Interim report
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Half-year results for period ended 30 June 2025 Released :07/08/2025 RNS Number : 3149U Morgan Advanced Materials PLC 07 August 2025 Half-year results for the period ended 30 June 2025 £ million unless otherwise stated (unaudited) H1 2025 H1 2024 Reported change Organic constant currency1 change Adjusted results Revenue 522.6 572.6 (8.7)% (5.8)% Group adjusted operating profit1 58.0 71.3 (18.7)% (13.0)% Group adjusted operating profit1 margin 11.1% 12.5% (140)bps (90)bps Return on invested capital1 16.2% 19.7% (350)bps Adjusted EPS 1 10.8p 14.7p (26.5)% Free cash flow before acquisitions, disposals and dividends1,2 1.2 (7.9) n/m Net debt (excl. lease liabilities) 1 249.1 222.3 12.1% Statutory results Revenue 522.6 572.6 (8.7)% Operating profit 41.2 66.8 (38.3%) Profit before taxation 30.4 57.5 (47.1)% Continuing EPS 5.3p 13.2p 7.9p Cash generated from continuing operations 69.3 66.1 4.8% Interim dividend per share 5.4p 5.4p - 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measures can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. Throughout this report these non-GAAP measures are clearly identified by an asterisk (*) where they appear in text and by a footnote where they appear in tables. 2. Movements where the % movement is not meaningful are represented by n/m. Group highlights · Organic constant-currency* revenue decline of 5.8%, in line with expectations and reflecting ongoing end- market weakness · Group adjusted operating profit* margin of 11.1%; benefits from business simplification programme and other cost control measures partly offset the impact of weaker markets, particularly in Semiconductor · Investment in semiconductor capacity scaled back from original plan to align with short term cyclical weakness is now substantially complete, but with flexibility retained to increase capacity further as market demand recovers · Business simplification programme progressing well; on track to deliver previously communicated benefits of £24 million during 2025 and £27 million during 2026 · Net debt*/EBITDA (excl. lease liabilities)* of 1.7 times reflects semiconductor and simplification programme investments; leverage to return to 1.5 times during H2 as free cash flow normalises
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· Full year revenue guidance unchanged; early signs of market stabilisation in the first half but no expectation of market recovery in the second half · Full year adjusted operating profit* now expected to be around the bottom of the consensus range**, impacted by weak market conditions, mix effects and foreign exchange headwinds ** Company compiled consensus range for 2025 adjusted operating profit is £126.3m to £115.6m Damien Caby, Chief Executive Officer, commented: "During the first half of this year, the business has delivered a resilient performance against a backdrop of challenging markets. We remain mindful of the macroeconomic environment, but we continue to believe the business is well placed to navigate through this period of global uncertainty. "We are continuing to execute on the strategy. I am pleased to report that we have now substantially completed our semiconductor capital investment and we continue to make good progress across our business simplification initiatives. These measures will ensure we are well placed to benefit from rapid margin expansion as markets recover. "It is a privilege to be appointed as the CEO of Morgan Advanced Materials. I believe Morgan has an exciting future ahead. With its deep advanced materials expertise and extensive process know how, Morgan has an important role to play in creating solutions to address some of the most critical challenges facing the world today. I am keen to apply our growth minded culture to unlock new opportunities around both revenue and cost, to leverage and selectively expand our capabilities, and to drive excellent performance for our customers. We have a well established and successful practice of simplification, and I can see further potential to optimise our footprint and operating processes." Business Simplification The simplification programme is progressing well and is on track to deliver the full expected benefits of £24 million of annualised savings during 2025 and £27 million during 2026, with an unchanged cash implementation cost of £45 million. The programme represents significant management action to help support the Group whilst markets remain challenging. FY 2023 £m FY 2024 £m FY 2025 £m FY 2026 £m FY 2027 £m Total £m Adjusted operating profit* benefits 1 8 24 27 27 Costs charged to specific adjusting items (7) (13) (20) (5) (45) Outlook We are cautious about demand in a number of our end-markets as the geopolitical and economic environment remains uncertain. Our revenue guidance for the full year remains unchanged, with organic constant currency revenue expected to decline by a mid single-digit percentage level. This assumes that the market stabilisation seen in the first half of this year continues, but with no expectation of recovery in the second half. We now expect profitability to be around the bottom end of the consensus range, impacted by weak market conditions, mix effects and foreign exchange headwinds. Our expectation is for free cash flow to normalise during the second half of the year as investment in semiconductor capacity and our simplification programme are now both nearing completion. This will assist in a return to leverage (net debt*/EBITDA excl. lease liabilities*) of 1.5 times by the end of the year. As we look towards 2026, although we note early signs of stabilisation we remain cautious about end-market demand given the ongoing external uncertainty. We expect to commission the new semiconductor capacity during 2026 and will incur one-off startup costs of approximately £7 million as a result. Our medium term guidance for overall capital expenditure is now around £70 million in 2025, £55 million in 2026 and £60 million in 2027. We remain committed to our medium-term financial framework. Results presentation today There will be an analyst and investor presentation at 09:30 (UK time) today via web-conference. A live audio webcast and slide presentation of this event will be available on www.morganadvancedmaterials.com. We recommend that you register by 09:15 ( UK time). Enquiries Richard Armitage, CFO Morgan Advanced Materials 01753 837 000 Nicholas Frost, Investor Relations Morgan Advanced Materials Nina Coad Brunswick 0207 404 5959 Forward looking statements This announcement contains forward-looking statements. These statements have been made in good faith based on the information available up to the time of the approval of this announcement. No assurance can be given that these expectations will prove to have been correct. By their nature, forward-looking statements involve risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by these forward- looking statements. As such, undue reliance should not be placed on forward-looking statements. The Directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. Notes to editors 1. Financial calendar
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Event Date Trading update Early November 2025 Strategy update Early December 2025 FY 2025 results February 2026 2. Capital expenditure Old 2025 £m Old 2026 £m Old 2027 £m New 2025 £m New 2026 £m New 2027 £m Semiconductor 30 5 - 21 4 - Other capacity 10 10 10 5 6 15 Maintenance 50 50 50 44 45 45 Total 90 65 60 70 55 60 3. Our financial framework As previously announced, our financial framework is: · Organic constant-currency* revenue growth of 4%-7% through the cycle · Adjusted operating profit margin* of 12.5%-15% · Return on invested capital* of 17%-20% · Leverage (net debt*/EBITDA excl. lease liabilities*) of 1.0-1.5 times without M&A, 1.0-2.0 times with M&A Basis of preparation Non-GAAP measures Throughout this report adjusted measures are used to describe the Group's financial performance. These are not recognised under IFRS or other generally accepted accounting principles (GAAP). The Executive Committee and the Board manage and assess the performance of the business on these measures and they are presented as the Directors consider they provide useful information to shareholders, including additional insight into ongoing trading and year-on-year comparisons. These non-GAAP measures should be viewed as complementary to, not replacements for, the comparable GAAP measures. Throughout this report these non-GAAP measures are clearly identified by an asterisk (*) where they appear in text, and by a footnote when they appear in tables. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. All periods presented in these condensed consolidated financial statements are for continuing operations, with separate disclosure of discontinued operations where appropriate. Operating review (Unaudited) Revenue Adjusted operating profit 1 Adjusted operating profit1 margin % H1 2025 H1 2024 H1 2025 H1 2024 H1 2025 H1 2024 £m £m £m £m % % Thermal Products 195.5 221.5 15.7 24.2 8.0% 10.9% Performance Carbon 154.1 178.9 25.1 31.3 16.3% 17.5% Technical Ceramics 173.0 172.2 20.2 18.8 11.7% 10.9% Segment total 1 522.6 572.6 61.0 74.3 Corporate costs (3.0) (3.0) Group adjusted operating profit 1 58.0 71.3 11.1% 12.5% Amortisation of intangible assets (0.5) (1.1) Operating profit before specific adjusting items 57.5 70.2 11.0% 12.3% Specific adjusting items included in operating profit2 (16.3) (3.4) Operating profit 41.2 66.8 7.9% 11.7% Net financing costs (10.8) (9.3) Profit before taxation 30.4 57.5
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1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. 2. Details of specific adjusting items can be found in note 3 to the condensed consolidated financial statements. Thermal Products The Thermal Products segment reported revenue of £195.5 million for the six months ended 30 June 2025, representing a decline of 11.7% compared to the prior period. On an organic constant-currency* basis, year-on-year revenue decreased by 8.0%. Revenue performance was impacted by continued weak market conditions in all key markets, particularly industrial and metals markets in Europe, China and the USA. The business reported operating profit of £12.1 million (H1 2024: £22.7 million), being a 400 bps decrease in reported operating profit margin of 6.2% (H1 2024: 10.2%). Performance reflects challenging market conditions and foreign exchange headwinds, and a £3.4 million investment in business simplification initiatives (H1 2024: £1.0 million). On an adjusted basis, the business delivered adjusted operating profit* of £15.7 million (H1 2024: £24.2 million) and an adjusted operating profit* margin of 8.0% (H1 2024: 10.9%). Performance Carbon The Performance Carbon segment reported revenue of £154.1 million for the six months ended 30 June 2025, representing a decline of 13.9% compared to the prior period. On an organic constant-currency* basis, year-on-year revenue decreased by 11.2%. Revenue performance reflects challenging conditions in Semiconductor markets, with significantly lower demand for our SiC power semiconductor consumables compared to the prior period and challenging market conditions in industrials and metals markets. The sharp decline in semiconductor growth was partially offset by growth in both the petrochemical and security and defence markets. The business reported operating profit of £22.3 million (H1 2024: £30.3 million), being a 240 bps decrease in reported operating profit margin of 14.5% (H1 2024: 16.9%). The decline in operating profit reflects the volume decline in Semiconductor sales and an overall adverse sales mix effect, and benefits from £5.2 million of trading receipts that will not repeat in the second half. The business invested £2.7 million in business simplification initiatives (H1 2024: £0.8 million). On an adjusted basis, the business delivered adjusted operating profit* of £25.1 million (H1 2024: £31.3 million) and an adjusted operating profit* margin of 16.3% (H1 2024: 17.5%). Technical Ceramics The Technical Ceramics segment reported revenue of £173.0 million for the six months ended 30 June 2025, broadly in line with the prior period. On an organic constant-currency* basis, year-on-year revenue increased by 2.6%. Revenue from faster growing segments was negatively impacted by continuing challenging conditions in Semiconductor markets, but performance in core markets remained strong, supported by growth in Aerospace, Security and Defence and Clean Energy markets. The business reported operating profit of £18.9 million (H1 2024: £18.0 million), being a 40 bps increase in reported operating profit margin of 10.9% (H1 2024: 10.5%). The business invested £1.1 million in business simplification initiatives (H1 2024: £0.4 million). On an adjusted basis, the business delivered adjusted operating profit* of £20.2 million (H1 2024: £18.8 million) and an adjusted operating profit* margin of 11.7% (H1 2024: 10.9%). We remain focused on simplifying our organisation and driving operational efficiency We remain focused on further simplifying our business to ensure that our operations are as efficient as possible and to support investment for growth and margin expansion over time. During 2024, we announced the initiation of our multi-year Group wide simplification programme, which reflects operational simplification opportunities and synergies within supply chain and back office functions. In total, these plans are expected to deliver a total annual adjusted operating profit* benefit of £27.0 million by the end of 2026 with a total cash cost to deliver of £45.0 million recognised within specific adjusting items in the consolidated income statement. We have made good progress against these plans during the first half of 2025. We have incurred costs of £10.7 million related to these initiatives in the period, which were presented as specific adjusting items in the consolidated income statement. The adjusted operating profit* benefit delivered from these programmes during the period was £7.6 million, compared to H1 2024, representing a cumulative total of £17 million compared to our 2023 baseline. Tariffs We continue to monitor the situation with regard to potential tariffs. With such a wide range of potential tariffs being considered, and with the details of those unknown, it is not possible to estimate the impact at this stage. We have a global manufacturing footprint and largely we make products where we sell them which will allow some degree of mitigation, and if necessary we will consider alternative manufacturing locations. The direct impact of tariffs during the first half of the year has been immaterial. We expect this to continue into the second half, but we continue to note the potential for an indirect impact on end-market demand. Our environmental commitments During the period, our scope 1 and 2 CO2e emissions have increased by 4%. Our 2030 goal is to reduce our scope 1 and 2 CO2e emissions by 50% (from a 2015 baseline): we are now 53% below our 2015 baseline. As our business grows, continued focus is needed on process efficiencies and technological advancements to maintain this. Financial Review Summary Group financial performance (unaudited) Summary income statement and key metrics £m unless otherwise stated Six months ended 30 June 2025 Six months ended 30 June 2024 % change Revenue 522.6 572.6 (8.7)% Adjusted operating profit1 58.0 71.3 (18.7)% Adjusted operating profit1 margin 11.1% 12.5% (140) bps
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Amortisation of intangible assets (0.5) (1.1) (54.5)% Specific adjusting items 1 (16.3) (3.4) n/m Operating profit 41.2 66.8 (38.3)% Net financing costs (10.8) (9.3) 16.1% Profit before taxation 30.4 57.5 (47.1)% Income tax expense (11.3) (15.4) (26.6)% Profit after taxation from continuing operations 19.1 42.1 (54.6)% Basic EPS from continuing and discontinuing operations 5.3p 13.2p (59.8)% Adjusted EPS 1 10.8p 14.7p (26.5)% Return on invested capital1 16.2% 19.7% (350) bps Summary cash flow and key metrics £m unless otherwise stated Six months ended 30 June 2025 Six months ended 30 June 2024 % change2 Cash generated from continued operations 69.3 66.1 4.8% Free cash flow before acquisitions, disposals and dividends1 1.2 (7.9) n/m Cash and cash equivalents 84.6 116.6 (27.4)% Net debt 1 249.1 222.3 12.1% Net debt1 to EBITDA ratio 1.7x 1.3x n/m Interim dividend per share 5.4p 5.4p - 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. 2. Movements where the % movement is not meaningful are represented by n/m. Revenue The Group recognised revenue of £522.6 million for the period ended 30 June 2025 (H1 2024: £572.6 million ), a decrease of 8.7% compared to the prior period, on a reported basis. As previously communicated, market conditions have continued to be challenging during the first six months of the year. In industrial markets, we have continued to see lower order levels in Europe and China and a slowing of growth in the USA. In our faster growing markets, growth in Semiconductor markets has been heavily impacted by stocking in customer supply chains and slower than anticipated growth in global sales of electric vehicles. Reported revenue was also impacted by foreign exchange headwinds, largely related to the US dollar and sterling exchange rate. Reflecting these dynamics, on an organic constant currency* basis, we saw a decline of 2.5% in our core markets and a 17.2% decline in our faster growing markets which was driven by a 35.1% decline in semiconductor sales. Overall organic constant currency* revenue for the Group declined by 5.8%, which was in line with our expectations for the first half of the year. Adjusted operating profit Adjusted operating profit* of £58.0 million (H1 2024: £71.3 million) was negatively impacted by volume decline and an adverse sales mix, as well as foreign exchange headwinds. We have continued to drive actions to support margins, with efficiency savings contributing a £11.4 million benefit, and a further £7.6 million benefit delivered from our business simplification initiatives, compared to the prior period. Adjusted operating profit* margin of 11.1% decreased by 140 bps versus prior period (H1 2024: 12.5%) and remained below our financial framework guidance. On an organic constant-currency* basis, adjusted operating profit* margin decreased by 90 bps compared to the prior period. Amortisation of intangible assets The Group amortisation charge was £0.5 million (H1 2024: £1.1 million). Specific adjusting items from continuing operations Specific adjusting items were £16.3 million (H1 2024: £3.4 million) and comprised the following: Specific adjusting items from continuing operations 1 (unaudited) Six months ended 30 June 2025 £m Six months ended 30 June 2024 £m Costs associated with the cyber security incident - (1.1) Net restructuring charge (10.7) (2.3) Design, configuration, customisation and implementation of a Global ERP system (5.6) - Total specific adjusting items before income tax (16.3) (3.4) Income tax credit from specific adjusting items 1.5 0.4 Total specific adjusting items after income tax (14.8) (3.0) 1. Details of specific adjusting items arising during the year and the comparative period are set out in note 3 to the condensed consolidated financial statements. In early 2024, the Group incurred expenditure of £1.1m being the residual costs associated with the cyber incident which occurred in January 2023. Expenditure of £10.7 million has been recognised in respect of our business simplification and restructuring programme (H1 2024: £2.3 million). In total, once fully implemented, our simplification initiatives are expected to deliver total annual adjusted operating profit* benefits of approximately £27 million by the end of 2026. Reflecting the timing of delivery for certain aspects of the restructuring programme, we now expect the costs incurred in 2025 to be £20.0 million, with the residual £5.0 million expense recognised in 2026. There is no change to the overall expenditure or expected benefits of the programme as a result of this phasing.
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Restructuring costs and savings 2023 £m 2024 £m 2025 £m 2026 £m 2027 £m Total £m Adjusted operating profit1 benefit (incremental) 1 8 24 27 27 Costs charged to specific adjusting items (7) (13) (20) (5) (45) 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. The Group has accelerated investment in the development of a Global ERP system which is intended to replace over 30 different legacy systems across the Morgan network and which will further strengthen information security and the wider control environment. Expenditure of £5.6 million (H1 2024: £nil) associated with the design, customisation, configuration and implementation of the system is presented as specific adjusting items in the income statement in 2025, in accordance with the Group's accounting policies. Reported operating profit Reported operating profit was £41.2 million (H1 2024: £66.8 million). Net financing costs Net financing costs of £10.8 million (H1 2024: £9.3 million) comprise net bank interest and similar charges of £9.3 million (H1 2024: £7.4 million), net interest on IAS 19 pension obligations of £0.1 million (H1 2024: £0.2 million), and the interest expense on lease liabilities of £1.4 million (H1 2024: £1.3 million). We expect net financing costs in the range of £18 - £20 million for the full year. Taxation The Group tax charge from continuing operations, excluding specific adjusting items, was £12.8 million (H1 2024: £15.8 million), being an effective tax rate, excluding specific adjusting items, of 27.4% (H1 2024: 26.0%). Note 5 to the condensed consolidated financial statements provides additional information on the Group's tax charge. We expect our effective tax rate, excluding specific adjusting items, to be within the 26-28% range for the full year. On a statutory basis, the Group tax charge was £11.3 million (H1 2024: £15.4 million), lower than the previous year reflecting lower taxable profits. Tax risks The Group follows a tax policy to fulfil local and international tax requirements, maintaining accurate and timely tax compliance whilst seeking to maximise long-term shareholder value. The Group adopts an open and transparent approach to relationships with tax authorities and continues to monitor and adopt new reporting requirements, for example those arising from the implementation of the OECD Base Erosion and Profit Shifting proposals within tax legislation across various jurisdictions. The tax strategy is aligned to the Group's business strategy and ensures that tax affairs have strong commercial substance. Earnings per share Basic earnings per share from continuing operations was 5.3 pence (H1 2024: 13.2 pence) and adjusted earnings per share* was 10.8 pence (H1 2024: 14.7 pence). Details of these calculations can be found in note 7 to the condensed consolidated financial statements. Foreign currency impact For illustrative purposes, the table below provides details of the impact on Group revenue and adjusted operating profit* for the six month period ended 30 June 2025 if the actual reported results, calculated using the actual average exchange rates applicable for the period, were restated for GBP weakening by 10 cents against the US dollar in isolation and 10 cents against the Euro in isolation: Increase in H1 2025 revenue/adjusted operating profit 1 if: Revenue £m Adjusted operating profit1 £m GBP weakens by 10c against the US dollar in isolation 20.5 2.3 GBP weakens by 10c against the Euro in isolation 9.6 1.5 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. The principal exchange rates used in the translation of the results of overseas subsidiaries were as follows: H1 2025 H1 2024 GBP to: Closing rate Average rate Closing rate Average rate US dollar 1.37 1.30 1.26 1.27 Euro 1.16 1.19 1.18 1.17 Cash flow (Unaudited) Six months ended 30 June 2025 £m Six months ended 30 June 2024 £m Cash generated from continuing operations 69.3 66.1 Net capital expenditure (40.5) (44.6) Net interest on cash and borrowings (9.0) (7.3) Tax paid (12.5) (16.0) Lease payments and interest (6.1) (6.1) Free cash flow before acquisitions, disposals and dividends 1 1.2 (7.9) Dividends paid to external plc shareholders (19.1) (19.1) Net cash flows from other investing and financing activities (12.2) (8.7)
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Net cash flows from discontinued operations 0.3 - Exchange movement and other non-cash movements 6.9 (1.4) Movement in net debt1 (22.9) (37.1) Opening net debt1 (226.2) (185.2) Closing net debt1 (249.1) (222.3) Lease liabilities (47.4) (48.2) Closing net debt1 and lease liabilities (296.5) (270.5) 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. The Group generated cash from continuing operations of £69.3 million (H1 2024: £66.1 million) which was £3.2 million higher than the prior period. Free cash flow before acquisitions, disposals and dividends* was £1.2 million inflow (H1 2024: £7.9 million outflow). The Group incurred net capital expenditure of £40.5 million (H1 2024: £44.6 million), reflecting strategic investments in semiconductor capacity and capability, investments in efficiency and continued investment in health, safety and environmental improvement programmes. The Group invested £15.0 million in semiconductor capacity in the period and the overall investment is now materially complete. We have retained flexibility to further extend semiconductor capacity, as needed, when market demand recovers. For the purposes of compliance with external debt covenants, net debt* is calculated excluding IFRS 16 lease liabilities. On this basis, net debt was £249.1 million (H1 2024: £222.3 million), representing a net debt* to EBITDA* ratio of 1.7 times (H1 2024: 1.3 times). We expect leverage to return to framework levels in the second half of the year, as free cash flow conversion begins to normalise. Commitments for property, plant and equipment and computer software for which no provision has been made are set out in note 8 to the condensed consolidated financial statements. Liquidity The Group had net cash and cash equivalents* of £84.4 million (H1 2024: £115.0 million) and undrawn headroom on its available credit facilities of £364.8 million (H1 2024: £274.1 million). Capital structure At the period end, total equity was £352.2 million (H1 2024: £412.3 million) with closing net debt including IFRS 16 lease liabilities of £296.5 million (H1 2024: £270.5 million). Non-current assets were £585.4 million (H1 2024: £563.7 million) and total assets were £1,020.4 million (H1 2024: £1,072.3 million). Interim dividend The Board has resolved to pay an interim dividend of 5.4 pence (H1 2024: 5.4 pence) per Ordinary share. The interim dividend will be paid on 17 November 2025 to Ordinary shareholders on the register of members at the close of trading on 24 October 2025. The ex-dividend date will be 23 October 2025. Share buyback In November 2024, the Group announced a share buyback programme of up to £40.0 million excluding expenses, to be executed in tranches of £10.0 million. As at 31 December 2024, the Group had purchased 1,825,090 shares as part of the first £10.0 million tranche, for a total consideration of £4.7 million. A further 2,080,327 shares were purchased in early 2025, for a total consideration of £5.3 million, which completed the first tranche of the buyback programme. A second tranche of £10.0 million was announced in February 2025 and as at the balance sheet date, a total of 1,756,918 shares had been purchased under this agreement, for a total consideration of £3.5 million. In total, during the period, the Company purchased 3,837,245 Ordinary Shares purchased for a total consideration of £8.8 million. Under the terms of the agreement with Investec Bank plc ('Investec'), Investec act as riskless principal purchasing shares on behalf of Morgan Advanced Materials plc. As such, a liability of £6.5 million has been recognised on the balance sheet, being the value of shares contracted but not yet purchased, in accordance with 'IAS 32 - Financial Instruments: Presentation', with a corresponding adjustment to equity. As at 30 June 2025, the Company has purchased and cancelled a total of 5,548,129 shares totalling £13.3 million under tranche 1 and 2 of the buyback programme. Post balance sheet events There were no reportable post balance sheet events following the balance sheet date. Principal risks and uncertainties The Group has an established risk management methodology, which seeks to identify, prioritise and mitigate risks, underpinned by a 'three lines of defence' model comprising an internal control framework, internal monitoring and independent assurance processes. The Board considers that risk management and internal control are fundamental to achieving the Group aim of creating long-term sustainable shareholder value. The current principal risks, representing those risks that the Board feels could have the most significant impact on achieving the Group's strategy of building a sustainable business for the long-term and delivering strong returns to the Group's shareholders, are set out in the 2024 Annual Report and Accounts, which are available on the Group's website at www.morganadvancedmaterials.com (pages 43 to 47). The Directors do not consider that the principal risks and uncertainties have changed since the publication of the Annual Report and Accounts. The Group's principal risks and uncertainties are: · External environment · Business change and development · Business continuity · Environment, health and safety (EHS)
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· IT infrastructure and security · Legal and regulatory · Contract management · Key finance processes The external environment remains dynamic, driven by geopolitical tensions, economic instability, regulatory uncertainty, climate challenges, and rapid changes in both AI and cybersecurity. Failure to adapt to these ongoing challenges could result in disruption to operations and ultimately negatively impact the Group's ability to achieve its strategic goals. The Group continuously assesses these external risks, evaluating their potential impact on capital investment outcomes and the overall competitive landscape. The Group continuously monitors its principal risks and applies appropriate mitigation strategies to ensure they remain within the risk parameters established by the Board of Directors. Going concern The Directors have conducted a review of the Group's business activities, financial position and main trends and factors likely to affect its future development, performance and financial position. Having considered the base forecasts, along with potential scenarios and principal risks, the Directors have a reasonable expectation, at the time of approving the financial statements, that the Company and the Group have adequate resources to continue in operational existence for a period of at least 18 months from the date of signing this half-yearly report. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated financial statements for the six months ended 30 June 2025. Further information is provided in note 1 to the Condensed Interim Financial Statements under the heading 'Going concern'. Directors' Responsibility Statement The Directors confirm that to the best of their knowledge: · The condensed consolidated financial statements have been prepared in accordance with UK-adopted IAS 34 Interim Financial Reporting; · The interim management report for the six month period ended 30 June 2025 includes a fair review of the information required by DTR 4.2.7R (indication of important events and their impact during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year); and; · The interim management report for the six month period ended 30 June 2025 includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). Information about the current Directors of Morgan Advanced Materials plc responsible for providing this Statement is maintained on the Company's website at www.morganadvancedmaterials.com By order of the Board Damien Caby Chief Executive Officer Richard Armitage Chief Financial Officer 6 August 2025 Condensed consolidated income statement Unaudited six months ended 30 June 2025 Unaudited six months ended 30 June 2024 Results before specific adjusting items Specific adjusting items 1 Total Results before specific adjusting items Specific adjusting items 1 Total Note £m £m £m £m £m £m Revenue 2 522.6 - 522.6 572.6 - 572.6 Operating costs before amortisation of intangible assets (464.6) (16.3) (480.9) (501.3) (3.4) (504.7) Profit from operations before amortisation of intangible assets 2 58.0 (16.3) 41.7 71.3 (3.4) 67.9 Amortisation of intangible assets (0.5) - (0.5) (1.1) - (1.1)
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Operating profit 2 57.5 (16.3) 41.2 70.2 (3.4) 66.8 Finance income 1.7 - 1.7 1.3 - 1.3 Finance expense (12.5) - (12.5) (10.6) - (10.6) Net financing costs 4 (10.8) - (10.8) (9.3) - (9.3) Profit before taxation 46.7 (16.3) 30.4 60.9 (3.4) 57.5 Income tax expense 5 (12.8) 1.5 (11.3) (15.8) 0.4 (15.4) Profit from continuing operations 33.9 (14.8) 19.1 45.1 (3.0) 42.1 Profit from discontinued operations 6 - - - - - - Profit for the period 33.9 (14.8) 19.1 45.1 (3.0) 42.1 Profit for the period attributable to: Shareholders of the Company 29.8 (14.8) 15.0 40.4 (3.0) 37.4 Non-controlling interests 4.1 - 4.1 4.7 - 4.7 Profit for the period 33.9 (14.8) 19.1 45.1 (3.0) 42.1 Earnings per share 7 Continuing and discontinued operations Basic earnings per share 5.3p 13.2p Diluted earnings per share 5.3p 13.0p Continuing operations Basic earnings per share 5.3p 13.2p Diluted earnings per share 5.3p 13.0p Dividends2 Proposed interim dividend - pence 5.4p 5.4p - £m 15.1 15.4 1. Details of specific adjusting items are given in note 3 to the condensed consolidated financial statements. 2. The proposed interim and approved final dividends are based upon the number of shares outstanding at the balance sheet date. Condensed consolidated statement of comprehensive income Unaudited six months ended 30 June 2025 Unaudited six months ended 30 June 2024 £m £m Profit for the period 19.1 42.1 Items that will not be reclassified subsequently to income statement: Remeasurement gain on defined benefit plans 0.3 6.2 Tax effect of components of other comprehensive income not reclassified (0.3) (0.8) - 5.4 Items that may be reclassified subsequently to income statement: Foreign exchange translation differences (32.8) (6.7) Cash flow hedges: Change in fair value 1.2 (0.8) Transferred to income statement 0.4 (0.5) Net investment hedges: Change in fair value 7.2 1.1 (24.0) (6.9) Total other comprehensive expense (24.0) (1.5) Total comprehensive (expense)/income (4.9) 40.6 Attributable to: Shareholders of the Company (6.3) 36.8 Non-controlling interests 1.4 3.8 (4.9) 40.6
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Total comprehensive (expense)/income attributable to shareholders of the Company arising from: Continuing operations (6.3) 36.8 Discontinued operations - - (6.3) 36.8 Condensed consolidated balance sheet Unaudited six months ended 30 June 2025 Unaudited six months ended 30 June 20241 Audited year ended 31 December 2024 Note £m £m £m Assets Property, plant and equipment 8 342.7 311.6 344.9 Right-of-use assets 34.3 33.0 32.5 Intangible assets: goodwill 9 170.6 177.2 176.9 Intangible assets: other 9 3.2 3.8 3.0 Investments 0.5 1.0 2.0 Trade and other receivables 2.9 2.0 3.6 Employee benefits: pensions 12 12.0 17.9 13.0 Deferred tax assets 19.2 17.2 21.4 Total non-current assets 585.4 563.7 597.3 Inventories 158.9 182.2 165.9 Derivative financial assets 11 3.3 0.3 1.2 Trade and other receivables 186.0 208.2 189.6 Current tax receivable 2.2 1.3 2.3 Cash and cash equivalents 10 84.6 116.6 120.8 Total current assets 435.0 508.6 479.8 Total assets 1,020.4 1,072.3 1,077.1 Liabilities Borrowings 10 333.5 337.3 337.7 Lease liabilities 36.2 39.3 36.1 Employee benefits: pensions 12 34.0 35.9 34.5 Provisions 13 10.5 10.5 10.9 Non-trade payables 2.5 2.4 2.8 Deferred tax liabilities 1.8 2.4 2.7 Total non-current liabilities 418.5 427.8 424.7 Borrowings and bank overdrafts 10 0.2 1.6 9.3 Lease liabilities 11.2 8.9 11.0 Trade and other payables 203.8 187.2 204.1 Current tax payable 25.1 24.7 26.6 Provisions 13 7.9 9.0 9.5 Derivative financial liabilities 11 1.5 0.8 2.6 Total current liabilities 249.7 232.2 263.1 Total liabilities 668.2 660.0 687.8 Total net assets 352.2 412.3 389.3 Equity Share capital 69.9 71.3 70.9 Share premium 111.7 111.7 111.7 Reserves (29.7) 0.5 (8.2) Retained earnings 164.8 191.2 179.3 Total equity attributable to shareholders of the Company 316.7 374.7 353.7 Non-controlling interests 35.5 37.6 35.6 Total equity 352.2 412.3 389.3 1. In the published results for the period ended 30 June 2024, the pension assets were presented net within pension liabilities. The figures for the period ended 30 June 2024 above have been re-presented to show the pension assets within non-current assets and a corresponding increase to the pension liabilities. There is no impact to net profit, net assets or cash flows. Condensed consolidated statement of changes in equity Fair Capital Total Non-
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Share capital Share premium Translation reserve Hedging reserve value reserve redemption reserve Other reserves Retained earnings parent equity controlling interests Total equity £m £m £m £m £m £m £m £m £m £m £m At 1 January 2024 71.3 111.7 (29.9) 1.1 (1.0) 35.7 0.6 170.8 360.3 38.3 398.6 Profit for the period - - - - - - - 37.4 37.4 4.7 42.1 Other comprehensive income/(expense): Remeasurement gain on defined benefit plans and related taxes - - - - - - - 5.4 5.4 - 5.4 Foreign exchange differences - - (5.8) - - - - - (5.8) (0.9) (6.7) Cash flow hedging fair value changes and transfers - - - (1.3) - - - - (1.3) - (1.3) Net investment hedging fair value changes and transfers - - 1.1 - - - - - 1.1 - 1.1 Total comprehensive income/(expense) - - (4.7) (1.3) - - - 42.8 36.8 3.8 40.6 Transactions with owners: Dividends - - - - - - - (19.1) (19.1) (2.3) (21.4) Purchase of non-controlling interest - - - - - - - (2.7) (2.7) (2.2) (4.9) Equity-settled share-based payments - - - - - - - 2.7 2.7 - 2.7 Own shares acquired for share incentive schemes (net) - - - - - - - (3.3) (3.3) - (3.3) Unaudited at 30 June 2024 71.3 111.7 (34.6) (0.2) (1.0) 35.7 0.6 191.2 374.7 37.6 412.3 At 1 January 2024 71.3 111.7 (29.9) 1.1 (1.0) 35.7 0.6 170.8 360.3 38.3 398.6 Profit for the year - - - - - - - 50.3 50.3 8.5 58.8 Other comprehensive income/(expense): Remeasurement gain on defined benefit plans and related taxes - - - - - - - 0.7 0.7 - 0.7 Foreign exchange differences - - (10.0) - - - - - (10.0) (1.0) (11.0) Cash flow hedging fair value changes and transfers - - - (1.3) - - - - (1.3) - (1.3) Net investment hedging fair value changes and transfers - - 1.7 - - - - - 1.7 - 1.7 Total comprehensive income/(expense) - - (8.3) (1.3) - - - 51.0 41.4 7.5 48.9 Transactions with owners: Dividends - - - - - - - (34.5) (34.5) (8.1) (42.6) Equity-settled share-based payments - - - - - - - 2.8 2.8 - 2.8 Own shares acquired for share incentive schemes (net) - - - - - - - (3.3) (3.3) - (3.3) Purchase of own shares for share buyback programme - - - - - - (10.0) - (10.0) - (10.0) Cancellation of own shares under share buyback programme (0.4) - - - - 0.4 4.5 (4.5) - - - Purchase of non-controlling interest - - - - - - - (3.0) (3.0) (2.1) (5.1) Audited at 31 December 2024 70.9 111.7 (38.2) (0.2) (1.0) 36.1 (4.9) 179.3 353.7 35.6 389.3 At 1 January 2025 70.9 111.7 (38.2) (0.2) (1.0) 36.1 (4.9) 179.3 353.7 35.6 389.3 Profit for the period - - - - - - - 15.0 15.0 4.1 19.1 Other comprehensive income/(expense): Remeasurement gain on defined benefit plans and related taxes - - - - - - - - - - - Foreign exchange differences - - (30.1) - - - - - (30.1) (2.7) (32.8) Cash flow hedging fair value changes and transfers - - - 1.6 - - - - 1.6 - 1.6 Net investment hedging fair value changes - - 7.2 - - - - - 7.2 - 7.2 Total comprehensive income/(expense) - - (22.9) 1.6 - - - 15.0 (6.3) 1.4 (4.9) Transactions with owners: Dividends - - - - - - - (19.1) (19.1) (1.5) (20.6) Equity-settled share-based payments - - - - - - - 1.4 1.4 - 1.4 Own shares acquired for share incentive schemes (net) - - - - - - - (3.0) (3.0) - (3.0) Purchase of own shares for share buyback programme - - - - - - (10.0) - (10.0) - (10.0) Cancellation of own shares under share buyback programme (1.0) - - - - 1.0 8.8 (8.8) - - - Unaudited at 30 June 2025 69.9 111.7 (61.1) 1.4 (1.0) 37.1 (6.1) 164.8 316.7 35.5 352.2 Condensed consolidated statement of cash flows Unaudited six months ended 30 June 2025 Unaudited six months ended 30 June 2024 Notes £m £m Operating activities Profit for the period from continuing operations 19.1 42.1 Profit for the period from discontinued operations 6 - - Adjustments for: Depreciation - property, plant and equipment 2,8 16.6 17.0 Depreciation - right-of-use assets 2 4.3 4.3
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Amortisation 2,9 0.5 1.1 Net financing costs 4 10.8 9.3 Non-cash specific adjusting items in operating profit 1.3 (0.2) Fair value loss/(gain) on equity instruments held at FVTPL 0.3 (1.0) Loss/(profit) on sale of property, plant and equipment 0.5 (0.1) Income tax expense 5 11.3 15.4 Equity-settled share-based payment expenses 1.4 2.7 Cash generated from operations before changes in working capital and provisions 66.1 90.6 Increase in trade and other receivables (8.6) (15.0) Increase in inventories (1.2) (9.1) Increase in trade and other payables 14.5 2.1 Decrease in provisions (1.4) (2.0) Payments to defined benefit pension plans (net of IAS 19 pension charges) 0.2 (0.5) Cash generated from operations 69.6 66.1 Interest paid - borrowings and overdrafts (10.6) (8.6) Interest paid - lease liabilities (1.4) (1.3) Income tax paid (12.5) (16.0) Net cash from operating activities 45.1 40.2 Investing activities Purchase of property, plant and equipment and software (40.9) (45.9) Purchase of investments (0.4) - Proceeds from sale of property, plant and equipment 0.4 0.7 Grants received for purchase of equipment - 0.6 Interest received 1.6 1.3 Disposal of investments 1.5 1.8 Net cash from investing activities (37.8) (41.5) Financing activities Purchase of own shares for share incentive schemes (3.0) (3.7) Net proceeds from exercise of share options - 0.4 Purchase of own shares for share buyback programme (8.8) - Purchase of non-controlling interest - (4.9) Increase in borrowings 38.9 44.2 Reduction and repayment of borrowings (37.3) (14.7) Payment of lease liabilities (4.7) (4.8) Dividends paid to shareholders of the Company (19.1) (19.1) Dividends paid to non-controlling interests (1.5) (2.3) Net cash from financing activities (35.5) (4.9) Net decrease in net cash and cash equivalents and overdrafts (28.2) (6.2) Net cash and cash equivalents at start of period 111.5 123.9 Effect of exchange rate fluctuations on cash held 1.1 (2.7) Net cash and cash equivalents at period end 10 84.4 115.0
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Notes to the condensed consolidated financial statements Note 1. Basis of preparation, accounting policies and judgment and estimates Morgan Advanced Materials plc (the 'Company') is a company incorporated in the UK under the Companies Act 2006. The unaudited condensed consolidated financial statements of the Company for the six months ended 30 June 2025 comprise the Company and the Group's subsidiaries (together 'the Group'). The condensed consolidated financial statements for the six months ended 30 June 2025 have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and International Financial Reporting Standards ('IFRSs') as adopted by the UK. There has been no change to the recognition, measurement or disclosure from preparation in previous periods under IFRSs as adopted by the UK. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements for the year ended 31 December 2024. The condensed consolidated financial statements and the comparative information for the six months ended 30 June 2025 have neither been audited nor reviewed, do not comprise statutory accounts for the purpose of section 434 of Companies Act 2006 and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2024. Those accounts have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying his report, and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The condensed consolidated financial statements have been prepared on a going concern basis, see the 'Going concern' section below for further details. All periods presented in these condensed consolidated financial statements are for continuing operations, with separate disclosure of discontinued operations where applicable. The consolidated financial statements of the Group for the year ended 31 December 2024 are available on request from the Company's registered office at York House, Sheet Street, Windsor, SL4 1DD or at morganadvancedmaterials.com. The condensed consolidated financial statements for the six months ended 30 June 2025 were approved by the Board on 6 August 2025. Accounting policies As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, these condensed consolidated financial statements have been prepared by applying the accounting policies that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2024, except for newly effective standards listed below. Use of judgements and estimates Preparing the condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The Group's critical accounting judgments and key sources of estimation uncertainty remain unchanged from those set out in the Group's consolidated financial statements for the year ended 31 December 2024. Newly adopted standards In the current period, the Group has applied the following amendments to IFRS Accounting Standards as adopted by the UK that are mandatorily effective for an accounting period that begins on or after 1 January 2025. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. · Lack of exchangeability (Amendments to IAS 21); Accounting developments and changes New accounting standards in issue but not yet effective New standards and interpretations that are in issue but not yet effective are listed below. · IFRS S1 'General requirements for Disclosure of Sustainability-related Financial Information'. · IFRS S2 'Climate-related Disclosures'. · Amendment to IFRS 9 and IFRS 7 'Classification and Measurement of Financial Instruments'. · IFRS 18: Presentation and Disclosure in Financial Statements.
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IFRS 18 is effective for periods beginning on or after 1 January 2027 and replaces IAS 1 Presentation of Financial Statements. The standard requires the classification of income and expenditure in the income statement to be split between operating, investing and financing, introduces disclosures around management defined performance measures (MPMs) and aggregation and disaggregation of other disclosure information. The impact of the standard on the Group is currently being assessed and it is not yet practicable to quantify the effect of IFRS 18 on these consolidated financial statements. Non-GAAP measures Where non-GAAP measures have been referenced, these have been identified by an asterisk (*) where they appear in text and by a footnote where they appear in a table. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. Going concern The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the 2024 Annual Report and Accounts on pages 2 to 56. The financial position of the Group, its cash flows, liquidity position and borrowing facilities, are set out in the Financial Review included within this announcement. In addition, note 11 to the condensed consolidated financial statements for the six months ended 30 June 2025 provides details of the Group's policies and processes for managing financial risk, details of its financial instruments and hedging activities and details of its exposures to credit risk and liquidity risk. The Group meets its day-to-day working capital requirements through local banking arrangements underpinned by the Group's £230.0 million unsecured multi-currency revolving credit facility, which matures in November 2029. As at 30 June 2025 the Group had both significant available liquidity and headroom on its covenants. Total committed borrowing facilities were £614.5 million. The amount drawn under these facilities was £334.1 million, which together with net cash and cash equivalents of £84.4 million, gave total headroom of £364.8 million. The multi-currency revolving credit facility was £14.0 million drawn. The principal borrowing facilities are subject to covenants that are measured semi-annually in June and December, being net debt to EBITDA of a maximum of 3 times and interest cover of a minimum of 4 times, based on measures defined in the facilities agreements which are adjusted from the equivalent IFRS amounts. The Group has carefully modelled its cash flow outlook, taking account of reasonably possible changes in trading performance, exchange rates, debt totalling approximately £111.0m which is due to mature over the 18-month review period and plausible downside scenarios. This review indicated that there was sufficient headroom and liquidity for the business to continue for at least the 18-month period based on the facilities available. The Group was also expected to be in compliance with the required covenants discussed above. The Board has also reviewed the Group's reverse stress testing performed to demonstrate available headroom on covenant levels in respect of changes in net debt, EBITDA, and underlying revenue. Based on this assessment, a combined reduction in EBITDA of 30% and an increase in net debt of 30% would still allow the Group to operate within its financial covenants. The Directors do not consider either of these scenarios to be plausible given the diversity of the Group's end markets and its broad manufacturing base. The Board and Executive Committee have regular reporting and review processes in place in order to closely monitor the ongoing operational and financial performance of the Group. As part of the ongoing risk management process, principal and emerging risks are identified and reviewed on a regular basis. In addition, the Directors have assessed the risk of climate change and do not consider that it will impact the Group's ability to operate as a going concern for the period under consideration. After making enquiries, and in the absence of any material uncertainties, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for a period of at least 18 months from the date of signing this half-yearly report. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated financial statements for the six months ended 30 June 2025. Note 2. Segmental reporting The Group is managed through three distinct segments, as detailed below. These have been identified on the basis of internal management reporting information that is regularly reviewed by the Group's Board of Directors (the Chief Operating Decision Maker) in order to allocate resources and assess performance. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly investments and related income, borrowings and related expenses, corporate assets and head office expenses, and income tax assets and liabilities. The information presented below represents the operating segments of the Group. Unaudited six months ended 30 June 2025 Thermal Products Performance Carbon Technical Ceramics Segment totals Corporate costs Group Continuing operations £m £m £m £m £m £m Revenue from external customers 195.5 154.1 173.0 522.6 - 522.6 Adjusted operating profit 1 15.7 25.1 20.2 61.0 (3.0) 58.0 Amortisation of intangible assets (0.2) (0.1) (0.2) (0.5) - (0.5) Operating profit before specific adjusting items 15.5 25.0 20.0 60.5 (3.0) 57.5 Specific adjusting items 2 (3.4) (2.7) (1.1) (7.2) (9.1) (16.3) Operating profit 12.1 22.3 18.9 53.3 (12.1) 41.2 Finance income 1.7 Finance expense (12.5) Profit before taxation 30.4 Segment assets 353.6 322.5 216.3 892.4 128.0 1,020.4 Segment liabilities 94.5 54.9 90.4 239.8 428.4 668.2
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Segment capital expenditure 10.1 22.0 8.8 40.9 - 40.9 Segment depreciation: property, plant and equipment 6.7 5.5 4.4 16.6 - 16.6 Segment depreciation: right-of-use assets 1.8 0.9 1.6 4.3 - 4.3 Segment impairment of non-financial assets - - - - - - 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section on pages at the end of this announcement. 2. Details of specific adjusting items are given in note 3 to the condensed consolidated financial statements. Unaudited six months ended 30 June 2024 3 Thermal Products Performance Carbon Technical Ceramics Segment totals Corporate costs Group Continuing operations £m £m £m £m £m £m Revenue from external customers 221.5 178.9 172.2 572.6 - 572.6 Adjusted operating profit 1 24.2 31.3 18.8 74.3 (3.0) 71.3 Amortisation of intangible assets (0.5) (0.2) (0.4) (1.1) - (1.1) Operating profit before specific adjusting items 23.7 31.1 18.4 73.2 (3.0) 70.2 Specific adjusting items 2 (1.0) (0.8) (0.4) (2.2) (1.2) (3.4) Operating profit 22.7 30.3 18.0 71.0 (4.2) 66.8 Finance income 1.3 Finance expense (10.6) Profit before taxation 57.5 Segment assets 377.0 307.9 230.4 915.3 157.0 1,072.3 Segment liabilities 100.8 51.9 82.5 235.2 424.8 660.0 Segment capital expenditure 8.0 25.8 11.5 45.3 0.6 45.9 Segment depreciation: property, plant and equipment 7.3 5.6 4.1 17.0 - 17.0 Segment depreciation: right-of-use assets 1.9 0.8 1.6 4.3 - 4.3 Segment impairment of non-financial assets - - - - - - 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. 2. Details of specific adjusting items are given in note 3 to the condensed consolidated financial statements. 3. In the prior year published segment reporting for the period ended 30 June 2024, the pension assets were presented net within segment liabilities. The figures above have been re-presented to show the pension assets within segment assets with a corresponding increase to segment liabilities. Audited year ended 31 December 2024 Thermal Products Performance Carbon Technical Ceramics Segment totals Corporate costs Group Continuing operations £m £m £m £m £m £m Revenue from external customers 418.2 345.2 337.3 1,100.7 - 1,100.7 Adjusted operating profit 1 40.0 55.1 39.2 134.3 (5.9) 128.4 Amortisation of intangible assets (0.8) (0.3) (0.6) (1.7) - (1.7) Operating profit before specific adjusting items 39.2 54.8 38.6 132.6 (5.9) 126.7 Specific adjusting items 2 (8.1) (7.6) (0.7) (16.4) (6.7) (23.1) Operating profit 31.1 47.2 37.9 116.2 (12.6) 103.6 Finance income 2.6 Finance expense (21.6) Profit before taxation 84.6 Segment assets 373.4 316.3 222.7 912.4 164.7 1,077.1 Segment liabilities 103.9 54.0 85.0 242.9 444.9 687.8 Segment capital expenditure 22.8 52.3 21.0 96.1 - 96.1 Segment depreciation: property, plant and equipment 14.6 10.9 8.6 34.1 - 34.1 Segment depreciation: right-of-use assets 3.8 1.5 3.3 8.6 - 8.6 Segment net impairment of non-financial assets 4.2 - - 4.2 - 4.2 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. 2. Details of specific adjusting items are given in note 3 to the condensed consolidated financial statements. Revenue from external customers by geography
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Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m USA 218.4 233.6 451.8 China 43.2 53.1 97.7 Germany 37.5 43.4 83.2 UK 22.1 21.6 44.2 Other Asia, Australasia, Middle East and Africa 90.0 98.4 192.9 Other Europe 84.1 87.6 165.6 Other North America 16.9 19.4 37.1 South America 10.4 15.5 28.2 522.6 572.6 1,100.7 Revenue from external customers is based on geographic location of the end-customer. No customer represents more than 5% of revenue. Revenue from external customers by end-market Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m Semiconductors 35.7 56.8 105.7 Healthcare 37.7 41.8 84.1 Clean energy and clean transportation 29.9 29.6 57.6 Faster growing markets 103.3 128.2 247.4 Industrial 144.5 156.6 294.2 Conventional transportation 101.7 106.3 202.8 Metals 64.7 73.1 140.0 Petrochemical and chemical 52.0 51.8 106.0 Security and defence 40.1 37.0 73.9 Conventional energy 16.3 19.6 36.4 Core markets 419.3 444.4 853.3 522.6 572.6 1,100.7 Intercompany sales to other segments Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m Thermal Products 0.7 0.9 1.7 Performance Carbon 0.2 0.3 0.5 Technical Ceramics 0.2 0.4 0.5 1.1 1.6 2.7 Note 3. Specific adjusting items
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Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m Costs associated with the cyber security incident - (1.1) (1.1) Net restructuring charge (10.7) (2.3) (13.1) Design, configuration, customisation and implementation of a Global ERP system (5.6) - (5.2) Credit in relation to the impact of Argentina's currency devaluation - - 0.5 Impairment of non-financial assets - - (4.2) Total specific adjusting items before income tax (16.3) (3.4) (23.1) Income tax credit from specific adjusting items 1.5 0.4 2.5 Total specific adjusting items after income tax (14.8) (3.0) (20.6) Cyber incident recovery costs and charges The Group incurred a residual £1.1 million of exceptional costs and charges in relation to the cyber security incident which took place in January 2023. Net restructuring charge During the year the business continued its previously announced simplification and restructuring programme to achieve cost reductions and efficiencies. A total charge of £10.7 million was recognised in relation to these programmes. Design, configuration, customisation and implementation of a Global ERP system The Group is developing a Global ERP intended to replace over 30 legacy systems across the Group. The programme is expected to complete over the next three years and will create further opportunities to align business processes, strengthen information security and the control environment. The costs of £5.6 million associated with the design, configuration and implementation of the system are classified as specific adjusting items due to their nature and size. Note 4. Finance income and expense Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m Interest on bank balances and cash deposits 1.7 1.3 2.6 Finance income 1.7 1.3 2.6 Interest expense on borrowings and overdrafts (11.0) (8.7) (18.4) Interest expense on lease liabilities (1.4) (1.3) (2.6) Net interest on IAS 19 defined benefit pension obligations (0.1) (0.2) (0.6) Net loss on sale of bonds - (0.4) - Finance expense (12.5) (10.6) (21.6) Net financing costs (10.8) (9.3) (19.0) Note 5. Taxation Continuing operations Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 2024 £m Audited year ended 31 December 2024 £m Income tax charge on profit before specific adjusting items (12.8) (15.8) (28.4) Income tax credit from specific adjusting items 1.5 0.4 2.5 Total income tax expense (11.3) (15.4) (25.9)
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The Group's consolidated effective tax rate, excluding specific adjusting items, was 27.4% for the six months ended 30 June 2025 (30 June 2024: 26.0%; 31 December 2024: 26.4%) and is based on the Directors' best estimate of the effective tax rate for the year. The Group operates in many jurisdictions around the world and is subject to factors that may impact future tax charges including the implementation of the OECD's BEPS actions, tax rate and legislation changes, expiry of the statute of limitations and resolution of tax audits and disputes. In accordance with the Organisation for Economic Co-operation and Development (OECD) G20 Inclusive Framework on Base Erosion and Profit Sharing (BEPS), the UK has enacted the legislation to comply with Pillar Two rules. The legislation implements a domestic top-up tax and a multinational top-up-tax which is effective for the Group, for the financial years starting from 1 January 2024. The Group is in scope of the enacted legislation and has performed an assessment of the potential exposure to Pillar Two income. The assessment indicates that the transitional safe harbour rules apply to most jurisdictions in which the Group operates, with the exception of France, Singapore and the United Arab Emirates. The Group estimates a current tax expense related to Pillar Two taxes of £0.1 million for the six months ended 30 June 2025. Note 6. Discontinued operations In 2018, the Group disposed of its Composites and Defence Systems business and the results of the disposal group were classified as discontinued operations. In the year ended 31 December 2024, the Group recognised £0.1m of revenue with no associated costs for discontinued operations. There was no income or expense related to discontinued operations for the six months ended 30 June 2025 and six months ended 30 June 2024. During the six months ended 30 June 2025, the Group received net cash inflows from discontinued operating activities of £0.3 million (H1 2024: £nil, FY 2024: £0.1 million). Note 7. Earnings per share Unaudited six months ended 30 June 2025 Unaudited six months ended 30 June 2024 Audited year ended 31 December 2024 Earnings Basic earnings per share Diluted earnings per share Earnings Basic earnings per share Diluted earnings per share Earnings Basic earnings per share Diluted earnings per share £m pence pence £m pence pence £m pence pence Profit for the period attributable to shareholders of the Company 15.0 5.3p 5.3p 37.4 13.2p 13.0p 50.3 17.7p 17.5p Profit from discontinued operations - - - - - - (0.1) - - Profit from continuing operations 15.0 5.3p 5.3p 37.4 13.2p 13.0p 50.2 17.7p 17.5p Specific adjusting items1 16.3 5.8p 5.8p 3.4 1.2p 1.2p 23.1 8.1p 8.0p Amortisation of intangible assets 0.5 0.2p 0.2p 1.1 0.4p 0.4p 1.7 0.6p 0.6p Tax effect of the above (1.5) (0.5)p (0.5)p (0.4) (0.1)p (0.1)p (2.5) (0.9)p (0.9)p Adjusted profit for the period from continuing operations as used in adjusted earnings per share 1 30.3 10.8p 10.8p 41.5 14.7p 14.5p 72.5 25.5p 25.2p 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. Unaudited six months ended 30 June 2025 millions Unaudited six months ended 30 June 2024 millions Audited year ended 31 December 2024 millions Number of shares Weighted average number of Ordinary shares for the purposes of basic earnings per share1 280.8 284.4 284.5 Effect of dilutive potential Ordinary shares: Share options 2.1 3.8 2.8
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Weighted average number of Ordinary shares for the purposes of diluted earnings per share 282.9 288.2 287.3 1 The calculation of the weighted average number of Ordinary shares excludes the shares held by The Morgan Employee Benefit Trust on which dividends are waived. Note 8. Property, plant and equipment Land and buildings £m Plant, equipment and fixtures £m Total £m Cost At 1 January 2025 216.6 817.9 1,034.5 Additions 1.6 34.6 36.2 Disposals (0.2) (10.4) (10.6) Transfer between categories 3.5 (3.5) - Effect of movement in foreign exchange (11.6) (43.5) (55.1) Unaudited at 30 June 2025 209.9 795.1 1,005.0 Depreciation and impairment losses At 1 January 2025 113.2 576.4 689.6 Depreciation charge for the period 2.6 14.0 16.6 Impairment 1.0 0.2 1.2 Disposals (0.2) (9.8) (10.0) Transfer between categories 1.0 (1.0) - Effect of movement in foreign exchange (6.4) (28.7) (35.1) Unaudited at 30 June 2025 111.2 551.1 662.3 Carrying amounts At 1 January 2025 103.4 241.5 344.9 Unaudited at 30 June 2025 98.7 244.0 342.7 As at 30 June 2025, commitments for property, plant and equipment and computer software expenditure for which no provision has been made in these accounts amount to £6.0 million (30 June 2024: £21.2 million). Note 9. Intangible assets Goodwill £m Customer relationships £m Technology & trademarks £m Capitalised development costs £m Computer software £m Total £m Cost At 1 January 2025 176.9 61.8 4.0 0.8 35.9 279.4 Additions - - - - 0.4 0.4 Disposals - - - - (1.1) (1.1) Effect of movement in foreign exchange (6.3) (4.9) 0.1 (0.1) (1.4) (12.6) Unaudited at 30 June 2025 170.6 56.9 4.1 0.7 33.8 266.1 Amortisation and impairment losses
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At 1 January 2025 - 61.0 3.3 0.8 34.4 99.5 Charge for the period - 0.1 0.1 - 0.3 0.5 Disposals - - - - (1.1) (1.1) Effects of movement in foreign exchange - (4.9) 0.1 (0.1) (1.7) (6.6) Unaudited at 30 June 2025 - 56.2 3.5 0.7 31.9 92.3 Carrying amounts At 1 January 2025 176.9 0.8 0.7 - 1.5 179.9 Unaudited at 30 June 2025 170.6 0.7 0.6 - 1.9 173.8 Note 10. Cash and cash equivalents reconciled to net debt* Unaudited at 30 June 2025 £m Unaudited at 30 June 2024 £m Audited at 31 December 2024 £m Bank balances 75.2 105.2 110.8 Cash deposits 9.4 11.4 10.0 Cash and cash equivalents 84.6 116.6 120.8 Bank overdrafts (0.2) (1.6) (9.3) Net cash and cash equivalents 84.4 115.0 111.5 Reconciliation of net cash and cash equivalents to net debt* Unaudited six months ended 30 June 2025 £m Unaudited six months ended 30 June 20242 £m Audited year ended 31 December 2024 £m Opening borrowings (337.7) (309.7) (309.7) Increase in borrowings (38.9) (44.2) (121.3) Repayment of borrowings 37.3 14.7 88.0 Effect of movement in foreign exchange 5.8 1.9 5.3 Closing borrowings (333.5) (337.3) (337.7) Net cash and cash equivalents1 84.4 115.0 111.5 Closing net debt1 (249.1) (222.3) (226.2) Opening lease liabilities (47.1) (47.1) (47.1) Payments of lease liabilities 4.7 4.8 10.6 New leases and lease remeasurement (7.5) (6.1) (10.9) Effect of movements in foreign exchange 2.5 0.2 0.3 Closing lease liabilities (47.4) (48.2) (47.1) Closing net debt1 and lease liabilities (296.5) (270.5) (273.3) 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. 2. Re-presented to net bank overdrafts against cash and cash equivalents. The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash changes. Borrowings £m Net cash and cash equivalents 1 £m Movement in net debt1 £m Lease liabilities £m Net debt and lease liabilities £m At 1 January 2025 (337.7) 111.5 (226.2) (47.1) (273.3) Cash outflow - (4.4) (4.4) - (4.4) Borrowings and lease liability cash flow (1.6) - (1.6) 4.7 3.1 Net interest paid - (12.0) (12.0) - (12.0) Net cash inflow/(outflow) (1.6) (16.4) (18.0) 4.7 (13.3) Share purchases - (11.8) (11.8) - (11.8)
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New leases and lease remeasurement - - - (7.5) (7.5) Exchange and other movements 5.8 1.1 6.9 2.5 9.4 Unaudited at 30 June 2025 (333.5) 84.4 (249.1) (47.4) (296.5) 1. Definitions of these non-GAAP measures and reconciliations to the equivalent statutory measure can be found in the 'Glossary' and 'Alternative performance measures' section at the end of this announcement. Note 11. Financial risk management Fair values Unaudited at 30 June 2025 Unaudited at 30 June 2024 Audited at 31 December 2024 Carrying amount £m Fair value Carrying amount £m Fair value Carrying amount £m Fair value Level 1 £m Level 2 £m Total £m Level 1 £m Level 2 £m Total £m Level 1 £m Level 2 £m Total £m Financial liabilities held at amortised cost 1.55% Euro Senior Notes 2026 (21.5) - (21.0) (21.0) (21.2) - (19.8) (19.8) (20.8) - (19.9) (19.9) 3.37% US Dollar Senior Notes 2026 (71.1) - (68.8) (68.8) (77.1) - (71.8) (71.8) (77.9) - (74.2) (74.2) 4.87% US Dollar Senior Notes 2026 (18.6) - (18.4) (18.4) (20.2) - (19.6) (19.6) (20.4) - (20.1) (20.1) 1.74% Euro Senior Notes 2028 (8.6) - (8.1) (8.1) (8.5) - (7.7) (7.7) (8.3) - (7.7) (7.7) 2.89% Euro Senior Notes 2030 (21.5) - (19.6) (19.6) (21.2) - (18.8) (18.8) (20.7) - (18.8) (18.8) 5.47% US Dollar Senior Notes 2031 (7.3) - (7.1) (7.1) (7.9) - (7.5) (7.5) (8.0) - (7.6) (7.6) 5.53% US Dollar Senior Notes 2033 (7.3) - (7.0) (7.0) (7.9) - (7.4) (7.4) (8.0) - (7.4) (7.4) 5.61% US Dollar Senior Notes 2035 (21.9) - (20.7) (20.7) (23.8) - (22.0) (22.0) (24.1) - (22.0) (22.0) 5.50% Cumulative First Preference shares (0.1) - (0.1) (0.1) (0.1) - (0.1) (0.1) (0.1) - (0.1) (0.1) 5.00% Cumulative Second Preference shares (0.3) - (0.3) (0.3) (0.3) - (0.3) (0.3) (0.3) - (0.3) (0.3) (178.2) - (171.1) (171.1) (188.2) - (175.0) (175.0) (188.6) - (178.1) (178.1) Financial assets held at FVTPL - - - - 1.0 1.0 - 1.0 2.0 2.0 - 2.0 Derivative financial assets held at fair value 3.3 - 3.3 3.3 0.3 - 0.3 0.3 1.2 - 1.2 1.2 3.3 - 3.3 3.3 1.3 1.0 0.3 1.3 3.2 2.0 1.2 3.2 Derivative financial liabilities held at fair value (1.5) - (1.5) (1.5) (0.8) - (0.8) (0.8) (2.6) - (2.6) (2.6)
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The table above analyses financial instruments carried at fair value, by valuation method, together with the carrying amounts shown in the balance sheet. The fair value of cash and cash equivalents, current trade and other receivables/payables and floating-rate bank and other borrowings are excluded from the preceding table as their carrying amount approximates to their fair value. Fair value hierarchy The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: not traded in an active market but the fair values are based on quoted market prices or alternative pricing sources with reasonable levels of price transparency. Fair value is calculated using discounted cash flow methodology, future cash flows are estimated based on forward exchange rates. Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). There were no transfers between Level 1 and Level 2 during the six months to 30 June 2025 or 2024 and there were no Level 3 financial instruments in either the six months to 30 June 2025 or 2024. The major methods and assumption used in estimating the fair values of financial instruments reflected in the preceding table are as follows: Fixed-rate borrowings Fair value is calculated based on discounted expected future principal and interest cash flows. The interest rates used to determine the fair value of borrowings are 3.5-6.3% (30 June 2024: 4.2-6.8%; 31 December 2024: 3.7-6.6%). Equity securities Fair value is based on quoted market prices at the balance sheet date. Derivatives Forward exchange contracts are marked to market either using listed market prices or by discounting the contractual forward price and deducting the current spot rate. 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. The Group is exposed to credit risk on financial instruments such as liquid assets, derivative assets and trade receivables. The current economic climate gives rise to an increased credit risk, primarily with respect to trade receivables. The Group establishes an allowance for impairment that represents its estimate of expected credit losses ('ECL') in respect of trade receivables. The loss allowance for trade receivables by ageing category is as follows: Unaudited at 30 June 2025 Unaudited at 30 June 2024 Audited at 31 December 2024 ECL Gross trade receivables ECL Net trade receivables ECL Gross trade receivables ECL Net trade receivables ECL Gross trade receivables ECL Net trade receivables % £m £m £m % £m £m £m % £m £m £m Not past due 0.1% 137.3 (0.1) 137.2 0.1% 150.2 (0.1) 150.1 0.1% 134.5 (0.1) 134.4 Past due 0-30 days 0.0% 15.4 - 15.4 1.1% 19.0 (0.2) 18.8 1.2% 17.2 (0.2) 17.0 Past due 31-60 days 0.0% 2.5 - 2.5 0.0% 4.2 - 4.2 0.0% 3.5 - 3.5 Past due 61-90 days 8.3% 1.2 (0.1) 1.1 5.3% 1.9 (0.1) 1.8 4.3% 2.3 (0.1) 2.2 Past due more than 90 days 73.4% 6.4 (4.7) 1.7 87.6% 8.9 (7.8) 1.1 96.3% 8.2 (7.9) 0.3 162.8 (4.9) 157.9 184.2 (8.2) 176.0 165.7 (8.3) 157.4 Full details of the Group's policies and processes for managing financial risk are described in note 21 of the Group's 2024 Annual Report and Accounts. Offsetting financial assets and liabilities The following table shows the amounts recognised for forward exchange contracts, which are subject to offsetting arrangements on a gross basis, and the amounts offset in the balance sheet. The Group also has cash pooling agreements which cannot be offset under IFRS, but which could be settled net under the terms of master netting agreements, are also presented in the table to show the total net exposure of the Group.
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Gross amounts of recognised financial assets/ (liabilities) Amounts offset Net amounts presented on the balance sheet Financial instruments not offset in the balance sheet Net amount £m £m £m £m £m Unaudited at 30 June 2025 Derivative financial assets 3.3 - 3.3 - 3.3 Derivative financial liabilities (1.5) - (1.5) - (1.5) Cash and cash equivalents 84.6 - 84.6 (0.2) 84.4 Current bank and other borrowings (0.2) - (0.2) 0.2 - Unaudited at 30 June 2024 Derivative financial assets 0.3 - 0.3 - 0.3 Derivative financial liabilities (0.8) - (0.8) - (0.8) Cash and cash equivalents 116.6 - 116.6 (1.6) 115.0 Current bank and other borrowings (1.6) - (1.6) 1.6 - Audited at 31 December 2024 Derivative financial assets 1.2 - 1.2 - 1.2 Derivative financial liabilities (2.6) - (2.6) - (2.6) Cash and cash equivalents 120.8 - 120.8 (9.3) 111.5 Current bank and other borrowings (9.3) - (9.3) 9.3 - Note 12. Pensions and other post-retirement employee benefits Defined benefit obligations Unaudited six months ended 30 June 2025 UK £m USA £m Europe £m Rest of the World £m Total £m Summary of net obligations Present value of unfunded defined benefit obligations - (3.9) (24.5) (4.1) (32.5) Present value of funded defined benefit obligations (312.1) (92.0) (1.3) (8.6) (414.0) Fair value of plan assets 323.6 92.4 0.3 8.2 424.5 Net assets/(obligations) 11.5 (3.5) (25.5) (4.5) (22.0) Represented by: Surpluses 11.5 0.2 - 0.3 12.0 Obligations - (3.7) (25.5) (4.8) (34.0) Movements in present value of defined benefit obligation At 1 January 2025 (318.1) (105.3) (26.1) (12.8) (462.3) Current service cost - - (0.4) (0.9) (1.3) Interest cost (8.4) (2.6) (0.3) (0.2) (11.5) Actuarial gain/(loss): Experience loss on plan obligations (1.5) (0.1) - - (1.6) Changes in financial assumptions - gain/(loss) 5.0 (1.4) 1.2 - 4.8 Benefits paid 10.9 4.4 0.8 0.8 16.9 Exchange adjustments - 9.1 (1.0) 0.4 8.5 At 30 June 2025 (312.1) (95.9) (25.8) (12.7) (446.5) Movements in fair value of plan assets At 1 January 2025 330.4 101.5 0.2 8.7 440.8 Interest on plan assets 8.7 2.5 - 0.2 11.4 Remeasurement (loss)/gain (4.3) 1.5 - (0.1) (2.9) Administrative cost (0.3) - - - (0.3) Contributions by employer - 0.2 0.8 0.5 1.5 Benefits paid (10.9) (4.4) (0.8) (0.8) (16.9) Exchange adjustments - (8.9) 0.1 (0.3) (9.1) At 30 June 2025 323.6 92.4 0.3 8.2 424.5 Actual return on assets 4.4 4.0 - 0.1 8.5 Fair value of plan assets by category Equities - 4.9 - - 4.9 Growth assets 26.2 - - - 26.2
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Bonds 29.8 85.2 - - 115.0 Liability-driven investments (LDI) 165.9 - - - 165.9 Matching insurance policies 87.5 1.3 0.3 5.8 94.9 Other 14.2 1.0 - 2.4 17.6 323.6 92.4 0.3 8.2 424.5 Principal actuarial assumptions at 30 June 2025: % % % % Discount rate 5.51 5.26 3.90 4.66 Inflation (UK: RPI/CPI) 2.89/2.31 n/a 2.00 n/a Unaudited six months ended 30 June 2024 UK £m USA £m Europe £m Rest of the World £m Total £m Summary of net assets/(obligations) Present value of unfunded defined benefit obligations - (4.8) (25.8) (4.5) (35.1) Present value of funded defined benefit obligations (338.3) (101.8) (0.5) (7.9) (448.5) Fair value of plan assets 354.4 102.8 0.3 8.1 465.6 Net assets/(obligations) 16.1 (3.8) (26.0) (4.3) (18.0) Represented by Surpluses 16.1 1.1 - 0.7 17.9 Obligations - (4.9) (26.0) (5.0) (35.9) Principal actuarial assumptions at 30 June 2024: % % % % Discount rate 5.12 5.28 3.80 5.52 Inflation (UK: RPI/CPI) 3.18/2.45 n/a 2.10 n/a Audited year ended 31 December 2024 UK £m USA £m Europe £m Rest of the World £m Total £m Summary of net assets/(obligations) Present value of unfunded defined benefit obligations - (4.0) (24.9) (3.9) (32.8) Present value of funded defined benefit obligations (318.1) (101.3) (1.2) (8.9) (429.5) Fair value of plan assets 330.4 101.5 0.2 8.7 440.8 Net assets/(obligations) 12.3 (3.8) (25.9) (4.1) (21.5) Represented by Surpluses 12.3 0.1 - 0.6 13.0 Obligations - (3.9) (25.9) (4.7) (34.5) Principal actuarial assumptions at 31 December 2024: % % % % Discount rate 5.45 5.47 3.50 4.66 Inflation (UK: RPI/CPI) 3.15/2.52 n/a 2.00 n/a Note 13. Provisions and contingent liabilities Closure and restructuring provisions £m Legal and other provisions £m Environmental provisions £m Total £m At 1 January 2025 7.4 6.3 6.7 20.4 Provisions made during the period 1.5 0.2 0.1 1.8 Provisions used during the period (2.0) (0.2) (0.2) (2.4) Provisions reversed during the period (0.6) (0.2) - (0.8)
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Effect of movements in foreign exchange (0.3) (0.2) (0.1) (0.6) Unaudited at 30 June 2025 6.0 5.9 6.5 18.4 Current 4.2 1.7 2.0 7.9 Non-current 1.8 4.2 4.5 10.5 Unaudited at 30 June 2025 6.0 5.9 6.5 18.4 Closure and restructuring provisions Closure and restructuring provisions relate to the Group's restructuring programmes and represent committed expenditure at the balance sheet date. The amounts provided are based on the costs of terminating relevant contracts, under the contract terms, and management's best estimate of other associated restructuring costs including professional fees. The provisions are expected to be utilised in the next one to two years. We have a provision for a multi-employer pension obligation for a site which was closed during 2021. The cash outflows relating to the pension obligation may continue for up to 16 years, subject to any settlement being reached in advance of that date. Legal and other provisions Where obligations are not capable of being reliably estimated, or if a material outflow of economic resources is considered not probable, it is classified as a contingent liability. The Group is of the opinion that any associated claims that might be brought can be defeated successfully and, therefore, the possibility of any material outflow in settlement is assessed as remote. Environmental provisions Environmental provisions are made for quantifiable environmental liabilities arising from known environmental issues. The amounts provided are based on the best estimate of the costs required to remedy these issues. The provisions are expected to be utilised in the next five to ten years. Environmental contingent liabilities Due to the international footprint of the Group and the nature of its manufacturing operations it is subject to a wide range of local health and safety, environmental and employment laws and regulations. At any point in time the Group has a number of ongoing environmental or employment cases for which there is uncertainty due to the wide range of possible outcomes and associated costs. Possible outcomes include the case being settled, withdrawn or dismissed. Tax contingent liabilities The Group is subject to periodic tax audits by various fiscal authorities covering corporate, employee and sales taxes in the various jurisdictions in which it operates. We have provided for estimates of the Group's likely exposures where these can be reliably estimated. Note 14. Related parties Identification of related parties The Company has related party relationships with its subsidiaries and with its Directors and executive officers. Transactions with key management personnel Details of transactions with key management personnel are described in note 26 of the Group's 2024 Annual Report and Accounts. Transactions with related parties There were no related party transactions during the period that have materially affected the financial position or the performance of the Group during the period. There have been no changes in the nature of related party transactions as described in note 26 to the Group's 2024 Annual Report and Accounts which could have a material effect on the financial position or performance of the Group during the period. Note 15. Subsequent events There were no reportable events subsequent to the balance sheet date. Glossary Constant-currency1 Constant-currency revenue and Group adjusted operating profit are derived by translating the prior year results at current year average exchange rates. Corporate costs Corporate costs consist of the costs of the central head office. Free cash flow before acquisitions, disposals and dividends1 Cash generated from continuing operations less net capital expenditure, net interest paid, tax paid and lease payments.
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Group earnings before interest, tax, depreciation and amortisation (EBITDA) 1 EBITDA is defined as operating profit before specific adjusting items, amortisation of intangible assets and depreciation. Earnings before interest, tax and amortisation (EBITA) 1 EBITA is defined as operating profit before specific adjusting items and amortisation of intangible assets. Group adjusted operating profit1 Operating profit adjusted to exclude specific adjusting items and amortisation of intangible assets. Group organic The Group results excluding acquisition, disposal and business exit impacts at constant- currency. Adjusted earnings per share (EPS) 1 Adjusted earnings per share is defined as operating profit adjusted to exclude specific adjusting items and amortisation of intangible assets, less net financing costs, income tax expense and non-controlling interests, divided by the weighted average number of Ordinary shares during the period. Net debt1 Borrowings and bank overdrafts less cash and cash equivalents. Net cash and cash equivalents1 Net cash and cash equivalents is defined as cash and cash equivalents less bank overdrafts. Return on invested capital (ROIC) 1 Group adjusted operating profit (operating profit excluding specific adjusting items and amortisation of intangible assets) divided by the average adjusted net assets (excludes long-term employee benefits, deferred tax assets and liabilities, current tax payable, provisions, cash and cash equivalents, borrowings, bank overdrafts and lease liabilities). Specific adjusting items See note 3 to the condensed consolidated financial statements for further details. Underlying Reference to underlying reflects the trading results of the Group without the impact of specific adjusting items and amortisation of intangible assets that would otherwise impact the users' understanding of the Group's performance. The Directors believe that adjusted results provide additional useful information on the core operational performance of the Group, and review the results of the Group on an adjusted basis internally. 1. Reconciliations of non-GAAP measures to GAAP measures can be found at the end of this announcement. Alternative performance measures The Group monitors business performance through alternative performance measures (APMs) which are not defined under IFRS and are therefore non-GAAP measures. The APMs provide useful information to stakeholders, including additional insight into ongoing trading and year-on-year comparisons. These APMs are not a substitute for IFRS measures but are complementary to them. The Group defines each APM and therefore they may not be directly comparable with similarly named metrics in other businesses. The definition, purpose and reconciliation to statutory figures where applicable are included below. Constant-currency Constant-currency figures are derived by translating the prior year results at current year average exchange rates. These measures are used as they allow key metrics such as revenue to be compared year on year excluding the impact of foreign exchange rates. Organic growth The growth of the business excluding the impacts of acquisitions, divestments and foreign currency impacts. This measure is used as it allows revenue and adjusted operating profit to be compared on a like-for-like basis. Thermal Products Performance Carbon Technical Ceramics Segment total £m £m £m £m H1 2024 revenue 221.5 178.9 172.2 572.6 Impact of foreign currency movements (9.1) (5.3) (3.6) (18.0) Impacts of acquisitions, disposals and business exits - - - - Organic constant-currency change (16.9) (19.5) 4.4 (32.0) Organic constant-currency change % (8.0)% (11.2)% 2.6% (5.8)% H1 2025 revenue 195.5 154.1 173.0 522.6 Thermal Products Performance Carbon Technical Ceramics Segment total Corporate costs Group £m £m £m £m £m £m H1 2024 adjusted operating profit 24.2 31.3 18.8 74.3 (3.0) 71.3 Impact of foreign currency movements (2.4) (1.5) (0.7) (4.6) - (4.6) Impacts of acquisitions, disposals and business exits - - - - - - Organic constant-currency change (6.1) (4.7) 2.1 (8.7) - (8.7) Organic constant-currency change % 27.9% 15.8% 11.6% (12.5)% - (13.0)% H1 2025 adjusted operating profit 15.7 25.1 20.2 61.0 (3.0) 58.0 Corporate costs Corporate costs Corporate costs consist of the costs of the central head office. Specific adjusting items Specific adjusting items are items which occur infrequently and are presented separately in the consolidated income
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Specific adjusting items are items which occur infrequently and are presented separately in the consolidated income statement due to their nature and size. They typically include but are not limited to: · Individual restructuring projects which are material or relate to the closure of a part of the business and are not expected to recur; · Impairment of non-financial assets which are material; · Gains or losses on disposal or exit of businesses; · Significant costs incurred as part of the integration of an acquired business; · Gains or losses arising on significant changes to or closures of defined benefit pension plan; and · Design, configuration and implementation of a Global ERP system. The Directors consider disclosure of specific adjusting items necessary for the users of the financial statements to obtain an alternative understanding of the financial information and underlying performance of the business. Note 3 provides details of the specific adjusting items in the current and prior year. Group earnings before interest, tax, depreciation and amortisation (EBITDA) Group EBITDA is defined as operating profit before specific adjusting items, amortisation of intangible assets and depreciation. The Group uses this measure as it is a key metric in covenants over debt facilities; these covenants use EBITDA excluding IFRS 16 Leases. The following table reconciles operating profit to Group EBITDA: H1 2025 £m H1 2024 £m Operating profit 41.2 66.8 Add back: specific adjusting items included in operating profit 16.3 3.4 Add back: depreciation - property, plant and equipment 16.6 17.0 Add back: depreciation - right-of-use assets 4.3 4.3 Add back: amortisation of intangible assets 0.5 1.1 Group EBITDA 78.9 92.6 Group EBITDA excluding IFRS 16 Lease impact Group EBITDA excluding IFRS 16 Leases impact is defined as Group EBITDA less interest expense on lease liabilities and capital payments on lease liabilities. The Group uses this measure as it is a key metric in covenants over debt facilities; these covenants use EBITDA on an IAS 17 basis (pre-IFRS 16 basis) and this metric is used as a proxy for the charge that would have been attributable to operating leases recognised in EBITDA under the now defunct IAS 17. The following table reconciles Group EBITDA to Group EBITDA excluding IFRS 16 Leases impact: H1 2025 £m H1 2024 £m Group EBITDA 78.9 92.6 Interest expense on lease liabilities (1.4) (1.3) Capital payments on lease liabilities (4.7) (4.8) Group EBITDA excluding IFRS 16 Lease Impact 72.8 86.5 Adjusted operating profit Adjusted operating profit is defined as operating profit excluding specific adjusting items and amortisation of intangible assets. Specific adjusting items are excluded on the basis that they distort trading performance. The exclusion of amortisation of intangible assets is to allow for consistent comparability internally and externally between our businesses. The following table reconciles operating profit to adjusted operating profit: Thermal Products Performance Carbon Technical Ceramics Segment total Corporate costs Group H1 2025 £m £m £m £m £m £m Operating profit 12.1 22.3 18.9 53.3 (12.1) 41.2 Add back: Specific adjusting items 3.4 2.7 1.1 7.2 9.1 16.3 Amortisation of intangible assets 0.2 0.1 0.2 0.5 - 0.5 Adjusted operating profit 15.7 25.1 20.2 61.0 (3.0) 58.0 Adjusted operating profit margin 8.0% 16.3% 11.7% 11.1% Thermal Products Performance Carbon Technical Ceramics Segment total Corporate costs Group H1 2024 £m £m £m £m £m £m Operating profit 22.7 30.3 18.0 71.0 (4.2) 66.8 Add back: Specific adjusting items 1.0 0.8 0.4 2.2 1.2 3.4 Amortisation of intangible assets 0.5 0.2 0.4 1.1 - 1.1 Adjusted operating profit 24.2 31.3 18.8 74.3 (3.0) 71.3 Adjusted operating profit margin 10.9% 17.5% 10.9% 12.5%
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Adjusted earnings per share (EPS) Adjusted earnings per share is defined as profit for the year attributable to shareholders of the Company adjusted to exclude profit from discontinued operations, specific adjusting items and amortisation of intangible assets and the tax effects of the excluded items, divided by the weighted average number of Ordinary shares during the year. Whilst amortisation of intangible assets is a recurring charge, it is excluded from these measures on the basis that it primarily arises on externally acquired intangible assets and therefore does not reflect consistently the benefit that all of the Group's businesses realise from their intangible assets, which may not be recognised separately. This measure of earnings is shown because the Directors consider that it provides a helpful indication of the Group's financial performance excluding material non-recurring expenses or gains and non-financial asset impairments and impairment reversals, and therefore facilitates the evaluation of the Group's performance over time. A reconciliation from IFRS profit to the profit used to calculate adjusted earnings per share is included in note 7 to the consolidated financial statements. Free cash flow before acquisitions, disposals and dividends Free cash flow before acquisitions, disposals and dividends is defined as cash generated from continuing operations less net capital expenditure, net interest (interest paid on borrowings, overdrafts and lease liabilities, net of interest received), tax paid and lease payments. The Group discloses free cash flow as this provides readers of the consolidated financial statements with a measure of the cash flows from the business before corporate-level cash flows (acquisitions, disposals and dividends). The following table reconciles cash generated from continuing operations to free cash flow before acquisitions, disposals and dividends: H1 2025 £m H1 2024 £m Cash generated from operations 69.3 66.1 Net capital expenditure (40.5) (44.6) Net interest on cash and borrowings (9.0) (7.3) Tax paid (12.5) (16.0) Lease payments and interest (6.1) (6.1) Free cash flow before acquisitions, disposals and dividends 1.2 (7.9) Net debt Net debt is defined as borrowings, and bank overdrafts less cash and cash equivalents. The Group discloses net debt because this is the measure used in the covenants over the Group's debt facilities. It helps readers of the consolidated financial statements assess its ability to meet its financial obligations, manage debt and its capacity to invest in growth opportunities. H1 2025 £m H1 2024 £m Cash and cash equivalents 84.6 116.6 Non-current borrowings (333.5) (337.3) Current borrowings and bank overdrafts (0.2) (1.6) Closing net debt (249.1) (222.3) Net cash and cash equivalents Net cash and cash equivalents is defined as cash and cash equivalents less bank overdrafts. The Group also discloses this measure as it provides an indication of the net short-term liquidity available to the Group. H1 2025 £m H1 2024 £m Cash and cash equivalents 84.6 116.6 Bank overdrafts (0.2) (1.6) Net cash and cash equivalents 84.4 115.0 Return on invested capital (ROIC) ROIC is defined as 12-month adjusted operating profit divided by the average capital employed. The Group discloses ROIC to assess its efficiency in generating profits from the capital it has invested in its operations. Third-party working capital includes inventories, current trade and other receivables, and current trade and other payables. H1 2025 £m H1 2024 £m Operating profit 78.0 124.2 Add back: specific adjusting items 36.0 15.1 Add back: amortisation of intangible assets 1.1 2.3 Group adjusted operating profit 115.1 141.6
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Third-party working capital 141.1 203.2 Property, plant and equipment 342.7 311.6 Right-of-use assets 34.3 33.0 Goodwill 170.6 177.2 Other intangible assets 3.2 3.8 Capital employed 691.9 728.8 Average capital employed 710.4 717.5 ROIC 16.2% 19.7% The capital employed for the prior year comparative has been re-presented to show the assets at the balance sheet date rather than an average of the assets over H1 2024 and H1 2023. There has been no change to the average capital employed figure or the ROIC outcome. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END IR FZGGRRVRGKZM