reference are available within the

Corporate Governance section of the Company’s website and

arereviewed annually.

All Directors are appointed by the Board following a rigorous

selection process and subsequent recommendation by

theCommittee.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Diversity

The Board recognises the benefits of diversity and believes the Board’s

perspective and approach are greatly enhanced by gender, age and

cultural diversity. The Nomination Committee is responsible for the Board’s

policy in this area. Diversity of skills, background, knowledge, international

and industry experience, and gender, amongst many other factors, will

be taken into consideration when seeking to appoint new Directors to

the Board. The Board’s Diversity Policy can be found in the Corporate

Governance section of the Company’s website. In addition, during the year

we integrated DEI activities into our CSR strategy, which is a focus area for

the business for the coming year.

During the year we relaunched our female leadership ERG, supported

by the Committee, which aims to help develop and promote our female

leadership, create a forum where we can identify, nurture and develop the

female leaders of the future and ensure that all women at Avon thrive in

their careers. The initiative is driven by a steering group which collaborates

on long-term ideas to help shape the future face of Avon Technologies

plc and create an agenda and platform to help build our future female

talent pipeline.

During 2024 we have supported a number of initiatives, including

International Women’s Day and a Group-wide mentoring programme.

We have achieved our minimum target of 33% female representation on

the Board and Executive Committee and continue to work to achieve the

same minimum target representation for the leadership teams.

Further information, including the number of women in senior management

and within the organisation, is shown in the Corporate Social Responsibility

Report on page 50.

Diversity of individuals on the Board and Executive management

In accordance with the UK Financial Conduct Authority’s Listing Rule

9.8.6R(9) the Board confirms that as of 30 September 2024 it has met the

targets for one of the senior positions on the Board (Chair, CEO, SID or CFO)

to be held by a woman and for one Director to be from an ethnic minority

background. The Board does not currently meet the target for at least 40%

female membership of the Board, with the Board currently comprising 33%

female representation. The Board will continue to work towards achieving

this target in future. The Company’s mandatory requirement for a diverse

candidate pool ensures that we continue to have the opportunity to

recruit candidates from all gender, cultural and ethnic backgrounds,

while we remain focused on recruiting the best candidate for any role

based on merit.

The below table sets out the details of the diversity of the individuals serving

on the Board and Executive management as at 30 September 2024.

Thedata was obtained on a voluntary self-reported basis.

Gender identity or sex of the Board and Executive management

Number of

Board members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO,

SID and Chair)

Number on the

Executive

Committee

Percentage of

Executive

Committee

Men 4 66% 3 5 62%

Women 2 33% 1 3 38%

Ethnic background of the Board and Executive management

Number of

Board members

Percentage

of the Board

Number of

senior positions

on the Board

(CEO, CFO,

SID and Chair)

Number on the

Executive

Committee

Percentage of

Executive

Committee

White British or other white (including

minority white groups) 5 83% 3 7 87%

Mixed multiple ethnic groups - - - - -

Asian/Asian British 1 17% 1 - -

Black/African/Caribbean/Black British - - - 1 13%

Other ethnic group, including Arab - - - - -

Nomination Committee Report continued

Avon Technologies plc Annual Report and Accounts 2024

Activities during 2024

During the period, the Committee:

• considered and confirmed the appointment of Maggie Brereton as

Non-Executive Director, following the departure of Chloe Ponsonby

on31 March 2024;

• considered and approved the appointment of Bindi Foyle as

SeniorIndependent Director and Victor Chavez as Chair of the

Remuneration Committee;

• reviewed the composition of the Board and its succession plan;

• carried out an annual review of the Committee’s terms of reference;

• recommended re-election of the Board at the forthcoming Annual

General Meeting; and

• discussed the Board performance evaluation results with the Board

as a whole.

Board changes

Chloe Ponsonby stepped down from the Board on 31 March 2024,

following an increase in her executive responsibilities. Chloe Ponsonby was

Chair of the Remuneration Committee and Senior Independent Director.

The Committee approved the appointment of Bindi Foyle as Senior

Independent Director and Victor Chavez as Chair of the Remuneration

Committee following Chloe’s departure. The recruitment process to

find Chloe’s replacement was led by me as Chair of the Committee.

Independent executive search consultants Korn Ferry were retained to

assist with the recruitment process. The Committee provided Korn Ferry

with a detailed description of the role and associated skills and experience

required. A longlist of Korn Ferry potential candidates based on initial

interviews was put together, from which a shortlist of candidates was

selected by the Committee for interview. The Chair interviewed the

shortlisted candidates and provided feedback to the Committee on each

candidate; shortlisted candidates were interviewed by other members of

the Board and they went through a referencing. Following the conclusion

of the interviews, Maggie Brereton was identified as the most suitable

candidate for the role of a Non-Executive Director and was appointed

to the Board on 1 April 2024. An interview with Maggie Brereton is

on page 84.

The Committee has previously decided that all Directors should be

put forward for re-appointment by shareholders each year at the AGM.

Taking into account the performance and value that each Director has

brought to the Board, the Committee confirms the appointment of each

Non-Executive and Executive Director should be renewed for a further

year. Accordingly, resolutions to re-appoint each Director for another year

are being put to shareholders at the forthcoming AGM.

Succession planning

The Committee reviews succession planning for the Board formally in

order to ensure the Board is adequately prepared for potential changes to

key Board positions. In addition, the Committee reviewed the executive

leadership needs of the Group during the period.

Renewing the longer-term succession planning of the Executive Committee

and business unit leadership teams will be a priority for the coming year

now the organisational structure changes have been completed.

Alongside this, the Committee retains oversight of the programmes in

place to assess and facilitate talent development amongst the management

teams to ensure there is a structured approach to growing, developing

and retaining the Company’s future leaders.

Committee evaluation

The evaluation of the effectiveness of the Committee was conducted

as part of this year’s Board performance evaluation. The outcome of the

2024 Committee review was positive and highlighted the need for the

Committee to ensure it covers broader succession plans for the Executive

Committee and senior leadership roles in 2025. Further detail on the result

of the Board evaluation exercise is included on page 86 of the Corporate

Governance Report.

Bruce Thompson

Chair of the Nomination Committee

19 November 2024

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Audit Committee Report

LETTER FROM

THE CHAIR

During 2024, the Audit Committee

continued its key oversight role for

the Board of the Group’s financial

management and reporting to

reassure shareholders that their

interests are properly protected.

Bindi Foyle

Chair of the Audit Committee

Attendance at Audit Committee meetings

During the period, the Audit Committee held four scheduled

meetings. Attendance of the members of the Committee is

recorded in the table below:

Scheduled meetings Attended

Eligible

to attend

Bindi Foyle (Chair) 4 4

Chloe Ponsonby 3 3

Maggie Brereton 1 1

Victor Chavez 4 4

The Committee monitors the integrity of the Group’s financial

statements and supports the Board with its ongoing monitoring

of the effectiveness of the Group’s risk management and internal

control systems.

During 2024, the Audit Committee continued its key oversight

role for the Board of the Group’s financial management and

reporting to reassure shareholders that their interests are

properlyprotected.

The Audit Committee has established a set programme of

activities, with agenda items scheduled to coincide with the

annual financial reporting calendar. The Committee reports

regularly to the Board on its work.

During the 2024 financial year, the Committee has continued

to monitor the integrity of the Group’s financial statements

and supported the Board with its ongoing monitoring of the

Group’s risk management and internal control systems. The

Committee also determined the focus of the Group’s internal

audit activity and reviewed its findings, and continues to

verify that recommendations and agreed actions are being

appropriatelyimplemented.

In accordance with the Code, the Committee continued to have

oversight of the Group’s whistleblowing function, known as

‘Speak Up’, together with the associated policies and procedures.

The Committee received regular updates on the number

and types of Speak Up reports and agreed follow-up actions

throughout the year from the General Counsel.

During 2024 the Audit Committee undertook a full evaluation

exercise of KPMG’s audit approach, to ensure the effectiveness

of the external audit function. Reviewing the results of the

evaluation of the external audit process, we are satisfied with

both the auditor’s independence and audit approach.

The Audit Committee acts on behalf of the full Board, and the

matters reviewed and managed by the Committee remain the

responsibility of the Directors as a whole.

Avon Technologies plc Annual Report and Accounts 2024

Main responsibilities of the Audit Committee

The Audit Committee has delegated authority from the Board set

out in its written terms of reference. The terms of reference for the

Audit Committee are available for inspection at the Company’s

registered office and on our website.

The key objectives of the Audit Committee are:

• to provide effective governance and control over the integrity

of the Group’s financial reporting and review the significant

financial reporting judgements;

• to support the Board with its ongoing monitoring of the

effectiveness of the Group’s system of internal controls and risk

management systems;

• to monitor the effectiveness of the Group’s internal audit

function and review its material findings;

• to oversee the relationship with the external auditor and

make recommendations to the Board in relation to the

re-appointment of the external auditor and monitor the

external auditor’s objectivity and independence;

• to review the adequacy of the Company’s whistleblowing

arrangements and the provision of appropriate investigation of

any matters raised; and

• to advise the Board on whether the Committee believes the

Annual Report and Accounts, taken as a whole, is fair, balanced,

and understandable and provides the information necessary

for shareholders to assess the Company’s position and

performance, business model and strategy.

2024 Annual Report

The main areas of focus considered by the Committee during 2024 were

as follows:

• The presentation of the financial statements and the quality and

acceptability of accounting policies and practices including the

presentation of adjusted performance measures and the adjusting

items. The Committee reviewed papers prepared by management,

challenged management’s judgements and estimates, and reviewed

the disclosure of adjusted items within the Group’s half year and

full yearresults, agreeing that the position taken in the financial

statementsis appropriate.

• The clarity of the disclosures and compliance with financial

reporting standards and relevant financial and governance reporting

requirements. Material areas in which significant judgements have been

applied are discussed separately in more detail below.

• At the request of the Board, the Committee considered whether the

2024 Annual Report was fair, balanced and understandable and whether

it provided the necessary information for shareholders to assess the

Company’s position and performance, business model and strategy.

Having taken account of the other information provided to the Board

throughout the year, the Committee was satisfied that, taken as a whole,

the Annual Report and Accounts was fair, balanced and understandable.

The Committee was content, after due challenge and debate, with the

assumptions made and the judgements applied in the accounts and

agreed with management’s recommendations. In addition, the Committee

reviewed and recommended the approval of the statements on corporate

governance, internal control and risk management in the Annual Report

and Accounts and the half year results announcement.

Significant judgements and estimates considered

bytheAudit Committee

After discussions with management and the external auditor, the

Committee determined that the key risks of material misstatement of the

Group’s 2024 financial statements arose in the following areas:

• valuation of goodwill allocated to Team Wendy; and

• estimation of the defined benefit pension assets and obligations.

Goodwill impairment

The Group has a significant goodwill balance as a result of legacy

acquisitions, predominantly in relation to Ceradyne and Team Wendy.

Goodwill and other attributable net assets are tested for impairment at the

Team Wendy and Avon Protection CGU level.

The impairment review of the Team Wendy CGU demonstrated future

value in use was greater than the carrying value of goodwill and other

attributable net assets. The value in use calculation was based on the risk-

adjusted Board approved five-year plan and utilised discounted cash flow

projections, adjusted to exclude expansionary capital expenditure and

linked cash flows.

The Committee considered and challenged the assumptions applied by

management, including consideration of scenario analysis and sensitivities,

confirming management’s assessment that no impairment was required.

Further analysis and detail on goodwill are set out in note 3.1 of the

financialstatements.

Composition of the Audit Committee

The members of the Committee are set out on page 86 of the Corporate

Governance Report. The Committee members are all independent

Non-Executive Directors and have the appropriate range of financial

and commercial expertise necessary to fulfil the Committee’s terms of

reference. The Board considers that as a serving Group Finance Director

of a UK listed company, I have both the current and relevant financial

experience required to chair this Committee.

During the period, Maggie Brereton joined the Committee on her

appointment as an independent Non-Executive Director. Chloe Ponsonby

stepped down from the Committee. Further details are provided in the

Nomination Committee Report on page 91.

The Committee typically invites the Board Chair to attend all Committee

meetings together with the Executive Directors, the Group Financial

Controller and the Internal Audit Manager.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Estimation of the defined benefit pension assets

andobligations

The Group operated a contributory defined benefit plan to provide

pension and death benefits for the employees of its UK Group companies

employed before 31 January 2003. The plan was closed to future accrual

ofbenefits on 1 October 2009.

The investments held by the pension scheme include both quoted

and unquoted securities, the latter of which by their nature involve

assumptions and estimates to determine their fair value. Where there

is no active market for the unquoted securities, the fair value of these

assets is estimated by the pension trustees based on advice received

from the investment manager whilst also using any available market

evidence of any recent transactions for an identical asset. The assumptions

used in valuing unquoted investments are affected by current market

conditions and trends which could result in changes in fair value after

themeasurement date.

Estimation of the defined benefit pension obligation involves significant

judgements concerning future changes in inflation, mortality rates and the

selection of a suitable discount rate, as well as the future performance and

valuation of the scheme’s assets. Changes to these actuarial judgements

could have a significant impact on the estimated pension obligation.

An updated actuarial valuation for IAS 19 (revised) purposes was carried

out by an independent team from the actuary (Aon) for year end using

the projected unit credit method. In the second half of FY24 the actuarial

valuation provider was changed to Aon, having previously been a separate

third party. This change facilitated the use of detailed member-by-member

calculations to estimate defined benefit obligations, as applied during full

actuarial valuations. This approach refines the roll-forward methodology

used previously and is considered a change in accounting estimate.

The Committee reviewed assumptions applied by the actuary for the

scheme and agreed these as appropriate. The refinement in methodology

to use member-by-member calculation was also specifically considered,

with the Committee confirming it appropriate to treat this as a change in

accounting estimate.

Further analysis and detail on the Group’s defined benefit pension scheme

are set out in note 6.2 of the financial statements.

External auditor

The Audit Committee considers the appointment of the external auditor

each year. KPMG LLP (KPMG) was appointed as the Group’s external auditor

for the 2019 audit following a tender process in 2018. 2024 is KPMG’s sixth

year as the Group’s external auditor. Paul Glendenning acted as audit

partner for the first time this year, in line with normal rotation practice.

The Committee oversees the relationship with the external auditor, and

monitors all services provided by and fees payable to it, to ensure that

potential conflicts of interest are considered and that an objective and

professional relationship is maintained.

In particular, the Committee reviews and monitors the independence

and objectivity of the external auditor and the effectiveness of the audit

process. At the outset of the annual audit process, the Committee receives

a detailed audit plan from the auditor, identifying its assessment of the key

risks and its intended areas of focus. This is agreed with the Committee to

ensure coverage is appropriately focused.

The Committee also holds separate discussions with the external auditor

without Executive management being present.

Review of the effectiveness of the external auditor

The Committee evaluates the effectiveness of the external auditor

annually. This evaluation includes a review of the effectiveness of the

external audit process, consideration of whether management had been

adequately challenged, interaction with the Committee and quality of the

audit work. The 2023 review included reports from the external auditor

and management incorporating feedback against a formal assessment

framework from key members of the Group’s finance team and those

employees who had interacted with KPMG during the audit. The Group

reviewed and discussed the overall structure of the audit team to ensure

consistency and appropriate resourcing in future audits. This report was

reviewed at the Committee’s meeting in March 2024. Overall feedback

was positive and where opportunities for improvement were identified in

respect of earlier discussion with management regarding developments

and changes during the period, KPMG was asked to take account of that

feedback in the planning for future audit activity. KPMG and management

also worked together to more clearly define the information required

from management during the audit to aid increased audit efficiency. This

review concluded that the audit was conducted to a good standard with

appropriate focus and challenge on the key audit risks.

KPMG has discussed more generally the firm’s process for enhancing

audit quality and efficiency which includes internal quality reviews and

enhanced use of technology.

Audit Committee Report continued

Avon Technologies plc Annual Report and Accounts 2024

Audit fees and auditor re-appointment

During 2024, the Committee reviewed and approved the proposed audit

fees and terms of engagement for the 2024 audit and recommended to

the Board that it proposes to shareholders that KPMG be re-appointed

as the Group’s external auditor for 2025 at the AGM to be held on

31January 2025.

Auditor independence

To ensure the independence and objectivity of the external auditor and

avoid a situation where the auditor’s familiarity with the Group’s affairs

results in excessive trust, the Committee maintains a formal Auditor

Independence Policy. The policy follows the ethical guidance on auditor

independence issued by the FRC in December 2019. Under the policy all

non-audit services permitted by the FRC require the specific approval

of the Audit Committee. The policy also establishes guidelines for the

recruitment of employees or former employees of the external auditor.

The breakdown of the fees paid to the external auditor is included in note

2.5 of the financial statements. KPMG also conducted a half year review on

the interim financial results of the Group. No other non-audit services were

provided by KPMG during the period.

Internal control

The Committee regularly reviews the effectiveness of the Group’s internal

controls and risk management processes. This involves monitoring

and reviewing the effectiveness of internal audit activities, which

includes a review of the audits carried out and the recommendations

arising. It also reviews management’s responses and actions to address

recommendations, and approves the internal audit programme and

resourcing for 2025.

The internal audit programme for 2024 comprised seven risk-based

audits undertaken by the Group Internal Audit Manager. The Group

Internal Audit Manager reports directly to the Audit Committee, which

considered and approved the scope of the 2024 internal audit programme

to be undertaken. During the period, internal audit work was focused on

inventory management, anti-bribery and corruption controls, sales and

business development and governance arrangements within the SBUs.

IT controls are a particular area of focus and a programme, headed by the

Group CISO, has been established to work towards Cyber Security Maturity

Model Certification (mandatory cybersecurity controls that will be required

by the US Department of Defense from 2025 onwards). 2024 saw some

progress in improving IT controls including those related to access and

master data management. This will remain an area of focus for 2025.

Under a rolling 12-month programme, the Audit Committee has approved

planned internal audit activity for 2025 including audits of the new

product introduction process and core financial controls.

During the year several improvements have been identified and actioned

in respect of developing the Group’s risk management processes. These

included an increased emphasis on bottom-up risk documentation and

analysis, along with enhanced controls documentation and reporting.

The new controls requirements will be rolled out through 2025 following

approval by the Committee.

For the current period the Group’s internal control processes functioned at

the SBU level. This was subject to monitoring by the Group Executive team,

through quarterly SBU reviews where business performance is reviewed

against budget, delivery of strategic priorities is measured against agreed

timelines, core business metrics are reviewed (safety, quality, operational

efficiency, sales and business development) and any required corrective

actions plans are documented. This process has been in place for the

year under review and up to the date of approval of the Annual Report

and Accounts. It has been reviewed by the Board and monitored by the

Committee, which is satisfied with the arrangements.

Audit Committee effectiveness review

The evaluation of the effectiveness of the Audit Committee was

conducted alongside the Board effectiveness review, information on

which is provided in the Corporate Governance Report on page 86.

The review concluded that the Audit Committee continued to operate

effectively during the period.

Bindi Foyle

Chair of the Audit Committee

19 November 2024

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Remuneration Committee Report

The Directors’ Remuneration Policy

approved last year was designed to

stimulate and reward the achievement

of strategic goals and the translation

of this into much improved financial

performance. It is gratifying to see

the Policy supporting and rewarding

superior execution by the leadership

team this year.

Victor Chavez CBE

Chair of the Remuneration Committee

Attendance at Remuneration

Committee meetings

During the period, the Remuneration Committee held four

scheduled meetings. Attendance of the members of the

Committee is recorded in the table below:

Scheduled meetings Attended

Eligible

to attend

Victor Chavez 4 4

Bruce Thompson 4 4

Bindi Foyle 4 4

Maggie Brereton 2 2

Chloe Ponsonby 2 2

I took on the role of chairing the Remuneration Committee in

March 2024 and I am grateful for the handover provided by my

predecessor, Chloe Ponsonby. As such I am pleased to present the

Directors’ Remuneration Report for the year ended 30 September 2024.

This includes the following three sections:

• this Annual Statement which summarises the work of the

Remuneration Committee (‘the Committee’) in 2024 and sets

out the context in which pay decisions were made;

• the Directors’ Remuneration Policy (‘the Policy’) which received

97.5% support at the 2024 AGM and sets the parameters within

which Directors are remunerated; and

• the Annual Report on Remuneration which provides: (i) details

of the remuneration earned by Directors and the link between

Company performance and pay in FY24; and (ii) how we intend

to implement the Policy in FY25.

The Annual Statement and the Annual Report on Remuneration

will, together, be subject to the usual advisory shareholder vote at

the AGM on 31 January 2025. The Policy, which was approved in

January 2024, will apply for the 2025 financial year.

LETTER FROM

THE CHAIR

Avon Technologies plc Annual Report and Accounts 2024

Remuneration Policy approval

At the January AGM, we received 97.5% shareholder support for our new

Policy which included a one-off matching award. This was a bespoke

arrangement and we are grateful for shareholders who participated in the

consultation process and for their support. The annual bonus and Long

Term Incentive Plan awards outlined in the Policy, including the one-off

share matching awards made earlier in the year, are designed to reward the

sustained delivery of financial and operational benefits.

To qualify for the matching scheme, the Executive Directors needed to

purchase shares in Avon Technologies plc with a value of 100% of salary.

They have subsequently fulfilled this requirement and each now hold

investments in Avon Technologies plc worth considerably more than two

year’s net salary. This shows their commitment to the Group and aligns

their net interests with shareholders.

Business context

This has been the first full year of Jos Slater’s leadership as CEO, closely

supported by Rich Cashin as CFO. The Executive team has made excellent

strategic progress during the year and the STAR strategy is clearly

delivering benefits. It is gratifying to see that superior execution by the

leadership team has led to considerable progress during the year through

the launch of a new business structure and way of working and the

change to a continuous improvement culture. Significant value has been

generated for all stakeholders.

This year saw adjusted operating profit increase from $21.2m to $31.6m

and improvements in working capital, both of which are rewarded

through the annual bonus. As we enter 2025 there is more to do to

continue to improve the Group’s processes and facilities and 2025 will

beayear where strong execution is critical, particularly in Team Wendy

where significant financial and operational benefits are expected under

the site consolidation programme.

Remuneration outcomes for FY24

The annual bonus for FY24 was dependent on a scorecard of measures

comprising adjusted Group operating profit (50%), average Group working

capital turns (30%) and the delivery of strategic objectives (20%). The Group

operating profit and working capital turns targets were met in full.

Following strong individual performance and delivery against the strategic

objectives the Committee has determined that 20% out of the 20% on

strategic objectives should be payable. Total annual bonus payments for

the Executive Directors are therefore 125% of salary.

Vesting of the Long-Term Incentive Plan award made to Rich Cashin on 8

March 2022 is based on two measures – relative TSR and EPS growth over

a three-year performance period. The EPS growth element of the LTIP

awards was, with hindsight, very stretching and has not been met, so this

part of the award will lapse in full. Achievement of the TSR element will be

measured over the three-year period ending on 31 January 2025. Based on

an interim assessment of performance the TSR portion of the award is on

track for around 60% vesting. JosSclater did not receive an award under

this cycle of the LTIP.

No discretion was applied in determining the annual bonus and LTIP

vesting outcomes. The Committee agreed the final remuneration

outcomes reflected Group performance over the respective performance

periods and was satisfied the Policy had operated as intended.

How the Policy will be applied in FY25

For FY25, the second year of the three-year Policy term, we will seek to

implement the Policy as follows:

Fixed pay

Jos Sclater’s salary will increase by 4% from £550,291 to £572,302 and

Rich Cashin’s salary will increase by 4% from £374,894 to £389,889.

Theseincreases are in line with the average general workforce increase

of4% for FY25. Pensions remain workforce aligned at 7.5% of base salary.

Annual bonus

The maximum annual bonus opportunity will be 125% of salary, with 25%

of any bonus earned deferred into shares for two years. The bonuses will

be based on absolute Group adjusted operating profit (50%), average

working capital turns (30%) and strategic objectives (20%). The targets are

commercially sensitive but will be disclosed in full on a retrospective basis

in next year’s report.

Long-Term Incentive Plan (LTIP)

The Committee intends to grant LTIP awards to senior executives and

both Executive Directors in 2024. The Committee has determined that the

2025 LTIP will be based on absolute total shareholder return, EPS growth

and ROIC measures. The TSR metric has been switched from relative to

absolute to reflect the lack of a clear peer group for Avon Technologies

plc and to provide a more transparent and clear set of targets for

participants. The targets take into account a return to the normal LTIP

structure (in contrast to the exceptional matching award made last year),

as well as ensuring the targets are appropriately stretching against three-year

internal and external forecasts. These are set out in the Annual Report

onRemuneration.

Views of our stakeholders

The Committee takes employees’ views on pay into account. This is

achieved through the Employee Opinion Survey and various other

communication channels which support employee engagement. This

year’s survey results confirmed general satisfaction with pay and benefit

levels across the Group but a strong desire for the introduction of a bonus

scheme for the production workforce, which has since been introduced

and is linked to manufacturing efficiency. Read more on page 53. The

Committee takes the view of employees into account when considering

executive remuneration and the pay and employment conditions

throughout the wider workforce. The Committee monitors pay increases,

bonus awards and other pay elements, including the annual cost of living

increase.

In advance of last year’s AGM, the Committee undertook a comprehensive

review of our Policy which included a wide-reaching consultation exercise

with shareholders in respect of proposed changes. I would like to thank

shareholders for their valued input and the strong support received at

the 2024 AGM.

I am always happy to hear from the Company’s shareholders and you can

contact me via the Company Secretary if you have any questions on this

report or more generally in relation to the Company’s remuneration.

Victor Chavez CBE

Chair of the Remuneration Committee

19 November 2024

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

REMUNERATION AT A GLANCE

The key elements of Executive Directors’ remuneration packages and our approach to implementation in 2025 are summarised below:

Remuneration 2024 Remuneration 2025

FIXED PAY

Salary

(annual base)

CEO: £550,291

CFO: £374,894

CEO: £572,302 (4% increase effective

1October 2024)

CFO: £389,889 (4% increase effective

1October 2024)

Pension A 7.5% of salary employer contribution rate

applies. This is aligned with the UK workforce

contribution rate

No change

Benefits Includes car allowance, private health insurance

and life insurance

No change

ANNUAL BONUS

Maximum

opportunity

125% of salary No change

Award level

and operation

• Performance measures: absolute Group

adjusted operating profit (50%), average

Group working capital turns (30%) and

strategic objectives (20%)

• 25% of the overall amount deferred into

shares which vest after two years

• Malus and clawback provisions apply

No change

LONG-TERM

INCENTIVES

Award level

One-off share matching arrangement

(FY24 only)

• Up to 100% of salary investment matched at

up to four times, i.e. up to 400% of salary

• Number of matching awards determined by

matching the investment value and using the

share price at grant

• CEO and CFO received 234,715 and 159,903

awards respectively

Reverting to normal LTIP awards with a

face value of 175% of salary for the CEO

and 150% of salary for the CFO

Operation • Performance measures: EPS (70% of award)

and ROIC (30% of award)

• Performance measured over three years

• Vests in two tranches after three years (two-thirds

of the award) and four years (one-third of

the award)

• Vesting dependent upon retention

of investment shares over the

performance period

• Additional holding periods apply to vested

awards such that no value can be realised

until after five years from grant

• Malus and clawback provisions apply

Performance measures:

• EPS (50% of award), ROIC (30% of award)

and absolute TSR (20% of award)

• Performance measured over three

financial years

• Awards vest after three years

• Additional two-year holding

period applies

• Malus and clawback provisions apply

SHAREHOLDING

GUIDELINES

In employment 200% of salary No change

Post-employment 200% of salary to be held for two years

post-employment

No change

Remuneration Committee Report continued

Avon Technologies plc Annual Report and Accounts 2024

DIRECTORS’ REMUNERATION POLICY

This section of the report sets out a summary of our Directors’ Remuneration

Policy which was approved by shareholders on 26 January 2024 and took

formal effect from that date. A full version can be found in the 2023 Annual

Report and Accounts.

Guiding policy

The Company’s guiding policy on executive remuneration is that:

• executive remuneration packages should be clear and simple, taking

into account the linkage between pay and performance by both

rewarding effective management and making the enhancement of

shareholder value a critical success factor in the setting of incentives,

both in the short and the long term;

• the overall level of salary, incentives, pension and other benefits

should be competitive (but not excessive) when compared with other

companies of a similar size and global spread and should be sufficient

to attract, retain and motivate Executive Directors of superior calibre in

order to deliver long-term success; and

• performance-related components should form a significant proportion

of the overall remuneration package, with maximum total potential

rewards being earned through the achievement of challenging

performance targets based on measures that are linked to the

Company’s KPIs and to the best interests of shareholders.

Consideration of shareholder views

The Committee is committed to an ongoing dialogue with shareholders

and welcomes feedback on Directors’ remuneration. The Committee

seeks to engage directly with major shareholders and their representative

bodies on any material changes to the Policy. The Committee also considers

shareholder feedback received in relation to the remuneration-related

resolutions each year following the AGM. This, plus any additional feedback

received from time to time (including any updates to shareholders’

remuneration guidelines), is then considered as part of the Committee’s

annual review of the Policy and its implementation.

In its review of the Policy, the Committee conducted a comprehensive

consultation exercise which sought feedback from shareholders holding

over 45% of shares in issue, as well as from the main shareholder

representative bodies. The Committee was very grateful for the

comments received. The feedback, which was largely positive, was used

constructively to shape our final proposals.

Consideration of employment conditions elsewhere

in the Group

The Committee closely monitors the pay and conditions of the wider

workforce and the design of the Directors’ Remuneration Policy is

informed by the policy for employees across the Group.

While employees are not formally consulted on the design of the Directors’

Remuneration Policy, the Board receives views through a Global Employee

Advisory Forum comprising representatives from our Culture Champion

network. Another way in which the Board engages with employees across

the Group on remuneration is through the Employee Opinion Survey,

which includes a section dedicated to pay and benefits. The results of this

are shared with the Board.

Differences in pay policy for Executive Directors

compared to employees more generally

As for the Executive Directors, general practice across the Group is

to recruit employees at competitive market levels of remuneration,

incentives and benefits to attract and retain employees, accounting for

national and regional talent pools. When considering salary increases for

Executive Directors, the Committee will take into account salary increases

and pay and employment conditions across the wider workforce. The

pension contribution for Executive Directors is consistent with that for the

general workforce. A significant proportion of employees are able to earn

annual bonuses for delivering exceptional performance, with corporate

performance measures aligned to those set for the Executive Directors.

All employees, including the Executive Directors, have the opportunity

to participate in the tax-approved share incentive plans. There are some

differences in the structure of the Policy for the Executive Directors

compared to that for other employees within the organisation, which

the Committee believes are necessary to reflect the differing levels of

seniority and responsibility. At senior levels, remuneration is increasingly

long term and ‘at risk’, with an increased emphasis on performance-related

pay and share-based remuneration. This ensures the remuneration of

the Executives is aligned with both the long-term performance of the

Company and the interests of shareholders.

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

DIRECTORS’ REMUNERATION POLICY CONTINUED

Policy table

The table below sets out the main components of the Directors’ Remuneration Policy, together with further information on how these aspects of

remuneration will operate. The Remuneration Committee has discretion to amend remuneration and benefits to the extent described in the table and the

written sections that follow it.

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Basic salary

To provide competitive

fixed remuneration.

To attract and retain

Executive Directors of

superior calibre in order

to deliver long-term

business success.

Reflects individual

experience and role.

The Committee’s aim

is to position salaries

around the mid-market

level of companies of

a similar size, scale and

complexity.

Normally reviewed annually by

the Remuneration Committee

with increases typically effective

1 October.

Individual salary adjustments

take into account each Executive

Director’s role, competence

and performance. Significant

adjustments are infrequent and

normally reserved for material

changes in role, a significant

increase in the size/complexity of

the Group, or where an individual

has been appointed on a low salary

with an intention to bring them to

market levels over time and subject

toperformance.

Other factors which will be taken

into account will include pay

and conditions elsewhere in the

Group, progression within the role,

and competitive salary levels in

companies of a broadly similar size

and complexity.

No prescribed maximum or

maximum increase.

The normal approach will

be to limit increases to the

average level across the

wider workforce, though

increases above this level

may be awarded subject

to Committee discretion

to take account of certain

circumstances, such as

those stated under the

‘Operation’ column of

this table.

On recruitment or

promotion, the Committee

will consider previous

remuneration and pay

levels for comparable

companies (for example,

companies of a similar size

and complexity, industry

sector or location), when

setting salary levels. This

may lead to salary being

set at a lower or higher

level than for the previous

incumbent.

Although there are no formal

performance conditions, any

increase in base salary is only

implemented after careful

consideration of individual

contribution and performance

and having due regard to the

factors set out in the ‘Operation’

column of this table.

Benefits

To provide competitive

fixed remuneration.

To attract and retain

Executive Directors of

superior calibre in order

to deliver long-term

business success.

Executive Directors are entitled

to benefits such as travel-related

benefits including a car or car

allowance, medical assessments,

private health insurance and life

assurance. Executive Directors will

be eligible for any other benefits

which are introduced for the wider

workforce on broadly similar terms.

Any reasonable business-related

expenses (and any tax thereon) can

be reimbursed if determined to be a

taxable benefit.

Executive Directors will be eligible to

participate in any all-employee share

plan operated by the Company, on

the same terms as other eligible

employees.

For external and internal

appointments or relocations, the

Company may pay certain relocation

and/or related incidental expenses

as appropriate.

As it is not possible to

calculate in advance the

cost of all benefits, a

maximum is not pre-

determined.

The maximum level of

participation in all-

employee share plans

is subject to the limits

imposed by the relevant tax

authority from time to time.

Not applicable.

Remuneration Committee Report continued

100

Avon Technologies plc Annual Report and Accounts 2024

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Pension

To reward sustained

contributions

by providing

retirement benefits.

The Company funds contributions

to a Director’s pension as

appropriate through contribution

to the Company’s money purchase

scheme or through the provision

of salary supplements or a

combination of these.

Company contribution

up to the prevailing rate

offered to the workforce in

the country where they are

based at the time (currently

7.5% of salary in the UK).

Not applicable.

Annual bonus

Rewards the

achievement of annual

financial and business

targets aligned with

the Group’s KPIs.

Maximum bonus only

payable for achieving

demanding targets.

Deferred element

encourages long-term

shareholdings and

discourages excessive

risk taking.

Bonus is based on performance in

the relevant financial period. Any

payment is discretionary and will

be subject to the achievement of

stretching performance targets.

Bonus is normally paid in cash,

except 25% of any bonus which is

deferred into shares for two years.

Bonuses are not contractual

and are not eligible for inclusion

in the calculation of pension

arrangements.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error in

calculation of a bonus and material

misstatement of financial results.

Dividends or dividend equivalents

may accrue on deferred shares.

Capped at 125% of salary. The Committee sets

performance measures and

targets that are appropriately

stretching each year, taking

into account key strategic and

financial priorities and ensuring

there is an appropriate balance

between incentivising Executive

Directors to meet targets, while

ensuring they do not drive

unacceptable levels of risk or

inappropriate behaviours.

The majority of the bonus will

normally be based on financial

measures and the balance could

be based on non-financial,

strategic, personal and/or

ESG-related objectives.

A graduated scale of targets

is normally set for each

measure, with no pay-out for

performance below a threshold

level of performance.

The Committee has discretion to

amend the pay-out should any

formulaic outcome not reflect

the Committee’s assessment of

overall business performance.

Long-Term

Incentive

Plan

Designed to align

Executive Directors’

interests with those of

shareholders and to

incentivise the delivery

of sustainable earnings

growth and superior

shareholder returns.

Awards of conditional shares or nil

cost option awards which normally

vest after three years subject to the

achievement of performance targets

and continued service.

An additional two-year holding

period applies after the end of the

three-year vesting period.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error in

calculation of award and material

misstatement of financial results.

Dividend equivalents may be paid

for awards to the extent they vest.

The Committee retains discretion to

adjust vesting levels in exceptional

circumstances, including but not

limited to regard of the overall

performance of the Company or the

grantee’s personal performance.

Executive Directors may

receive an award of up

to 175% of basic salary

per annum.

The Committee will

consider the prevailing

share price when deciding

on the number of shares to

be awarded as part of any

LTIP grant.

A 10% in ten years dilution

limit governing the issue

of new shares to satisfy all

share schemes operated by

the Company will apply.

Performance measures may

include, and are not limited to,

relative TSR, ROIC, EPS, strategic

measures and ESG-related

objectives.

The Committee retains

discretion to set alternative

weightings or performance

measures for awards over the

life of the Policy.

100% of awards vest for stretch

performance, up to 20% of an

award would normally vest for

threshold performance and

no awards vest below this.

Underpins may apply.

101

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

One-off share

matching

arrangement

under the

Long-Term

Incentive Plan

FY24 (no further

matching

awards will

be granted)

Designed to be

retentive over the

longer term, to

incentivise the new

management team to

deliver a turnaround

and a significant

improvement in

financial performance,

and to closely align

Executive Directors’

interests with those of

shareholders.

To participate in the arrangement,

the Executive Directors were

required to purchase ordinary shares

with their own funds (‘Investment

Shares’) and in return they received a

matching award (‘Matching Shares’).

Awards of Matching Shares were

made as nil cost options which will

normally vest in two tranches after

three years (2/3 of the award) and

four years (1/3 of the award) subject

to retention of the Investment

Shares over the performance period,

achievement of performance targets

and continued service.

Additional two-year and one-year

holding periods apply after the

end of the three-year and four-year

vesting periods respectively.

Failure to retain the Investment

Shares over the full performance

period will normally result in a pro-

rata reduction in Matching Shares

under award.

Recovery and withholding

provisions apply in cases of

misconduct, corporate failure,

reputational damage, error in

calculation of award and material

misstatement of financial results.

Dividend equivalents may be paid

for awards to the extent they vest.

The Committee retains discretion to

adjust vesting levels in exceptional

circumstances, including but not

limited to regard of the overall

performance of the Company or the

grantee’s personal performance.

Investment Shares

Executive Directors were

able to invest up to an

overall maximum of 100%

of annual salary.

Matching Shares

Executive Directors could

receive an award equal

to up to four times the

value of Investment Shares

purchased, i.e. up to 400%

of salary. The number

of awards was based on

the share price at the

time of grant.

Awards to Executive

Directors were subject to

an overall cap of 450,000

shares in aggregate

(CEO:267,656 shares;

andCFO: 182,344 shares).

No further awards under

the Long-Term Incentive

Plan may be made in

addition to the Matching

Shares in the same

financial year.

A 10% in ten years dilution

limit governing the issue

of new shares to satisfy all

share schemes operated by

the Company will apply.

Not applicable.

ownership

guidelines

To increase alignment

between Executives

and shareholders.

Executive Directors are required

to retain at least 50% of their net

of tax vested awards until the

in-employment shareholding

guideline is met.

Nil cost options which have vested

but are yet to be exercised and

deferred bonus awards subject

to a time condition only may be

considered to count towards the

in-employment shareholding on a

notional post-tax basis.

Executive Directors are

required to build up and

maintain an in-employment

shareholding worth 200%

of salary (100% for other

senior management).

Executive Directors are

normally required to hold

shares at a level equal to the

lower of their shareholding

at cessation and 200% of

salary for two years post-

employment (excluding

shares purchased with own

funds and any shares from

share plan awards made

before the adoption of the

previous Policy (approved

on 29 January 2021)).

Not applicable.

Remuneration Committee Report continued

DIRECTORS’ REMUNERATION POLICY CONTINUED

Policy table continued

102

Avon Technologies plc Annual Report and Accounts 2024

Min.

£631

100%

On-target

£1,239

51%

29%

20%

£’000

Max.

£2,348

27%

43%

30%

Max. with

growth

£2,849

22%

35%

18%

25%

CEO

Min.

£435

100%

On-target

£825

53%

30%

18%

Max.

£1,508

32%

39%

Max. with

growth

£1,800

27%

32%

16%

CFO

Total fixed remuneration Annual bonus LTIP Share price growth

£3,000

£2,500

£2,000

£1,500

£1,000

£500

£0

29%

24%

Element of

remuneration

Purpose and link

to strategy Operation Maximum potential value Performance targets

Chair and

Non-Executive

Directors’ fees

and benefits

To provide

compensation in line

with the demands of

the roles at a level that

attracts high calibre

individuals and reflects

their experience and

knowledge.

Fees are normally reviewed annually

taking into account factors such

as the time commitment and

contribution of the role and market

levels in companies of comparable

size and complexity.

The Chair is paid an all-inclusive fee

for all Board responsibilities.

Fees for the other Non-Executive

Directors may include a base fee

and additional fees for further

responsibilities (for example, for

chairing Board Committees or

for holding the office of Senior

Independent Director).

The Company repays any reasonable

expenses that a Non-Executive

Director incurs in carrying out their

duties as a Director, including travel,

hospitality-related and other modest

benefits and any tax liabilities

thereon, if appropriate.

If there is a temporary yet material

increase in the time commitments

for Non-Executive Directors, the

Board may pay extra fees on a

pro-rata basis to recognise the

additional workload.

No prescribed maximum

fee or maximum

fee increase.

Increases will be informed

by taking into account

internal benchmarks such

as the salary increase for

the general workforce

and will have due regard

to the factors set out in

the ‘Operation’ column of

this table.

Not applicable.

Illustration of the application of the Policy

The balance between fixed and variable ‘at risk’ elements of remuneration changes with performance. Our Policy results in a significant proportion of

remuneration received by Executive Directors being dependent on performance. The charts below illustrate how the Policy would function for minimum,

on-target and maximum performance in the second year of the Policy.

103

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

DIRECTORS’ REMUNERATION POLICY

CONTINUED

Illustration of the application of the Policy continued

Assumptions for the chart above

• Minimum: comprises fixed pay for the year made up of base salary

(applying from 1 October 2024), the value of pension at 7.5% of annual

base salary and the estimated value of benefits using FY24 values.

• On-target: bonus achieved at 50% of the maximum opportunity, i.e.

62.5% of salary and with the on-target level of vesting assumed to be

25% of the face value of grant.

• Maximum: full bonus achieved and the share matching arrangement

vesting in full, i.e. 125% of salary bonus pay-out and an LTIP grant of

175% of salary for CEO and 150% for CFO.

• Share price appreciation of 50% has been assumed for the LTIP awards

under the final ‘Max. with growth’ scenario.

• Amounts relating to all-employee share schemes have, for simplicity,

been excluded from the charts.

Selection of performance measures and targets

Annual bonus

The Executive Directors’ annual bonus arrangements are focused on

the achievement of the Company’s short and medium-term financial

objectives, with financial measures selected to closely align the

performance of the Executive Directors with the strategy of the business

and with shareholder value creation. Where non-financial objectives are

set, these are chosen to support the delivery of the longer-term strategic

milestones and which link to those KPIs of most relevance to each

Director’s individual responsibilities.

Details of the measures used for the annual bonus are provided in the

Annual Report on Remuneration.

Long-Term Incentive Plan

One of the primary aims of the share matching arrangement was to

motivate participants to make a substantial investment in the Group and

to achieve very stretching adjusted EPS and ROIC growth targets aligned

to the delivery of the STAR strategy.

The share matching arrangement operated for the first year of the

2024 Policy period only, after which the Committee has returned to

making annual awards under our normal LTIP. The Committee will

review the choice of performance measures and the appropriateness

of the performance targets prior to each LTIP grant. The target ranges

for LTIP awards will be set as sliding scales which will be calibrated at

the time of award taking account of internal and external forecasts, to

encourage continuous improvement and incentivise the delivery of stretch

performance. Details of the measures, weightings and targets for the FY25

awards are set out in the Annual Report on Remuneration.

Flexibility, discretion and judgement

The Remuneration Committee operates the annual bonus and LTIP

according to the rules of each respective plan which, consistent with

market practice, include discretion in a number of respects in relation to

the operation of each plan. Discretions include:

• who participates in the plan, the quantum of an award and/or payment

and the timing of awards and/or payments;

• determining the extent of vesting;

• treatment of awards and/or payments on a change of control or

restructuring of the Group;

• whether an Executive Director or a senior manager is a good/bad leaver

for incentive plan purposes and whether the proportion of awards that

vest do so at the time of leaving or at the normal vesting date(s);

• how and whether an award may be adjusted in certain circumstances

(e.g. for a rights issue, a corporate restructuring or special dividends);

• what the weighting, measures and targets should be for the annual

bonus plan and LTIP awards from year to year;

• the ability, within the Policy, if events occur that cause it to determine

that the conditions set in relation to an annual bonus plan or a granted

LTIP award are no longer appropriate or unable to fulfil their original

intended purpose, to adjust targets and/or set different measures or

weightings for the applicable annual bonus plan and LTIP awards.

Any such changes would be explained in the subsequent Directors’

Remuneration Report and, if appropriate, be the subject of consultation

with the Company’s major shareholders; and

• the ability to override formulaic outcomes in line with Policy.

All assessments of performance are ultimately subject to the Committee’s

judgement and discretion is retained to adjust payments in appropriate

circumstances as outlined in this Policy. Any discretion exercised (and the

rationale) will be disclosed.

Legacy arrangements

For the avoidance of doubt, in approving this Directors’ Remuneration

Policy, authority is given to the Company to honour any previous

commitments entered into with current or former Directors (such as

the payment of a pension or the unwinding of legacy share schemes or

historical share awards granted before the approval of this Policy) that

remain outstanding.

Approach to recruitment remuneration

New Executive Directors will be offered a base salary in line with the Policy.

This will take into consideration a number of factors including external

market forces, the expertise, experience and calibre of the individual and

current level of pay. Where the Committee has set the salary of a new

appointment at a discount to the market level initially until proven, an

uplift or a series of planned increases may be applied in order to bring

the salary to the appropriate market position over time. For external and

internal appointments, the Committee may agree that the Company

will meet appropriate relocation and/or related incidental expenses

asappropriate.

Annual bonus awards, LTIP awards and pension contributions would

not be in excess of the levels stated in the Policy and, if appropriate, may

include participation in the matching arrangement in FY24.

Depending on the timing of the appointment, the Committee may deem

it appropriate to set different annual bonus performance conditions

for the first performance year of appointment. An LTIP award can be

made shortly following an appointment (assuming the Company is not

in a close period). In the case of an internal appointment, any variable

pay element awarded in respect of the prior role would be allowed to

pay out according to its terms, adjusted as relevant to take into account

theappointment.

In addition, the Committee may offer additional cash and/or share-based

buyout awards when it considers these to be in the best interests of the

Company (and therefore shareholders) to take account of remuneration

given up at the individual’s former employer. This includes the use

of awards made under 9.4.2 of the Listing Rules. Such awards would

be capped at a reasonable estimate of the value forgone and would

reflect, as far as possible, the delivery mechanism, time horizons and

whether performance requirements are attached to that remuneration.

Shareholders will be informed of any such payments at the time of

appointment and/or in the next published Annual Report.

For the appointment of a new Chair or Non-Executive Director, the

fee arrangement would be set in accordance with the approved

Remuneration Policy.

Remuneration Committee Report continued

104

Avon Technologies plc Annual Report and Accounts 2024

Service contracts, letters of appointment and policy on

payments for loss of office

Executive Directors

The Company’s policy is that Executive Directors should normally be

employed under a contract which may be terminated by either the

Company or the Executive Director giving no more than 12 months’ notice.

The Company may terminate the contract with immediate effect with

or without cause by making a payment in lieu of notice by monthly

instalments of salary and benefits, with reductions for any amounts

received from providing services to others during this period. There are

no obligations to make payments beyond those disclosed elsewhere in

this report.

The Remuneration Committee strongly endorses the obligation on an

Executive Director to mitigate any loss on early termination and will seek

to reduce the amount payable on termination where it is appropriate to

do so. The Committee will also take care to ensure that, while meeting its

contractual obligations, poor performance is not rewarded. The Executive

Directors’ contracts contain early termination provisions consistent with

the Policy outlined above.

The Group may pay outplacement and professional legal fees incurred by

Executives in finalising their termination arrangements, where considered

appropriate, and may pay any statutory entitlements or settle compromise

claims in connection with a termination of employment, where considered

in the best interests of the Company. Outstanding savings/shares under

all-employee share plans would be transferred in accordance with the

terms of the plans.

A pro-rated bonus may be paid subject to performance, for the period of

active service only. Outstanding share awards may vest in accordance with

the provisions of the various scheme rules.

Under the Deferred Bonus Plan, the default treatment is that any

outstanding awards will continue on the normal timetable, save for

forfeiture for serious misconduct. Clawback and malus provisions will also

apply. On a change of control, awards will generally vest on the date of a

change of control, unless the Committee permits (or requires) awards to

roll over into equivalent shares in the acquirer.

Under the LTIP, any outstanding awards will ordinarily lapse; however, in

‘good leaver’ cases the default treatment is that awards will vest subject to

the original performance condition and time pro-ration and the holding

period will normally continue to apply.

For added flexibility, the rules allow for the Committee to decide not

to pro-rate (or pro-rate to a lesser extent) if it decides it is appropriate

to do so, and to allow vesting to be triggered at the point of leaving by

reference to performance to that date, rather than waiting until the end

of the performance period. On a change of control, any vesting of awards

will be subject to assessment of performance against the performance

conditions and normally be pro-rated. The Committee has the flexibility

to decide not to pro-rate (or to pro-rate to a lesser extent) if it decides it is

appropriate to do so.

Where a buy-out award is made under the Listing Rules then the leaver

provisions would be determined as part of the terms of the award.

Chair and Non-Executive Directors

All Non-Executive Directors have letters of appointment rather than

service contracts and are appointed on a rolling annual basis, which

may be terminated on giving up to three months’ notice at any time by

either party.

Chair and Non-Executive Director appointments are subject to Board

approval and election by shareholders at each Annual General Meeting.

Key details of the service contracts and letters of appointment of the

current Directors can be found in the Annual Report on Remuneration and

all service contracts and letters of appointment are available for inspection

at the Company’s registered office.

External appointments

The Company recognises that its Executive Directors may be invited to

become Non-Executive Directors of other companies. Such Non-Executive

duties can broaden a Director’s experience and knowledge which can

benefit Avon Technologies. Subject to approval by the Board, Executive

Directors are allowed to accept Non-Executive appointments, provided

that these appointments are not likely to lead to conflicts of interest,

and the Committee will consider its approach to the treatment of any

fees received by Executive Directors in respect of Non-Executive roles as

they arise.

ANNUAL REPORT ON REMUNERATION

Role and composition of the Remuneration Committee

The Board is ultimately accountable for executive remuneration and

delegates this responsibility to the Remuneration Committee. The

Remuneration Committee is responsible for developing and implementing

a Remuneration Policy that supports the Group’s strategy and for

determining the Executive Directors’ individual packages and terms

of service together with those of the other members of the Executive

Committee. When setting the remuneration terms for Executive Directors,

the Committee reviews and has regard to workforce remuneration and

related policies and takes close account of the UK Corporate Governance

Code requirements for clarity, simplicity, risk mitigation, predictability,

proportionality and alignment to culture.

The Remuneration Committee’s terms of reference are available on the

Company’s website and include:

• determining and agreeing with the Board the policy for the

remuneration of the Company’s CEO, CFO, Chair and Company

Secretary and such other members of the senior management team

as it chooses to consider or is designated to consider (currently the

Executive Committee), having regard to remuneration trends across

the Group;

• putting in place a remuneration structure that supports strategy

and promotes long-term sustainable success – with executive

remuneration aligned to Company purpose and values and clearly

linked to the successful delivery of the Company’s long-term strategy

– and which attracts, retains and motivates executive management

of the quality required to run the Company successfully without paying

more than is necessary, having regard to views of shareholders and

otherstakeholders;

• reviewing the pay arrangements put in place for the broader workforce;

• within the terms of the agreed policy, determining the total individual

remuneration package of each Executive Director including, where

appropriate, bonuses, incentive payments, share options and

pensionarrangements;

• determining the targets for the performance-related bonus schemes for

the Executive Directors and the Group Executive management team;

• reviewing the design of all share incentive plans for approval by the

Board and shareholders;

• for any such discretionary plans, determining each year whether awards

will be made, the overall amount of such awards, the individual awards

to Executive Directors and the Group Executive management team (and

others) and the performance targets to be used; and

• agreeing termination arrangements for senior executives.

The Committee currently comprises Victor Chavez (Chair), Bruce

Thompson, Bindi Foyle and Maggie Brereton.

By invitation of the Committee, meetings are also attended by the CEO,

CFO and Company Secretary (who acts as secretary to the Committee),

who are consulted on matters discussed by the Committee, unless those

matters relate to their own remuneration. Advice or information is also

sought directly from other employees where the Committee feels that

such additional contributions will assist the decision-making process.

105

Annual Report and Accounts 2024 Avon Technologies plc

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ANNUAL REPORT ON REMUNERATION

CONTINUED

Role and composition of the Remuneration

Committee continued

The Committee is authorised to take such internal and external advice as it

considers appropriate in connection with carrying out its duties, including

the appointment of its own external remuneration advisors. During the

period, the Committee was assisted in its work by FIT Remuneration

Consultants LLP (‘FIT’). FIT was appointed in December 2019 and has

provided advice in relation to general remuneration matters and the

review of the Remuneration Policy. Fees paid to FIT in relation to advice

provided to the Committee during the current period were £31,540

(excluding VAT), charged on a time/cost basis. FIT also provided advice to

the Company in relation to Non-Executive Director fees and on technical

share plan implementation matters but other than this did not provide any

other services to the Company.

FIT is a member of the Remuneration Consultants Group and, as such,

voluntarily operates under the Code of Conduct in relation to executive

remuneration consulting in the UK. The Committee is satisfied that the

advice it received from FIT was objective and independent.

The Committee addressed the following main topics during the

financial period:

• engaged extensively with shareholders in advance of the 2024 AGM to

understand the views of shareholders in respect of the 2024 Directors’

Remuneration Policy. At the conclusion of the consultation exercise,

the Committee wrote to our largest shareholders with details of the

Committee’s conclusions;

• assessed whether our remuneration framework is appropriately aligned

with our culture and values and motivates our leaders to achieve the

Group’s strategic objectives;

• reviewed guidance from investor bodies and institutional shareholders;

• reviewed and approved the remuneration packages for our current

Executive Directors;

• approved the annual bonus outcome for the 2022/23 financial

period and received updates on the 2023/24 bonus scheme (financial

performance and strategic measures);

• reviewed and confirmed the performance outcomes of the LTIP awards

granted in February 2021;

• monitored the performance of the outstanding awards against their

performance targets;

• approved restricted stock awards for a select group of key employees as

a retention tool; and

• approved the one-off share matching awards to Executive Directors

after the AGM in January 2024 and the terms of LTIP awards granted to

other senior executives.

Since the end of the 2023/24 financial period, the Committee has:

• approved annual bonus outcomes for the Executive Directors and

the Executive Board, following completion of the external audit in

November 2024;

• agreed the annual bonus structure for the year ending

30September 2025; and

• agreed the LTIP metric and targets for awards to be granted in 2024/25.

The information that follows has been audited (where indicated) by the

Company’s auditor, KPMG LLP.

Single total figure of remuneration for Directors for the year ended 30 September 2024 (audited)

Directors’ single total figures of remuneration for the year ended 30 September 2024 were as follows:

Basic

salary

and fees

£’000

Pension

£’000

Other

benefits

£’000

Fixed

remuneration

sub-total

£’000

Annual

bonus

£’000

LTIP

£’000

Variable

remuneration

sub-total

£’000

Total

remuneration

£’000

Current Executive Directors

Jos Sclater 2024 550 41 16 607 688 - 688 1,295

2023 376 29 12 417 93 - 93 510

Rich Cashin 2024 375 28 16 419 469 124

593 1,012

2023 359 27 14 400 90 - 90 490

Non-Executive Directors

Bruce Thompson 2024 183 - - 183 - - - 183

2023 175 - - 175 - - - 175

Chloe Ponsonby

2024 34 - - 34 - - - 34

2023 65 - - 65 - - - 65

Bindi Foyle 2024 65 - - 65 - - - 65

2023 60 - - 60 - - - 60

Victor Chavez 2024 57 - - 57 - - - 57

2023 50 - - 50 - - - 50

Maggie Brereton

2024 26 - - 26 - - - 26

2023 - - - - - - - -

Notes to total figure of remuneration table

1. Rich Cashin was a member of the Group’s money purchase scheme in FY24. Contributions to the

scheme were £5k. Remaining pension contributions for Rich Cashin and Jos Sclater were paid as

a salary supplement.

2. Benefits for FY24 included a car allowance, the cost of private health insurance, critical illness

cover and executive medical.

3. Chloe Ponsonby stepped down from the Board on 31 March 2024.

4. Maggie Brereton joined the Board as Non-Executive Director on 1 April 2024.

5. Based on an assessment undertaken to 5 November 2024, the TSR performance is tracking at

61.25% vesting (or 31.1% of the whole award) and is reflected in the above table. Rich Cashin’s

LTIP figure in the single figure table reflects the provisional TSR vesting outcome and has been

valued using a share price of 1,255 pence, being the three-month average share price to 30

September 2024.

6. The notional non-cash IFRS 2 share-based payment expense in respect of the Directors was

$754k (2023: $332k).

Remuneration Committee Report continued

106

Avon Technologies plc Annual Report and Accounts 2024

Annual bonus for the year ended 30 September 2024 (audited)

The annual bonus opportunity for Executive Directors for FY24 was 125% of salary and this was based on absolute Group operating profit (50%), average

working capital turns (30%) and strategic objectives (20%).

The targets applying to each measure and performance against them are set out in the table below:

Including Armour

Threshold

(0% payable)

Target

(50% payable)

Stretch

(100% payable)

Actual/

reported

achievement

Bonus payable

(% of maximum)

Absolute Group adjusted operating

profit (50%) $26.5m $29.4m $30.9m $31.6m 100% 50%

Average working capital turns (30%) 3.6 4.0 4.2 4.5 100% 30%

Strategic objectives (20%) Set out in more detail below 100% 20%

Total 100%

• Absolute Group operating profit means adjusted operating profit as defined in the Adjusted Performance Measures section of the 2024 Annual Report.

• Average Group working capital turns means the ratio of the 12-month average month end working capital (defined as the total of inventory, receivables

and payables excluding lease liabilities) to revenue as defined in the Adjusted Performance Measures section of the 2024 Annual Report.

The strategic element of the bonus for FY24 was based on the following broad categories with objectives assigned to each. The categories and

achievements are set out in the table below:

Grow faster than our markets by successfully

ramping up production on key programmes

Ramp up on NG IHPS, ACH and EPIC helmet programmes progressed well and rebreather deliveries

were made to plan. Revenue grew by 12%, significantly ahead of the market.

Build the foundations for medium-term growth by

increasing the order book and pipeline

Order book $89.4m higher than prior year. Pipeline significantly larger and more visible. Key

strategic wins included the UK General Service Respirator, Australia masks, German rebreathers and

the Swedish Police.

Ensure the long-term future of the Group by

developing products to deliver long-term growth

Good success winning DOD technology/product development programmes, CBRN suit launched

and the MITR half mask launched and on track for full system launch next year.

Create a strong platform for margin expansion and

strong cash flow

Margin and cash flow significantly ahead of budget and market expectations. Both uplifts were

delivered on a sustainable basis. Investment in R&D went up 12% in the year on a gross basis, with

no expenditure being capitalised. Scrap as a percentage of revenue was down from 3.9% to 1.6%

despite the new product ramp-up.

Outmanage peers by ensuring excellent

strategy execution

Following a period of upheaval, we now have SBU teams with capable, motivated and aligned

people, brought together by a common set of values. The Group is taking on increasingly complex

projects and we have strengthened our programme management capability.

Based on the above assessment, a bonus of 100% of maximum (or 125% of salary) was earned. The Committee believes this is an appropriate outcome and

reflects underlying business performance during the year. In line with the Policy, one quarter of the bonus will be deferred in shares for two years.

Incentive awards vesting (audited)

Awards were granted on 1 February 2022 under the LTIP to the former CEO and on 8 March 2022 to current CFO Rich Cashin and these were based on

three-year performance targets. Half of the award was subject to a relative TSR condition (measuring performance against the constituents of the FTSE 250

excluding investment trusts) and the other half was subject to EPS growth targets.

The TSR measurement period will end on 1 February 2025 and the Company’s TSR performance will be reviewed and determined at this point. The

Company delivered an adjusted basic EPS of 69.9c, which was below the threshold growth target. Therefore, this element of the award will lapse.

Weighting Threshold Maximum Actual performance % vesting

TSR 50% Median Upper quintile Between median

and upper quartile

(10.8% of TSR)

61.25%

(estimated)

Adjusted basic EPS 50% 100c 140c 69.9c 0%

Based on an assessment undertaken to 5 November 2024, the TSR performance is 10.8% which is tracking at 61.25% vesting and is reflected in the above

table. Rich Cashin’s LTIP figure in the single figure table reflects the provisional TSR vesting outcome of 31.1% and has been valued using a share price of

1,255p, being the three-month average share price to 30 September 2024.

107

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

ANNUAL REPORT ON REMUNERATION CONTINUED

Single total figure of remuneration for Directors for the year ended 30 September 2024 (audited) continued

LTIP awards granted in the year ended 30 September 2024 (audited)

The table below provides details of share awards made to Jos Sclater and Rich Cashin on 26 January 2024:

Type of award Basis of award

Number of shares

under award

Face value

of award

£’000

% vesting

at threshold

End of

performance period

Jos Sclater Nil cost option Matching award

4x salary

234,715 2,201 12.5% 30 September 2026

Rich Cashin Nil cost option Matching award

4x salary

159,903 1,500 12.5% 30 September 2026

1 The total number of shares under the award was determined by dividing 100% of base salary as at 1 October 2023 x4 by £9.378 (the average of the closing prices for the five dealing days preceding the

grant date of 26 January 2024).

Jos Sclater and Rich Cashin designated 72,230 and 46,969 of their previously purchased shares in the Company respectively as ‘investment shares’ for the

purposes of the matching award. This equated to an investment of 100% of base salary, and these investment amounts (£) were matched on a 4:1 basis.

The value of the matched amounts was divided by £9.378 (being the average of the closing prices for the five dealing days preceding the grant date of

26January 2024). This resulted in 234,715 awards being granted to Jos Sclater and 159,903 awards to Rich Cashin.

Vesting of this award will be based on three-year performance with 70% on adjusted basic earnings per share (EPS) and 30% on return on invested capital

(ROIC), each independently assessed as follows:

FY26 EPS (70%) FY26 ROIC (30%) Match

Threshold 90c 16% 0.5:1 (i.e. 12.5% vesting)

Normal LTIP maximum 125c 18% 0.75:1 (i.e. 43.75% vesting)

Matching award maximum 150c 20% 4:1 (i.e. 100% vesting)

Two-thirds of the awards will be eligible to vest after three years and the remaining one-third after four years.

The Remuneration Committee also retains a general discretion to reduce the extent of vesting of the awards generally if it considers that the underlying

business performance of the Company does not justify vesting.

Directors’ shareholdings and share interests and position under shareholding guidelines (audited)

Beneficial interests of Directors, their families and trusts in ordinary shares of the Company at 30 September 2024 were:

Number of

shares owned

outright (including

connected persons)

Unvested shares

subject to

performance

conditions

Shareholding as a

% of salary as at

30 September 2024

Shareholding

guidelines

(200% of salary) met?

Jos Sclater 73,804

319,322 163.6% No

Rich Cashin 48,875

241,995 159.1% No

Bruce Thompson 41,000 - N/A N/A

Bindi Foyle 2,000 - N/A N/A

Chloe Ponsonby 4,550 - N/A N/A

Victor Chavez 3,048 - N/A N/A

Maggie Brereton 1,565 - N/A N/A

1 Unvested LTIP awards.

2 Includes 1,553 deferred bonus shares for Jos Sclater, and 2,675 deferred bonus shares for Rich Cashin.

3 Chloe Ponsonby stepped off the Board on 31 March 2024.

Outstanding LTIP awards (audited)

Award date

Award held at

1 October 2023

Granted

in the period

Vested

in the period

Lapsed

in the period

Outstanding

awards at

30 September

2024

Jos Sclater 26.01.24 - 234,715 - - 234,715

18.01.23 84,607 - - - 84,607

Rich Cashin 26.01.24 - 159,903 - - 159,903

21.12.22 49,406 - - - 49,406

08.03.22 32,686 - - - 32,686

The awards granted in 2022 and 2023 are subject to two performance criteria. Half the awards are subject to a relative TSR measure and the other half are

subject to an EPS growth condition. The 2024 one-off matching awards are subject to EPS and ROIC conditions as set out earlier in this report.

Remuneration Committee Report continued

108

Avon Technologies plc Annual Report and Accounts 2024

Dilution

The Company reviews the awards of shares made under the all-employee and executive share plans in terms of their effect on dilution limits in any rolling

ten-year period. In respect of the 5% and 10% limits recommended by the Investment Association, in the ten years ending on 30 September 2024, the

Company has not issued any new shares in this period.

It remains the Company’s practice to use an Employee Share Ownership Trust (ESOT) in order to meet its liability for shares awarded under the LTIP.

At 30 September 2024 there were 555,205 shares held in the ESOT which will either be used to satisfy awards granted under the LTIP to date, or in

connection with future awards. A hedging committee ensures that the ESOT holds sufficient shares to satisfy existing and future awards made under the

LTIP by buying shares in the market or recommending the Company issues new shares. Shares held in the ESOT do not receive dividends.

As at 30 September 2024, the market price of Avon Technologies plc shares was £12.20 (2023: £6.18). During the year ended 30 September 2024 the highest

and lowest daily closing market prices were £5.93 and £13.78 respectively.

Share Incentive Plan

The Company currently operates the Avon Rubber p.l.c. Share Incentive Plan (SIP), approved by shareholders at the AGM in February 2012. All UK tax

resident employees of the Company and its subsidiaries are entitled to participate. Under the SIP, participants purchase shares in the Company monthly

using deductions from their pre-tax pay. Jos Sclater and Rich Cashin purchased 321 shares under the SIP during the period. The maximum contribution

each month under the SIP is currently £150, a sum which is set by the Government.

Payments to past Directors, including payments for loss of office (audited)

There were no payments to past Directors, including payments for loss of office, during the year to 30 September 2024.

Paul McDonald stepped down from the Board and his role as CEO on 30 September 2022. As a good leaver, Paul was allowed to keep his unvested LTIP

awards subject to achievement of performance criteria and a time pro-rata reduction. The EPS portion of the LTIP award granted to Paul on 1 February

2022 failed to meet the threshold performance conditions and this element of the award will lapse. The performance period for the TSR element ends on

31 January 2025 and will be assessed after this date.

Service contracts and letters of appointment

The table below summarises key details in respect of each Executive Director’s contract.

Contract date

Company

notice period

Executive

notice period

Jos Sclater 17 October 2022 12 months 12 months

Rich Cashin 6 January 2022 12 months 12 months

The date of each Non-Executive appointment is set out below, together with the date of their last re-election by shareholders.

Date of initial

appointment

Date of last

re-election

Maggie Brereton 1 April 2024 N/A

Bruce Thompson 1 March 2020 26 January 2024

Bindi Foyle 1 May 2020 26 January 2024

Victor Chavez 1 December 2020 26 January 2024

All service contracts and letters of appointment are available for inspection at the Company’s registered office.

Other appointments

Jos Sclater remains a Director of two secure companies within the Ultra Group which were established to safeguard technology critical to UK national

security as part of the acquisition by Cobham in 2021. Jos Sclater does not receive any remuneration for these services.

109

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

ANNUAL REPORT ON REMUNERATION CONTINUED

Total shareholder return performance graph

The following graph illustrates the total return, in terms of share price growth and dividends on a notional investment of £100 in the Company over the

last ten years relative to the FTSE Small Cap Index (excluding investment trusts), the FTSE 250 Index (excluding investment trusts) and the FTSE All-

Share Index (excluding investment trusts). These indices were chosen by the Remuneration Committee as a competitive indicator of general UK market

performance for companies of a broadly similar current and past size.

Source: Datastream (a Refintiv product)

Chief Executive Officer’s remuneration

The total remuneration figures, including annual bonus and vested LTIP awards (shown as a percentage of the maximum that could have been achieved),

for the CEO for each of the last ten financial periods are shown in the table below.

Peter Slabbert retired on 30 September 2015. Rob Rennie stood down from the Board and was replaced by Paul McDonald on 15 February 2017. Paul

McDonald stepped down as CEO on 30 September 2022 and was replaced by Jos Sclater on 16 January 2023.

Financial period CEO

CEO single

figure

of total

remuneration

£’000

Annual bonus

pay-out

against

maximum

opportunity

Long-term

incentive

vesting

2024 Jos Sclater 1,295 100% -

2023 Jos Sclater 510 20% -

2022 Paul McDonald 873 44% 0%

2021 Paul McDonald 819 0% 50%

2020 Paul McDonald 1,686 66% 100%

2019 Paul McDonald 928 55% 80%

2018 Paul McDonald 734 80% 84%

2017 Paul McDonald

663 81% 99%

2017 Rob Rennie 213 57% -

2016 Rob Rennie 484 52% -

2015 Peter Slabbert 1,676 91% 100%

2014 Peter Slabbert 1,529 91% 96%

1 Includes remuneration received in the period prior to his appointment as Director in 2017.

Remuneration Committee Report continued

September

2024

September

2014

September

2015

September

2016

September

2017

September

2018

September

2019

September

2020

September

2021

September

2022

September

2023

800

700

600

500

400

300

200

100

Avon Technologies plc FTSE Small Cap excl. investment trusts FTSE All Share excl. investment trusts FTSE 250 Index excl. investment trusts

Total return

110

Avon Technologies plc Annual Report and Accounts 2024

Percentage change in remuneration of Directors compared with other employees

The following table shows the percentage change in each Executive and Non-Executive Director’s remuneration compared with the average change for

all employees of the Company for the year ended 30 September 2024. Changes for prior periods are also shown which are building up over time to cover a

rolling five-year period.

Salary/fee Pension and other benefits Annual bonus

2024 2023 2022 2021 2024 2023 2022 2021 2024 2023

2022 2021

Current Directors

Jos Sclater

46.3% - - - 40.7% - - - 639.8% - - -

Rich Cashin

4.5% 80.4% - - 5.8% 105.0% - - 421.1% (15.1)% - -

Bruce Thompson

4.5% 0.0% 13.6% 541.7% - - - - - - - -

Bindi Foyle

8.9% 0.0% 5.3% 235.3% - - - - - - - -

Victor Chavez

14.9% 0.0% 19.0% - - - - - - - - -

Maggie Brereton

- - - - - - - - - - - -

Past Directors

Paul McDonald

- (33.3)% 2.8% 22.0% - (45.3)% (17.6)% 15.2% - (100.0)% - (100.0)%

Nick Keveth

- - (48.6)% 22.8% - - (44.8)% 13.6% - - - (100.0)%

Pim Vervaat

- - - (58.9)% - - - - - - - -

David Evans

- - - (82.9)% - - - - - - - -

Chloe Ponsonby

(47.8)% 0.0% (3.0)% 19.6% - - - - - - - -

All employees

11. 3% 5.3% 3.2% 4.7% 10.8% 11.2% 3.9% 6.8% 451.3% (36.8)% N/A (100.0)%

1 Jos Sclater joined the Board on 16 January 2023.

2 Rich Cashin joined the Board on 31 March 2022.

3 Bruce Thompson was appointed as Chair on 2 December 2020.

4 Bindi Foyle was appointed to the Board as Non-Executive Director with effect from 1 May 2020 and took over as Chair of the Audit Committee on 29 January 2021.

5 Victor Chavez was appointed to the Board with effect from 1 December 2020 and took over as Chair of the Remuneration Committee on 1 April 2024.

6 Maggie Brereton joined the Board on 1 April 2024.

7 Paul McDonald stepped off the Board on 30 September 2022.

8 Nick Keveth stepped off the Board on 31 March 2022.

9 Pim Vervaat and David Evans stepped off the Board on 29 January 2021 and 2 December 2020 respectively.

10 Chloe Ponsonby stepped off the Board on 31 March 2024.

11 As the only Avon Technologies plc employees are the CEO and the CFO, comparative figures for all UK employees of the Group have been set out on a voluntary basis. To aid comparison, the group

ofemployees selected are those full-time UK employees who were employed over the complete period.

12 In 2021 no bonuses were payable to Directors or employees, meaning percentage changes are not applicable for 2022.

Chief Executive Officer to employee pay ratio

The table below sets out the ratio between the total pay of the CEO and the total pay of the employees at the 25th, 50th (median) and 75th percentiles of

the UK workforce.

The reward policies and practices across the Group are considered by the Committee in the design process and implementation of the Remuneration

Policy each year for the Executive Directors. The Committee is satisfied that the median pay ratio for FY24 is consistent with the pay, reward and

progression policies for UK employees. Year-on-year movements in the CEO pay ratio are likely to be volatile due to the wide range of incentive outcomes

for the CEO single figure, but the Remuneration Committee does note the ratio and will monitor long-term trends. The increase in 2024 ratios from the

2023 ratios is mainly due to the higher CEO’s bonus outcome in 2024.

Financial period Method 25th percentile Median 75th percentile

2024 A 43:1 36:1 20:1

2023 A 26:1 21:1 13:1

2022 A 36:1 28:1 19:1

2021 A 36:1 29:1 20:1

The 25th, 50th and 75th percentile ranked individuals have been identified using Option A in accordance with the reporting regulations, selected on

the basis that this provides the most robust and statistically accurate means of identifying the relevant employees. The day by reference to which the

25th, 50th and 75th percentile employees were determined was 30 September 2024. The CEO pay figure is the total remuneration figure as set out in the

single figure table and then annualised and equivalent figures (on a full-time equivalent basis) have been calculated for the relevant 25th, 50th and 75th

percentile employees.

The total pay and benefits figures used to calculate the ratios for each of the 25th percentile, median and 75th percentile employees are set out below:

Financial period 25th percentile Median 75th percentile

2024 £29,814 £35,938 £63,377

The increase in 2024 ratio from the 2023 ratio is mainly due to the CEO’s higher bonus outcome in 2024.

111

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

ANNUAL REPORT ON REMUNERATION CONTINUED

Chief Executive Officer’s remuneration continued

Chief Executive Officer to employee pay ratio continued

The salary element (including overtime and other pay allowances) for each of these figures is set out below:

Financial period 25th percentile Median 75th percentile

2024 £29,561 £35,326 £56,396

The reward policies and practices across the Group are considered by the Committee in the design process and implementation of the Remuneration

Policy each year for the Executive Directors. The Committee is satisfied that the median pay ratio for FY24 is consistent with the pay, reward and

progression policies for UK employees. Year-on-year movements in the CEO pay ratio are likely to be volatile due to the wide range of incentive outcomes

for the CEO single figure, but the Remuneration Committee does note the ratio and will monitor long-term trends.

The Committee is satisfied that CEO remuneration is reasonable and consistent with the Company’s wider policies on employee pay, reward and

progression; see page 111 for further details.

Relative importance of spend on pay

The following table shows the change in Group expenditure between the current and previous financial periods on remuneration and associated costs

for all employees globally, set against distributions to shareholders and other uses of profit or cash flow, being profits retained within the business,

investments in research and development and other capital expenditure.

2024

2023

$m % change

Overall expenditure on pay (note 6.1) 90.7 83.2 9.0%

Dividends paid 6.8 13.4 (49.3)%

Loss retained (profit/loss for the period less dividends) (3.8) (27.8) (86.3)%

Total R&D expenditure 11.4 10.2 11. 8%

Other capital expenditure (excluding capitalised development costs) 11. 2 7.9 41.8%

Implementation of Policy for the year ended 30 September 2025

Basic salary

Salaries have been increased by 4% to £572,302 and £389,889 for Jos Sclater and Rich Cashin respectively. This is in line with the average increase across

the global and wider UK workforce of 4%.

2025

2024

Jos Sclater 572,302 550,291

Rich Cashin 389,889 374,894

Non-Executive Director fees

Fees have been increased by 4% for the Non-Executive Directors, in line with the average increase across the global and wider UK workforce of 4%.

2025

2024

Chair 190,190 182,875

Non-Executive Director 54,340 52,250

Committee Chair 10,868 10,450

Senior Independent Director 10,868 * 10,450

* There is a maximum additional fee of £16,302 (FY24: £15,675) if the Senior Independent Director also chairs a Committee.

Benefits

Benefits remain unchanged and include a car allowance, the cost of private health insurance, life insurance, critical illness insurance and executive medical.

Pension

The Executive Directors receive a contribution towards pension of 7.5% of basic salary, paid either as a non-pensionable salary supplement or delivered

through the Group’s money purchase scheme. This contribution rate is in line with the UK workforce rate.

Remuneration Committee Report continued

112

Avon Technologies plc Annual Report and Accounts 2024

Annual bonus

For the 2025 financial period, the maximum opportunity under the annual bonus plan will be 125% of base salary for both Executive Directors. 25% of the

total bonus payment will be deferred into shares for two years.

Bonuses will be based on absolute Group adjusted operating profit (50%), average working capital turns (30%) and strategic objectives (20%). The actual

targets are commercially sensitive and will be disclosed on a retrospective basis.

2025 LTIP awards

The Committee expects to make LTIP awards to senior executives in 2025 with a face value of 175% of salary for the CEO and 150% for the CFO.

For the 2025 LTIP awards, the measures will be based 50% on EPS, 30% on ROIC and 20% on absolute TSR. The switch from a relative to an absolute TSR

measure ensures there is greater transparency and clarity on targets for participants and reflects the lack of a clear peer group. The EPS and ROIC targets

will relate to performance for the year ending 30 September 2027.

The targets for last year’s one-off LTIP award reflected targets set in the normal course of events plus an additional “matching scheme”. The matching

scheme came with additional stretch targets for the opportunity above 175% of salary provided that the recipients invested one times their gross salary

(roughly two times net salary) into shares in the Group. In determining the targets for the 2025 LTIP, the Committee has sought to include an appropriate

degree of stretch on the ‘normal’ part of last year’s LTIP and to ensure that there would only be a full pay-out if excellent performance is delivered. The

table below sets out the targets for the 2025 LTIP and, for information, how they compare with targets attached to last year’s ‘normal’ and ‘one off’

matching awards.

Revised proposal for the FY25 LTIP structure

Normal LTIP

(maximum 175% of salary)

FY25

(normal 175%)

LTIP

FY24

(normal 175%

and one-off

225%) LTIP

Adjusted EPS

Weighting 50% 70%

Threshold 100c 90c

Maximum 140c 125c

Exceptional (one-off) N/A 150c

ROIC

Weighting 30% 30%

Threshold 18% 16%

Maximum 22% 18%

Exceptional (one-off) N/A 20%

Absolute TSR

Weighting 20% N/A

Threshold £16 N/A

Maximum £20 N/A

1. The normal FY24 LTIP matching grant delivered an award equivalent to a normal 175% of salary LTIP award based on the Threshold and Maximum targets disclosed above. The additional one-off

element of the FY24 matching grant (equivalent to an additional 225% of salary subject to personal investment in shares of 100% of salary) was based on delivering the Exceptional targets of 150 cents

(EPS) and 20% (ROIC).

2. For the normal FY25 LTIP the absolute TSR metric will be measured by reference to the three-month average share price for the period 1 July 2027 to 30 September 2027. Any ordinary dividends paid

over the three-year performance period (1 October 2024 to 30 September 2027) will be added to the three-month average share price.

3. The Committee retains discretion to adjust the targets or outcomes in the event of share buyback, special dividends and/or M&A.

The Committee believes the EPS, ROIC and absolute TSR targets for 2025 are stretching when considered against actual performance for 2024 and internal

forecasts and relative to market consensus.

Statement of shareholder voting on the RemunerationReport

The shareholder vote on the Remuneration Report for the year ended 30 September 2023 at the AGM which took place on 26 January 2024 was as follows:

Resolution

Votes for

(including

discretionary) % for

Votes against

(excluding withheld) % against

Total (excluding

withheld and third

party discretionary) Withheld

Approval of the Directors’

Remuneration Policy 22,107,214 97.45% 579,010 2.55% 22,686,224 2,803

Approval of the Directors’

Remuneration Report 22,631,170 99.76% 55,394 0.24% 22,686,564 2,463

This Remuneration Report has been approved by the Board of Directors and signed on its behalf by:

Victor Chavez CBE

Chair of the Remuneration Committee

19 November 2024

113

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Directors’ Report

The Directors submit the Annual Report and audited financial statements

of Avon Technologies plc (‘the Company’) and the Avon Technologies

Group of companies (‘the Group’). The financial period represents the

year ended 30 September 2024 (prior financial period 52 weeks ended

30September 2023). The Company has adopted a calendar year end to

align with the majority of listed peers, and certain subsidiary companies.

The Company is a public limited company incorporated and domiciled

in England and Wales with company registration number 32965. The

Company’s subsidiary undertakings, including those located outside the

UK, are listed in note 7.3 of the financial statements.

Strategic Report

The Strategic Report, which contains a review of the Group’s business

(including by reference to key performance indicators), a description of

the principal risks and uncertainties facing the Group, and commentary on

likely future developments, is set out on pages 4 to 76 and is incorporated

into this Directors’ Report by reference.

Financial results and dividend

The Group statutory profit for the period after taxation amounts to $3m

(2023: loss $14.4m). Full details are set out in the Consolidated Statement

ofComprehensive Income on page 132.

An interim dividend of 7.2c per share (converted to 5.63p) was paid on

6September 2024 (2023: 14.3c).

The Directors recommend a final dividend of 16.1c per share, which will

be converted into GBP prior to payment to shareholders (2023: 15.3c),

resulting in a total dividend distribution per share for the year ended

30September 2024 of 23.3c per share (2023: 29.6c).

Share capital

The Company only has one class of share capital, which comprises ordinary

shares of £1 each. As at 19 November 2024 the Company has 30,258,194

shares in issue, with 765,098 held in treasury, and no shares were issued

during the period. All shares forming part of the ordinary share capital

have the same rights and carry one vote each. There are no unusual

restrictions on the transfer of a share. Further details of the shares in issue

during the financial year are set out in note 2.3 of the financial statements.

The full rights and obligations attaching to the Company’s shares as

well as the powers of Directors are set out in the Company’s Articles

of Association (‘the Articles’), copies of which can be obtained from

Companies House or by writing to the Company Secretary. Shareholders

are entitled to receive the Company’s reports and accounts, to attend

and speak at general meetings, to exercise voting rights in person or by

appointing a proxy and to receive a dividend where declared or paid

out of profits available for that purpose. There are no restrictions on the

transfer of issued shares or on the exercise of voting rights attached to

them, except where the Company has suspended their voting rights

or prohibited their transfer following a failure to respond to a notice to

shareholders under section 793 of the Companies Act 2006, or where the

holder is precluded from transferring or voting by the Financial Services

Authority’s Listing Rules or the City Code on Takeovers and Mergers.

The 555,205 shares held in the name of the Employee Share Ownership

Trust are held as a hedge against awards previously made or to be made

pursuant to the Long-Term Incentive Plan and are held on terms which

provide voting rights to the trustee. In FY24 the trust acquired 301,947

shares (2023: nil).

The Company is not aware of any agreements between its shareholders

which may restrict the transfer of their shares or the exercise of their voting

rights, the only exception to this being that the trustee of the Employee

Share Ownership Trust has waived its rights to dividends.

At the Company’s last AGM held on 26 January 2024, shareholders

authorised the Company to make market purchases of up to 3,025,819 of

the Company’s issued ordinary shares. No shares were purchased under

this authority during the period. A resolution will be put to shareholders

atthe forthcoming AGM to renew this authority.

The Directors require authority to allot unissued share capital of the

Company and to disapply shareholders’ statutory pre-emption rights.

Such authorities were granted at the 2024 AGM and resolutions to renew

these authorities will be proposed at the 2025 AGM; see explanatory notes

on pages 177 to 179. No shares were allotted under this authority during

the period.

Substantial shareholdings

As at 24 September 2024 the following shareholders held 3% or more of

the Company’s issued share capital:

Alantra EQMC Asset Management SGIIC SA 16.88%

Kempen Capital Management Nv 8.26%

Aberforth Partners LLP 8.24%

Schroder Investment Management Limited 6.68%

Royal London Asset Management Limited 4.17%

NFU Mutual 3.36%

Hargreaves Lansdown Stockbrokers 3.29%

Invesco Asset Management Limited 3.22%

Significant agreements – change of control

The only significant agreements to which the Company is a party which

take effect, alter or terminate upon a change of control of the Company

following a takeover bid are the Company’s:

• revolving credit facility agreement; and

• Long-Term Incentive Plan (‘the Plan’).

The unsecured revolving credit facility of $200m provided by Barclays

Bank PLC, HSBC UK Bank PLC, Comerica Bank Inc., and Wintrust Bank N.A.

contains a provision which, in the event of a change of control of the

Company, gives each lending bank the right to cancel its commitments

to the Company and to declare all the outstanding amounts and accrued

interest owed to such lending bank immediately due and payable. If

a lending bank does not exercise this right within 15 business days of

being notified of the change of control, it shall not be able to cancel

its commitments or require repayment of its share of the amounts

outstanding under the facility in respect of such change of control.

A change of control will be deemed to have occurred if any person

or group of persons acting in concert (as defined in the City Code on

Takeovers and Mergers) gains direct or indirect control of the Company.

Under the rules of the Plan, on a takeover a proportion of each

outstanding grant will vest. The number of shares that vest is to be

determined by the Remuneration Committee, including by reference to

the extent to which the performance conditions have been satisfied and

the amount of time that has passed since the award was made.

It is also possible that the trustee of the pension plan would seek to review

the current funding arrangements and deficit recovery plan as part of or

following a change of control, particularly if that resulted in a weakening of

the employer covenant.

The Company does not have agreements with any Director or employee

that would provide compensation for loss of office or employment

resulting from a change of control, except in relation to the Long-Term

Incentive Plan as described above.

114

Avon Technologies plc Annual Report and Accounts 2024

Directors

The current Directors as at 19 November 2024 and their biographies are

shown on page 79. Maggie Brereton was appointed to the Board on 1 April

2024 following the departure of Chloe Ponsonby on 31 March 2024.

According to the Articles of Association, all Directors are subject to

election by shareholders at the first AGM following their appointment,

and to re-election thereafter at intervals of no more than three years. In

line with best practice reflected in the UK Corporate Governance Code, all

current Directors will be standing for re-appointment at the forthcoming

AGM to be held on 31 January 2025.

The remuneration of the Directors including their respective shareholdings

in the Company is set out in the Remuneration Report on page 106.

The Company’s rules about the appointment and replacement of

Directors, together with the powers of Directors, are contained in the

Articles. Changes to the Articles must be approved by special resolution of

the shareholders.

Directors’ and Officers’ indemnity insurance

In accordance with the Company’s Articles and subject to the provisions of

the Companies Act 2006 (‘the Act’), the Company maintains, at its expense,

Directors’ and Officers’ liability insurance to provide cover in respect of

legal action against its Directors. This was in force throughout the financial

year and remains in force as at the date of this report.

The Company’s Articles allow the Company to provide the Directors with

funds to cover the costs incurred in defending legal proceedings. The

Company is therefore treated as providing an indemnity for its Directors

and Company Secretary which is a qualifying third-party indemnity

provision for the purposes of the Act.

Conflicts of interest

During the period no Director held any beneficial interest in any

contract significant to the Company’s business, other than a contract of

employment. The Company has procedures set out in the Articles for

managing conflicts of interest. Should a Director become aware that they,

or their connected parties, have an interest in an existing or proposed

transaction with the Group, they are required to notify the Board as soon

as reasonably practicable.

Research and development

The Group continues to utilise its technical and materials expertise to

remain at the forefront of innovative technology and produce specialist

products and services to maximise the performance and capabilities of its

customers. The Group maintains its links to key universities in the US and

UK and continues to work with new and existing customers and suppliers

to develop its knowledge and product range. Total Group expenditure on

research and development in the year was $11.4m (2023: $10.2m), further

details of which are contained in the Strategic Report on page 39.

Corporate governance

The Company’s statement on corporate governance can be found in

the Corporate Governance Report on pages 85 to 88. The Corporate

Governance Report forms part of this Directors’ Report and is incorporated

into it by cross-reference.

Stakeholder engagement

The Board factors stakeholder opinions and feedback into its decisions to

ensure the impact on key stakeholders’ needs and concerns is considered.

More information on how the Board engages with stakeholders can be

found in the Section 172 Statement on pages 48 and 49.

Employee share schemes and plans

The Group encourages its employees to share in the future success of the

Group and operates three share-based incentive plans. The Avon Rubber

Share Incentive Plan (SIP) is open to all eligible UK employees. Under the

SIP participants are able to purchase shares in the Company monthly

using deductions from their pre-tax pay. The Avon Rubber Employee

Stock Purchase Plan (ESPP) is open to all eligible US employees. Under

the ESPP, participants are able to purchase shares in the Company at a

discounted rate from payroll deductions. The Avon Rubber Long-Term

Incentive Plan (LTIP) is designed to align Executive Directors’ and senior

employees’ interests with those of shareholders and to incentivise the

delivery of sustainable earnings growth and superior shareholder returns.

Discretionary awards are granted under the LTIP over a fixed number of

shares by reference to salary, with awards ordinarily vesting, subject to

meeting performance criteria, on the third anniversary of the grant date.

Environmental and corporate social responsibility

Matters relating to environmental and corporate social responsibility

including reference to our policy on diversity are set out in the People

section on pages 52 to 55.

Greenhouse gas emissions

The disclosures concerning greenhouse gas emissions required by law are

included within the Corporate Social Responsibility Report on page 57.

Political and charitable contributions

No political contributions were made during the period or the prior

period. Contributions for charitable purposes amounted to $108,511

(2023: $124,706) consisting of numerous small donations to various

community charities in Wiltshire, Maryland, Michigan, New Hampshire,

California and Ohio.

Policy on employee disability

Avon provides support, training and development opportunities to all our

employees irrespective of any disabilities they may have. We give full and

fair consideration to disabled applicants, and where an existing employee

becomes disabled during their employment, we will make every effort to

enable them to continue their employment with Avon in their original or

an alternative role.

Financial instruments

An explanation of the Group policies on the use of financial instruments

and financial risk management objectives is contained in note 5.4 of the

financial statements.

Independent auditor

The Directors who held office at the date of approval of this Directors’

Report confirm that, so far as they are each aware, there is no relevant

audit information of which the Company’s auditor is unaware, and each

Director has taken all the steps that they ought to have taken as a Director

to make themselves aware of any relevant audit information and to

establish that the Company’s auditor is aware of that information.

Auditor

KPMG LLP has expressed its willingness to continue in office as

independent auditor and a resolution to re-appoint it and authorising the

Board to agree its remuneration will be proposed at the AGM.

Annual General Meeting

The Company’s AGM will be held at our Hampton Park West facility,

Semington Road, Melksham, Wiltshire SN12 6NB, on 31 January 2025 at

10.30 am. Registration will be from 10.00 am. The Notice of the AGM and

an explanation of the resolutions to be put to the meeting are set out in

the Notice of Meeting and can be found on pages 175 to 181.

115

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

Statement of Directors’ responsibilities in respect of the

Annual Report and the financial statements

The Directors are responsible for preparing the Annual Report and the

Group and Parent Company financial statements in accordance with

applicable law and regulations.

Company law requires the Directors to prepare Group and Parent

Company financial statements for each financial year. Under that law they

are required to prepare the Group financial statements in accordance with

UK adopted International Accounting Standards.

Under company law the Directors must not approve the financial

statements unless they are satisfied that they give a true and fair view of

the state of affairs and profit or loss of the Group and Parent Company.

In preparing each of the Group and Parent Company financial statements,

the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable, relevant

and reliable;

• state whether they have been prepared in accordance with UK adopted

International Accounting Standards;

• assess the Group and Parent Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern; and

• use the going concern basis of accounting unless they either intend to

liquidate the Group or the Parent Company or to cease operations, or

have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records

that are sufficient to show and explain the Parent Company’s transactions

and disclose with reasonable accuracy at any time the financial position

of the Parent Company and enable them to ensure that its financial

statements comply with the Companies Act 2006.

They are responsible for such internal control as they determine is

necessary to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error, and have

general responsibility for taking such steps as are reasonably open to them

to safeguard the assets of the Group and to prevent and detect fraud and

other irregularities.

Under applicable law and regulations, the Directors are also responsible

forpreparing a Strategic Report, Directors’ Report, Directors’ Remuneration

Report and Corporate Governance Statement that comply with that law

and those regulations. The Directors are responsible for the maintenance

and integrity of the corporate and financial information included on the

Company’s website. Legislation in the UK governing the preparation

and dissemination of financial statements may differ from legislation

inotherjurisdictions.

In accordance with Disclosure Guidance and Transparency Rule (DTR)

4.1.16R, the financial statements will form part of the annual financial

report prepared under DTR 4.1.17R and 4.1.18R. The Auditor’s Report on

these financial statements provides no assurance over whether the annual

financial report has been prepared in accordance with those requirements.

Directors’ confirmations

Each of the Directors, whose names and functions are listed on pages 78

and 79, confirms that to the best of their knowledge:

• the financial statements, prepared in accordance with the applicable

set of accounting standards, give a true and fair view of the assets,

liabilities, financial position and profit or loss of the Company and the

undertakings included in the consolidation taken as a whole; and

• the Strategic Report and Directors’ Report include a fair review of the

development and performance of the business and the position of

the issuer and the undertakings included in the consolidation taken

as a whole, together with a description of the principal risks and

uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair,

balanced and understandable and provides the information necessary for

shareholders to assess the Group’s position and performance, business

model and strategy.

The Directors’ Report and Responsibilities Statement were approved

by the Board of Directors on 19 November 2024 and are signed on its

behalf by:

Jos Sclater

Chief Executive Officer

19 November 2024

Directors’ Report continued

116

Avon Technologies plc Annual Report and Accounts 2024

We are excited by the ability

of the organisation to change

and translate strategy

into action. We have built

a culture where improving

processes is becoming the

Avon way of life, we have

much more capable people

and the pace of change is

accelerating.

ADJUSTED

PERFORMANCE

MEASURES

ADJUSTED

PERFORMANCE

MEASURES

CONTENTS

118 Adjusted Performance Measures

117

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

PERFORMANCE MEASUREMENT

The Directors assess the operating performance of the Group based on both statutory and adjusted measures. Adjusted measures include operating

profit, net finance costs, taxation and earnings per share, as well as other measures not defined under IFRS including orders received, closing order

book, operating profit margin, returnon invested capital, cash conversion, net debt excluding lease liabilities, average working capital turns, scrap levels,

inventory turns, productivity and constant currency equivalents for relevant metrics. These measures are collectively described as Adjusted Performance

Measures (APMs) in this Annual Report.

The Directors believe that the APMs provide a useful comparison of business trends and performance. The APMs exclude exceptional items considered

unrelated to the underlying trading performance of the Group. The term adjusted is not defined under IFRS and may not be comparable with similarly

titled measures used by other companies.

The Group uses these measures for planning, budgeting and reporting purposes and for its internal assessment of the operational performance.

ADJUSTED PERFORMANCE MEASURES

The following table summarises the statutory and adjusted profit and loss account measures for the year together with the adjustments made to each

line item.

Year ended 30 September 2024 52 weeks ended 30 September 2023

Adjusted

Adjustments

Total

Adjusted

Adjustments

Total

Continuing operations

Revenue 275.0 - 275.0 243.8 - 243.8

Cost of sales (168.2) (1.0) (169.2) (157.9) - (157.9)

Gross profit 106.8 (1.0) 105.8 85.9 - 85.9

Sales and marketing expenses (16.1) - (16.1) (14.9) - (14.9)

Research and development costs (11.5) (2.6) (14.1) (10.0) (0.2) (10.2)

General and administrative expenses (47.6) (17. 3) (64.9) (39.8) (33.6) (73.4)

Operating profit/(loss) 31.6 (20.9) 10.7 21.2 (33.8) (12.6)

EBITDA 43.4 (10.8) 32.6 35.7 (2.9) 32.8

Depreciation, amortisation andimpairment (11.8) (10.1) (21.9) (14.5) (30.9) (45.4)

Operating profit/(loss) (1) 31.6 (20.9) 10.7 21.2 (33.8) (12.6)

Net finance costs (2) (6.3) (2.1) (8.4) (7.2) (0.4) (7.6)

Profit/(loss) before taxation 25.3 (23.0) 2.3 14.0 (34.2) (20.2)

Taxation (3) (4.4) 5.1 0.7 (1.9) 5.7 3.8

Profit/(loss) for the period from

continuingoperations 20.9 (17.9) 3.0 12.1 (28.5) (16.4)

Discontinued operations – profit

fromdiscontinued operations (4) - - - - 2.0 2.0

Profit/(loss) for the period (5) 20.9 (17.9) 3.0 12.1 (26.5) (14.4)

Basic earnings/(loss) per share (6) 69.9c (59.9c) 10.0c 40.3c (88.3)c (48.0)c

Diluted earnings/(loss) per share (6) 67. 6c (57.9c) 9.7c 40.3c (88.3)c (48.0)c

118

Avon Technologies plc Annual Report and Accounts 2024

Adjusted Performance Measures

1 Adjustments to operating profit

Adjusted operating profit excludes discontinued operations and exceptional items considered unrelated to the underlying trading performance of the

Group. Transactions are classified as exceptional where they relate to an event that falls outside of the underlying trading activities of the business and

where individually, or in aggregate, the Directors consider they have a material impact on the financial statements.

2024

2023

Operating profit/(loss) 10.7 (12.6)

Amortisation of acquired intangibles 6.2 6.3

Impairment of other non-current assets (excluding restructuring-related impairments) 1.7 0.5

Transformational, restructuring and transition costs 10.8 2.9

Acceleration of software amortisation – transformational 1.6 -

Acceleration of Irvine depreciation and amortisation – transformational 0.6 -

Impairment of goodwill - 23.4

Restructuring-related impairment of non-current assets - 0.7

Adjusted operating profit 31.6 21.2

Depreciation 7.4 9.2

Other amortisation charges 4.4 5.3

Adjusted EBITDA 43.4 35.7

Amortisation of acquired intangibles

Amortisation charges for acquired intangible assets of $6.2m (2023: $6.3m) are considered exceptional as they do not change each period based on

underlying business trading and performance.

Impairment of other non-current assets

Review of the Group’s non-current assets resulted in a $1.7m exceptional impairment loss (2023: $0.5m) as the carrying value of a product group level CGU

exceeded its estimated recoverable amount. Further details are provided in note 3.1. The impairment losses are significant items resulting from changes in

assumptions for future recoverable amounts. As such they are considered unrelated to tradingperformance.

Transformational, restructuring and transition costs

Current year transformational costs excluding depreciation and amortisation charges were $10.8m. These include $7.4m related to planned footprint

optimisation through closure of the Irvine, California, facility, and $3.4m related to other transformational programmes as reconciled in the Financial

Review on page 36. Transformational spend relates to costs directly related to transformation initiatives as described in the CEO Review on page 12, and

will be incurred until these programmes are completed FY25 spend on transformational costs of this nature is expected to be at similar levels to FY24.

Transformational accelerated depreciation and amortisation charges were $2.2m. These include $1.6m related to one of the Group’s legacy ERP systems,

and $0.6m for assets held in Irvine that are not expected to transfer to Cleveland on closure. This acceleration of charges is considered a change in

accounting estimate during the year.

Prior period costs were $2.9m. These include $1.4m restructuring costs related to the right-sizing of operations and $1.5m transition costs related to the

transfer of legacy Team Wendy operations onto a Group controlled ERP system.

These costs are considered exceptional as they relate tospecific activities which do not form part of the underlying business trading andperformance.

Impairment of goodwill

In the prior period, review of the Team Wendy CGU resulted in impairment to goodwill of $23.4m as the carrying value of the CGU exceeded its estimated

recoverable amount. Further details are provided in note 3.1. The impairment was a significant item based on forecast assumptions for future cash flows.

Assuch it was considered unrelated to trading performance.

Restructuring-related impairment of non-current assets

In the prior period restructuring-related impairment of non-current assets was $0.7m. This related to the closure of one of our US offices, with a $0.5m

impairment to right of use assets and $0.2m impairment to plant and machinery. These costs are considered exceptional as they relate to a specific office

closure which does not form part of the underlying business trading andperformance.

119

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

2 Adjustments to net finance costs

Adjusted net finance costs exclude exceptional items considered unrelated to the underlying trading performance of the Group.

2024

2023

Net finance costs 8.4 7.6

Defined benefit pension unwind discount (2.1) (0.4)

Adjusted net finance costs 6.3 7.2

$2.1m (2023: $0.4m) unwind of discounting on the UK defined benefit pension scheme liability is treated as exceptional given the scheme relates to

employees employed prior to 31 January 2003 and was closed to future accrual of benefits on 1 October 2009 (note 6.2).

3 Adjustments to taxation

Adjustments to taxation represent the tax effects of the adjustments to operating profit and net finance costs. Except for the impairment to goodwill,

adjusting items do not have significantly different effective tax rates compared to statutory rates, with an overall effective rate of 22% (2023: 17%).

In the prior period the $23.4m impairment to goodwill resulted in a tax credit of $3.4m (effective tax rate 14.5%), which explains the lower overall rate

compared tostatutory rates on the total level of adjustments.

4 Profit from discontinued operations

Adjusted profit measures for the prior period exclude the result from discontinued operations relating to the divestment of milkrite | InterPuls and

closure of the Armour business (note 2.2). Discontinued operations related to milkrite | InterPuls ended on 30 September 2023. Total profit after tax from

discontinued operations was $2.0m in 2023.

5 Adjustments to profit/loss

2024

2023

Profit/(loss) for the period 3.0 (14.4)

Amortisation of acquired intangibles 6.2 6.3

Transformational, restructuring and transition costs 10.8 2.9

Restructuring-related impairment of non-current assets - 0.7

Acceleration of software amortisation – transformational 1.6 -

Acceleration of Irvine depreciation and amortisation – transformational 0.6 -

Impairment of other non-current assets (excluding restructuring-related impairments) 1.7 0.5

Impairment of goodwill - 23.4

Defined benefit pension unwind discount 2.1 0.4

Tax on exceptional items (5.1) (5.7)

Profit from discontinued operations - (2.0)

Adjusted profit for the period 20.9 12.1

6 Adjusted earnings per share

Weighted average number of shares 2024 2023

Weighted average number of ordinary shares in issue used in basic calculation (thousands) 29,895 29,996

Potentially dilutive shares (weighted average) (thousands) 1,022 263

Diluted number of ordinary shares (weighted average) (thousands) 30,917 30,259

Adjusted continuing earnings per share

2024

$ cents

2023

$ cents

Basic 69.9c 40.3c

Diluted 67. 6c 40.3c

120

Avon Technologies plc Annual Report and Accounts 2024

Adjusted Performance Measures continued

7 Net debt

2024

2023

Cash and cash equivalents 14.0 13.2

Bank loans (57.5) (77.7)

Net debt excluding lease liabilities (43.5) (64.5)

Lease liabilities (21.9) (20.9)

Net debt including lease liabilities (65.4) (85.4)

8 Adjusted dividend cover ratio

2024

$ cents

2023

$ cents

Interim dividend 7.2c 14.3c

Final dividend 16.1c 15.3c

Total dividend 23.3c 29.6c

Adjusted basic earnings per share 69.9c 40.3c

Adjusted dividend cover ratio 3.0 times 1.4 times

9 Return on invested capital

Return on invested capital (ROIC) is calculated as adjusted operating profit over average invested capital relating to continuing operations.

2024

2023

Net assets 166.5 159.4

Net assets associated with discontinued operations - (5.6)

Net assets associated with continuing operations 166.5 153.8

Net debt excluding lease liabilities 43.5 64.5

Lease liabilities 21.9 20.9

Pension 17. 2 40.2

Derivatives - (0.9)

Net tax (31.4) (33.2)

Total invested capital 217.7 245.3

Average invested capital 231.5 243.4

Adjusted operating profit 31.6 21.2

ROIC 13.7% 8.7%

Average invested capital

2024

2023

Current period invested capital 217.7 245.3

Prior period invested capital 245.3 241.5

Average invested capital 231.5 243.4

121

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

10 Average working capital turns (AWCT)

AWCT is the ratio of the 12-month average month end working capital (defined as the total of inventory, receivables and payables excluding lease liabilities) to

revenue, based on continuing operations.

Continuing operations

2024

2023

12-month average month end working capital 60.8 65.7

Revenue 275.0 243.8

AWCT 4.52 3.71

11 Cash conversion

Cash conversion excludes the impact of exceptional items from operating cash flows and EBITDA.

2024

2023

Cash flows from continuing operations 58.8 0.2

Restructuring and transition costs paid 9.7 2.3

Cash flows from continuing operations before exceptional items 68.5 2.5

2024

2023

Cash flows from continuing operations before exceptional items 68.5 2.5

Adjusted EBITDA 43.4 35.7

Cash conversion 157. 8% 7.0%

12 Constant currency reporting

Constant currency measures are calculated by translating the prior period at current period exchange rates.

2023

constant

currency

2023

reported

Orders received 260.1 258.7

Closing order book 137.1 135.8

Revenue 245.1 243.8

Adjusted operating profit 20.6 21.2

Adjusted profit before tax 13.4 14.0

Adjusted basic earnings per share 38.8c 40.3c

13 Scrap (% of revenue)

Scrap (% of revenue) is calculated by dividing the total value of scrap produced in the period by the revenue generated for the last 6 months.

Our mid-term targets are calculated by dividing the total value of scrap produced in the year by the revenue generated for the 12 month period.

2024 H2

2024 H1

2023 H2

2023 H1

Last 6 months of scrap 2.4 2.1 5.5 3.1

Last 6 months of revenue 147.9 127.1 142.2 101.6

Group scrap (% of revenue) 1.6% 1.7% 3.9% 3.1%

122

Avon Technologies plc Annual Report and Accounts 2024

Adjusted Performance Measures continued

14 Inventory turns

Inventory turns measure how many times the inventory was turned over in the period by dividing adjusted cost of sales over the last 12 months by the

inventory value. Adjusted cost of sales excludes $0.5m plant and machinery exceptional impairment (note 3.2) and $0.5m acceleration of depreciation

charges related to assets held in Irvine.

2024

2023

Inventory 54.9 54.4

Last 12 months adjusted cost of sales 168.2 157.9

Group inventory turns 3.1 2.9

15 Productivity

Productivity measures how much revenue was generated per direct employee by dividing the revenue over the last 12 months by the total number of

direct heads. Direct heads are employees completing manufacturing activities.

2024 2023

Direct headcount 539 580

Last 12 months of revenue $275.0m $243.8m

Group productivity $510k $420k

2024 2023

Direct headcount 342 346

Last 12 months of revenue $129.4m $86.9m

Team Wendy productivity $378k $251k

2024 2023

Direct headcount 197 234

Last 12 months of revenue $145.6m $156.9m

Avon Protection productivity $739k $671k

123

Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

It is now 18 months since we

launched the STAR strategy

and we are making good

progress. This is demonstrated

by our much stronger financial

performance, improving

operating metrics and a

fast‑growing order book.

FINANCIAL

STATEMENTS

125 Independent Auditor’s Report

132 Consolidated Statement of

Comprehensive Income

133 Consolidated Balance Sheet

134 Consolidated Cash Flow

Statement

135 Consolidated Statement of

Changes in Equity

136 Accounting Policies and Critical

Accounting Judgements

141 Notes to the Group Financial

Statements

168 Parent Company Balance Sheet

169 Parent Company Statement of

Changes in Equity

170 Parent Company Accounting

Policies

172 Notes to the Parent Company

Financial Statements

175 Notice of Annual General

Meeting

182 Glossary of Abbreviations

IBC Shareholder Information

CONTENTS

Avon Technologies plc Annual Report and Accounts 2024

124

125

Independent Auditor’s Report

To the Members of Avon Technologies plc

1 Our opinion is unmodified

We have audited the financial statements of Avon Technologies plc

(“theCompany”) for the year ended 30 September 2024 which comprise

the Consolidated Statement of Comprehensive Income, the Consolidated

and Parent Company Balance Sheets, the Consolidated Cash Flow

Statement, and the Consolidated and Parent Company Statements of

Changes in Equity, and the related notes, including the accounting policies

sections in both the Group and Parent Company financial statements.

In our opinion:

• the financial statements give a true and fair view of the state of the

Group’s and of the Parent Company’s affairs as at 30 September 2024

and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in

accordance with UK-adopted international accounting standards;

• the Parent Company financial statements have been properly prepared

in accordance with UK accounting standards including FRS 101 Reduced

Disclosure Framework; and

• the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards

onAuditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are

described below. We believe that the audit evidence we have obtained

is a sufficient and appropriate basis for our opinion. Our audit opinion is

consistent with our report to the audit committee.

We were first appointed as auditor by the shareholders on 1 February 2019.

The period of total uninterrupted engagement is for the 6 financial periods

ended 30 September 2024. We have fulfilled our ethical responsibilities

under, and we remain independent of the Group in accordance with,

UKethical requirements including the FRC Ethical Standard as applied

tolisted public interest entities. No non-audit services prohibited by

thatstandard were provided.

Overview

Materiality: group financial

statements as a whole

$2.1m (2023:$2.05m)

0.76% (2023: 0.84%) of revenue

Coverage 100% (2023:100%) of revenue

Key audit matters 2024 vs 2023

Recurring risks Goodwill impairment - Team Wendy (formerly Head Protection)

Parent Company Recoverability of Parent Company’s investment in subsidiaries

2 Key audit matters: our assessment of risks

ofmaterialmisstatement

Key audit matters are those matters that, in our professional judgement,

were of most significance in the audit of the financial statements and

include the most significant assessed risks of material misstatement

(whether or not due to fraud) identified by us, including those which had

the greatest effect on: the overall audit strategy; the allocation of resources

in the audit; and directing the efforts of the engagement team. We include

below the key audit matters in decreasing order of audit significance,

together with our key audit procedures to address those matters and as

required for public interest entities our results from those procedures.

These matters were addressed, and our results are based on procedures

undertaken, in the context of, and solely for the purpose of, our audit of

the financial statements as a whole and in forming our opinion thereon,

and consequently are incidental to that opinion, and we do not provide a

separate opinion on these matters. We continue to perform procedures

over Recoverability of capitalised development expenditure. However,

following a re-assessment of the capitalised development expenditure

population, we have not assessed this as one of the most significant risks

in our current year audit and, therefore, it is not separately identified in our

report this year.

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

126

Independent Auditor’s Report

To the Members of Avon Technologies plc continued

2 Key audit matters: our assessment of risks ofmaterialmisstatement continued

The risk Our response

Goodwill Impairment

– Team Wendy CGU

Team Wendy Goodwill

of $62.9million

(2023:$62.9 million)

Risk vs 2023:

Refer to page 93

(AuditCommittee Report),

pages 138 (accounting policy)

and pages 148, 149, and 150

(financial disclosures).

Forecast-based assessment:

• Goodwill is significant and at risk of

impairment due to the level of revenue

and margin growth required to support

the carrying amount allocated to the Team

Wendy Cash Generating Unit (CGU). Whilst

the Group’s transformation programme,

announced in the year, positively impacts

on forecast headroom, the estimated

recoverable amount is subjective due to the

inherent uncertainty involved in forecasting

and discounting future cash flows.

• The effect of these matters is that, as part

of our risk assessment, we determined that

the value in use of goodwill in respect of

the Team Wendy CGU has a high degree

of estimation uncertainty, with a potential

range of reasonable outcomes greater than

our materiality for the financial statements

as a whole, and possibly many times that

amount. In conducting our final audit work,

we concluded that reasonably possible

changes to the value in use of Team Wendy

goodwill would not be expected to result

in material impairment. The financial

statements (pages 149 and 150 ) disclose the

sensitivity estimated by the Group.

Our procedures included:

• Historical comparison: We assessed the accuracy of the group’s

forecasting by comparing actual cash flows in the period to the prior

period forecasts;

• Our sector experience: We evaluated the assumptions used, in

particular those relating to forecast revenue growth, gross profit

margins based on our knowledge of the Group;

• Benchmarking assumptions: We compared the Group’s

assumptions to externally derived data in relation to key inputs such

as revenue growth rates and discount rates, using our own valuation

specialist;

• Comparing valuations: We compared the sum of the discounted

cash flows (including the Avon Protection and Team Wendy CGUs) to

the Group’s market capitalisation to assess the reasonableness of the

assumptions used;

• Assess transparency: We assessed whether the Group’s disclosures

about the sensitivity of the outcome of the impairment assessment to

changes in key assumptions reflect the risks inherent in the estimation

ofthe recoverable amount of goodwill, including an assessment

of whether the degree of aggregation in the disclosure of key

assumptions was materially acceptable.

We performed the tests above rather than seeking to rely on any of

the Group’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

procedures described.

Our results

• We found the Group’s conclusion that there is no impairment ofthe

goodwill related to Team Wendy to be acceptable (2023: result: acceptable).

The risk Our response

Recoverability of

Parent Company’s

investments in

subsidiaries

(£212.7 million; 2023:

£212.7 million)

Risk vs 2023:

Refer to page 171 (accounting

policy) and page 173 (financial

disclosures).

Low risk, high value

The carrying amount of the Parent

company’s investments in subsidiaries

represents 94.9% (2023: 96.7%) of the

company’s total assets. Their recoverability is

not at a high risk of significant misstatement

or subject to significant judgement.

However, due to their materiality in the

context of the Parent company financial

statements, this is considered to be the area

that had the greatest effect on our overall

Parent company audit.



Our procedures included:

• Tests of detail: We compared the carrying amount of 100% of

investments with the relevant subsidiaries’ draft balance sheet to

identify whether their net assets, being an approximation of their

minimum recoverable amount, were in excess of their carrying

amount and assessing whether those subsidiaries have historically

been profit-making.

• Assessing subsidiary audits: We assessed the work performed

by the subsidiary audit team and the group team on all of those

subsidiaries and considering the results of that work, on those

subsidiaries’ profits and net assets.

Where the net assets of a subsidiary were below the investment’s

carrying amount, our procedures also included:

• Our sector experience: Evaluating the current level of the

subsidiary’s trading, including identifying any indications of a

downturn in activity, by examining the post year end management

accounts and considering our knowledge of the Group and

the market.

We performed the tests above rather than seeking to rely on any of the

company’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

procedures described.

Our results:

We found the company’s conclusion that there is no impairment of its

investments in subsidiaries to be acceptable (2023: acceptable).

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127

3 Our application of materiality and an overview of the

scope of our audit

Materiality for the group financial statements as a whole was set at

$2.1million (2023: $2.05 million), determined with reference to a benchmark

oftotal revenues, of which it represents 0.76% (2023: 0.84% of revenue). We

consider total revenues to be the most appropriate benchmark as it better

reflects the size of the business compared to the Group’s profit before tax.

Materiality for the Parent company financial statements as a whole was

setat £1.1 million (2023: £1.1 million), which is the component materiality

for the Parent company determined by the group audit engagement team.

This is lower than the materiality we would otherwise have determined

with reference to a benchmark of Parent company total assets, of which

itrepresents 0.5% (2023: 0.5%).

In line with our audit methodology, our procedures on individual

account balances and disclosures were performed to a lower threshold,

performance materiality, so as to reduce to an acceptable level the risk that

individually immaterial misstatements in individual account balances add

up to a material amount across the financial statements as a whole.

Performance materiality was set at 65% (2023: 75%) of materiality for the

Group financial statements as a whole, which equates to $1.36 million

(2023: $1.8 million). We applied this percentage in our determination of

performance materiality based on the level of identified misstatements

andcontrol deficiencies during the prior period.

Performance materiality was set at 75% (2023: 75%) of materiality for

the Parent company financial statements as a whole which equates to

£0.825 million (2023: £0.825 million). We applied this percentage in our

determination of performance materiality because we did not identify

anyfactors indicating an elevated level of risk.

We agreed to report to the Audit Committee any corrected or

uncorrectedidentified misstatements exceeding $105,000 (2023: $100,000),

in addition to other identified misstatements that warranted reporting

onqualitative grounds.

Revenue

$275m (2023: $243.8m Revenue)

Revenue

$275m

Revenue Group

materiality

Group Materiality

$2.1m (2023: $2.05m)

$2.1m

Whole financial statements materiality

(2023: $2.05m)

$1.36m

Whole financial statements performance

materiality (2023: $1.53m)

$1.5m

Range of materiality at 6 components

($0.3m-$1.5m) (2023: $0.15m to $1.55m)

$0.105m

Misstatements reported to the audit committee

(2023: $0.1m)

Group revenue Group profit (2023: loss)

before tax

Group total assets

100%

(2023: 100%)

97%

(2023 92%)

100

92 98

Full scope for group audit purposes 2024

Specified risk-focused audit procedures 2024

Full scope for group audit purposes 2023

Specified risk-focused audit procedures 2023

2024 Residual components

100%

(2023 98%)

100

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

128

Independent Auditor’s Report

To the Members of Avon Technologies plc continued

3 Our application of materiality and an overview

ofthe scope of our audit continued

Of the Group’s eight (2023: eight) reporting components, we

subjected five (2023: five) to full scope audits for group purposes and

one (2023: one) to specified risk-focused audit procedures over cash

& cash equivalents (2023: cash & cash equivalents). The latter was

not individually financially significant enough to require a full scope

audit for group purposes, but did present specific individual risks

that needed to be addressed. The components within the scope of

our work accounted for the percentages illustrated opposite. For the

residual two components, we performed analysis at an aggregated

group level to re-examine our assessment that there were no

significant risks of material misstatement within these.

The Group team instructed component auditors as to the significant

areas to be covered, including the relevant risks detailed above and

the information to be reported back. The Group team approved the

component materialities, which ranged from $0.3 million to $1.5

million (2023: $0.15 million to $1.55 million), having regard to the mix

of size and risk profile of the Group across the components. The work

on one of the components (2023: One of the components) included

procedures performed by component auditors and the rest, including

the audit of the Parent Company, was performed solely by the Group

team. The Group team visited 5 (2023: 5) component locations in the

UK and USA, to assess the audit risk and strategy. Video and telephone

conference meetings were also held with the component auditors

during which the findings reported to the Group team were discussed

in more detail, and any further work required by the Group team was

then performed by the component auditor.

The scope of the audit work performed was predominately

substantive as we placed limited reliance upon the Group’s internal

control over financial reporting.

4 The Impact of Climate Change on our audit

In planning our audit we have considered the potential impacts of

climate change on the Group’s business and its financial statements.

We performed a risk assessment of the impact of climate change on

the financial statements and our audit approach.

Climate change impacts the Group in a variety of ways including the

impact of climate risk on manufacturing and procurement, potential

reputational risk associated with the Group’s delivery of its climate

related initiatives, and greater emphasis on climate related narrative

and disclosure in the annual report.

The Group’s exposure to climate change is primarily through the

acquisition of materials in its supply chain and increased costs in

relation to manufacturing end products. As part of our audit we

have made enquiries of management to understand the extent of

the potential impact of climate change risk on the Group’s financial

statements and the Group’s preparedness for this.

We have also read the Group’s and the Parent Company’s disclosure

of climate related information in the front half of the annual report as

set out on pages 64 to 69. On the basis of the procedures performed

above, we concluded that the risk of climate change was not

significant when we considered the nature of the Group’s product

range and relevant contractual terms. As a result, there was no

material impact from this on our key audit matters.

5 Going concern

The Directors have prepared the financial statements on the going

concern basis as they do not intend to liquidate the Group or the

Company or to cease their operations, and as they have concluded

that the Group’s and the Company’s financial position means that

this is realistic. They have also concluded that there are no material

uncertainties that could have cast significant doubt over their ability

to continue as a going concern for at least a year from the date of

approval of the financial statements (“the going concern period”).

We used our knowledge of the Group, its industry, and the general

economic environment to identify the inherent risks to its business

model and analysed how those risks might affect the Group’s and

Company’s financial resources or ability to continue operations

over the going concern period. The risks that we considered most

likely to adversely affect the Group’s and Company’s available

financial resources and metrics relevant to debt covenants over

thisperiod were:

• Achievement of anticipated savings from the Group’s ongoing

restructuring exercises;

• Competition in winning new bids;

• Dependence on a large customer or market.

• Inflationary pressures on the Group’s cost base;

We considered whether these risks could plausibly affect the liquidity

or covenant compliance in the going concern period by assessing the

degree of downside assumption that, individually and collectively,

could result in a liquidity issue, taking into account the Group’s current

and projected cash and facilities (a reverse stress test).

Our procedures also included:

• Comparing past budgets to actual results to assess the Directors’

track record of budgeting accurately.

• Inspecting the confirmation from the lender of the level of

committed financing including re-financing of existing facilities,

and the associated covenant requirements.

• We assessed the completeness of the going concern disclosures.

Our conclusions based on this work:

• We consider that the Directors’ use of the going concern basis

of accounting in the preparation of the financial statements is

appropriate;

• We have not identified, and concur with the Directors’ assessment

that there is not, a material uncertainty related to events or

conditions that, individually or collectively, may cast significant

doubt on the Group’s or Company’s ability to continue as a going

concern for the going concern period; and

• We have nothing material to add or draw attention to in relation to

the Directors’ statement on page 136 to the financial statements on

the use of the going concern basis of accounting with no material

uncertainties that may cast significant doubt over the Group

and Company’s use of that basis for the going concern period,

and we found the going concern disclosure on page 136 to be

acceptable; and

• The related statement under the Listing Rules set out on page

88 is materially consistent with the financial statements and our

auditknowledge.

However, as we cannot predict all future events or conditions and

as subsequent events may result in outcomes that are inconsistent

with judgements that were reasonable at the time they were made,

the above conclusions are not a guarantee that the Group or the

Company will continue in operation.

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129

6 Fraud and breaches of laws and regulations –

ability to detect

Identifying and responding to risks of material misstatement

due to fraud

To identify risks of material misstatement due to fraud (“fraud risks”) we

assessed events or conditions that could indicate an incentive or pressure

to commit fraud or provide an opportunity to commit fraud. Our risk

assessment procedures included :

• Enquiring of directors, the audit committee, internal audit and

inspection of policy documentation as to the Group’s high-level policies

and procedures to prevent and detect fraud, including the internal

audit function, and the Group’s channel for “whistleblowing”, as well as

whether they have knowledge of any actual, suspected or alleged fraud.

• Reading Board and audit committee minutes.

• Considering remuneration incentive schemes (annual bonus scheme &

performance share plan) and performance targets for management and

directors including the total shareholder return target and EPS target for

management remuneration.

• Using analytical procedures to identify any unusual or unexpected

relationships.

• Consultation with our own forensic professionals regarding the

identified fraud risks and the design of the audit procedures planned in

response to these. This involved the forensic professionals attending the

Risk Assessment and Planning Discussion.

We communicated identified fraud risks throughout the audit team and

remained alert to any indications of fraud throughout the audit. This

included communication from the group to the component audit team of

relevant fraud risks identified at the Group level and request to component

audit teams to report to the Group audit team any instances of fraud that

could give rise to a material misstatement at the Group level.

As required by auditing standards, and taking into account possible

pressures to meet profit targets and our overall knowledge of the control

environment, we perform procedures to address the risk of management

override of controls and the risk of fraudulent revenue recognition, in

particular the risk that revenue is recorded in the wrong period and the risk

that Group and component management may be in a position to make

inappropriate accounting entries.

We also performed procedures including:

• Identifying journal entries and other adjustments to test for all full scope

components based on risk criteria and comparing the identified entries

to supporting documentation. These included those posted to unusual

or unexpected accounts.

• For a sample of revenue recognised pre period end date, assessing

whether revenue had been recognised in the appropriate period by

comparing to dispatch notes or terms of specific sale agreements.

• Assessing significant accounting estimates for bias.

Identifying and responding to risks of material misstatement

due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be

expected to have a material effect on the financial statements from our

general commercial and sector experience and through discussion with

the directors (as required by auditing standards), and from inspection of

the Group’s regulatory and legal correspondence and discussed with the

directors the policies and procedures regarding compliance with laws

andregulations.

As the Group is regulated, our assessment of risks involved gaining

an understanding of the control environment including the entity’s

procedures for complying with regulatory requirements. We communicated

identified laws and regulations throughout our team and remained alert

to any indications of non-compliance throughout the audit. The potential

effect of these laws and regulations on the financial statements varies

considerably. This included communication from the Group audit team to

component audit teams of relevant laws and regulations identified at the

Group level, and a request for component auditors to report to the Group

audit team any instances of non-compliance with laws and regulations

that could give rise to a material misstatement at the Group level.

Firstly, the Group is subject to laws and regulations that directly affect the

financial statements including financial reporting legislation (including

related companies legislation), distributable profits legislation, taxation

legislation, and pensions regulation and we assessed the extent of

compliance with these laws and regulations as part of our procedures

onthe related financial statement items.

Secondly, the Group is subject to many other laws and regulations where

the consequences of non-compliance could have a material effect on

amounts or disclosures in the financial statements, for instance through

the imposition of fines or litigation. We identified the following areas

as those most likely to have such an effect: export control legislation

recognising the Governmental nature of many of the group’s customers,

product regulation, health and safety, employment law, environmental

legislation and anti-bribery & corruption legislation recognising the

nature of the Group’s activities. Auditing standards limit the required audit

procedures to identify non-compliance with these laws and regulations

to enquiry of the directors and inspection of regulatory and legal

correspondence, if any. Therefore if a breach of operational regulations is

not disclosed to us or evident from relevant correspondence, an audit will

not detect that breach.

Context of the ability of the audit to detect fraud or breaches

of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable

risk that we may not have detected some material misstatements in

the financial statements, even though we have properly planned and

performed our audit in accordance with auditing standards. For example,

the further removed non-compliance with laws and regulations is from the

events and transactions reflected in the financial statements, the less likely

the inherently limited procedures required by auditing standards would

identify it.

In addition, as with any audit, there remained a higher risk of non-

detection of fraud, as these may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal controls. Our

audit procedures are designed to detect material misstatement. We are

not responsible for preventing non-compliance or fraud and cannot be

expected to detect non-compliance with all laws and regulations.

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Independent Auditor’s Report

To the Members of Avon Technologies plc continued

7 We have nothing to report on the other information in

the Annual Report

The directors are responsible for the other information presented in

the Annual Report together with the financial statements. Our opinion

on the financial statements does not cover the other information and,

accordingly, we do not express an audit opinion or, except as explicitly

stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider

whether, based on our financial statements audit work, the information

therein is materially misstated or inconsistent with the financial statements

or our audit knowledge. Based solely on that work we have not identified

material misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:

• we have not identified material misstatements in the strategic report

and the directors’ report;

• in our opinion the information given in those reports for the financial

period is consistent with the financial statements; and

• in our opinion those reports have been prepared in accordance with

the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be

audited has been properly prepared in accordance with the Companies

Act 2006.

Disclosures of emerging and principal risks and

longer-termviability

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ disclosures in respect of

emerging and principal risks and the viability statement, and the financial

statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

• the directors’ confirmation within the Viability statement on page 88

that they have carried out a robust assessment of the emerging and

principal risks facing the Group, including those that would threaten its

business model, future performance, solvency and liquidity;

• the Principal risks disclosures describing these risks and how emerging

risks are identified, and explaining how they are being managed and

mitigated; and

• the directors’ explanation in the Viability statement of how they have

assessed the prospects of the Group, over what period they have done

so and why they considered that period to be appropriate, and their

statement as to whether they have a reasonable expectation that the

Group will be able to continue in operation and meet its liabilities

as they fall due over the period of their assessment, including any

related disclosures drawing attention to any necessary qualifications

orassumptions.

We are also required to review Viability statement, set out on page

88 under the Listing Rules. Based on the above procedures, we have

concluded that the above disclosures are materially consistent with the

financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only

the knowledge acquired during our financial statements audit. As we

cannot predict all future events or conditions and as subsequent events

may result in outcomes that are inconsistent with judgements that were

reasonable at the time they were made, the absence of anything to report

on these statements is not a guarantee as to the Group’s and Company’s

longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ corporate governance

disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following

is materially consistent with the financial statements and our audit knowledge:

• the directors’ statement that they consider that the annual report

and financial statements taken as a whole is fair, balanced and

understandable, and provides the information necessary for

shareholders to assess the Group’s position and performance,

businessmodel and strategy;

• the section of the annual report describing the work of the Audit

Committee, including the significant issues that the audit committee

considered in relation to the financial statements, and how these

issueswere addressed; and

• the section of the annual report that describes the review of

the effectiveness of the Group’s risk management and internal

control systems.

We are required to review the part of the Corporate Governance Statement

relating to the Group’s compliance with the provisions of the UK Corporate

Governance Code specified by the Listing Rules for our review. We have

nothing to report in this respect.

8 We have nothing to report on the other matters

onwhich we are required to report by exception

Under the Companies Act 2006, we are required to report to you if,

inouropinion:

• adequate accounting records have not been kept by the Parent

Company, or returns adequate for our audit have not been received

from branches not visited by us; or

• the Parent Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are

not made; or

• we have not received all the information and explanations we require

for our audit.

We have nothing to report in these respects.

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131

9 Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 110, the

directors are responsible for: the preparation of the financial statements

including being satisfied that they give a true and fair view; such internal

control as they determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether

due to fraud or error; assessing the Group and Parent Company’s ability to

continue as a going concern, disclosing, as applicable, matters related to

going concern; and using the going concern basis of accounting unless

they either intend to liquidate the Group or the Parent Company or to

cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the

financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue our opinion in an auditor’s

report. Reasonable assurance is a high level of assurance, but does not

guarantee that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in

aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website

at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in

an annual financial report prepared under Disclosure Guidance and

Transparency Rule (“DTR”) 4.1.17R and 4.1.18R. This auditor’s report provides

no assurance over whether the annual financial report has been prepared

in accordance with those requirements.

10 The purpose of our audit work and to whom we owe

our responsibilities

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our

audit work has been undertaken so that we might state to the Company’s

members those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than the Company

and the Company’s members, as a body, for our audit work, forthis report,

or for the opinions we have formed.

Paul Glendenning (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

15 Canada Square

London E14 5GL

19 November 2024

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132

Consolidated Statement of Comprehensive Income

For the year ended 30 September 2024

			52 weeks
		Year ended	ended
		30 September	30 September
		2024	2023
	Note	$m	$m
Continuing operations
Revenue	2.1	275 . 0	243 . 8
Cost of sales		(16 9. 2)	(1 5 7. 9)
Gross profit		105 . 8	8 5.9
Sales and marketing expenses		(1 6 .1)	(14 . 9)
Research and development costs		(14 .1)	(10 . 2)
General and administrative expenses		(6 4.9)	(73 .4)
Operating profit/(loss)	2.1	10 . 7	(12 . 6)
Net finance costs	5.2	(8 . 4)	(7. 6)
Profit/(loss) before taxation	2.5	2. 3	(20. 2)
Taxation	2.6	0.7	3. 8
Profit/(loss) for the period from continuing operations		3.0	(16 . 4)
Discontinued operations
Profit from discontinued operations	2.2	-	2. 0
Profit/(loss) for the period		3.0	(14 . 4)
Other comprehensive income/(expense)
Items that are not subsequently reclassified to the income statement
Remeasurement gain/(loss) recognised on retirement benefit scheme	6.2	19. 6	(3 1.8)
Deferred tax relating to retirement benefit scheme	2.6	(5. 0)	6.9
Deferred tax relating to change in tax rates	2.6	-	1.1
Deferred tax relating to other temporary differences	2.6	0 .1	(0. 2)
Items that may be subsequently reclassified to the income statement
Deferred tax exchange differences offset in reserves	2.6	1.1	0.8
Other exchange differences offset in reserves		(2.9)	(0. 5)
Cash flow hedges		(0. 8)	0.4
Deferred tax relating to cash flow hedges		0.2	-
Other comprehensive income/(expense) for the period		12 . 3	(2 3 . 3)
Total comprehensive income/(expense) for the period		15 . 3	(3 7. 7)
Earnings per share	2.3
Basic		10 . 0c	(4 8. 0c)
Diluted		9. 7c	(48 .0c)
Earnings per share from continuing operations	2.3
Basic		10 . 0c	(5 4 . 7c)
Diluted		9. 7c	(5 4 . 7c)

132

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133

Consolidated Balance Sheet

At 30 September 2024

		At 30	At 30
		September	September
		2024	2023
	Note	$m	$m
Assets
Non-current assets
Intangible assets	3.1	12 6 . 4	13 9 . 2
Property, plant and equipment	3.2	43. 7	35. 8
Finance leases	3.3	5. 4	6.2
Deferred tax assets	2.6	31.1	4 0 .1
Derivative financial instruments	5.4	-	0.6
		206 .6	2 21.9
Current assets
Inventories	4.1	54.9	54.4
Trade and other receivables	4.2	36.9	58.3
Derivative financial instruments	5.4	0. 2	0.3
Current tax receivables		0. 3	-
Cash and cash equivalents	4.4	14 . 0	13 . 2
		10 6 . 3	12 6 . 2
Liabilities
Current liabilities
Borrowings	5.1	3.9	4.3
Current tax payables		-	0.7
Trade and other payables	4.3	36. 4	34.6
Provisions for liabilities and charges	7.1	6.6	0 .4
		4 6.9	4 0.0
Net current assets		59. 4	86.2
Non-current liabilities
Borrowings	5.1	75. 5	9 4. 3
Derivative financial instruments	5.4	0. 2	-
Deferred tax liabilities	2.6	-	6.2
Retirement benefit obligations	6.2	17. 2	40. 2
Provisions for liabilities and charges	7.1	6.6	8.0
		9 9. 5	14 8 . 7
Net assets		16 6 . 5	15 9 . 4
Shareholders’ equity
Ordinary shares	5.5	50. 3	50. 3
Share premium account	5.5	5 4.3	54. 3
Other reserves		(15 . 7)	(13 . 9)
Cash flow hedging reserve		-	0.8
Retained earnings		7 7. 6	6 7. 9
Total equity		166 . 5	15 9 . 4

These financial statements on pages 132 to 167 were approved by the Board of Directors on 19 November 2024 and signed on its behalf by:

Jos Sclater Rich Cashin

Chief Executive Officer Chief Financial Officer

The accompanying accounting policies and notes form part of these financial statements.

Company number 00032965

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

134

Consolidated Cash Flow Statement

For the year ended 30 September 2024

			52 weeks
		Year ended	ended
		30 September	30 September
		2024	2023
	Note	$m	$m
Cash flows from operating activities
Cash flows from continuing operations	4.4	58 .8	0. 2
Cash flows from discontinued operations	4.4	4 .9	3. 2
Cash flows from operations	4.4	63.7	3.4
Retirement benefit deficit recovery contributions	6.2	(9 . 1)	-
Tax (paid)/received		(0.7)	3.7
Net cash flows from operating activities		53.9	7.1
Cash flows used in investing activities
Proceeds from disposal of discontinued operations	2.2	-	7. 9
Costs of disposal	2.2	-	(0. 4)
Purchase of property, plant and equipment	3.2	(10 . 6)	(7. 4)
Capitalised development costs and purchased software	3.1	(0 . 6)	(3. 6)
Other finance income	5.2	0.7	0.4
Finance lease capital receipts	3.3	1. 0	0.5
Net cash flows used in investing activities		(9. 5)	(2. 6)
Cash flows used in financing activities
Proceeds from loan drawdowns	5.3	10 0 . 5	4 8.0
Loan repayments	5.3	(12 0 . 7)	(24 . 0)
Finance costs paid in respect of bank loans and overdrafts	5.2	(6 . 5)	(6 . 3)
Finance costs paid in respect of leases	5.2	(0.9)	(0.7)
Repayment of lease liability		(4 . 3)	(3.5)
Dividends paid to shareholders	5.6	(6 . 8)	(13 . 4)
Purchase of own shares – Long-Term Incentive Plan	5.5	(5. 0)	-
Financing cash flows used in discontinued operations		-	(0 .9)
Net cash flows used in financing activities		(43. 7)	(0. 8)
Net increase in cash and cash equivalents		0.7	3 .7
Cash and cash equivalents at the beginning of the period		13. 2	9. 5
Effects of exchange rate changes		0 .1	-
Cash and cash equivalents at the end of the period	4.4	14 . 0	13 . 2

134

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135

Consolidated Statement of Changes in Equity

For the year ended 30 September 2024

		Share	Share	Hedging	Other	Retained	Total
		capital	premium	reserve	reserves	earnings	equity
	Note	$m	$m	$m	$m	$m	$m
At 1 October 2022		50.3	54.3	0.4	(14 . 2)	119 . 7	210 . 5
Loss for the period		–	–	–	–	(14 . 4)	(14 . 4)
Net exchange differences offset in reserves		–	–	–	0.3	–	0.3
Deferred tax relating to other temporary differences	2.6	–	–	–	–	(0. 2)	(0. 2)
Remeasurement loss recognised on retirement benefit
scheme	6.2	–	–	–	–	(3 1.8)	(3 1.8)
Deferred tax relating to retirement benefit scheme	2.6	–	–	–	–	6 .9	6 .9
Deferred tax relating to change in tax rates	2.6	–	–	–	–	1 .1	1.1
Interest rate swaps – cash flow hedge	5.4	–	–	0.4	–	–	0.4
Total comprehensive income for the period		–	–	0.4	0.3	(38.4)	(3 7. 7)
Dividends paid	5.6	–	–	–	–	(13 . 4)	(13 . 4)
Fair value of share-based payments	6.3	–	–	–	–	0.7	0.7
Deferred tax relating to employee share schemes
charged directly to equity	2.6	–	–	–	–	(0.7)	(0.7)
At 30 September 2023		50.3	54.3	0.8	(13 . 9)	6 7. 9	15 9 . 4
Profit for the year		–	–	–	–	3.0	3.0
Net exchange differences offset in reserves		–	–	–	(1. 8)	–	(1. 8)
Deferred tax relating to other temporary differences	2.6	–	–	–	–	0.3	0. 3
Remeasurement loss recognised on retirement
benefitscheme	6.2	–	–	–	–	19 . 6	19. 6
Deferred tax relating to retirement benefit scheme	2.6	–	–	–	–	(5 .0)	(5 . 0)
Interest rate swaps – cash flow hedge	5.4	–	–	(0. 8)	–	–	(0 . 8)
Total comprehensive income for the period		–	–	(0 . 8)	(1. 8)	17. 9	15 . 3
Dividends paid	5.6	–	–	–	–	(6 . 8)	(6 . 8)
Own shares acquired	5.5	–	–	–	–	(5. 0)	(5. 0)
Fair value of share-based payments	6.3	–	–	–	–	3. 3	3.3
Deferred tax relating to employee share schemes
charged directly to equity	2.6	–	–	–	–	0. 3	0. 3
At 30 September 2024		50. 3	54. 3	–	(15 . 7)	7 7. 6	16 6 . 5

Other reserves consist of the capital redemption reserve of $0.6m (2023: $0. 6m) and the translation reserve of $( 1 6. 3)m (2023: $(14.5)m).

All movements in other reserves relate to the translation reserve.

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

136

Accounting Policies and Critical Accounting Judgements

For the year ended 30 September 2024

Section 1 – Accounting policies

The principal accounting policies adopted in the preparation of these

financial statements are set out below. These policies have been

consistently applied to all the periods presented, unless otherwise stated.

Basis of preparation

Avon Technologies plc is a public limited company incorporated and

domiciled in England and Wales and its ordinary shares are traded on the

London Stock Exchange.

The financial period presents the year ended 30 September 2024 (prior

financial period 52 weeks ended 30 September 2023). The Company has

adopted a calendar year end to align with the majority of listed peers, and

certain subsidiary companies.

With effect from 30 July 2024, the name of the Group was changed from

Avon Protection plc to Avon Technologies plc.

The financial statements have been prepared in accordance with UK

adopted International Accounting Standards. The financial statements

have been prepared under the historical cost convention except for

derivative instruments which are held at fair value through profit or loss.

Going concern

The Directors have prepared a going concern assessment covering the

12-month period from the date of approval of these financial statements.

The assessment indicates that the Group will have sufficient funds to meet

its liabilities as they fall due for that period.

The Group has committed RCF facilities of $137m to May 2027. Related loan

covenants include a limit of 3.0 times for the ratio of net debt, excluding

lease liabilities, to bank-determined adjusted EBITDA (leverage), and a

minimum limit of 3.5 times for the ratio of bank-determined adjusted

EBITDA to interest payable on bank loans and overdrafts. At 30 September

2024 leverage was 0.91 times (2023: 1.94 times). Bank-determined adjusted

EBITDA is calculated excluding certain items.

As part of the going concern assessment, the Directors considered

sensitivity of financial covenants and liquidity headroom to a reverse

stress test to determine the deterioration against the base case forecast

required to break even with covenant levels. This demonstrated substantial

headroom, with the downside movement required not considered

plausible given the secured order book and mitigating actions available to

reduce future cash outflows or expenses within management’s control.

On this basis, the Directors are confident that the Group and Company

will have sufficient funds to continue to meet their liabilities as they fall

due for at least 12 months from the approval of these financial statements.

Accordingly the Group and Company continue to adopt the going

concern basis in preparing their financial statements.

Basis of consolidation

The consolidated financial statements incorporate the financial results

and position of the Group and its subsidiaries.

Subsidiaries are those entities over which the Group has power, exposure

or rights to variable returns from its involvement with the entity and

the ability to use its power to affect the amount of the Group’s returns.

Subsidiaries are fully consolidated from the date on which control is

transferred to the Group until the date that control ceases. Inter-group

transactions, balances and unrealised gains and losses on transactions

between Group companies are eliminated.

Revision to IFRS not applicable in 2024

Standards and interpretations issued by the IASB are only applicable if

endorsed by the UK. The Group does not consider that any of the below

standards, amendments or interpretations issued by the IASB, but not

yet applicable, will have a material impact on the consolidated financial

statements. Effective dates are for annual periods beginning on or after

the dates stated.

• Amendments to IAS 1 Presentation of Financial Statements:

classification of liabilities as current or non-current with covenants

(effective 1 January 2024)

• Amendments to IFRS 16 Leases: lease liability in sale and leaseback

(effective 1 January 2024)

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial

Instruments: supplier finance arrangements (effective 1 January 2024)

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange

Rates: lack of exchangeability (effective 1 January 2025)

• Amendments to IFRS 9 and IFRS 7 Classification and Measurement of

Financial Instruments (effective 1 January 2026)

• IFRS 18 Presentation and Disclosure in Financial Statements (effective

1 January 2027)

• BEPS: UK legislation on international tax system reform

Foreign currencies

The results and financial position of all subsidiaries and associates that

have a functional currency different from US dollars are translated into US

dollars as follows:

• assets and liabilities are translated at the closing rate at the balance

sheet date; and

• income and expenses are translated at an average exchange rate for the

month where the relevant rate approximates to the foreign exchange

rates ruling at the dates of the transactions.

All resulting exchange differences are recognised as a separate component

of equity.

On consolidation, exchange differences arising from the translation of the

net investment in entities with a functional currency other than US dollars,

and of borrowings and other currency instruments designated as hedges

of such investments, are taken to shareholders’ equity. When an entity with

a functional currency other than US dollars is sold, the cumulative amount

of such exchange difference is recognised in the Consolidated Statement

of Comprehensive Income as part of the gain or loss on sale.

Foreign currency transactions are initially recorded in an entity’s

functional currency accounts at the exchange rate ruling at the date

of the transaction. Foreign exchange gains and losses resulting from

settlement of such transactions and from the translation at exchange

rates ruling at the balance sheet date of monetary assets or liabilities

denominated in foreign currencies are recognised in the Consolidated

Statement of Comprehensive Income, except when deferred in equity as

qualifying hedges.

Business combinations

Business combinations are accounted for using the acquisition accounting

method. Identifiable assets and liabilities acquired are measured at fair

value at acquisition date. Costs related to the acquisition, other than

those associated with the issue of debt or equity securities, are expensed

as incurred. Any contingent consideration payable is recognised at fair

value at the acquisition date. If the contingent consideration is classified

as equity, it is not remeasured and settlement is accounted for within

equity. Otherwise, subsequent changes to the fair value of the contingent

consideration are recognised in profit or loss. Unwinding of discount on

contingent consideration is included within finance costs. Changes to the

fair value arising from changes in the contingent element, for example,

expected cash to be paid or timing of when payments will be made, are

included in general and administrative expenses.

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137

Revenue

Revenue is measured at the fair value of the consideration which is

expected to be received in exchange for goods and services provided, net

of trade discounts and sales-related taxes. The Group acts as a principal in

all sales of goods and services.

Revenue is recognised when all of the following conditions are satisfied:

• a contract exists with a customer;

• the performance obligations within the contract have been identified;

• the transaction price has been determined;

• the transaction price has been allocated to the performance obligations

within the contract; and

• revenue is recognised as or when a performance obligation is satisfied.

Sale of goods – point in time

Revenue from the sale of goods is recognised at a point in time when

control of the goods has transferred to the customer, usually when

the goods have been shipped to the customer in accordance with the

contracted shipping terms or upon acceptance by the end customer.

Sale of goods – over time

The Group has determined that for certain made-to-order military

contracts performance obligations are satisfied over time, depicting the

transfer of goods to the customer.

This is because under those contracts products are made to a customer’s

specification with no alternative use and if a contract is terminated by the

customer, then the Group is entitled to reimbursement of costs incurred to

date plus a reasonable profit margin.

A single method of measuring progress is selected for each related

performance obligation and applied consistently, with an output-based

method used to measure progress based on units certified by the end

customer as a proportion of total units.

Provision of services

Revenue from a contract to provide services, for example externally

commissioned technical reports, funded research and development or

training, is recognised over time as those services are provided. The Group

recognises the amount of revenue from the services provided under

a contract with reference to the costs incurred as a proportion of total

expected costs.

Contract assets and liabilities

Assets and liabilities arising from contracts with customers are separately

identified. Contract assets relate to consideration recognised for work

completed but not billed at the balance sheet date. Contract liabilities

relate to consideration received but not recognised as revenue at the

balance sheet date.

Segment reporting

Segments are identified based on how management monitors the

business. An operating segment is a component of an entity:

• that engages in business activities from which it may earn revenues

and incur expenses (including revenues and expenses relating to

transactions with other components of the same entity);

• whose operating results are regularly reviewed by the entity’s chief

operating decision maker to make decisions about resources to be

allocated to the segment and assess its performance; and

• for which discrete financial information is available.

Operating segments are aggregated into a single reportable segment

only when the segments have similar economic characteristics, and the

segments are similar in each of the following respects:

• the nature of the products and services;

• the nature of the production processes;

• the type or class of customer for their products and services;

• the methods used to distribute their products or provide their services; and

• the nature of the regulatory environment.

The Group Executive team, being the Chief Operating Decision Maker,

assesses the performance of operating segments based on adjusted

measures of EBITDA, operating profit, net finance costs, taxation and

earnings per share, as well as other measures not defined under IFRS,

including orders received, closing order book, EBITDA margin, operating

profit margin, return on invested capital, net debt excluding lease liabilities,

average working capital turns and constant currency equivalents for

relevant metrics. Further details on these measures can be found in the

Adjusted Performance Measures section.

The Group has two operating and reportable segments: Avon Protection

and Team Wendy. These have responsibility and empowerment to

deliver their own specific strategic objectives, with resourcing, internal

performance management and CODM reporting structures fully in place.

Employee benefits

Pension obligations and post-retirement benefits

The Group has both defined benefit and defined contribution plans.

The defined benefit plan’s asset or liability is the present value of the

defined benefit obligation at the balance sheet date less the fair value

of plan assets. The defined benefit obligation is calculated annually

by independent actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by

discounting the estimated cash outflows using interest rates of high

quality corporate bonds that are denominated in the currency in which

the benefits will be paid and that have terms to maturity approximating

to the terms of the related pension liability. Actuarial gains and losses

arising from experience adjustments and changes in actuarial assumptions

are recognised in full in the period in which they occur, as part of other

comprehensive income. Costs associated with investment management

are deducted from the return on plan assets. Other expenses are

recognised in the income statement as incurred.

For the defined contribution plans, the Group pays contributions to

publicly or privately administered pension insurance plans on a mandatory,

contractual or voluntary basis. Contributions are expensed as incurred.

Share-based compensation

The Group operates a number of equity-settled, share-based

compensation plans, under which the entity receives service from

employees as consideration for equity instruments (options) of the

Group. The fair value of the employee service received in exchange for

the grant of the options is recognised as an expense. The total amount

to be expensed is determined by reference to the fair value of the

options granted:

• including any market-based performance conditions;

• excluding the impact of any service and non-market performance

vesting conditions (for example, profitability, sales growth targets and

remaining an employee of the entity over a specified time period); and

• including the impact of any non-vesting conditions (for example, the

requirement for employees to save).

Non-market vesting conditions are included in assumptions about

the number of options that are expected to vest. The total expense is

recognised over the vesting period, which is the period over which all

of the specified vesting conditions are to be satisfied. At the end of each

reporting period, the entity revises its estimates of the number of options

that are expected to vest based on the non-market vesting conditions. It

recognises the impact of the revision to original estimates, if any, in the

Consolidated Statement of Comprehensive Income, with a corresponding

adjustment to equity.

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138

Accounting Policies and Critical Accounting Judgements

For the year ended 30 September 2024 continued

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair

value of the Group’s share of the identifiable net assets of the acquired

subsidiary at the date of acquisition. Identifiable net assets include intangible

assets other than goodwill. Any such intangible assets are amortised over

their expected future lives unless they are regarded as having an indefinite

life, in which case they are not amortised but subjected to annual

impairment testing in a similar manner to goodwill.

Since the transition to IFRS, goodwill arising from acquisitions of

subsidiaries after 3 October 1998 is included in intangible assets. It is

not amortised but is tested annually for impairment and carried at cost

less accumulated impairment losses. Gains and losses on the disposal of

an entity include the carrying amount of goodwill relating to the entity

sold. Goodwill arising from acquisitions of subsidiaries before 3 October

1998, which was set against reserves in the period of acquisition under

UK GAAP, has not been reinstated and is not included in determining any

subsequent profit or loss on disposal of the related entity.

Goodwill is tested for impairment at least annually or whenever there is an

indication that the asset may be impaired. Goodwill is allocated to cash-

generating units for the purpose of impairment testing. The allocation is

made to those cash-generating units or groups of cash-generating units

that are expected to benefit from the business combination in which

the goodwill arose. Any impairment is recognised immediately in the

Consolidated Statement of Comprehensive Income. Subsequent reversals

of impairment losses for goodwill are not recognised.

Development expenditure

Expenditure in respect of product development is capitalised where a

positive outcome is assessed as being reasonably certain, taking account

of commercial viability and technical feasibility. Assessment of commercial

viability includes review of whether future economic benefits are probable

for specific projects. Greater weight is placed on external market evidence

as part of this assessment, including the existence of committed orders,

and previous sales within an overall product category. Technical feasibility

includes assessment of the ability to develop and scale production.

Subsequently capitalised costs are amortised over the expected useful

lives of the related products (typically between five and ten years),

representing the estimated period of sales. Amortisation begins when a

development project is substantively complete and the related product

is available for sale. Expenditure that does not meet these criteria is

expensed as incurred. Development costs capitalised are tested for

impairment annually or whenever there is an indication that the asset

may be impaired. Any impairment, or subsequent reversal, is recognised

immediately in the Consolidated Statement of Comprehensive Income.

UK development costs have not been treated as a realised loss by the

Directors as they relate to specific R&D projects from which the Group is

expected to obtain significant future economic benefit. External customer

contributions to development projects are presented in revenue under the

provision of services accounting policy, with related costs classified in cost

of sales.

Computer software

Computer software comprises costs that are directly associated with the

production of identifiable software products controlled by the Group

and are probable of producing future economic benefits. Capitalised

costs include employee costs and directly attributable overheads.

Costs associated with maintaining software programs are recognised

as an expense when they are incurred. Amortisation is charged to the

Consolidated Statement of Comprehensive Income on a straight-line basis

over the estimated useful life from the date the software is available for

use, generally between three and ten years.

Other intangible assets

Other intangible assets that are acquired by the Group as part of business

combinations are stated at cost less accumulated amortisation and

impairment losses. The useful lives take account of the differing natures

of each of the assets acquired. The lives used are:

• brands and trademarks – four to fifteen years;

• customer relationships – three to fourteen years; and

• technology and licence agreements – two to ten years.

Amortisation is charged on a straight-line basis over the estimated useful

lives of the assets through general and administrative expenses .

Property, plant and equipment

Property, plant and equipment is stated at historical cost or deemed

cost where IFRS 1 exemptions have been applied, less accumulated

depreciation and any recognised impairment losses.

Costs include the original purchase price of the asset and the costs

attributable to bringing the asset to its working condition for its intended

use including any qualifying finance expenses.

Land is not depreciated. Depreciation is provided on other assets

estimated to write down the depreciable amount of relevant assets by

equal annual instalments over their estimated useful lives.

In general, the lives used are:

• freehold – forty years;

• leasehold property – over the period of the lease; and

• plant and machinery:

– computer hardware – three years;

– presses – fifteen years; and

– other plant and machinery – five to ten years.

Residual values and useful lives of the assets are reviewed, and adjusted

if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable

amount if its carrying amount is greater than its estimated net realisable

value. Gains and losses on disposal are determined by comparing

proceeds with carrying amounts. These are included in the Consolidated

Statement of Comprehensive Income.

Leases

Right of use assets and lease liabilities are recognised at the commencement

date of the contract for all leases conveying the right to control the

associated asset for a period of time.

Right of use assets are initially measured at cost, which comprises initial

measurement of the lease liability plus an estimate of dilapidation

provisions where required. Subsequently right of use assets are measured

at cost less accumulated depreciation and any accumulated impairment

losses and adjusted for any remeasurement of the lease liability.

Depreciation is calculated on a straight-line basis over the life of the lease.

The lease liability is initially measured at the present value of the lease

payments due over the life of the lease. Lease payments are discounted at

the rate implicit in the lease or if that is not readily determined using the

Group’s incremental borrowing rate.

The lease term is determined with reference to any non-cancellable period

of lease contracts plus any periods covered by an option to extend/terminate

the lease if it is considered reasonably certain that the option will/will

not be exercised. In concluding whether or not it is reasonably certain an

option will be exercised management has considered the strategic outlook

for the Group and other operational factors.

Subsequently the lease liability is measured by increasing the carrying

value to reflect interest on the liability and reducing the carrying value to

reflect lease payments made.

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139

Exceptional items

Transactions are classified as exceptional where they relate to an event that

falls outside of the underlying trading activities of the business and where

individually or in aggregate the Directors consider they have a material

impact on the financial statements.

Finance leases

The Group acts as an intermediate lessor for certain legacy commercial

premises where they are no longer required for operations and accounts

for its interests in corresponding head leases and subleases separately.

Lease classification of the sublease between finance and operating

is assessed with reference to the right of use asset arising from the

head lease.

Following the sublet of additional properties in the period, finance

lease assets have been transferred from right of use assets to a specific

finance lease balance sheet classification as they are now considered

collectively material.

Finance lease assets are initially measured at the present value of the lease

receipts due over the life of the lease. Receipts are discounted at the rate

implicit in the sublease or the corresponding head lease liability if the

implicit rate cannot be readily determined.

Inventories

Inventories are stated at the lower of cost, including all relevant overhead

expenditure, and net realisable value. Inventory cost is valued using the

most appropriate method based on the business use of inventory. In the

majority of cases this is standard cost. The cost of finished goods and

work in progress comprises raw materials, direct labour, other direct costs

and related production overheads (based on normal operating capacity).

It excludes borrowing costs. Net realisable value is the estimated selling

price in the ordinary course of business, less applicable incremental selling

expenses. Provisions are generally based on ageing of inventory and

forecast demand. Specific adjustments are made for obsolete or damaged

items where appropriate.

Financial instruments

Recognition and initial measurement

Trade receivables are initially recognised when they are originated and

measured at the transaction price.

Trade payables are obligations to pay for goods or services that have been

acquired in the ordinary course of business from suppliers and are initially

recognised at fair value. All other financial assets and financial liabilities

are initially recognised when the Company becomes a party to the

contractual provisions of the instrument and measured at fair value.

Classification and subsequent measurement

Trade and other receivables and trade and other payables are classified

as measured at amortised cost. The Group recognises loss allowances for

expected credit losses (ECLs) on financial assets measured at amortised

cost and contract assets (as defined in IFRS 15). Loss allowances for trade

receivables and contract assets are always measured at an amount equal

to lifetime ECL.

Accounts payable are classified as current liabilities if payment is due

within one year or less (or in the normal operating cycle of the business

if longer). If not, they are presented as non-current liabilities.

Cash and cash equivalents include cash at bank and in hand and highly

liquid interest-bearing securities with maturities of three months or less.

Bank overdrafts are shown within borrowings in current liabilities on the

balance sheet.

Derivative financial instruments and hedging

The Group classifies outstanding forward exchange contracts, interest rate

swaps and corresponding hedged items as cash flow hedges and states

them at fair value through the Consolidated Statement of Comprehensive

Income. Any ineffective portion of the hedge is recognised immediately in

the income statement.

Impairment

At each reporting date, the Company assesses whether financial assets

carried at amortised cost are credit impaired. A financial asset is ‘credit

impaired’ when one or more events that have a detrimental impact on the

estimated future cash flows of the financial asset have occurred. The gross

carrying amount of a financial asset is written off (either partially or in full)

to the extent that there is no realistic prospect of recovery.

Provisions

Provisions are recognised when the Group has a legal or constructive

obligation as a result of a past event, it is probable that an outflow of

resources will be required to settle the obligation and the amount can

be reliably estimated. Provisions are measured at the present value of the

expenditures expected to be required to settle the obligation.

Where there are a number of similar obligations, for example where a

warranty has been given, the likelihood that an outflow will be required

in settlement is determined by considering the class of obligations as

a whole. A provision is recognised even if the likelihood of an outflow

with respect to any one item included in the same class of obligation

may be small.

If the provision is for a single item, for example a legal claim, costs

associated with the most likely outcome are used as a best estimate.

Restructuring provisions are recognised when the Group has developed

a detailed formal plan for the restructuring and has raised a valid

expectation in those affected that it will carry out the restructuring by

starting to implement the plan or announcing its main features to those

affected by it. The measurement of a restructuring provision includes only

the direct expenditures arising from the restructuring, which are those

amounts that are both necessarily entailed by the restructuring and not

associated with the ongoing activities of the entity.

Taxation

Income tax on the profit or loss for the period comprises current and

deferred tax.

Taxable profit differs from accounting profit because it excludes certain

items of income and expense that are recognised in the financial

statements but are treated differently for tax purposes. Current tax is

the amount of tax expected to be payable or receivable on the taxable

profit or loss for the current period. This amount is then amended for any

adjustments in respect of prior periods.

Current tax is calculated using tax rates that have been written into

law (enacted) or irrevocably announced/committed by the respective

government (substantively enacted) at the period end date. Current tax

receivable (assets) and payable (liabilities) are offset only when there is

a legal right to settle them net and the entity intends to do so. This is

generally true when the taxes are levied by the same tax authority.

Because of the differences between accounting and taxable profits and

losses reported in each period, temporary differences arise on the amount

certain assets and liabilities are carried at for accounting purposes and

their respective tax values. Deferred tax is the amount of tax payable or

recoverable on these temporary differences.

Deferred tax liabilities arise where the carrying amount of an asset is

higher than the tax value (more tax deduction has been taken). This can

happen where the Group invests in capital assets, as governments often

encourage investment by allowing tax depreciation to be recognised

faster than accounting depreciation. This reduces the tax value of the

asset relative to its accounting carrying amount. Deferred tax liabilities are

generally provided on all taxable temporary differences. The periods over

which such temporary differences reverse will vary depending on the life

of the related asset or liability.

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Taxation continued

Deferred tax assets arise where the carrying amount of an asset is lower

than the tax value. This can happen where the Group has trading losses,

which cannot be offset in the current period but can be carried forward.

Deferred tax assets are recognised only where the Group considers it

probable that it will be able to use such losses by offsetting them against

future taxable profits.

However, the deferred income tax is not accounted for if it arises from

initial recognition of an asset or liability in a transaction other than a

business combination that at the time of the transaction affects neither

accounting nor taxable profit or loss.

Taxable temporary differences can also arise on investments in foreign

subsidiaries and associates and interests in joint ventures. Where the Group

is able to control the reversal of these differences and it is probable that

these will not reverse in the foreseeable future, then no deferred tax is

provided. Deferred tax is calculated using the enacted or substantively

enacted rates that are expected to apply when the asset is realised or

the liability is settled. Similarly to current taxes, deferred tax assets and

liabilities are offset only when there is a legal right to settle them net and

the entity intends to do so. This normally requires both assets and liabilities

to have arisen in the same country.

Income tax expense reported in the financial statements comprises

current tax as well as the effects of changes in deferred tax assets and

liabilities. Tax expense/credits are generally recognised in the same place

as the items to which they relate. For example, the tax associated with

a gain on disposal is recognised in the income statement, in line with

the gain on disposal. Equally, the tax associated with pension obligation

actuarial gains and losses is recognised in other comprehensive income,

in line with the actuarial gains and losses.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs

incurred, and subsequently stated at amortised cost. Borrowing costs are

expensed using the effective interest method.

Dividends

Final dividends are recognised as a liability in the Group’s financial

statements in the period in which the dividends are approved by

shareholders, while interim dividends are recognised in the period in

which the dividends are paid.

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or

options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company equity share

capital (treasury shares), the consideration paid, including any directly

attributable incremental costs (net of income taxes), is deducted from

equity attributable to the Company’s equity holders until the shares are

cancelled, reissued or disposed of. Where such shares are subsequently

sold or reissued, any consideration received, net of any directly attributable

incremental transaction costs and the related income tax effects, is

included in equity attributable to the Company’s equity holders.

Consideration of climate change

In preparing the financial statements, the Directors have considered

the impact of climate change, particularly in context of the risks and

opportunities identified in the TCFD disclosures. There has been no

material impact identified on the financial reporting judgements and

estimates. In particular, the Directors considered the impact of climate

change in respect of the following areas:

• going concern and viability of the Group; and

• cash flow forecasts used in the impairment assessments of non-current

assets including goodwill and development costs.

Significant accounting judgements and estimates

The preparation of financial statements requires the use of estimates and

assumptions that affect the reported amounts of assets and liabilities,

income and expenses. It also requires management to exercise its

judgement in the process of applying the Group’s accounting policies.

The key areas where assumptions and estimates are significant to the

financial statements are disclosed below.

Goodwill – impairment

Goodwill is tested for impairment at least annually or whenever there is an

indication that the asset may be impaired. Goodwill is allocated to CGUs

for the purpose of impairment testing.

Discounted cash flow projections and related assumptions for impairment

testing of goodwill and related CGU asset groupings are a significant

estimate that could result in future material adjustments to asset carrying

amounts. Sensitivities are provided in note 3.1 .

Estimating the defined benefit pension scheme assets

and obligations

Measurement of defined benefit pension obligations requires estimation

of future changes in inflation and mortality rates and the selection of a

suitable discount rate.

An updated actuarial valuation for IAS 19 (revised) purposes was carried

out by an independent team from the actuary (Aon) for year end using

the projected unit credit method (note 6.2). In the second half of FY24 the

actuarial valuation provider was changed to Aon, having previously been a

separate third party. This change facilitated the use of detailed member-

by-member calculations to estimate defined benefit obligations, as

applied during full actuarial valuations. This approach refines roll-forward

methodology used previously and is considered a change in accounting

estimate under IAS 8.

The investments held by the pension scheme include both quoted

and unquoted securities, the latter of which by their nature involve

assumptions and estimates to determine their fair value. Where there is

not an active market for the unquoted securities the fair value of these

assets is estimated by the pension trustees based on advice received

from the investment manager whilst also using any available market

evidence of any recent transactions for an identical asset. The assumptions

used in valuing unquoted investments are affected by current market

conditions and trends which could result in changes in fair value after the

measurement date.

Accounting Policies and Critical Accounting Judgements

For the year ended 30 September 2024 continued

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141

Section 2 – Results for the period

This section contains disclosures explaining the Group’s results for the period, segmental information, earnings per share and taxation, and details of

discontinued operations.

2.1 Operating segments

The Group Executive team is responsible for allocating resources and assessing performance of the operating segments. Operating segments are

therefore reported in a manner consistent with the internal reporting provided to the Group Executive team.

The Group has two different continuing operating and reportable segments: Avon Protection and Team Wendy. During the year the previous Respiratory

Protection segment was renamed Avon Protection, and the Head Protection segment was renamed Team Wendy. These were name changes only with no

impact on previously reported segmental results.

				Year ended 30 September 2024
				Adjustments
	Avon			and
	Protection	Team Wendy	Total	discontinued 1	Total
	$m	$m	$m	$m	$m
Revenue	145.6	129.4	275.0	-	275.0
Operating profit/(loss)	26.6	5.0	31.6	(20.9)	10.7
Finance costs			(6.3)	(2.1)	(8.4)
Profit/(loss) before taxation			25.3	(23.0)	2.3
Taxation			(4.4)	5.1	0.7
Profit/(loss) for the period from continuing operations			20.9	(17.9)	3.0
Discontinued operations – result for the year			-	-	-
Profit/(loss) for the year			20.9	(17.9)	3.0
Basic earnings per share (cents)			69.9c	(59.9c)	10.0c
Diluted earnings per share (cents)			67.6 c	(57.9c)	9.7c

				52 weeks ended 30 September 2023
				Adjustments
	Avon			and
	Protection	Team Wendy	Total	discontinued 1	Total
	$m	$m	$m	$m	$m
Revenue	156.9	86.9	243.8	-	243.8
Operating profit/(loss)	29.3	(8.1)	21.2	(33.8)	(12.6)
Finance costs			(7.2)	(0.4)	(7.6)
Profit/(loss) before taxation			14.0	(34.2)	(20.2)
Taxation			(1.9)	5.7	3.8
Profit/(loss) for the period from continuing operations			12.1	(28.5)	(16.4)
Discontinued operations – profit for the year			-	2.0	2.0
Profit/(loss) for the year			12.1	(26.5)	(14.4)
Basic earnings per share (cents)			40.3c	(88.3c)	(48.0c)
Diluted earnings per share (cents)			40.3c	(88.3c)	(48.0c)

1. Refer to Adjusted Performance Measures section for a full breakdown of adjusted measures.

Notes to the Group Financial Statements

For the year ended 30 September 2024

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142

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 2 – Results for the period continued

2.1 Operating segments continued

Revenue analysed by geographic origin

	2024	2023
	$m	$m
Europe	42.0	38.2
US	233.0	205.6
Total	275.0	243.8

Revenue by line of business

	Year ended 30 September 2024			52 weeks ended 30 September 2023
	Avon			Avon
	Protection	Team Wendy	Total	Protection	Team Wendy	Total
	$m	$m	$m	$m	$m	$m
US DOD	39.6	83.1	122.7	67.1	42.5	109.6
Commercial Americas	40.9	30.2	71.1	30.5	27.0	57.5
UK and International	65.1	16.1	81.2	59.3	17.4	76.7
	145.6	129.4	275.0	156.9	86.9	243.8

US DOD revenues, sold directly and through indirect channels, represent the only customer which individually contributes more than 10% to Group revenues.

Revenue by nature of performance obligation

		2024	2023
		$m	$m
Sale of goods	– point in time recognition	225.3	219.7
Sale of goods – over time recognition		47. 6	20.4
Provision of services	– over time recognition	2.1	3.7
		275.0	243.8

Revenue from the sale of goods is recognised at a point in time when control of the goods has transferred to the customer, usually when the goods have

been shipped to the customer in accordance with the contracted shipping terms.

The Group has determined that for certain made-to-order military good contracts performance obligations are satisfied over time, depicting the transfer

of goods to the customer. A single method of measuring progress is selected for each related performance obligation and applied consistently. In the

current financial period over time recognition applied to a single contract, with an output-based method used to measure progress based on customer

acceptance of product.

Revenue from provision of services is recognised over time as those services are provided.

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143

Section 2 – Results for the period continued

2.2 Discontinued operations

At 30 September 2023 all armour orders had been delivered to customers, and Armour operations were fully closed. As such the Armour business was

classified as discontinued in the prior period.

In September 2020 the Group divested of the milkrite | InterPuls business, resulting in its classification as discontinued. As part of the divestment, the

Group entered into a Manufacturing Service Agreement with the purchasers to provide manufacturing support, which ended on 30 September 2023. As

the activity under this agreement was not part of continuing operations, related revenue and costs were classified as discontinued.

		milkrite \|			milkrite \|
	Armour	InterPuls	2024	Armour	InterPuls	2023
	$m	$m	$m	$m	$m	$m
Revenue	-	-	-	30.5	6.2	36.7
Cost of sales	-	-	-	(36.5)	(4.0)	(40.5)
Gross (loss)/profit	-	-	-	(6.0)	2.2	(3.8)
General and administrative expenses	-	-	-	(2.8)	-	(2.8)
Operating (loss)/profit	-	-	-	(8.8)	2.2	(6.6)
Finance costs	-	-	-	(0.2)	-	(0.2)
(Loss)/profit before taxation	-	-	-	(9.0)	2.2	(6.8)
Taxation	-	-	-	1.8	(0.5)	1.3
(Loss)/profit from discontinued operations related to trading	-	-	-	(7. 2)	1.7	(5.5)
Gain on disposal before tax	-	-	-	9.1	-	9.1
Tax on disposal	-	-	-	(1.6)	-	(1.6)
Gain on disposal after tax	-	-	-	7.5	-	7.5
Total profit from discontinued operations	-	-	-	0.3	1.7	2.0
Basic earnings per share	-	-	-	1.0c	5.7c	6.7c
Diluted earnings per share	-	-	-	1.0c	5.7c	6.7c

Gain on disposal – Armour

In the second half of 2023, the Group completed the sale of Armour assets at the Lexington facility for cash consideration of $7.4m. The sale agreement

also included a sublease of the Lexington facility to the purchaser. The Group retained its lease liabilities relating to the Lexington head lease. The Group

also separately disposed of other Armour assets for cash consideration of $0.5m.

The total gain on disposal relating to Armour operations is reconciled below:

	2023
	$m
Cash consideration received – Lexington	7.4
Cash consideration received – other assets	0.5
Inventories disposed	(2.0)
Plant and machinery disposed	(0.5)
Finance lease adjustment	4.1
Transaction costs	(0.4)
Gain on disposal before tax	9.1
Tax on disposal	(1.6)
Gain on disposal after tax	7.5

The finance lease adjustment recognises the present value of the finance lease receipts over the sublease term. The right of use lease asset for the

Lexington site was previously impaired to $nil in the 2021 financial period. Cash consideration was fully paid in the prior period.

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144

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 2 – Results for the period continued

2.2 Discontinued operations continued

Cash flows from discontinued operations included in the cash flow statement are as follows:

	2024	2023
	$m	$m
Cash flows from discontinued operating activities	4.9	3.2
Financing cash flows used in discontinued operations	-	(0.9)
Net cash flows from discontinued operations	4.9	2.3

2.3 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in

issue during the period, excluding those held in the employee share ownership trust. The Company has dilutive potential ordinary shares in respect of the

Performance Share Plan.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below. As the Group was loss making on a

statutory basis in the prior period, basic and diluted earnings per share are equivalent.

Weighted average number of shares	2024	2023
Weighted average number of ordinary shares in issue used in basic calculations (‘000)	29,895	29,996
Potentially dilutive shares (weighted average) (‘000)	1,022	263
Diluted number of ordinary shares (weighted average) (‘000)	30,917	30,259

	2024	2023
Earnings	$m	$m
Basic	3.0	(14.4)
Basic – continuing operations	3.0	(16.4)
Basic – discontinued operations	-	2.0

	2024	2023
Earnings per share	$ cents	$ cents
Basic	10.0c	(48.0c)
Basic – continuing operations	10.0c	(54.7c)
Basic – discontinued operations	-	6.7c
Diluted	9.7c	(48.0c)
Diluted – continuing operations	9.7c	(54.7c)
Diluted – discontinued operations	-	6.7c

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145

Section 2 – Results for the period continued

2.4 Expenses by nature

	2024	2023
Continuing operations	$m	$m
Employee and other staff costs 1	94.5	75.6
Legal and professional fees	8.7	9.1
Depreciation and amortisation charges (notes 3.1 and 3.2)	20.2	20.8
Impairment charges – non-current assets	1.7	24.6
Foreign exchange gains	(1.0)	(1.0)
Transportation expenses	4.7	5.2
Material costs	82.9	84.1
Transformational costs	10.8	2.9
Other expenses	41.8	35.1
Total cost of sales, selling and marketing expenses, research and development costs and general and administrative expenses	264.3	256.4

1. Employee costs disclosed in note 2.4 are presented on a continuing basis for staff-related costs expensed to the Consolidated Statement of Comprehensive Income. They do not therefore reconcile to

note 6.1 for the prior period which includes discontinued costs.

2.5 Profit before taxation

	2024	2023
Profit before taxation is shown after charging:	$m	$m
Loss on disposal of property, plant and equipment (excluding assets related to 2023 Armour disposal, note 2.2)	-	0.3
Repairs and maintenance of property, plant and equipment	4.1	4.0
Impairment of trade receivables (note 5.4)	-	-

	2024	2023
Services provided to the Group (including its overseas subsidiaries) by the Company’s auditor:	$m	$m
Audit fees in respect of the audit of the accounts of the Group including subsidiaries	1.0	0.8
Audit fees in respect of the audit of the accounts of the Parent Company	0.2	0.2
Other assurance services	0.1	0.1
Total fees	1.3	1.1

Other assurance services comprise the audit of the defined benefit pension scheme accounts and review of the Group’s half-yearly financial report.

2.6 Taxation

	2024	2023
	$m	$m
UK current tax	-	1.1
UK adjustment in respect of previous periods	(0.2)	0.6
Overseas current tax	-	(0.4)
Total current tax (credit)/charge	(0.2)	1.3
Deferred tax – current period	(0.2)	(4.4)
Deferred tax – adjustment in respect of previous periods	(0.3)	(0.7)
Total deferred tax credit	(0.5)	(5.1)
Total tax credit	(0.7)	(3.8)

The overseas current tax credit of $0.4m in the prior period includes a $0.3m credit in connection with the resolution of a number of historical uncertain

tax positions.

The above table excludes tax on discontinued operations for the prior period (including disposals) which amounted to a charge of $0.3m.

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146

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 2 – Results for the period continued

2.6 Taxation continued

The tax on the Group’s profit/(loss) before taxation differs from the theoretical amount that would arise using the standard UK tax rate applicable to profits

of the consolidated entities as follows:

The standard rate of corporation tax in the UK increased from 19% to 25% effective 1 April 2023. The average rate of UK tax in the prior period was

therefore 22%.

	2024	2023
	$m	$m
Profit/(loss) before taxation	2.3	(20.2)
Taxation at the average standard rate of 25.0% (2023: 22.0%)	0.6	(4.4)
Other timing differences	(0.2)	-
Non-deductible expenses	-	0.4
Permanent differences	(0.7)	-
Differences in overseas tax rates	0.1	0.3
Adjustment in respect of previous periods	(0.5)	(0.1)
Total tax credit	(0.7)	(3.8)

The deferred tax charged directly to other comprehensive income during the period was $3.5m (2023: credit of $8.8m). The deferred tax charged directly

to equity during the period was $0.3m (2023: $0.7m).

Deferred tax

Net deferred tax assets and liabilities of $31.3m have been offset in the 30 September 2024 Statement of Financial Position as the Group has a right to set

off current and deferred tax balances levied by tax authorities in relevant taxable jurisdictions. The Directors have considered the impact on the prior

period and determined the classification change not material for restatement.

Deferred tax related to lease assets and liabilities, including restatement of prior period comparatives, has been presented on a gross basis to reflect

amendments to IAS 12 for tax related to assets and liabilities arising from a single transaction.

Deferred tax liabilities

		Accelerated
	Right of use	capital
	assets	allowances	Total
	$m	$m	$m
At 1 October 2022	-	5.8	5.8
Credited to profit for the period	-	0.4	0.4
At 30 September 2023	-	6.2	6.2
Charged to profit for the year	-	0.7	0.7
Transfer from deferred tax assets	1.5	-	1.5
At 30 September 2024	1.5	6.9	8.4

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147

Section 2 – Results for the period continued

2.6 Taxation continued

Deferred tax assets

Deferred tax assets have been recognised in respect of temporary differences giving rise to deferred tax assets where it is probable that these assets will

be recovered.

	Retirement								Other
	benefit	Share	Tax	Pension		Lease	Right of		temporary
	obligation	options	losses	spreading	Intangibles	liabilities	use assets	Interest	differences	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
At 1 October 2022	1.6	0.6	6.4	2.1	5.9	3.2	-	1.8	5.1	26.7
IAS 12 restatement at 1
October 2022	-	-	-	-	-	1.5	(1.5)	-	-	-
Credited/(charged) against profit for the period	0.3	0.2	0.4	(1.4)	2.3	(0.9)	0.6	3.9	(0.1)	5.3
Credited to other comprehensive income	6.9	-	-	-	-	-	-	-	-	6.9
Impact of change in tax
rates credited to other comprehensive income	1.1	-	-	-	-	-	-	-	-	1.1
Exchange differences
offset in reserves	0.2	0.1	0.1	-	-	-	-	-	0.4	0.8
Charged to equity	-	(0.7)	-	-	-	-	-	-	-	(0.7)
At 30 September 2023
(restated)	10.1	0.2	6.9	0.7	8.2	3.8	(0.9)	5.7	5.4	40.1
(Charged)/credited against profit for the period	(1.5)	0.8	(2.6)	1.3	0.2	0.2	(0.6)	1.9	1.5	1.2
(Charged)/credited to other comprehensive income	(5.0)	-	-	-	-	-	-	-	0.3	(4.7)
Exchange differences
offset in reserves	0.7	0.1	0.1	0.2	-	-	-	-	-	1.1
Credited to equity	-	0.3	-	-	-	-	-	-	-	0.3
Transfer to deferred tax
liabilities	-	-	-	-	-	-	1.5	-	-	1.5
At 30 September 2024	4.3	1.4	4.4	2.2	8.4	4.0	-	7.6	7. 2	39.5

The Group has unrecognised deferred tax assets of $4.5m (2023: $4.2m) in respect of capital losses where it is not considered that there will be sufficient

available future profits to utilise these losses. The gross amount of unrecognised deferred tax assets is $18.2m and has no expiry date.

Deferred tax on pension spreading relates to excess pension contributions made in the current and previous periods for which tax relief is spread across

four years.

Continued recognition of deferred tax assets is considered appropriate in the context of increasing confidence in the benefits and payback of

transformation and continuous improvement programmes. Through these specific initiatives and the wider STAR strategy a sustained return to

profitability is expected which will enable accumulated tax losses and other temporary differences to be utilised.

$5.0m (2023: $4.7m) of the deferred tax asset within other temporary differences relates to inventory reserves and differing cost capitalisation rules for

accounting and tax purposes, with the remainder of other temporary differences relating to a number of smaller timing differences between the tax and

accounting treatment.

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148

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 3 – Non-current assets

3.1 Intangible assets

		Acquired	Development	Computer
	Goodwill	intangibles	expenditure	software	Total
	$m	$m	$m	$m	$m
At 1 October 2022
Cost	88.7	98.2	69.2	15.3	271.4
Accumulated amortisation and impairment	-	(46.1)	(48.1)	(6.2)	(100.4)
Net book amount	88.7	52.1	21.1	9.1	171.0
52 weeks ended 30 September 2023
Opening net book amount	88.7	52.1	21.1	9.1	171.0
Exchange differences	0.1	-	0.3	-	0.4
Additions	-	-	3.1	0.5	3.6
Impairments	(23.4)	-	(0.2)	(0.6)	(24.2)
Amortisation	-	(6.3)	(4.1)	(1.2)	(11.6)
Closing net book amount	65.4	45.8	20.2	7.8	139.2
At 30 September 2023
Cost	88.8	98.2	69.5	15.0	271.5
Accumulated amortisation and impairment	(23.4)	(52.4)	(49.3)	(7.2)	(132.3)
Net book amount	65.4	45.8	20.2	7.8	139.2
Year ended 30 September 2024
Opening net book amount	65.4	45.8	20.2	7.8	139.2
Exchange differences	-	-	0.1	-	0.1
Additions	-	-	-	0.6	0.6
Impairments	-	-	(1.2)	-	(1.2)
Reclassification	-	-	(0.3)	0.3	-
Amortisation	-	(6.2)	(3.1)	(3.0)	(12.3)
Closing net book amount	65.4	39.6	15.7	5.7	126.4
At 30 September 2024
Cost	88.8	98.2	69.6	15.6	272.2
Accumulated amortisation and impairment	(23.4)	(58.6)	(53.9)	(9.9)	(145.8)
Net book amount	65.4	39.6	15.7	5.7	126.4

The remaining useful economic life of the development expenditure is up to nine years.

Impairment review of goodwill

Goodwill is tested for impairment annually and whenever there is an indication of impairment at the level of the CGU to which it is allocated.

Goodwill has been allocated to Team Wendy and Avon Protection CGUs. Team Wendy includes goodwill from the Ceradyne and Team Wendy acquisitions,

which are part of the fully integrated business segment. Avon Protection goodwill is related to three legacy acquisitions that completed in 2016 and earlier

financial periods.

Goodwill has been allocated to CGUs on the basis of historical acquisitions, which provides a more accurate basis than allocating by relative value given

each of the acquisitions related fully to Avon Protection or Team Wendy products individually.

			Net book
	Cost	Impairment	amount
Allocation of goodwill by CGU	$m	$m	$m
Avon Protection	2.5	-	2.5
Team Wendy	86.3	(23.4)	62.9
Total goodwill	88.8	(23.4)	65.4

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149

Section 3 – Non-current assets continued

3.1 Intangible assets continued

Impairment review of goodwill continued

The total carrying value of each CGU is tested for impairment against corresponding recoverable amounts. CGU carrying values include associated

goodwill, other intangible assets, property, plant and equipment, and attributable working capital.

The recoverable amount of the CGUs has been determined based on value in use calculations, using discounted cash flow projections for a five-year

period plus a terminal value based upon a long-term perpetuity growth rate of 1.5% (2023: 1.5%). The growth rate was selected as appropriate for the

Team Wendy review considered below, based on lower bound estimates of expected growth for the overall market given inherent uncertainty over the

terminal period. Any reasonable adjustment to the growth rate that could be made for the Avon Protection review would still leave substantial headroom.

Value in use calculations are based on the Group’s Board approved risk-adjusted five-year plan which has been amended to exclude the impact of capital

expenditure considered expansionary and certain linked earnings and cash flows. Excluded expansionary items relate to new helmet programmes

which, although specifically identified and planned, have yet to incur significant capital expenditure. Risk-adjusted five-year plan cash flows incorporate a

balanced view of risks and opportunities specific to each CGU. Central costs in the five-year plan are allocated to Avon Protection and Team Wendy CGUs

based on an average of relative net assets, payroll costs and revenues. Central costs include Board, Finance, IT, HR, Legal and Communications where these

are not directly attributable to an individual CGU.

It is considered appropriate to extrapolate cash flows into perpetuity as the fifth year represents a reasonable estimate of steady state business operations,

excluding expansionary items. The post-tax discount rates applied were 12.5% for Avon Protection and 12.0% for Team Wendy (2023: 10.4% for Avon

Protection and 10.9% for Team Wendy). Equivalent pre-tax rates were 16.1% and 14.7% (2023: 14.2% and 14.9%). Post-tax discount rates were derived by

external experts taking into consideration current market conditions.

The Group’s Board approved five-year plan includes management’s estimate of revenue, gross margin and other financial assumptions that will

be achieved under the STAR strategy. These consolidate risk-adjusted granular forecasts for individual products or initiatives that consider market

opportunities, execution risk, past experience and other relevant factors.

As set out in the TCFD section the Group has assessed the potential impact of climate change for the next five years to be low and has therefore not

included climate-related impacts in the value in use calculation. Beyond 2028, although there are potential costs associated with climate change, these are

balanced with significant opportunity for increased demand for protective products in a changing global security environment. Given this balanced view

no climate-related risk adjustments have been made to long-term projections beyond five years.

Team Wendy CGU

In the prior period the recoverable amount of the Team Wendy CGU of $182.1m, determined based on value in use calculations, was less than the carrying

amount of the associated CGU net assets and therefore resulted in an impairment to goodwill of $23.4m.

In the current period the recoverable amount of the Team Wendy CGU of $202.5m was $29.8m higher than the carrying amount of the associated CGU

net assets. A key factor supporting the higher recoverable value compared to the prior period is the inclusion of net cash flow benefits associated with

transformational programmes including the planned closure of the Irvine, California, facility, consolidation of manufacturing in Cleveland and supporting

initiatives to improve operational efficiency. The Irvine closure was announced during the year following final approval and commitment to the project by

the Board.

The prior period impairment arose following the Team Wendy level CGU test being performed for the first time, including all goodwill associated with

the 2020 Ceradyne acquisition of $28.0m and 2021 Team Wendy acquisition of $58.3m. In 2021, goodwill related to the Ceradyne acquisition was allocated

in full to the sole Respiratory and Team Wendy operating segment and as such was unaffected by the 2021 Armour-related impairments. In 2022, the

decision to present Armour as a separate operating segment was taken, with $nil goodwill value allocated to the Armour segment. This was based on a

relative value approach, which attributed $nil value to Armour given trading losses forecast to closure.

The calculation of the recoverable amount for the Team Wendy CGU is highly sensitive to small changes in key assumptions, considered to be revenue

growth, gross profit margins and the discount rate. The Group has carried out sensitivity analysis on the Team Wendy CGU impairment test, using

reasonably plausible scenarios focused on changes to key assumptions applied in the value in use calculations. The table below provides the expected

revenue and gross margin growth rates included in the current year calculation. Annual growth is expected to be higher in earlier years of the five-year

plan. The benefits of Team Wendy transformational programmes are a key factor supporting the higher level of gross margin growth.

Compound annual growth rate in revenue from 2023/24 to 2028/29	4%
Compound annual growth rate in gross margin from 2023/24 to 2028/29	8%

Annual growth in revenue and gross margin excludes items considered expansionary as required by IAS 36. These items form a substantial part of the

Group’s long-term commercial forecasts and growth strategy.

If the compound annual revenue growth rate (CAGR) over the first five years of the forecast was reduced by 1.0%, with the impact on the fifth year

extrapolated in calculating terminal value, the current year value in use of the Team Wendy CGU would be reduced by $14.3m. A reduction in CAGR

of 2.0% would result in the recoverable amount being equal to Team Wendy CGU net assets. There are many individual product revenue assumptions

which are included in the forecasts, with the impact of a 1% change in revenue growth rate disclosed. Small changes in other aspects of the revenue

assumptions would have material impact on the value in use which we have not disclosed. A 1.0% change in the revenue growth rate demonstrates the

significant impact on a wide range of these revenue assumptions.

After upfront exceptional transformational costs at similar levels to FY24 in FY25, and a large drop in FY26, Team Wendy transformational programmes are

forecast to deliver at least $10m underlying savings annually before tax from FY26. The majority of expected benefits relate to projects that are sufficiently

advanced that they have been incorporated into forecast cash flows for the impairment review. Other potential projects are in the advance stages of

planning and have not yet received Board approval and commitment.

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

150

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 3 – Non-current assets continued

3.1 Intangible assets continued

Impairment review of goodwill continued

Sensitivity to reasonably plausible changes in other key assumptions is as follows:

		Reduction to
	2024	Team
		Wendy CGU
		value in use
		$m
Gross margin for all products reduced by 1.0%		11.4
Post-tax discount rate increased by 0.5%		8.6

Whilst keeping other assumptions constant, a reduction in gross margin of 2.6% or post-tax discount rate increase of 2.0% would result in the recoverable

amount being equal to Team Wendy CGU net assets.

Avon Protection CGU

Value in use for the Avon Protection CGU was substantially greater than its carrying amount in the current and prior periods. Sensitivity analysis has been

performed which shows there are no reasonable changes in assumptions that would result in an impairment to goodwill and other net assets associated

with the Avon Protection CGU.

Impairment review of development costs

Development assets are grouped into the smallest identifiable group of assets generating future cash flows largely independent from other assets, known

as cash-generating units (CGU). Included in CGUs are development expenditures, tangible assets and inventory related to the product group. CGUs are

tested for impairment annually and whenever there is an indication of impairment. The CGUs have been tested against their recoverable amount deemed

to be their value in use. Cash flows were discounted using post-tax rates of 10.9–12.5% (2023: 10.9%). Equivalent pre-tax rates were 16.1–19.5% (2023: 14.9%).

Cash flows were adjusted to incorporate risks specific to each CGU.

As a result of the current year review the $4.1m carrying amount of the boots and gloves product range CGU was exceptionally impaired by $1.7m ($1.2m

fully impairing associated development expenditure, $0.5m plant and machinery). The impairment was a result of changes in forecast cash flows based on

latest costing and revenue assumptions.

The remaining $2.4m carrying amount post-impairment is dependent on securing further profitable future orders and reductions in unit product cost as

volumes increase to full rate production. There is no dependency on expansionary capital expenditure. Sensitivity to key assumptions is as follows:

	Increase to
	2024 boots
	and gloves
	CGU
	impairment
	$m
Revenue reduced by 20.0%	0.6
Gross margin reduced by 2.5%	0.6
Post-tax discount rate increased by 1.0%	0.1

In the prior period assets relating to one of the products in the Group’s escape hood range was fully exceptionally impaired by $0.5m due to its

discontinuation ($0.2m development expenditure, $0.3m plant and machinery).

Following the impairment charges recognised, recoverable amounts were equal to carrying amounts. At the year end there were no development costs

relating to technology under development (2023: $2.6m for ACH GEN II testing approval).

Acquired intangibles

	At		At		At
	1 October		30 September		30 September
	2022		2023		2024
	Net book		Net book		Net book
	amount	Amortisation	amount	Amortisation	amount
	$m	$m	$m	$m	$m
Brand	10.4	(1.1)	9.3	(1.2)	8.1
Customer relationships	25.4	(3.0)	22.4	(3.0)	19.4
Other intangibles	16.3	(2.2)	14.1	(2.0)	12.1
Total acquired intangibles	52.1	(6.3)	45.8	(6.2)	39.6

The valuation of acquired assets is determined at point of acquisition using complex valuation techniques including forecasting and discounting of future

cash flows. This includes assumptions such as discount rates, royalty rates and estimates for growth rates, weighted average cost of capital and useful lives.

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151

Section 3 – Non-current assets continued

3.1 Intangible assets continued

Customer relationships

The net book value of customer relationships includes one separately identifiable individually material contract with the National Industries for the Blind

(NIB). The NIB contract was acquired through the acquisition of Team Wendy at a fair value of $14.9m. As at 30 September 2024, this acquired intangible

had a carrying value of $9.6m and a remaining amortisation period of seven years. Other customer relationships also included other Team Wendy

customer relationships acquired at fair value of $13.3m. As at 30 September 2024, these acquired intangibles had a carrying value of $9.6m and a remaining

amortisation period of ten years.

Other customer relationships include those associated with the acquisition of the 3M ballistic protection business originally recognised at a fair value of

$5.9m amortised over five years. The remaining carrying value of these assets is $0.2m, after amortisation and historical impairment charges.

3.2 Property, plant and equipment

		Right of use	Plant and	Leasehold
	Freeholds	lease assets	machinery	improvements	Total
	$m	$m	$m	$m	$m
At 1 October 2022
Cost	3.0	43.2	96.8	3.9	146.9
Accumulated depreciation and impairment	(1.3)	(30.6)	(74.2)	(0.9)	(107.0)
Net book amount	1.7	12.6	22.6	3.0	39.9
52 weeks ended 30 September 2023
Opening net book amount	1.7	12.6	22.6	3.0	39.9
Exchange differences	-	0.5	0.5	-	1.0
Additions	-	1.1	7.4	-	8.5
Disposals	-	-	(0.8)	-	(0.8)
Impairments	-	(0.5)	(0.5)	-	(1.0)
Transfer of finance leases	-	(2.6)	-	-	(2.6)
Depreciation charge	(0.2)	(2.6)	(5.7)	(0.7)	(9.2)
Closing net book amount	1.5	8.5	23.5	2.3	35.8
At 30 September 2023
Cost	3.0	41.7	86.0	3.7	134.4
Accumulated depreciation and impairment	(1.5)	(33.2)	(62.5)	(1.4)	(98.6)
Net book amount	1.5	8.5	23.5	2.3	35.8
Year ended 30 September 2024
Opening net book amount	1.5	8.5	23.5	2.3	35.8
Exchange differences	-	0.3	0.6	-	0.9
Additions	-	4.8	8.0	2.6	15.4
Impairment	-	-	(0.5)	-	(0.5)
Depreciation charge	(0.1)	(2.7)	(4.5)	(0.6)	(7.9)
Closing net book amount	1.4	10.9	27.1	4.3	43.7
At 30 September 2024
Cost	3.0	46.8	94.6	6.3	150.7
Accumulated depreciation and impairment	(1.6)	(35.9)	(67. 5)	(2.0)	(107.0)
Net book amount	1.4	10.9	27.1	4.3	43.7

The $0.5m impairment to plant and machinery in the current year relates to boots and gloves (note 3.1). In the prior period the $0.5m right of use asset

impairment and $0.2m of the plant and machinery impairment related to the closure of a US office. The remaining $0.3m related to escape hoods

(note 3.1).

Property, plant and equipment with a net book amount of $35.6m is located within the United States of America (2023: $28.2m). The balance is located in

the United Kingdom.

$3.1m (2023: $5.3m) of expenditure included in the carrying value of plant and machinery relates to assets under construction.

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152

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 3 – Non-current assets continued

3.3 Finance leases

	Finance leases
	$m
At 1 October 2022	-
Transfer from property, plant and equipment	2.6
Additions	4.1
Interest income	0.1
Payments received	(0.6)
At 30 September 2023	6.2
Additions	0.2
Interest income	0.4
Payments received	(1.4)
At 30 September 2024	5.4

Payments received include $0.4m interest and $1.0m capital receipts (2023: $0.1m interest and $0.5m capital receipts).

The Group subleases commercial premises where they are no longer required for operations, resulting in lease assets being held on the balance sheet.

Following sublet of an additional property in the prior period, assets were transferred from right of use assets to a specific finance lease classification as

they were considered collectively material. Expected credit losses on finance lease assets are less than $0.1m and have been considered immaterial.

Section 4 – Working capital

4.1 Inventories

	2024	2023
	$m	$m
Raw materials	27.9	30.1
Work in progress	20.6	22.3
Finished goods	19.7	14.3
Inventory – gross	68.2	66.7
Inventory provisions	(13.3)	(12.3)
Inventory – net	54.9	54.4

The cost of inventories recognised as an expense and included in cost of sales amounted to $82.9m (2023: $84.1m). The amount of inventory carried as fair

value less costs to sell is $nil (2023: $nil).

4.2 Trade and other receivables

	2024	2023
	$m	$m
Trade receivables	32.6	54.4
Less: provision for impairment of receivables	(0.3)	(0.5)
Trade receivables – net	32.3	53.9
Prepayments	3.4	3.6
Other receivables	1.2	0.8
	36.9	58.3

The Group has no contract assets in the current or prior period.

See note 5.4 (i) Credit risk for further details in relation to the Group provision for impairment of receivables. Changes in provisions for impaired receivables

are included within general and administrative expenses in the Consolidated Statement of Comprehensive Income.

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153

Section 4 – Working capital continued

4.3 Trade and other payables

	2024	2023
	$m	$m
Trade payables	16.2	17.3
Contract liabilities	0.9	1.3
Other taxation and social security	0.6	0.9
Accruals	18.7	15.1
	36.4	34.6

Contract liabilities represent amounts invoiced under contracts with customers but not recognised as revenue at the balance sheet date and cash

received in advance. $1.3m (2023: $1.7m) of the balance in contract liabilities at the start of the period was recognised as revenue in the current period. The

outstanding balance at the end of the period is expected to be recognised within the next 12 months.

4.4 Cash and cash equivalents

	2024	2023
	$m	$m
Cash and cash equivalents	14.0	13.2

Cash and cash equivalents are denominated in US dollars, pounds sterling and euros and earn interest based on central bank rates. The Group generates

cash from its operating activities as follows:

	2024	2023
	$m	$m
Continuing operations
Profit/(loss) for the period	3.0	(16.4)
Taxation	(0.7)	(3.8)
Depreciation	7.9	9.2
Amortisation of intangible assets	12.3	11. 6
Loss on disposal (excluding Armour sale transaction)	-	0.3
Restructuring-related impairment of non-current assets	-	0.7
Impairment of other non-current assets (excluding restructuring-related impairments)	1.7	0.5
Impairment of goodwill	-	23.4
Defined benefit pension scheme cost	1.1	1.0
Net finance costs	8.4	7.6
Fair value of share-based payments	3.3	0.7
Transformational, restructuring and transition costs expensed	10.8	2.9
Decrease/(increase) in inventories	0.3	(6.8)
Decrease/(increase) in receivables	17. 2	(26.2)
Increase/(decrease) in payables and provisions	3.2	(2.2)
Cash flows from continuing operations before exceptional items	68.5	2.5
Transformational, restructuring and transition costs paid	(9.7)	(2.3)
Cash flows from continuing operations	58.8	0.2

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154

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 4 – Working capital continued

4.4 Cash and cash equivalents continued

	2024	2023
	$m	$m
Discontinued operations
Profit for the period	-	2.0
Taxation	-	0.3
Impairments	-	0.6
Net finance costs	-	0.2
Gain on disposal before tax	-	(9.1)
Decrease in inventories	-	16.7
Decrease/(increase) in receivables	5.1	(1.3)
Decrease in payables and provisions	(0.2)	(6.2)
Cash flows from discontinued operations	4.9	3.2
Cash flows from operations	63.7	3.4

Cash flows from discontinued operations relate to final working capital receipts and payments for the Armour business which closed in FY23 (note 2.2).

The balance sheet change in inventories is reconciled as follows:

	2024	2023
	$m	$m
Change in inventories – continuing operations cash flows	(0.3)	6.8
Change in inventories – discontinued operations cash flows	-	(16.7)
Inventories disposed (note 2.2)	-	(2.0)
Non-cash foreign exchange translation	0.8	0.7
Balance sheet inventories movement (note 4.1)	0.5	(11. 2)

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Avon Technologies plc Annual Report and Accounts 2024

155

Section 5 – Funding

The following section provides disclosures about the Group’s funding position, including borrowings, finance costs, exposure to financial risks and capital

management policies.

5.1 Borrowings

	2024	2023
	$m	$m
Current
Lease liabilities	3.9	4.3
Non-current
Bank loans	57. 5	77.7
Lease liabilities	18.0	16.6
	75.5	94.3
Total Group borrowings	79.4	98.6

Bank loans comprise drawings under the revolving credit facility (RCF).

The Group had the following committed facilities at the balance sheet date:

	2024	2023
	$m	$m
Total undrawn committed borrowing facilities	82.5	127.3
Bank loans utilised	57.5	77.7
Total Group facilities	140.0	205.0

At 30 September 2023, the Group had an RCF with a total commitment of $200m.

On 14 May 2024 the Group signed a new $137m RCF, together with a $50m accordion replacing the previous facility. The new RCF was agreed with a

syndicate of four lenders and is available until May 2027, with two further one-year extension options.

The previous and new RCF are subject to financial covenants measured on a bi-annual basis. These include a limit of 3.0 times for the ratio of net debt,

excluding lease liabilities, to bank-defined adjusted EBITDA (leverage). The Group was in compliance with all financial covenants during the current and

prior period.

The RCF is drawn in short to medium-term tranches of debt which are repayable within 12 months of draw down. These tranches of debt can be rolled

over provided certain conditions are met, including covenant compliance. The Group considers that it is highly unlikely it would be unable to exercise its

right to roll over the debt based on forecast covenant compliance. Even in a severe downside scenario there are mitigating actions (within the control of

the Group) that could be taken to maintain compliance with these conditions, including future covenant requirements. The Directors therefore believe

that the Group has the ability and the intent to roll over the drawn RCF amounts when due and consequently has presented the RCF as a non-current liability.

The RCF is floating rate priced on the Secured Overnight Financing Rate (SOFR) plus a margin depending on leverage. The Group has provided the lenders

with a negative pledge in respect of certain shares in Group companies.

In addition to the RCF the Group’s US operations have access to a $3.0m overdraft facility that is renewed annually and used to manage short-term

liquidity requirements.

The table below presents the maturity analysis in respect of lease liabilities and bank loans:

	2024	2023
	$m	$m
In one year or less, or on demand	3.9	4.3
Two to five years	68.2	86.8
More than five years	7.3	7.5
Total Group borrowings	79.4	98.6

Lease liabilities relate to land and buildings (right of use assets) leased by the Group for its office space and manufacturing facilities. The leases typically

run for a period of five to ten years. Most leases include an option to renew the lease for an additional period after the end of the contract term. Where

practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable

only by the Group and not by the lessors. The Group assesses at lease commencement, and if there is a significant change in circumstances, whether

it is reasonably certain to exercise the extension options. During the period lease liabilities were increased by $4.8m to recognise extension options

considered reasonably certain (2023: no change in liabilities).

Payments associated with short-term leases and leases of low value assets are recognised on a straight-line basis as an expense in the income statement.

Short-term leases are leases with a lease term of 12 months or less. Low value assets comprise IT and other equipment.

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156

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 5 – Funding continued

5.2 Net finance costs

	2024	2023
	$m	$m
Interest payable on bank loans and overdrafts	(5.4)	(6.3)
Interest payable in respect of leases	(0.9)	(0.7)
Amortisation of finance fees	(0.7)	(0.6)
Net interest cost: UK defined benefit pension scheme (note 6.2)	(2.1)	(0.4)
Other finance income	0.7	0.4
Net finance costs	(8.4)	(7.6)

Other finance income comprises $0.4m finance lease interest (2023: $0.1m) and $0.3m bank interest on cash balances (2023: $0.3m).

The effective interest rates at the balance sheet dates were as follows:

	2024		2023
	Sterling	Dollar	Sterling	Dollar
	%	%	%	%
Bank loans (interest payable on drawn facilities)	-	6.89%	-	7.76%
Lease liabilities	7.70%	2.80%	7.70%	2.80%

Floating interest on bank loans has been hedged using interest rate swaps as described in note 5.4 (iv). Finance costs paid in respect of bank loans and

overdrafts in the consolidated cash flow statement is shown net of cash receipts from interest rate swaps.

Movement analysis for interest due on bank loans and interest rate swaps

	At				At
	30 September	Cash flow paid/	Non-cash	Exchange	30 September
	2023	(received)	movements	movements	2024
	$m	$m	$m	$m	$m
Interest due on bank loans	-	6.1	(6.1)	-	-
Interest rate swaps	0.9	(0.7)	(0.2)	-	-

In addition to net cash flows of $5.4m disclosed above for interest on bank loans and interest rate swaps, during the year the Group paid $1.1m in

arrangement fees and other directly attributable upfront costs for the new RCF.

	At				At
	1 October		Non-cash	Exchange	30 September
	2022	Cash flow	movements	movements	2023
	$m	$m	$m	$m	$m
Interest due on bank loans	-	6.6	6.6	-	-
Interest rate swaps	0.5	(0.3)	0.7	-	0.9

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157

Section 5 – Funding continued

5.3 Analysis of net cash/(debt)

	At				At
	30 September		Non-cash	Exchange	30 September
	2023	Cash flow	movements	movements	2024
	$m	$m	$m	$m	$m
Cash and cash equivalents	13.2	0.7	-	0.1	14.0
Bank loans	(77.7)	20.2	-	-	(57.5)
Net debt excluding lease liabilities	(64.5)	20.9	-	0.1	(43.5)
Lease liabilities	(20.9)	5.2	(5.7)	(0.5)	(21.9)
Net debt	(85.4)	26.1	(5.7)	(0.4)	(65.4)

On refinancing the Group repaid borrowings under the previous RCF of $71.5m and drew borrowings under the new RCF of $72.9m. A reconciliation of

gross cash flows for bank loans is provided as follows:

	Prior RCF		New RCF initial	Other
	repayment on	Other loan	drawdown	drawdown	Total
	cancellation	repayments	proceeds	proceeds	cash flow
	$m	$m	$m	$m	$m
Bank loans	71.5	49.2	(72.9)	(27.6)	20.2

	At				At
	1 October		Non-cash	Exchange	30 September
	2022	Cash flow	movements	movements	2023
	$m	$m	$m	$m	$m
Cash and cash equivalents	9.5	3.7	-	-	13.2
Bank loans	(53.7)	(24.0)	-	-	(77.7)
Net debt excluding lease liabilities	(44.2)	(20.3)	-	-	(64.5)
Lease liabilities	(23.8)	5.1	(1.5)	(0.7)	(20.9)
Net debt	(68.0)	(15.2)	(1.5)	(0.7)	(85.4)

Cash flows against lease liabilities were as follows:

	2024	2023
	$m	$m
Repayment of lease liability – continuing operations	4.3	3.5
Finance costs paid in respect of leases – continuing operations	0.9	0.7
Lease cash flows related to discontinued operations	-	0.9
Total lease cash flows	5.2	5.1

5.4 Financial instruments

Financial instruments by category

Trade and other receivables (excluding prepayments) and cash and cash equivalents are classified as ‘financial assets’. Borrowings and trade and other

payables are classified as ‘other financial liabilities at amortised cost’. Both categories are initially measured at fair value and subsequently held at

amortised cost.

Derivatives (interest rate swaps) are classified as ‘derivatives used for hedging’ and accounted for at fair value with gains and losses taken to reserves

through the Consolidated Statement of Comprehensive Income.

Financial risk and treasury policies

The Group’s finance team monitors liquidity, manages relations with the Group’s bankers, identifies and manages risk and provides a treasury service

to the Group’s businesses. Treasury dealings such as investments, borrowings and foreign exchange are conducted only to support underlying

business transactions.

(i) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises

principally from the Group’s receivables from customers and monies on deposit with financial institutions.

The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost and contract assets (as defined

in IFRS 15). ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference

between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted

at the effective interest rate of the financial asset. Loss allowances for trade receivables and contract assets are always measured at an amount equal to

lifetime ECL.

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OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

158

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 5 – Funding continued

5.4 Financial instruments continued

Financial risk and treasury policies continued

(i) Credit risk continued

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company

considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and

qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-looking

information. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	2024	2023
Carrying amount of financial assets	$m	$m
Trade receivables – net	32.3	53.9
Other receivables	1.2	0.8
Cash and cash equivalents	14.0	13.2
	47. 5	67.9

The maximum exposure to credit risk for financial assets at the reporting date by currency was:

	2024	2023
Carrying amount of financial assets	$m	$m
Pound sterling	4.4	10.0
US dollar	42.5	56.1
Euro	0.4	1.7
Other currencies	0.2	0.1
	47. 5	67.9

The ageing of trade receivables and associated provision for impairment at the reporting date was:

	Gross	Provision	Net	Gross	Provision	Net
	2024	2024	2024	2023	2023	2023
	$m	$m	$m	$m	$m	$m
Not past due	28.6	-	28.6	48.8	-	48.8
Past due 0–30 days	3.0	-	3.0	5.0	-	5.0
Past due 31–60 days	0.5	-	0.5	0.2	(0.1)	0.1
Past due 61–90 days	0.2	-	0.2	-	-	-
Past due 91 days	0.3	(0.3)	-	0.4	(0.4)	-
	32.6	(0.3)	32.3	54.4	(0.5)	53.9

The total past due receivables, net of provisions, is $3.7m (2023: $5.1m).

Individually impaired receivables relate to a small number of specific customers. Provisions for impairment are based on expected credit losses and are

estimated based on knowledge of customers and historical experience of losses. A portion of these receivables is expected to be recovered.

Movements on the Group provision for impairment of trade receivables are as follows:

	2024	2023
	$m	$m
At the beginning of the period	0.5	0.5
Provision for impairment of trade receivables	(0.2)	-
At the end of the period	0.3	0.5

The only significant concentration of credit risk is with the US Government Department of Defense. At the balance sheet date outstanding trade

receivables for this customer were $1.2m (2023: $13.7m).

The credit risk in relation to trade receivables is managed via credit evaluations for all non-government customers requiring credit above a certain

threshold, with required approval levels dependent on the value of sales. Where possible, letters of credit or payments in advance are received for

significant export sales.

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159

Section 5 – Funding continued

5.4 Financial instruments continued

Financial risk and treasury policies continued

(ii) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to

ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without

incurring unacceptable losses or risking damage to the Group’s reputation.

The Group uses weekly cash flow forecasts to monitor cash requirements and to optimise its borrowing position. Typically the Group ensures that it has

sufficient borrowing facilities to meet foreseeable operational expenses.

The following shows the contractual maturities of financial liabilities, including interest payments, where applicable, and excluding the impact of netting

agreements and on an undiscounted basis:

	Carrying	Contractual	Less than		After
	amount	cash flows	12 months	2–5 years	5 years
Analysis of contractual cash flow maturities	$m	$m	$m	$m	$m
30 September 2024
Bank loans and overdrafts	(57.5)	(65.9)	(4.0)	(61.9)	-
Trade and other payables	(34.9)	(34.9)	(34.9)	-	-
Lease liabilities	(21.9)	(28.7)	(5.0)	(13.7)	(10.0)
Derivatives	-	-	0.2	(0.2)	-
	(114 .3)	(129.5)	(43.7)	(75.8)	(10.0)

	Carrying	Contractual	Less than		After
	amount	cash flows	12 months	2–5 years	5 years
Analysis of contractual cash flow maturities	$m	$m	$m	$m	$m
30 September 2023
Bank loans and overdrafts	(77.7)	(87.0)	(4.7)	(82.3)	-
Trade and other payables	(32.4)	(32.4)	(32.4)	-	-
Lease liabilities	(20.9)	(26.8)	(5.2)	(11. 3)	(10.3)
Derivatives	0.9	0.9	0.3	0.6	-
	(130.1)	(145.3)	(42.0)	(93.0)	(10.3)

(iii) Currency risk

The Group is exposed to transactional foreign exchange risk to the extent that there is a mismatch between the currencies in which sales and purchases

are denominated and the respective functional currencies of Group companies. The functional currencies of Group companies are sterling and US dollars.

Transactional risk is minimised through natural hedging of sales and purchase currencies at a Company level. The Group monitors net transactional

exposure and can utilise forward foreign exchange contracts to hedge the remaining currency risk. These contracts are generally designated as cash flow

hedges. At the end of the reporting period there were no forward contracts outstanding (2023: $nil).

The Group is also exposed to translational foreign exchange risk arising when the results of sterling denominated companies are consolidated into the

Group presentational currency, US dollars. Group policy is not to hedge translational foreign exchange risk.

In respect of monetary assets and liabilities that are not denominated in Company functional currencies, the Group regularly reviews net exposure and

ensures this is kept to an acceptable level by monitoring intercompany funding structures and buying or selling foreign currencies where necessary to

address short-term imbalances.

Sensitivity analysis

It is estimated that, with all other variables held equal (in particular other exchange rates), a 1c increase in the value of the US dollar against sterling

would have increased the Group’s profit before interest and tax by $0.2m (2023: $0.2m), increased the Group’s profit after tax by $0.2m (2023: $0.2m) and

increased shareholders’ funds by $0.2m (2023: $0.2m).

The following significant exchange rates applied during the period:

	Average rate	Closing rate	Average rate	Closing rate
	2024	2024	2023	2023
Pound sterling	0.7887	0.7469	0.8163	0.8161

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160

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 5 – Funding continued

5.4 Financial instruments continued

Sensitivity analysis continued

(iv) Interest rate risk

	2024	2023
Derivative financial instruments – interest rate swaps	$m	$m
Current	0.2	0.3
Non-current	(0.2)	0.6
	-	0.9

The RCF is floating rate priced using the Secured Overnight Financing Rate (SOFR). In 2022 the Group implemented a hedging policy using interest rate

swaps to fix a portion of SOFR floating rate interest. The notional value of active interest rate swaps at 30 September 2024 was $30.0m (2023: $30.0m),

expiring on 8 September 2025. The Group also has additional interest rate swaps in place with a notional value of $20.0m starting on 8 September 2025

and expiring on 8 September 2026 (2023: $20.0m).

After taking account of hedging, a 1.0% increase in SOFR would have increased interest payable on bank loans by $0.4m (2023: $0.5m).

(v) Fair values

The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:

	Carrying		Carrying
	amount	Fair value	amount	Fair value
	2024	2024	2023	2023
	$m	$m	$m	$m
Trade receivables – net	32.3	32.3	53.9	53.9
Other receivables	1.2	1.2	0.8	0.8
Derivatives	-	-	0.9	0.9
Cash and cash equivalents	14.0	14.0	13.2	13.2
Bank loans	(57.5)	(57.5)	(77.7)	(77.7)
Trade and other payables	(35.8)	(35.8)	(33.7)	(33.7)

Basis for determining fair value

The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments reflected in the table above.

Derivatives

The Group’s interest rate swaps are not traded in active markets. These have been fair valued using observable interest rates. The effects of non-observable

inputs are not significant for interest rate swaps.

Counterparty banks perform valuations of interest rate swaps for financial reporting purposes, determined by discounting the future cash flows at rates

determined by year end yield curves.

Secured loans

As the loans are floating rate borrowings, amortised cost is deemed to reflect fair value.

Trade and other receivables/payables

As the majority of receivables/payables have a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

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Avon Technologies plc Annual Report and Accounts 2024

161

Section 5 – Funding continued

5.5 Equity

Share capital

		Ordinary	Share		Ordinary	Share
	Number	shares	premium	Number	shares	premium
	of shares	2024	2024	of shares	2023	2023
	2024	$m	$m	2023	$m	$m
Called up allotted and fully
paid ordinary shares of £1 each At the beginning of the period	31,023,292	50.3	54.3	31,023,292	50.3	54.3
At the end of the period	31,023,292	50.3	54.3	31,023,292	50.3	54.3

Ordinary shareholders are entitled to receive dividends and to vote at meetings of the Company.

Own shares held – Long-Term Incentive Plan

	2024	2023
	Number of	Number of
	shares	shares
Opening balance	261,714	261,714
Acquired in the period	301,947	-
Disposed of on exercise of options	(8,456)	-
Closing balance	555,205	261,714

These shares are held in trust in respect of awards made under the Group’s Long-Term Incentive Plan. Dividends on the shares have been waived. The market

value of shares held in trust at 30 September 2024 was $9.1m (30 September 2023: $2.0m). The shares are held at cost as treasury shares and deducted from

shareholders’ equity.

During 2024 the trust acquired 301,947 (2023: nil) shares at a cost of $5.0m (2023: $nil).

Own shares held – Share Buyback Programme

	2024	2023
	Number of	Number of
	shares	shares
Opening balance	765,098	765,098
Acquired in the period	-	-
Closing balance	765,098	765,098

In 2022 the Group completed a £9.25m ($12.4m) Share Buyback Programme, purchasing 765,098 ordinary shares. Dividends on these shares have been

waived. Purchased shares under the programme are held at cost as treasury shares and deducted from shareholders’ equity.

5.6 Dividends

On 26 January 2024, the shareholders approved a final dividend of 15.3c per qualifying ordinary share in respect of the 52 weeks ended 30 September 2023.

This was paid on 8 March 2024 utilising $4.6m of shareholders’ funds.

The Board of Directors declared an interim dividend of 7.2c (2023: 14.3c) per qualifying ordinary share in respect of the year ended 30 September 2024.

This was paid on 6 September 2024 utilising $2.2m (2023: $4.3m) of shareholders’ funds.

The Board is recommending a final dividend of 16.1c per share (2023: 15.3c) which together with the 7.2c interim dividend gives a total dividend of

23.3c (2023: 29.6c). The final dividend will be paid on 7 March 2025 to shareholders on the register at 7 February 2025 with an ex-dividend date of

6 February 2025.

Dividend cover

	2024	2023
	$ cents	$ cents
Interim dividend	7.2c	14.3c
Final dividend	16.1c	15.3c
Total dividend	23.3c	29.6c
Basic earnings per share – continuing operations	10.0c	(54.7c)
Dividend cover ratio	0.4 times	(1.8) times

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162

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 6 – Key management and employee benefits

6.1 Employees

Total remuneration and associated costs for the period, in relation to both continuing and discontinued operations, were:

	2024	2023
	$m	$m
Wages and salaries	71.3	66.8
Social security costs	7.3	6.5
Other pension costs	3.0	3.1
US healthcare costs	5.8	6.1
Share-based payments (note 6.3)	3.3	0.7
	90.7	83.2

Detailed disclosures of Directors’ remuneration and share options, including disclosure of the highest paid Director, are given on page 106.

The average monthly number of employees (including Executive Directors) during the period was:

	2024	2023
	number	number
Avon Protection	452	544
Team Wendy	463	386
Armour	-	35
Dairy	-	3
	915	968

The total number of employees (including Executive Directors) at the end of the reporting period was:

	2024	2023
	number	number
Avon Protection	436	501
Team Wendy	481	422
Armour	-	2
Dairy	-	3
	917	928

Central employees that are not specifically related to an individual business have been allocated to Avon Protection and Team Wendy based on an

average of relative net assets, payroll costs and revenues.

Key management compensation

The key management compensation below includes the Executive Directors plus four (2023: five) others who were active members of the Group

Executive team during the period. It also includes the Non-Executive Directors.

	2024	2023
	$m	$m
Salaries and other employee benefits	5.9	3.1
Post-employment benefits	0.2	0.2
	6.1	3.3

The value of LTIP share awards held by key management that vested during the period was $nil (2023: $nil).

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Avon Technologies plc Annual Report and Accounts 2024

163

Section 6 – Key management and employee benefits continued

6.2 Pensions and other retirement benefits

Defined contribution pension scheme

The charge in respect of defined contribution pension schemes was $3.0m (2023: $3.1m).

Defined benefit pension scheme

Retirement benefit assets and liabilities can be analysed as follows:

	2024	2023
	$m	$m
Net pension liability	17. 2	40.2

The Group operated a contributory defined benefit plan to provide pension and death benefits for the employees of Avon Technologies plc and its

Group undertakings in the UK employed prior to 31 January 2003. The plan was closed to future accrual of benefit on 1 October 2009 and has a weighted

average maturity of approximately eleven years. The assets of the plan are held in separate trustee administered funds and are invested by professional

investment managers. The trustee is Avon Rubber Pension Trust Limited, the Directors of which are members of the plan. Five Directors are appointed by

the Company and two are elected by the members. The plan exposes the Group to actuarial risks such as longevity risk, inflation risk and investment risk.

The funding of the plan is based on regular actuarial valuations. The most recent full actuarial valuation of the plan was carried out at 31 March 2022

when the market value of the plan’s assets was £337.5m. The fair value of those assets represented 91% of the value of the benefits which had accrued to

members, after allowing for future increase in pensions.

During the period the Group made payments of $9.1m to the plan (2023: $nil) in respect of scheme expenses and deficit recovery plan payments. In

accordance with the deficit recovery plan agreed following the 31 March 2022 actuarial valuation, the Group will make payments in FY25 of £4.3m, FY26 of

£4.7m and FY27 of £5.1m in respect of deficit recovery and scheme expenses.

The Directors have confirmed no additional liability is required to be recognised as a consequence of minimum funding requirements. The trustees have

no rights to wind up the scheme or improve benefits without Company consent.

An updated actuarial valuation for IAS 19 (revised) purposes was carried out by an independent team from the actuary (Aon) for year end using the

projected unit credit method. In the second half of FY24 the actuarial valuation provider was changed to Aon, having previously been a separate third

party. This change facilitated the use of detailed member-by-member calculations to estimate defined benefit obligations, as applied during full actuarial

valuations. This approach refines roll-forward methodology used previously and is considered a change in accounting estimate under IAS 8. The change is

estimated to have reduced defined benefit obligations by $13.4m, included in 2024 other comprehensive income under actuarial experience adjustments.

The net pension liability for the scheme amounted to $17.2m as at 30 September 2024 (2023: $40.2m). Administrative expenses have been shown as a

deduction against defined benefit assets in 2024 as these are not part of the actuarial defined benefit funding obligation.

Movement in net defined benefit liability

		Defined benefit obligation		Defined benefit asset		Net defined benefit liability
	2024	2023	2024	2023	2024	2023
	$m	$m	$m	$m	$m	$m
At the beginning of the period	(321.7)	(284.9)	281.5	278.6	(40.2)	(6.3)
Included in profit or loss
Administrative expenses	-	(1.0)	(1.1)	-	(1.1)	(1.0)
Net interest cost	(17.7)	(16.2)	15.6	15.8	(2.1)	(0.4)
	(17.7)	(17.2)	14.5	15.8	(3.2)	(1.4)
Included in other comprehensive income
Remeasurement gain/(loss):
– Actuarial gain/(loss) arising from:
– Demographic assumptions	7. 3	(2.6)	-	-	7. 3	(2.6)
– Financial assumptions	(11.6)	15.0	-	-	(11.6)	15.0
– Experience adjustment	21.1	(24.4)	-	-	21.1	(24.4)
– Return on plan assets excluding
interest income	-	-	2.8	(19.8)	2.8	(19.8)
	16.8	(12.0)	2.8	(19.8)	19.6	(31.8)
Other Contributions by the employer	-	-	9.1	-	9.1	-
Net benefits paid out	22.0	23.7	(22.0)	(23.7)	-	-
FX loss	(28.7)	(31.3)	26.2	30.6	(2.5)	(0.7)
At the end of the period	(329.3)	(321.7)	312.1	281.5	(17. 2)	(40.2)

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164

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 6 – Key management and employee benefits continued

6.2 Pensions and other retirement benefits continued

Plan assets

The fair value of the assets of the pension scheme analysed by asset category is shown below:

	2024	2023
	$m	$m
Equities and other securities	96.2	83.2
Liability Driven Investment	138.2	73.8
Infrastructure fund	46.9	64.0
Other receivable	26.1	-
Cash and cash equivalents	4.7	60.5
Total fair value of assets	312.1	281.5

At the year end, a portion of infrastructure fund asset had been redeemed but the cash had not yet been received and therefore this has been classified as

an other receivable.

Equity securities are valued using quoted prices in active markets where available. The Liability Driven Investment (LDI) comprises an investment in a level

2 pooled investment vehicle which combines a series of variable interest-earning cash deposits with contracts to hedge interest rate and inflation risk. The

LDI is valued using a net asset value.

$114.2m (2023: $126.0m) of the remaining investments is classified as level 3 within the fair value hierarchy. Holdings in unquoted securities are valued at

fair value which is typically the net asset value provided by the fund administrator at the most recent quarter end. Holdings in the infrastructure fund are

valued by an independent valuer using a model-based valuation such as a discounted cash flow approach.

The significant assumptions used in the valuation are the discount rate and the expected cash flows, both of which are subject to estimation uncertainty.

Changes in assumptions relating to these variables could positively or negatively impact the reported fair value of these instruments.

The defined benefit pension scheme has an investment strategy which is targeted at maximising investment returns with a low risk strategy which still

represents a prudent approach to meeting the plan’s liabilities and ensuring that members’ benefits are protected. The strategy considers the need for

appropriate asset class diversification to balance the risks and rewards across a range of alternative asset classes. The investments held by the pension

scheme include both quoted and unquoted securities, the latter of which by their nature involve assumptions and estimates to determine their fair

value. Where there is not an active market for the unquoted securities, the fair value of these assets is estimated by the pension trustees based on advice

received from the investment manager whilst also using any available market evidence of any recent transactions for an identical asset. The target weightings

under the current asset allocation strategy are 40% to matching investments, 50% to cash flow driven investments and 10% to return-seeking investments.

Actuarial assumptions

The main financial assumptions used by the independent qualified actuaries to calculate the liabilities under IAS 19 (revised) are set out below:

	2024	2023
	% p.a.	% p.a.
Inflation (RPI)	3.10	3.30
Inflation (CPI)	2.70	2.65
Pension increases post-August 2005	2.15	2.10
Pension increases pre-August 2005	2.90	3.10
Discount rate for scheme liabilities	5.05	5.50
Base mortality	Deferred members: 114% of S3PA tables	Deferred members: 114% of S3PA tables
	Pensioners: 104% of S3PA tables	Pensioners: 104% of S3PA tables
	based on members’ year of birth	based on members’ year of birth
Future improvements in longevity	CMI 2023 projections with a long-term	CMI 2022 projections with a long-term
	trend of 1.25% p.a.	trend of 1.50% p.a.

RPI inflation has been set in line with market breakeven expectations less an inflation risk premium of 0.3% (2023: 0.3%). Sensitivity analysis for inflation

is disclosed on the following page.

Mortality rate

Assumptions regarding future mortality experience are set based on advice, published statistics and experience.

The average life expectancy in years of a pensioner retiring at age 65 on the balance sheet date is as follows:

	2024	2023
Male	21.1	21.3
Female	23.6	23.7

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Avon Technologies plc Annual Report and Accounts 2024

165

Section 6 – Key management and employee benefits continued

6.2 Pensions and other retirement benefits continued

Mortality rate continued

The average life expectancy in years of a pensioner retiring at age 65, 20 years after the balance sheet date, is as follows:

	2024	2023
Male	21.6	22.1
Female	24.4	24.8

Core CMI 2023 mortality assumptions have been adopted which include an adjustment for the impact of COVID-19. This is based on 15% of the higher

mortality rates experienced in England and Wales in calendar years 2022 and 2023. Core CMI 2022 mortality assumptions applied in the prior period

included a COVID-19 adjustment of 25% of the higher mortality rates experienced in England and Wales in calendar year 2022.

Sensitivity analysis

	Defined benefit obligation	Defined benefit obligation
	increase/(decrease)	increase/(decrease)
	2024	2023
	$m	$m
Inflation (0.25% increase)	5.7	5.8
Inflation (0.25% decrease)	(5.6)	(5.8)
Discount rate for scheme liabilities (0.25% increase)	(8.7)	(8.4)
Discount rate for scheme liabilities (0.25% decrease)	9.3	8.8
Future mortality (one-year increase)	11.7	10.5

The above sensitivity analysis shows the impact on the defined benefit obligation only, not the net pension liability, as it does not take into account any

impact on the asset valuation. Each sensitivity analysis disclosed in this note is based on changing one assumption while holding all other assumptions

constant. In practice, this is unlikely to occur.

6.3 Share-based payments

The Group operates an equity-settled share-based Performance Share Plan (PSP). Details of the plan are set out in the Remuneration Report, ‘Long-Term

Incentive Plan’ section on page 108. An expense of $3.3m (2023: $0.7m) was recognised in the period relating to share-based payments.

The table below summarises the movements in the number of share options outstanding for the Group, all of which are nil cost options:

	Number of	Number of
	options	options
	2024	2023
	‘000	‘000
Outstanding at the beginning of the period	533	418
Forfeited and cancelled during the period	(245)	(222)
Exercised during the period	(8)	-
Granted during the period	974	337
Outstanding at the end of the period	1,254	533

The weighted average remaining contractual life of outstanding share options is 22 months (2023: 18 months). Share options that were exercised in the

year vested on 28 June 2024 at a share price of £13.08.

A Monte Carlo simulation was used to calculate the fair value of awards granted that are subject to a total shareholder return performance condition.

The fair value of other awards was calculated as the market price of the shares at the date of grant reduced by the present value of the dividends expected

to be paid over the vesting period. Volatility and risk-free rate are not applicable in 2024 as granted awards only have non-market conditions. Other

principal assumptions used to value awards each period were on average:

Key assumptions	2024	2023
Weighted average fair value (£)	8.3	8.8
Closing share price at date of grant (£)	8.5	10.6
Expected volatility (%)	N/A	54.0
Risk-free interest rate (%)	N/A	3.4
Expected option term, including holding period where applicable (years)	3.6	3.0
Dividend yield (%)	-	-

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166

Notes to the Group Financial Statements

For the year ended 30 September 2024 continued

Section 7 – Other

7.1 Provisions for liabilities and charges

			Property
	Warranty	Legal	obligations	Restructuring	Offset	Other	Total
	$m	$m	$m	$m	$m	$m	$m
Balance at 1 October 2022	2.3	-	3.3	-	-	-	5.6
Transferred from accruals during the period	-	-	-	-	1.0	-	1.0
(Released)/created during the period	(0.4)	-	0.6	-	1.4	-	1.6
Cash payments	(0.2)	-	-	-	-	-	(0.2)
Foreign exchange movements	0.1	-	0.3	-	-	-	0.4
Balance at 30 September 2023	1.8	-	4.2	-	2.4	-	8.4
Transferred from accruals during the period	-	0.5	-	-	-	-	0.5
Created/(released) during the period	2.6	0.8	0.6	1.7	(0.9)	0.4	5.2
Cash payments	(0.5)	-	-	(0.3)	(0.5)	-	(1.3)
Foreign exchange movements	0.1	-	0.3	-	-	-	0.4
Balance at 30 September 2024	4.0	1.3	5.1	1.4	1.0	0.4	13.2

	2024	2023
Analysis of total provisions	$m	$m
Current	6.6	0.4
Non-current	6.6	8.0
	13.2	8.4

Warranty provisions cover expected costs under guarantees provided with certain products.

Legal provisions relate to specific claims against the Group. In the year legal provisions were transferred from accruals to provisions for liabilities and

charges, this being considered a more appropriate categorisation.

Property obligations relate to leased premises of the Group which are subject to dilapidation risks and are expected to be utilised within the next ten

years. Property obligations are not subject to discounting as the impact would be immaterial.

Restructuring provisions relate to costs associated with the closure of the Irvine, California, facility and other transformational programmes.

Offset provisions relate to the Group’s estimated obligations under programmes to generate economic value for specific countries. Offset provisions were

previously included within accruals. During the prior period offset provisions were transferred from accruals to provisions for liabilities and charges, this

being considered a more appropriate categorisation.

7.2 Other financial commitments

	2024	2023
	$m	$m
Capital expenditure committed	1.5	2.4

Capital expenditure committed represents the amount contracted in respect of property, plant and equipment at the end of the financial period for

which no provision has been made in the financial statements.

166

Avon Technologies plc Annual Report and Accounts 2024

167

Section 7 – Other continued

7.3 Group undertakings

					Country in which
	Registered office address			Activity	incorporated
Held by Parent Company
Avon Polymer Products Limited	Hampton Park West, Melksham SN12 6NB, UK			The manufacture and distribution	UK
				of respiratory protection systems
Avon Protection Holdings Limited	Hampton Park West, Melksham SN12 6NB, UK			Investment holding company	UK
Avon Rubber Pension Trust Limited	Hampton Park West, Melksham SN12 6NB, UK			Pension fund trustee	UK
Held by Group undertakings
Avon Protection Systems, Inc.	503 8th St, Cadillac, MI 49601, United States			The manufacture and distribution of respiratory	US
				and ballistic protection systems
Avon Rubber & Plastics, Inc.	503 8th St, Cadillac, MI 49601, United States			Investment holding company	US
Avon Protection Ceradyne, LLC	4000	Barranca Parkway, Suite 100, Irvine,		The manufacture and distribution	US
	CA	92604,	United States	of ballistic protection systems
Team Wendy LLC	17000	St Clair Ave, Cleveland, OH 44110,		The manufacture and distribution	US
	United States			of helmet systems
Avon Protection Limited	Hampton Park West, Melksham SN12 6NB, UK			Dormant company	UK
Avon Protection UK Limited	Hampton Park West, Melksham SN12 6NB, UK			Dormant company	UK

Shareholdings are ordinary shares and all undertakings are wholly owned by the Group and operate primarily in their country of incorporation. All

companies have the same financial year end. Avon Polymer Products Limited and Avon Protection Holdings Limited are exempt from the requirement to

file audited accounts by virtue of section 479A of the Companies Act 2006 (‘the Act’). All remaining UK subsidiaries are exempt from the requirement to file

audited accounts by virtue of section 480 of the Act.

7.4 Related party transactions

Except in respect of the defined benefit pension scheme, internal transactions between Group companies and compensation of key management

personnel, there were no related party transactions during the period or outstanding at the end of the period (2023: $nil). Transactions with the defined

benefit pension scheme are disclosed in note 6.2. Key management compensation is disclosed in note 6.1.

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168

Parent Company Balance Sheet

At 30 September 2024

Note

2024

£m

2023

£m

Assets

Non-current assets

Tangible assets 4 3.2 3.8

Finance leases 5 1.0 0.9

Investments in subsidiaries 6 212.7 212.7

Deferred tax assets 7 2.4 1.2

219.3 218.6

Current assets

Trade and other receivables 8 5.5 0.7

Cash and cash equivalents - 0.7

5.5 1.4

Liabilities

Current liabilities

Borrowings 11 0.9 0.5

Trade and other payables 9 56.1 42.2

57.0 42.7

Net current liabilities (51.5) (41.3)

Non-current liabilities

Borrowings 11 4.4 5.0

Provisions for liabilities and charges 10 3.0 2.6

7.4 7.6

Net assets 160.4 169.7

Shareholders’ equity

Ordinary shares 12 31.0 31.0

Share premium account 34.7 34.7

Capital redemption reserve 0.5 0.5

Retained earnings 94.2 103.5

Total equity 160.4 169.7

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Company profit and loss account.

Theloss for the Company for the period was £5.2m (2023: profit of £9.5m).

These financial statements on pages 168 to 174 were approved by the Board of Directors on 19 November 2024 and signed on its behalf by:

Jos Sclater Rich Cashin

Chief Executive Officer Chief Financial Officer

The accompanying accounting policies and notes form part of these financial statements.

168

Avon Technologies plc Annual Report and Accounts 2024

169

Parent Company Statement of Changes in Equity

For the year ended 30 September 2024

Note

capital

£m

premium

£m

Capital

redemption

reserves

£m

Retained

earnings

£m

Total

equity

£m

At 1 October 2022 31.0 34.7 0.5 104.8 171.0

Profit for the period 1 - - - 9.5 9.5

Dividends paid 2 - - - (10.9) (10.9)

Fair value of share-based payments 13 - - - 0.6 0.6

Deferred tax relating to employee share schemes 7 - - - (0.5) (0.5)

At 30 September 2023 31.0 34.7 0.5 103.5 169.7

Loss for the year 1 - - - (5.2) (5.2)

Dividends paid 2 - - - (5.3) (5.3)

Own shares acquired (3.9) (3.9)

Fair value of share-based payments 13 - - - 4.8 4.8

Deferred tax relating to employee share schemes 7 - - - 0.3 0.3

At 30 September 2024 31.0 34.7 0.5 94.2 160.4

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170

Parent Company Accounting Policies

For the year ended 30 September 2024

Accounting policies

The principal accounting policies adopted in the preparation of these

financial statements are set out below. These policies have been

consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements were prepared in accordance with Financial

Reporting Standard 101 Reduced Disclosure Framework (FRS 101).

In preparing these financial statements, the Company applies the

recognition, measurement and disclosure requirements of International

Accounting Standards in conformity with the requirements of the

Companies Act 2006 (adopted IFRSs), but makes amendments where

necessary in order to comply with the Companies Act 2006 and has set

out below where advantage of the FRS 101 disclosure exemptions has

been taken:

• presentation of a cash flow statement and related notes (IAS 7);

• comparative period reconciliations for share capital and intangible

andtangible fixed assets (paragraph 38, IAS 1);

• transactions with wholly owned subsidiaries (IAS 24);

• capital management (paragraphs 134–136, IAS 1);

• share-based payments (paragraphs 45(b) and 46–52, IFRS 2);

• financial instruments (IFRS 7);

• compensation of key management personnel (paragraph 17, IAS 24);

• fair value measurement (paragraphs 91–99, IFRS 13);

• leases (paragraphs 90–93, IFRS 16);

• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies,

Changes in Accounting Estimates and Errors; and

• the requirements of paragraph 18A of IAS 24 Related Party Disclosures.

Where required, equivalent disclosures are given in the Group

financialstatements.

The financial period presents the year ended 30 September 2024 (prior

financial period 52 weeks ended 30 September 2023). The Company has

adopted a calendar year end to align with the majority of listed peers and

certain subsidiary companies.

With effect from 30 July 2024, the name of the Company was changed

from Avon Protection plc to Avon Technologies plc.

Pensions

The Group operated a contributory defined benefit plan to provide

pension and death benefits for the employees of Avon Protection plc

and its Group undertakings in the UK employed prior to 31 January 2003.

The scheme is closed to new entrants and was closed to future accrual of

benefits from 1 October 2009. Scheme assets are measured using market

values, while liabilities are measured using the projected unit method.

One of the Company’s subsidiaries, Avon Polymer Products Limited, is

the employer that is legally responsible for the scheme and the pension

obligations are included in full in its accounts. No asset or provision has

been reflected in the Company’s balance sheet for any surplus or deficit

arising in respect of pension obligations.

The Company also provides pensions by contributing to defined

contribution schemes. The charge in the profit and loss account reflects

the contributions paid and payable to these schemes during the period.

Full disclosures of the UK pension schemes have been provided in the

Group financial statements.

Foreign currencies

The Company’s functional currency is sterling as this is the currency of the

primary economic environment in which the Company operates. Foreign

currency transactions are recorded at the exchange rate ruling on the

date of transaction. Foreign exchange gains and losses resulting from the

settlement of such transactions, and from the retranslation at year end

exchange rates of monetary assets and liabilities denominated in foreign

currencies, are recognised in the profit and loss account.

Share-based payments

The Company operates a number of equity-settled, share-based

compensation plans. The fair value of the employee services received

inexchange for the grant of the options is recognised as an expense.

Thetotal amount to be expensed over the vesting period is determined

by reference to the fair value of the options granted, excluding the

impact of any non-market vesting conditions (for example, profitability

and sales growth targets). Non-market vesting conditions are included

inassumptions about the number of options that are expected to vest.

Ateach balance sheet date, the entity revises its estimates of the number

of options that are expected to vest. It recognises the impact of the

revision to original estimates, if any, in the profit and loss account. The

proceeds received net of any directly attributable transaction costs are

credited to share capital (nominal value) and share premium when the

options areexercised. Share-based payment expenses are recharged to

subsidiary companies based on employee services provided.

Plant and equipment

Property, plant and equipment is stated at historical cost less accumulated

depreciation and any recognised impairment losses.

Costs include the original purchase price of the asset and the costs

attributable to bringing the asset to its working condition for its intended

use including any qualifying finance expenses.

Depreciation is provided to write down the depreciable amount of

relevant assets by equal annual instalments over their estimated useful

lives. In general, the lives used for leasehold property are the period of

lease agreement.

The residual values and useful lives of the assets are reviewed, and adjusted

if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable

amount if its carrying amount is greater than its estimated net realisable

value. Gains and losses on disposal are determined by comparing

proceeds with carrying amounts.

Leases

Right of use assets and lease liabilities are recognised at the commencement

date of the contract for all leases conveying the right to control the

associated asset for a period of time.

The right of use assets are initially measured at cost, which comprises the

initial measurement of the lease liability plus an estimate of dilapidation

provisions where required. Subsequently the right of use assets are measured

at cost less accumulated depreciation and any accumulated impairment

losses and adjusted for any remeasurement of the leaseliability.

Depreciation is calculated on a straight-line basis over the life of the

lease. In general, the lives used for leasehold property are the period of

leaseagreement.

The lease liability is initially measured at the present value of the lease

payments due over the life of the lease. The lease payments are discounted

at the rate implicit in the lease or if that is not readily determined using the

Company’s incremental borrowing rate.

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171

Leases continued

The lease term is determined with reference to any non-cancellable

period of lease contracts plus any periods covered by an option to

extend/terminate the lease if it is considered reasonably certain that

the option will/will not be exercised. In concluding whether or not

it is reasonably certain an option will be exercised for new leases

management has considered the strategic outlook for the Group and

other operational factors.

Subsequently the lease liability is measured by increasing the carrying

value to reflect interest on the liability and reducing the carrying value

toreflect lease payments made.

Finance leases

The Company acts as an intermediate lessor for certain legacy commercial

premises where they are no longer required for operations and accounts

for its interests in corresponding head leases and subleases separately.

Lease classification of the sublease between finance and operating is

assessed with reference to the right of use asset arising from the head lease.

Finance lease assets are initially measured at the present value of the lease

receipts due over the term of the lease. Receipts are discounted at the

rate implicit in the sublease or the corresponding head lease liability if the

implicit rate cannot be readily determined.

Investments in subsidiary undertakings

Investments in subsidiary undertakings are recorded at cost plus incidental

expenses less any provision for impairment. Impairment reviews are

performed by the Directors when there has been an indication of

potentialimpairment.

Deferred taxation

Because of the differences between accounting and taxable profits and

losses reported in each period, temporary differences arise on the amount

certain assets and liabilities are carried at for accounting purposes and

their respective tax values. Deferred tax is the amount of tax payable or

recoverable on these temporary differences.

Deferred tax liabilities arise where the carrying amount of an asset is higher

than the tax value (more tax deduction has been taken). This can happen

where the Company invests in capital assets, as governments often

encourage investment by allowing tax depreciation to be recognised

faster than accounting depreciation. This reduces the tax value of the

asset relative to its accounting carrying amount. Deferred tax liabilities are

generally provided on all taxable temporary differences. The periods over

which such temporary differences reverse will vary depending on the life

of the related asset or liability.

Deferred tax assets arise where the carrying amount of an asset is lower

than the tax value (less tax benefit which has been taken). Deferred tax

assets are recognised only where the Company considers it probable

that it will be able to use such losses by offsetting them against future

taxable profits.

However, the deferred income tax is not accounted for if it arises from

initial recognition of an asset or liability in a transaction other than a

business combination that at the time of the transaction affects neither

accounting nor taxable profit or loss.

Deferred tax is calculated using the enacted or substantively enacted

rates that are expected to apply when the asset is realised or the liability

is settled.

Trade and other receivables

Trade and other receivables are classified as measured at amortised cost.

The Company recognises loss allowances for expected credit losses (ECLs)

on financial assets measured at amortised cost. Loss allowances for trade

receivables are always measured at an amount equal to lifetime ECL.

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand, highly liquid

interest-bearing securities with maturities of three months orless, and

bank overdrafts. Bank overdrafts are shown within borrowings in current

liabilities on the balance sheet.

Trade payables

Trade payables are obligations to pay for goods or services that have been

acquired in the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities if payment is due

within one year or less (or in the normal operating cycle of the business if

longer). If not, they are presented as non-current liabilities. They are initially

recognised at fair value and subsequently held at amortised cost.

Provisions

Provisions are recognised when the Company has a legal or constructive

obligation as a result of a past event, it is probable that an outflow of

resources will be required to settle the obligation and the amount can be

reliably estimated.

Provisions are measured at the present value of the expenditures expected

to be required to settle the obligation.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs

incurred and subsequently stated at amortised cost. Borrowing costs are

expensed using the effective interest method.

Dividends

Final dividends are recognised as a liability in the Company’s financial

statements in the period in which the dividends are approved by

shareholders, while interim dividends are recognised in the period in

which the dividends are paid.

Share capital

Ordinary shares are classified as equity. Incremental costs directly

attributable to the issue of new shares or options are shown in equity

asadeduction, net of tax, from the proceeds.

Where the Company purchases its own share capital (treasury shares)

through employee share ownership trusts, the consideration paid,

including any directly attributable incremental costs (net of income

taxes), is deducted from shareholders’ funds until the shares are cancelled,

reissued or disposed of. Where such shares are subsequently sold or

reissued, any consideration received, net of any directly attributable

incremental transaction costs and the related income tax effects, is

included in shareholders’ funds.

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172

1 Parent Company

As a Consolidated Statement of Comprehensive Income is published, a separate profit and loss account for the Parent Company is omitted from the

accounts by virtue of section 408 of the Companies Act 2006. The Parent Company’s loss for the financial year was £5.2m (2023: profit of £9.5m).

The audit fee in respect of the Parent Company is set out in note 2.5 to the Group financial statements.

2 Dividends

Details of the Company’s dividends are set out in note 5.6 to the Group financial statements.

3 Employees

The only employees of the Company during the current period were the CEO and the CFO of the Group. Detailed disclosures of the Executive Directors’

remuneration packages are provided in the Remuneration Report on pages 96 to 113.

4 Tangible assets

Right of use

lease assets

£m

Cost

At 30 September 2023 and 30 September 2024 11. 3

Depreciation charge

At 30 September 2023 7.5

Charge for the period 0.6

At 30 September 2024 8.1

Net book value

At 30 September 2024 3.2

At 30 September 2023 3.8

Lease assets relate to the Company’s leased properties.

5 Finance leases

Finance leases

£m

At 30 September 2023 0.9

Interest income 0.1

Payments received -

At 30 September 2024 1.0

The Company subleases legacy commercial premises where they are no longer required for operations, resulting in lease assets being held on the

balancesheet. All payments have been received on time for the year, rounding to £nil as these were below £50,000.

Expected credit losses on finance lease assets are less than £0.1m and have been considered immaterial.

Notes to the Parent Company Financial Statements

For the year ended 30 September 2024

172

Avon Technologies plc Annual Report and Accounts 2024

173

6 Investments in subsidiaries

2024

£m

2023

£m

Opening net book value 212.7 191.0

Additions - 21.7

Closing net book value 212.7 212.7

During the prior period, the Company made an additional investment in Avon Protection Holdings Limited of £21.7m. The investments consist of a 100%

(unless indicated otherwise) interest in the following subsidiaries:

Principal activity Registered office

Country in which

incorporated

Avon Polymer Products Limited The manufacture and distribution

ofrespiratory protection systems

Hampton Park West, Melksham SN12 6NB, UK UK

Avon Protection Holdings Limited Investment company Hampton Park West, Melksham SN12 6NB, UK UK

Avon Rubber Pension Trust Limited Pension fund trustee Hampton Park West, Melksham SN12 6NB, UK UK

Details of investments held by these subsidiaries are given in note 7.3 to the Group financial statements.

In the prior period the impairment of the Team Wendy CGU, detailed further in note 3.1, was considered a potential indicator of impairment for the

Company’s investment in subsidiaries. A full impairment test was therefore performed, comparing the carrying value of investments in subsidiaries to

recoverable amounts. The recoverable amount was determined based on value in use calculations for subsidiary groups under an approach consistent

with that detailed in note 3.1. This analysis demonstrated the value in use of investments in subsidiaries was substantially greater than carrying amounts.

Sensitivity analysis has been performed which shows there are no reasonable changes in assumptions that would result in an impairment.

7 Deferred tax assets

options

£m

Other

temporary

differences

£m

Total

£m

At 1 October 2022 0.6 1.9 2.5

Credited/(charged) to profit for the year 0.1 (0.9) (0.8)

Charged to equity (0.5) - (0.5)

At 30 September 2023 0.2 1.0 1.2

Credited/(charged) to profit for the year 0.6 0.3 0.9

Credited to equity 0.3 - 0.3

At 30 September 2024 1.1 1.3 2.4

The Company has unrecognised deferred tax assets of £3.3m (2023: £3.3m) in respect of capital losses where it is not considered that there will be

sufficient available future profits to utilise these losses. The gross amount of unrecognised deferred tax assets is £13.0m and has no expiry date.

8 Trade and other receivables

2024

£m

2023

£m

Other receivables 0.3 0.1

Prepayments 0.8 0.5

Amounts owed by Group undertakings 4.4 0.1

5.5 0.7

Amounts owed by Group undertakings are unsecured, are interest free, have no fixed date of repayment and are repayable on demand.

9 Trade and other payables

2024

£m

2023

£m

Trade payables 0.2 0.4

Accruals 3.0 2.2

Amounts due to Group undertakings 52.9 39.6

56.1 42.2

Amounts due to Group undertakings are unsecured, are interest free, have no fixed date of repayment and are repayable on demand.

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174

10 Provisions for liabilities and charges

Property

obligations

£m

Balance at 1 October 2022 2.2

Addition during the period 0.4

Balance at 30 September 2023 2.6

Addition during the period 0.4

Balance at 30 September 2024 3.0

Analysis of total provisions

2024

£m

2023

£m

Current 0.4 -

Non-current 2.6 2.6

Provisions relate to property obligations arising in relation to leased premises of the Company which are subject to dilapidation risks and are expected to

be utilised within the next ten years. Property provisions are subject to uncertainty in respect of any final negotiated settlement of any dilapidation claims

with landlords.

11 Borrowings

On 14 May 2024 the Group signed a new $137m RCF, together with a $50m accordion replacing the previous facility. The new RCF was agreed with a

syndicate of four lenders and is available until May 2027, with two further one-year extension options.

The Company was overdrawn in cash by £0.3m at 30 September 2024 (2023: in credit of £0.7m). Overall UK cash was credit at 30 September 2024. The

Group’s UK companies have the right to offset net cash positions, and intend to realise asset and settle liability positions simultaneously. As such from a

Group perspective no overdraft balance has been reported in relation to 2024 UK cash (note 4.4).

Further details regarding borrowings and credit risks are disclosed in note 5.4 to the Group financial statements.

2024

£m

2023

£m

Current

Lease liabilities 0.6 0.5

Overdraft 0.3 -

Non-current

Lease liabilities 4.4 5.0

Total borrowings 5.3 5.5

The table below presents the contractual maturity analysis in respect of lease liabilities:

2024

£m

2023

£m

In one year or less, or on demand 0.6 0.5

Two to five years 2.8 2.6

More than five years 1.6 2.4

Total lease liabilities 5.0 5.5

Lease liabilities relate to land and buildings (lease assets) leased by the Company for its office space and manufacturing facilities of UK trading subsidiaries.

12 Share capital

Details of the Company’s share capital and own shares acquired in the year are set out in note 5.5 to the Group financial statements.

13 Share-based payments

The Company operates an equity-settled share-based Long-Term Incentive Plan (LTIP), details of which are disclosed in note 6.3 to the Group

financialstatements.

The Company recognises share-based payment charges for company specific services provided by the CEO and the CFO. Share-based payment charges

for other employees and services provided by the CEO and CFO to other Group companies arerecharged to the relevant subsidiary where material. The

recharge is credited to retained earnings.

Notes to the Parent Company Financial Statements continued

For the year ended 30 September 2024

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175

Notice of Annual General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to what action you should take, you are recommended to seek your own financial advice from your bank manager,

stockbroker, solicitor, accountant or other independent financial advisor authorised under the Financial Services and Markets Act 2000. If you

have sold or otherwise transferred all of your shares in Avon Technologies plc, please forward this document, together with the accompanying

documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these

documents to the person who now holds the shares.

Notice of Annual General Meeting for the year ended

30September 2024

Notice is hereby given that the AGM of shareholders of Avon Technologies

plc (‘the Company’) will be held at Hampton Park West, Semington Road,

Melksham, Wiltshire SN12 6NB, on 31 January 2025 at 10:30 am for the

purposes set out below.

You will not receive a form of proxy for the AGM in the post. Instead,

you will receive instructions to enable you to vote electronically

and outlining how to register to do so. You may request a hard copy

form of proxy directly from the Registrar, Link Group, via email at

shareholderenquiries@linkgroup.co.uk, at Central Square, 29 Wellington

Street, Leeds LS1 4DL, or on 0371 664 0300 or +44 371 664 0300 if overseas.

Ordinary business

To consider and, if thought fit, pass resolutions 1–13 (inclusive) as ordinary

resolutions:

Resolution 1

To receive the Company’s accounts and the reports of the Directors and

the auditor for the year ended 30 September 2024.

Resolution 2

To approve the Directors’ Remuneration Report (other than the part

containing the Directors’ Remuneration Policy) for the financial year ended

30 September 2024.

Resolution 3

To declare a final dividend of 16.1 US cents per ordinary share as

recommended by the Directors.

Resolution 4

To re-elect Jos Sclater as a Director of the Company.

Resolution 5

To re-elect Rich Cashin as a Director of the Company.

Resolution 6

To re-elect Bruce Thompson as a Director of the Company.

Resolution 7

To re-elect Bindi Foyle as a Director of the Company.

Resolution 8

To re-elect Victor Chavez CBE as a Director of the Company.

Resolution 9

To appoint Maggie Brereton as a Director of the Company.

Resolution 10

To re-appoint KPMG LLP as auditor of the Company, to hold office until the

conclusion of the next general meeting at which accounts are laid before

the Company.

Resolution 11

To authorise the Directors to determine the auditor’s remuneration.

Resolution 12

That, in accordance with sections 366 and 367 of the Companies Act 2006

(‘the Act’), the Company and all its subsidiaries during the period for which

this resolution has effect be and are hereby authorised, in aggregate, to:

(a) make political donations to political parties or to independent

election candidates not exceeding £100,000 in total;

(b) make political donations to political organisations (other than political

parties) not exceeding £100,000 in total; and

during the period beginning with the date of the passing of this

resolution and ending at the close of business on 27 December 2025

or, if sooner, the conclusion of the next AGM of the Company. For

the purpose of this resolution ‘political donation’, ‘political party’,

‘political organisation’, ‘independent election candidate’ and ‘political

expenditure’ are to be construed in accordance with sections 363, 364

and 365 of the Act.

Resolution 13

That, in accordance with section 551 of the Act, the Directors be generally

and unconditionally authorised to allot Relevant Securities (as defined in

the notes to this resolution):

(a) up to an aggregate nominal amount of £10,086,064 (such amount to

be reduced by any allotments or grants made under paragraph (b)

below); and

(b) comprising equity securities (as defined by section 560 of the Act) up

to an aggregate nominal amount of £20,172,129 (such amount to be

reduced by any allotments or grants made under paragraph (a) above)

in connection with a pre-emptive offer (including an offer by way of a

rights issue or open offer):

(i) to holders of ordinary shares in proportion (as nearly as

practicable) to their existing holdings; and

(ii) to holders of other equity shares as required by the rights of those

securities or as the Directors otherwise consider necessary,

but subject to such limits, restrictions, exclusions or other

arrangements as the Directors may deem necessary or expedient

in relation to treasury shares, fractional entitlements, record dates,

regulatory or practical problems in, or under the laws of, any territory

or any other matter,

such authority to expire on the date 15 months after the date of this

resolution or, if earlier, the date of the next AGM of the Company (unless

renewed, varied or revoked by the Company prior to or on that date), save

that the Company may, before such expiry, make offers or agreements

which would or might require Relevant Securities to be allotted and

the Directors may allot Relevant Securities in pursuance of such offer or

agreement notwithstanding that the authority conferred by this resolution

has expired.

This resolution revokes and replaces all unexercised authorities previously

granted to the Directors to allot Relevant Securities but without prejudice

to any allotment of shares or grant of rights already made, offered or

agreed to be made pursuant to such authorities.

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Annual Report and Accounts 2024 Avon Technologies plc

OVERVIEW STRATEGIC REPORT GOVERNANCE ADJUSTED PERFORMANCE MEASURES FINANCIAL STATEMENTS

176

Special business

To consider and, if thought fit, pass resolutions 14–17 (inclusive) as special

resolutions and resolution 18 as an ordinary resolution:

Resolution 14

That, subject to the passing of resolution 13, the Directors be authorised to

allot equity securities (as defined by section 560 of the Act) for cash under

the authority conferred by that resolution and/or to sell ordinary shares

held by the Company as treasury shares for cash, as if section 561 of the

Act did not apply to any such allotment or sale, provided that this power

shall be limited to:

(a) the allotment of equity securities and sale of treasury shares in

connection with an offer of, or invitation to apply for, equity securities

(but in the case of the authority granted under paragraph (b) of

resolution 13, by way of a pre-emptive offer (including a rights issue or

open offer)):

(i) to holders of ordinary shares in proportion (as nearly as

practicable) to their existing holdings; and

(ii) to holders of other equity securities, as required by the rights

attaching thereto, or as the Directors otherwise consider

necessary,

and so that the Directors may impose such limits, restrictions or

exclusions and make any arrangements which they deem necessary or

expedient in relation to treasury shares, fractional entitlements, record

dates or legal, regulatory or practical problems in, or under the laws of,

any territory or any other matter;

(b) in the case of the authority granted under paragraph (a) of resolution

13, the allotment of equity securities and/or sale of treasury shares

(otherwise than under paragraph (a) above) up to a nominal amount

of £3,025,819; and

than under paragraphs (a) or (b) above) up to a nominal amount equal

to 20% of any allotment of equity securities or sale of treasury shares

from time to time under paragraph (b) above, such authority to be

used only for the purposes of making a follow-on offer which the

Directors determine to be of a kind contemplated by paragraph 3 of

section 2B of the Statement of Principles on Disapplying Pre-Emption

Rights most recently published by the Pre-Emption Group prior to the

date of this Notice,

such authority to expire on the date 15 months after the date of this

resolution or, if earlier, the date of the next AGM of the Company (unless

renewed, varied or revoked by the Company prior to or on that date) save

that the Company may, before such expiry, make an offer or agreement

which would or might require equity securities to be allotted (or treasury

shares to be sold) after such expiry and the Directors may allot equity

securities (or sell treasury shares) in pursuance of any such offer or

agreement notwithstanding that the power conferred by this resolution

has expired.

Resolution 15

That, subject to the passing of resolution 13, the Directors be authorised,

in addition to any authority granted under resolution 14, to allot equity

securities (as defined by section 560 of the Act) for cash under the

authority conferred by that resolution and/or to sell ordinary shares held

by the Company as treasury shares for cash, as if section 561 of the Act did

not apply to any such allotment or sale, such authority to be:

(a) limited to the allotment of equity securities or sale of treasury

shares up to a nominal amount of £3,025,819, to be used only for

the purposes of financing (or refinancing, if the authority is to be

used within 12 months after the original transaction) a transaction

which the Directors determine to be an acquisition or other capital

investment of a kind contemplated by the Statement of Principles on

Disapplying Pre-Emption Rights most recently published by the Pre-

Emption Group prior to the date of this Notice; and

(b) limited to the allotment of equity securities or sale of treasury shares

(otherwise than under paragraph (a)) up to a nominal amount equal

to 20% of any allotment of equity securities or sale of treasury shares

from time to time under paragraph (a), such authority to be used only

for the purposes of making a follow-on offer which the Directors of

the Company determine to be of a kind contemplated by paragraph

3 of section 2B of the Statement of Principles on Disapplying Pre-

Emption Rights most recently published by the Pre-Emption Group

prior to the date of this Notice,