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 A