Annual Report

&Accounts 2025

Building Tomorrow’s World

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Marshalls

Building Tomorrow’s World

Marshalls plc Annual Report & Accounts 2025

Decisive actions undertaken

to deliver a stronger, more

profitable business

Strategic highlights

• Group returned to revenue growth with a clear plan

to intensify the execution of the ‘Transform & Grow’

strategy

• Landscaping Products improvement plan delivered

higher volumes and market share gains despite subdued

end markets, offset by targeted price investment and a

weaker product mix

• Building Products delivered revenue growth with good

performances in Water Management and Mortars and

good progress on strategic growth opportunities in

Water Management

• Roofing Products revenue growth of 4% driven by c.32%

growth in Viridian Solar as it capitalised on new build

energy efficiency regulations

Financial highlights

• Robust Balance Sheet with year-end pre-IFRS 16

netdebt of £137.9 million and leverage of 1.8 times

adjusted EBITDA

• Adjusted operating cash flow conversion of 88% reflects

disciplined working capital management

• Successfully refinanced the £270 million facility

inNovember with no change in commercial terms,

reinforcing the medium-term funding platform and

providing flexibility to continue executing the strategy

at pace

ESG highlights

• Recognised by Financial Times and Statista as one

ofEurope’s Climate Leaders for the fourth time

• Continued to expand the range of Environmental Product

Declarations (EPDs) to support customer transparency

and tender requirements

• Maintained Fair Tax Mark accreditation and Living Wage

employer status

• Continued progress against the Group’s net-zero

pathway, supported by improved data capabilities

• Strengthened responsible business practices, including

comprehensive supply chain mapping at Viridian Solar

and the launch of an Ethical Use of AI policy and training

• Continued focus on skills development and social

value incommunities where we operate

Adjusted profit before tax (£’m)

(1)

£43.7m

(2024: £52.2m)

Reported operating profit (£’m)

£32.0m

(2024: £53.9m)

Reported profit before tax (£’m)

£17.7m

(2024: £39.4m)

Adjusted return on capital employed (%)

(1)

7.0%

(2024: 8.2%)

Adjusted basic EPS (p)

(1)

13.4p

(2024: 16.0p)

Reported EPS (p)

5.7p

(2024: 12.3p)

Full-year dividend recommended (p)

6.7p

(2024: 8.0p)

Revenue (£’m)

£632.1m

(up 2%)

632.1

589.3

719.4

671.2

619.2

2021 2022 2023 2024 2025

Adjusted operating profit

(1)

(£’m)

£56.4m

(down 15%)

56.4

77.4

101.1

70.7

66.7

2021 2022 2023 2024 2025

Adjusted EBITDA

(1)

(£’m)

£85.0m

(down 13%)

85.0

107.1

136.0

103.6

97.8

2021 2022 2023 2024 2025

X Our investment case page 4

Note:

1. Alternative performance measures are used consistently

throughout this Annual Report. For further details of their

purpose, definition and reconciliation to the equivalent

statutory measures, see Note 29.

Highlights

Strategic Report

1 Highlights

2 At a Glance

4 Investment Case

6 Chair’s Statement

8 Chief Executive Officer’s Statement

11 Our Strategy

14 Our Markets

16 Business Model

17 Key Performance Indicators

19 Summary of Group Performance

20 Segmental Review

23 Our Section 172(1) Statement

26 Stakeholder Engagement

31 Sustainability

41 Task Force on Climate-related

FinancialDisclosures

48 Financial Review

52 Risk Management andPrincipal Risks

61 Non-financial and Sustainability

Information Statement

Governance

62 Board of Directors

64 Corporate Governance Statement

79 Nomination Committee Report

84 Audit Committee Report

90 ESG Committee Report

92 Remuneration Committee Report

92 Annual Statement

96 Annual Report on Remuneration

104 2026 Directors’ Remuneration Policy

113 Directors’ Report – Other

RegulatoryInformation

115 Statement of Directors’ Responsibilities

117 Independent Auditor’s Report

Financial Statements

124 Consolidated Income Statement

124 Consolidated Statement

ofComprehensive Income

125 Consolidated Balance Sheet

126 Consolidated Cash Flow Statement

127 Consolidated Statement

ofChangesinEquity

129 Notes to the Consolidated

FinancialStatements

154 Company Balance Sheet

155 Company Statement of ChangesinEquity

156 Notes to the Company

FinancialStatements

162 Financial History – Consolidated Group

164 Glossary

165 Shareholder Information

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 1

At a Glance

Strengthen performance through the cycle

and deliver sustainable, profitable growth

Our strength lies in our diversified portfolio. Spanning across brands, categories and end markets, we offer

a broad product range with specialist and innovative products and solutions across the UK construction sector.

LANDSCAPING PRODUCTS

locations

Revenue

£265.8m

ROOFING PRODUCTS

locations

Revenue

£194.3m

BUILDING PRODUCTS

locations

Revenue

£172.0m

Marshalls Landscaping

• Market leadership position

• Balanced exposure to

endmarkets

• Well-invested national

operations network

Marley Roofing

• Market leader in

pitchedroofing

• Balanced end market exposure

Viridian Solar

• Market leader in

integratedsolar

• Leadership in ESG

• Market leading

wrap-aroundservice

Marshalls Water

Management

• Leading market position in

residential wastewater and

surface water drainage

• Nationwide operations network

Marshalls

Bricks &Masonry

• Market leader in lower-carbon

concrete bricks

• Wide product range and

nationwide coverage

Marshalls Mortars &

Screeds and Aggregates

• Integral parts of the Group’s

portfolio of businesses

BRAND POWERHOUSES

GROWTH ENGINES

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 2

At a Glance continued

Portfolio of strong brands

inits existing markets

Reputation for leading in ESG Strength in operational

excellence, national

manufacturing scale and

operational leverage

Good customer relationships Knowledgeable and

passionate people

Increasingly diversified group of businesses beyond its heritage in landscaping with:

Revenue

by segment

42% Landscaping Products

27% Building Products

31% Roofing Products

End market

exposure

45% New housing

25% Housing RMI

30% Commercial

& infrastructure

Where we operate

We operate from strategically

located manufacturing and

distribution sites across the UK.

Group employees

2,348

Our brands

Where we are today

Leading brands delivering

pioneering systems

and solutions

ESG and carbon leadership Realising the synergies and

operational leverage of our

national manufacturing and

logistics network

Powerful customer

partnerships

High-performance,

delivery-focused culture

that realises the potential

ofits people

Group with strategic clarity and ambition, known for:

Where we are going

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 3

Creating shareholder value

Group positioned to outperform

the construction market

Attractive, diversified portfolio of

businesses exposed to scale markets

with long-term growth drivers and

near-term structural market tailwinds.

Significant headroom for growth in

our addressable markets through

innovation and bolt-on acquisitions.

Profit growth delivered

through operational leverage

Group expected to benefit from

material profit improvement due to

operational leverage and optimising

manufacturing network.

Highly cash generative

business model

Strategy execution expected to

deliver material increase in operating

cash flow.

Normalisation of capital expenditure

tounderpin plan in medium term.

Free cash flow de-levers

Balance Sheet

Increase in free cash flow expected to

de-lever the Balance Sheet and provide

capital for bolt-on acquisitions or

returns to shareholders.

Profitable growth increases

shareholder returns

Expected earnings growth will drive

dividend growth.

Increased returns expected without

material increase in capital employed.

Strategy execution increases

cyclicalresilience.

Investment Case

MEDIUM-TERM TARGETS

2–4%

market outperformance

15%

operating margin

90%

cash conversion

£20–30m

capital expenditure p.a.

0.5–1.5x

pre-IFRS 16 net debt to

EBITDA leverage

target range

dividend cover

15%

return on capital employed

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 4

Capital allocation policy

Organic growth

• Strategic plan requires capital investment of £20–30 million

per annum

• Comprises growth capex in water management together with

maintenance capex and investment in IT

Investment to enhance competitive advantage

• Market leading brands and solutions that are consistently

recognised for their quality, range and service

• Best-in-class technical and design support

• Carbon leadership

Dividends

• Maintain dividend cover of two times adjusted earnings

• Earnings growth expected to drive increase in cash shareholder

returns in medium term

Balance Sheet deleveraging

• Strong conversion of profit into operating cash flow and capital

expenditure normalised

• Balance Sheet deleveraging to continue in medium term

• Target leverage range of 0.5–1.5x EBITDA optimal to

provideflexibility

Selective acquisitions

• Selective bolt-on M&A to support growth strategy

• Create optionality for scale acquisition in longer term

Group financial model

‘Transform & Grow’ strategy drives revenue growth

outperformanceand operational leverage, which will deliver

enhanced shareholder returns.

Our performance

Marshalls has a long-term track record of delivering shareholder value

before the recent downturn adversely impacted results...

Adjusted profit before tax

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

46.0

52.1

63.8

71.1

23.7

73.3

90.4

53.3

52.2

43.7

100.0

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

£’m%

... and delivers strong and consistent cash conversion.

Operating cash flow conversion

101

106 106

120

100

Shareholder

value creation

‘Transform

& Grow’

strategy

Revenue

growth

Capital

allocation

Cash

conversion

Return on

sales and

capital

employed

X Our strategy page 11 X Our financial review page 48

Investment Case continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 5

The Marshalls Way

Act with courage

• We take responsibility for everyaction

• We get things done

• We learn from experiences

• We challenge and feed back

Doing the right things, for the right

reasons, in the right way, safely

Shape the future

• We champion our customers

• We initiate and embrace change

• We consider the long-term impact of our decisions

• We develop diverse teams

Inspire with clear purpose

• We are proud and passionate

• We share and celebrate success

• We continuously improve

• We create clarity of expectations

Win together

• We work as one Marshalls team

• We respect everyone

• We propose solutions

• We value development

Chair’s Statement

Summary

• Disciplined stewardship in subdued markets,

with the Board safeguarding liquidity, cash

generation and capital discipline

• Medium-term funding secured through

the successful £270 million refinancing

completed in November 2025

• Dividend maintained in line with policy, with

a proposed final dividend of 4.5 pence per

share and continued commitment to two

times cover

• Leadership continuity and accountability

strengthened with Simon Bourne appointed

Chief Executive Officer following a robust

search process

• Board oversight of ‘Transform & Grow’

execution intensified, including monitoring

and challenging of the Landscaping

Products improvement plan

• Risk and internal controls remain a core

Board focus, as we continue to strengthen

our framework in line with evolving

governance expectations

• Progress on our carbon roadmap, with SBTi

validation reinforcing the credibility of our

net-zero pathway

Vanda Murray OBE

Chair

In a year of significant change

andcontinued market challenges,

the Board’s focus has been

clear:safeguarding our financial

resilience today while driving the

structural transformation required

for tomorrow.

Overview

Against a backdrop of continued macro-economic

uncertainty and subdued activity in our key end

markets, the Board has ensured that the business

remained focused on rigorous self-help measures.

These actions, executed by the leadership team,

have reshaped the business and created the

foundation for an improvement in profitability.

Our diversified portfolio provided balance during

the year, with a robust contribution from Roofing

and Building Products partially offsetting weaker

profitability in Landscaping Products, where

the turnaround is progressing. We supported

management in taking difficult but necessary

decisions to reset our Landscaping business,

including the optimisation of our manufacturing

network and the simplification of our product

portfolio. In parallel, we ensured that a clear

strategic focus on supporting the continued scaling

of our growth engines in Solar, Bricks and Water

Management was maintained.

Governance and stewardship remain at the centre

of our approach. Following the leadership change

announced in November, we appointed Simon

Bourne as Interim Chief Executive, prioritising

both stability and the rigorous selection of

the right leader for the Group’s next phase. On

19January 2026, we were delighted to confirm

Simon’s appointment as Chief Executive Officer.

This decision followed a comprehensive process

involving a robust evaluation of both internal and

external candidates. Simon has been integral to

the growth and development of the Group over the

last ten years and has played a central role in crafting

the ‘Transform & Grow’ strategy. His appointment not

only supports our desire to reinforce the execution

of this strategy but is deserved recognition for

his proven ability to drive change and continuous

improvement. The Board is convinced that this

combination of strategic continuity and operational

focus best serves our shareholders.

Under the Board’s guidance, the Group is now

well positioned to deliver our strategy and embed

the improvements made throughout 2025. Our

focus remains on the delivery of these benefits

and ensuring we take full advantage of our growth

opportunities through 2026 and beyond.

Financial stewardship

The Board has maintained a rigorous focus on

financial discipline, liquidity and capital efficiency,

ensuring that the Group’s financial position remains

strong against a backdrop of continued market

uncertainty. A key priority this year was securing

medium-term funding stability. We successfully

achieved this in November, extending the maturity

profile of the Group’s bank facility to 2029 with no

change in commercial terms.

With funding stability secured, our capital allocation

framework remains unchanged. We continue

to prioritise organic investment in the business,

support a sustainable ordinary dividend and ensure

Balance Sheet strength in line with our risk appetite,

creating long-term value for our shareholders.

Further detail of our financial performance, funding

and capital allocation decisions is set out on pages8

to 10 of the Chief Executive Officer’s Statement and

pages 48 to 51 of the Financial Review.

Dividends

The Board has proposed a final dividend of

4.5pence per share which, combined with the

interim dividend of 2.2 pence, results in a total

distribution for 2025 of 6.7 pence (2024: 8.0 pence).

This is in line with our policy of maintaining dividend

cover of two times adjusted earnings. The dividend

will be paid on 1 July 2026 to shareholders on the

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 6

Chair’s Statement continued

‘Transform & Grow’ strategy

The Board remains steadfast in its commitment

tothe ‘Transform & Grow’ strategy. As stewards

ofMarshalls’ long-term direction, we are confident

this remains the right framework to deliver sustainable

growth and improve resilience. Simon’s appointment

safeguards strategic continuity, minimising disruption

and ensuring the Executive Team remains focused

on delivery.

Throughout the year, our governance activities

centred on monitoring the pace and effectiveness

of execution rather than revisiting the strategy

itself.We conducted regular deep-dive reviews

intotheLandscaping Products improvement plan,

challenging management on the delivery of key

milestones, including cost reduction targets and

margin recovery expectations. During 2026, we

expect to scrutinise capital and resource allocation

proposals in respect of our growth engines, ensuring

effective capital deployment and validating thatour

plans remain aligned to an evolving regulatory

andmarket backdrop.

To ensure rigorous oversight, the Board monitors

progress through a clear framework of financial and

non-financial KPIs. This gives the Board a clear view

of how the strategy is taking effect on the ground

and allows us to hold management to account for

delivering planned improvements in profitability

andcounter-cyclical resilience.

Environment

Sustainability is a core commercial driver of our

‘Transform & Grow’ strategy. The Board continues

to oversee our progress against the Group’s

net-zero 2050 targets, which are validated by the

Science Based Targets initiative (SBTi). This year,

we have focused on embedding carbon leadership

into our customer proposition, expanding our suite

of Environmental Product Declarations to give our

customers the transparency they need. By continuing

to innovate in lower-carbon concrete, weare

ensuring Marshalls remains the partner ofchoice

for building a sustainable future.

Board changes

On 27 November 2025, Matt Pullen stepped down

from the Board as Chief Executive. On behalf

oftheDirectors, I would like to thank Matt for his

contribution, particularly his work in developing

the‘Transform & Grow’ strategy. Following Matt’s

departure, Simon Bourne was appointed Interim

Chief Executive Officer and the Board initiated a

formal search process with independent advisers,

including robust assessment of internal and

external candidates. On 19 January 2026, we

appointed Simon as Chief Executive Officer with

immediate effect. Simon has been with the Group

for more than a decade in senior operational and

commercial roles and has been a member of the

Board since 2022. His appointment reflects the

Board’s focus on execution and our desire to

accelerate delivery of ‘Transform & Grow’ with

continuity and operational leadership. The Board

does not intend to appoint a separate Chief

Commercial Officer. Commercial leadership is now

embedded within the Executive team and divisional

leadership structure, with the Chief Executive Officer

retaining overall accountability for the Group’s

commercial agenda.

During the year, we were pleased to welcome Paul

Inman as a Non-Executive Director. Paul joined us in

September 2025 as part of our planned succession

for Graham Prothero, who has served a nine-year

term and in accordance with good governance

standards will not stand for re-election at the 2026

AGM. On behalf of the Board, I would like to thank

Graham for his dedicated service and wise counsel

over the last decade and wish him the best in his

future endeavours.

Outlook

Market activity levels in the first two months of

2026 remained consistent with the close of 2025,

although they were affected by persistent rainfall.

Against this backdrop, our priority in 2026 is the

disciplined implementation of ‘Transform & Grow’

todrive improved operating margins and strong

cash generation, supported by tight control of our

costs, working capital and capital expenditure.

Thiswill be underpinned by sharper execution

Social

As a responsible business, we remain guided

bytheUN Global Compact and committed to

theUN Sustainable Development Goals (SDGs),

underpinned by The Marshalls Way and our

purposeof ‘Building Tomorrow’s World’.

The Board places the health, safety and wellbeing

ofour colleagues at the centre of its oversight

andis committed to fostering an inclusive,

high-performance culture where people can

developand thrive. We have maintained our

focuson responsible supply chains, applying

comprehensive human rights due diligence,

particularly as we expand in high-growth areas

likesolar. We are proud to have retained our

statusas a Living Wage employer and Fair Tax

Markholder for over a decade, reflecting our

enduring commitment todoing business the

right way.

Governance

Strong governance remains fundamental to how

werun Marshalls. Our Corporate Governance

Statement on pages 64 to 78 sets out how we

haveapplied the principles of the UK Corporate

Governance Code (the “UK Code”) and maintained

high standards of Board leadership, accountability

andtransparency.

The Board’s agenda during the year balanced

oversight of strategy execution, leadership

succession and culture with detailed scrutiny

ofrisk, internal controls and financial reporting.

Wehave also continued our readiness activities

forthe changes in the UK Code which come into

effect from January 2026.

We continue to engage transparently with

shareholders and wider stakeholders to ensure our

stewardship remains aligned with their long-term

interests. Details on this can be found in our

Stakeholder Engagement section on

pages 26 to 30.

through intensifying our pace, tightening our focus,

and improving performance, ensuring teams

throughout our businesses are aligned behind

priorities that will improve margin, cash and

service outcomes.

The Board is mindful of the conflict in the Middle

East. However, in the absence of clarity on the

impact of the conflict on our end markets and

costbase, our expectations for the year remain

unchanged and the Board is confident of driving

amaterial increase in profitability and returns over

the medium-term.

Vanda Murray OBE

Chair

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 7

I would like to thank our colleagues across

the Group for their dedication during a year of

significant change. Our people are the bedrock

of our business, and their commitment to

safety, customer service and our values has

remained steady in challenging conditions.

With a renewed leadership team and a clear

strategy in place, I am confident that our

high-performance culture will continue to

driveour transformation and future success.

X Read more about our people on pages 33 to 35

Our people

Chief Executive Officer’s Statement

Simon Bourne

Chief Executive Officer

Summary

• Returned the Group to revenue growth

by delivering momentum in Roofing and

Building Products

• Delivered performance in line with revised

expectations, while taking targeted actions

to stabilise Landscaping and protect

futurereturns

• Reinforced the Landscaping Products

improvement plan, delivering £3 million

of in-year savings and securing a further

£8million savings for 2026

• Scaled regulation and infrastructure

aligned growth engines, including Viridian

Solar revenue growth of c.32% and Water

Management strengthening its position

through key framework agreements

aheadof AMP8

• Improved safety performance, with LTIFR

down to 1.54 (2024: 2.34)

• Maintained strong cash conversion and

ended the year with pre-IFRS 16 net debt

of £137.9million, supported by strict

workingcapital management

With a clear focus on pace and

execution, we are reinforcing the

delivery of our ‘Transform & Grow’

strategy to unlock the full potential

ofour diversified portfolio. Guided by

our purpose of ‘Building Tomorrow’s

World’, we have taken decisive

actionto drive resilience today while

building a stronger, more profitable

business for the future.

Overview

It is a privilege to lead Marshalls as Chief Executive

Officer at this pivotal time. Having joined the Group

in 2015, I have worked alongside colleagues across

our businesses through a period of significant

change – including the evolution from a Landscaping

leader into a more diversified building products

manufacturer and sustainable solutions providerfor

the built environment. Having played an integralrolein

developing our ‘Transform & Grow’ strategy, I amfully

committed to the direction we have set. My focusnow

is on delivery: moving faster on the priorities that matter

and executing with greater discipline, ensuring that we

translate our strategic intent into operational reality.

2025 was a demanding year for Marshalls. Our

core markets remained subdued for longer than we

originally expected, particularly in new build housing

and housing repair, maintenance and improvement

(RMI), and this continued to weigh on demand

for our products. Despite this backdrop, the Group

returned to revenue growth, a testament to the

strength of our diversified portfolio. This performance

was driven by our Roofing and Building Products

divisions, where the scaling of our growth engines

–specifically Viridian Solar and Water Management–

is now delivering material contributions that help offset

cyclical weakness elsewhere in the portfolio.

We have not stood still. Facing market headwinds, we

took necessary, and sometimes difficult, decisions

to reset our cost base, simplify our portfolio and

optimise our manufacturing network. We are not

managing the business on the assumption of a rapid

cyclical recovery. Our priority is to execute ‘Transform

& Grow’ with discipline to improve performance in the

current market, leaving the Group well positioned to

outperform as demand improves. We will be selective

with the activity we undertake, ensuring it moves the

dial positively from a P&L perspective, giving us the

launch pad to grow in the areas we believe will have

the greatest future impact for our business.

Trading performance

Our financial performance in 2025 reflects the

discipline we have applied across the Group. It is

encouraging to see revenue return to growth, increasing

by 2% to £632.1 million (2024: £619.2million), driven

by the momentum in our Roofing and Building

Products segments. While profitability was impacted

by a lower-margin mix in Landscaping and targeted

price investments to secure volume in key channels,

our adjusted operating profit of £56.4million (2024:

£66.7million) was delivered in line with the revised

expectations we set inJuly 2025.

Cash and capital discipline remained central.

Wemaintained tight control of working capital

and capital expenditure, delivering another year

ofstrong cash conversion, with operating cash

flow at 88% of EBITDA, and we ended the year with

net debt of £137.9 million (2024: £133.9 million).

Thisoperational rigour underpinned the successful

refinancing of our bank facility in November, securing

a new £270 million facility on equivalent terms that

provides medium-term stability and the flexibility

toinvest selectively throughout the cycle.

X Further details on the performance of the Group’s

reporting segments are provided on pages 20 to 22

Executing ‘Transform & Grow’

Strengthening our brand powerhouses

Landscaping has been the most challenged part of

the Group, and the external backdrop has remained

difficult. Subdued demand and cyclical overcapacity

impacted pricing, while customer “value engineering”

has shifted volumes towards lower-margin commodity

products. Against that context, our focus has been

to reset the business to perform profitably at current

demand levels – reducing complexity, aligning

capacity to the market and pivoting from volume

towards specification-led value.

Our improvement plan is now delivering tangible

results. We accelerated manufacturing and overhead

optimisation, delivering £3 million of cost savings in

2025 and remaining on track to achieve £11 million

of annualised savings by 2026. We also simplified

the portfolio to reduce complexity and working

capital intensity, including reducing SKU count by

30% and focusing sales effort on higher-margin,

value-added ranges.

Commercial discipline has been strengthened

through refreshed leadership, clearer product

portfolio architecture (“good-better-best”), and

tighter governance of pricing, discounting and

margin. Alongside improvements in service

performance and availability, we have seen

these actions being recognised by customers,

with Marshalls winning several Supplier of the

Year awards, all while protecting profitability.

There is more to do, but the business exits

2025 with a stabilised cost base and improving

operational traction.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 8

Chief Executive Officer’s Statement continued

Executing ‘Transform & Grow’ continued

Strengthening our brand powerhouses continued

While our immediate priority has been the

operational turnaround, the underlying strength

of the Marshalls Landscaping brand remains

undisputed. Our distinctive, national specification-

led sales model continues to differentiate us from

competitors, allowing us to influence projects at the

design stage and pull demand through the supply

chain. Crucially, this commercial advantage is now

supported by a leaner, more efficient cost base. We

are not just waiting for the market to come back; we

have rebuilt Marshalls’ Landscaping business to be

profitable in the current market, making a recovery

the catalyst for outperformance.

Marley navigated a more challenging trading and

operational backdrop in 2025. Market conditions

softened in the second half, reflecting reduced

confidence across both new build and RMI, while

structural shifts in new build weighed on volume.

The increasing adoption of solar under Part L

is reducing demand for traditional roof tiles,

and additional industry capacity has increased

competitive intensity in certain categories.

Against this backdrop, we remained focused

on margin protection, service performance and

disciplined trading. Within tiles, our clay tile business

gained market share as pricing normalised following

the stabilisation of gas costs, narrowing the price

premium to concrete tiles. While overall tile volumes

remain influenced by end market softness and rising

solar penetration, we expect clay to continue to

perform comparatively well in 2026.

We are strengthening Marley’s competitive position

through targeted capital investment to modernise

manufacturing lines, improve productivity and

reinforce service resilience, alongside continued focus

on customer partnerships and specification-led selling.

In 2026, our priority is to maintain and selectively grow

market share, improve manufacturing efficiency and

protect returns through the cycle.

Scaling our growth engines

Our growth engines underline the value of a more

diversified portfolio by further reducing our reliance

on discretionary consumer spend and increasing

exposure to regulation-led and infrastructure-driven

demand. By capitalising on powerful structural

tailwinds – from energy efficiency to climate adaptation

– we are pivoting the business towards growing

markets that offer the potential for significant

long-term value creation.

Viridian Solar has delivered a standout performance,

achieving revenue growth of c.32% for the year. This

trajectory is underpinned by the structural shift in

building regulations (Part L), which has accelerated

the adoption of our roof-integrated solar product.

With the Future Homes Standard expected to mandate

further energy efficiency standards, we are continuing

to invest in Viridian Solar to maintain our market

leadership in this rapidly expanding market.

In Water Management, we have successfully pivoted

our focus towards the wider infrastructure sector.

With regulated investment, flood resilience and

Sustainable Drainage System (SuDS) requirements

becoming increasingly important, we have invested in

engineering capability and strengthened our route to

market. By securing framework agreements with Tier1

contractors, we have established a strong foothold

ahead of the AMP8 investment cycle. This positioning

will allow us to unlock significant opportunities in water

infrastructure and wastewater management, areas

where we expect to see a structural growth in demand.

The Board expects to consider a comprehensive

business case in the first half of 2026 to enable

scalable, flexible capacity expansion.

In Bricks & Masonry, trading reflected the continued

challenges in the new build housing market during

the year, with volumes impacted by lower demand

and increased supply-side competition. Despite this

reduction in activity, we successfully maintained

trading margins through disciplined pricing and cost

control. Our conviction in the long-term strategy

remains unchanged; as housing output recovers,

our concrete bricks offer a lower-carbon, cost-

effective alternative to traditional clay, positioning

the business to recover volume and drive future

value. However, in 2026, investment will continue

to be tightly controlled, balancing readiness for

recovery with prudent capital allocation until

activitylevels in new housing improve.

CEO priorities

Strategic continuity, sharper execution

Following my appointment as CEO, my immediate priority is sharper execution of our ‘Transform & Grow’ strategy – intensifying the pace with which we take

decisions, focusing our attention on activities that drive value and improving performance throughout our businesses.

Pace. Focus. Performance.

Delivery-led organisation Selective in what we do Commercial excellence

Flattening the structure Prioritised investment Enhancing financial transparency

Agile decision making Linking workforce plans to value Aligning incentives to outcomes

Seamless customer integration Refreshing product portfolio & NPD Expanding sales & product training

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 9

Chief Executive Officer’s Statement continued

Sustainability and innovation

Sustainability is increasingly a source of

commercial advantage for Marshalls. Our strategy

targets two critical customer needs: decarbonising

the built environment and adapting to a changing

climate. This year, Viridian Solar played a key role

in helping customers meet strict energy efficiency

requirements and, going forward, we believe our

lower-carbon concrete bricks will support specifiers

in meeting increasingly robust stakeholder demands

with respect to embodied carbon. In parallel, our

Water Management division is working to secure

specifications on major projects which will provide

essential infrastructure needed to deliver flood

resilience and effective water handling.

Our progress is anchored by rigorous data. We

have continued to invest in materials innovation,

including our CarbonStep technologies as part of

our cement replacement programme. Crucially,

we are translating this into customer value by

expanding our Environmental Product Declarations

(EPDs), providing the verifiable data increasingly

required for project tenders. With our net-zero

targets validated by the SBTi, our roadmap is clear,

and we are executing it with commercial focus.

Customers and commercial excellence

Reconnecting with our customers has been

a key priority this year. Over the past twelve

months, we have refreshed our Landscaping

Products commercial leadership team, clarified

responsibilities across sales, marketing and

specification, and reset expectations around

howwe show up for our customers day to day.

We have also reshaped how we go to market.

Amore disciplined account segmentation model,

clearer frameworks for pricing and discounting, and

better use of data and CRM tools are helping our

teams focus on meeting our customers’ needs, with

the right offers, at the right times. While there is more

to do, these changes are already translating into

stronger commercial consistency and improving

service performance across key product lines.

Listening and partnership are central to this shift.

We have stepped up joint planning with our largest

distributors and merchant partners, increased the

cadence of customer forums and feedback surveys,

and built these insights directly into our product,

service and investment decisions. In 2026, we will

continue to deepen these relationships, embed

our commercial playbooks across every business

and monitor customer experience consistently, so

that choosing Marshalls is synonymous with ease,

reliability and value.

Our colleagues and culture

This has undoubtedly been a demanding year for

our people. The restructuring required to right-size

our cost base in the Landscaping business has

involved difficult decisions and the departure

of valued colleagues. On behalf of the Board,

Iwould like to express my gratitude to all of our

teams for the resilience and professionalism they

have demonstrated throughout this period of

significant change.

Throughout the transformation, safety has

remained our absolute priority and I am pleased

to report that our lost time injury frequency rate

(LTIFR) has improved to 1.54 (2024: 2.34), reflecting

the rigorous application of our safety standards

across our manufacturing network even during

times of operational change.

Beyond safety, we are investing heavily in skills and

leadership to build the capabilities required for our

next phase of growth. This commitment extends to

the next generation, with 145 apprentices currently

developing their careers across the Group.

Engagement has been vital in navigating the

challenges of the past year. Through regular and

transparent dialogue with our Employee Voice

Group and our Group-wide engagement survey,

we have sought to keep colleagues connected

to our purpose and supported through the

Group’stransformation.

Looking forward

As we move into 2026, we continue to plan on

the basis that markets remain mixed, and we are

not relying on a sharp cyclical recovery. However,

we enter the year with stronger foundations: a

cost base aligned to demand, a clearer portfolio,

improved data and a sharper focus on our

customers and execution. We must now build

on those foundations with a focus on strategic

execution from the boardroom to the shop floor.

Our priorities for the coming year are clear. We will:

(1) complete the Landscaping turnaround and convert

the planned cost savings into profit, (2)continue

toraise service levels and strengthen commercial

discipline across the Group, and (3)scale our

growth engines to capture the structural demand

linked to regulation, energy and infrastructure

investment cycles.

If we execute well, we expect an improved financial

performance in 2026, even if volumes remain

subdued, and we will be well placed to outperform

the market when demand improves.

Simon Bourne

Chief Executive Officer

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 10

Our Strategy

Our purpose: ‘Building Tomorrow’s World’

Our strategy: ‘Transform & Grow’

Our vision: To be the customer’s first choice for

building materials and infrastructure solutions

Business excellence

Investing in technology and systems to drive

ouroperationalandcommercial excellence.

Leadership in ESG

Commitment to leading in ESG standards and governance as

aresponsible business, guided by the UN Global Compact.

Great place to work

Investing in our people, organisation and culture.

Carbon leadership

Commitment to materials innovation and a nationwide

networksupports lower-carbon supplier of choice.

Best-in-class technical

anddesign support

Technical know-how and understanding of the building

standardsof today and tomorrow provide unrivalled

expertiseforcustomers.

Leading brands

Market leading brands andsolutions consistently

recognisedfortheir quality, range and service.

Customers

who value our

unique set of

capabilities

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 11

Strategy in Action: Brand Powerhouses

Brand

Powerhouses

Diversification across brands, categories and end

markets is a strategic advantage that spreads our risk

while creating flexibility to pursue future opportunities.

MARLEY ROOFING

Protecting margins in a changing

roof tile market

As solar adoption under Part L continued to

reshape new build demand and competitive

intensity increased in certain categories,

Marley stayed focused on margin protection

and service performance. Clay tiles gained

share as the price premium narrowed,

and targeted investment to strengthen

manufacturing efficiency and availability

is underway.

+6ppts

market share (clay tiles)

Building a leaner, more agile

Landscaping business

In a subdued market we reshaped the business

to perform profitably at current demand levels

– cutting complexity, right-sizing the cost base

and sharpening pricing and mix discipline. As

volumes recover, the combination of a lower

fixed cost base, better mix and operating

leverage provides clear upside potential.

Medium-term operating margin target:

≥12%

MARSHALLS LANDSCAPING

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 12

Strategy in Action: Growth Engines

Growth

Engines

Targeted investment in our growth engines –

ViridianSolar, Marshalls Bricks and Marshalls

WaterManagement – to drive significant market

outperformance in attractive end markets.

Delivering growth in our core

housing markets and winning new

infrastructure business

We have built the foundations for the next

phase of growth: improved service, scaled

operational capacity and stronger engagement

with Tier 1 contractors and specifiers through

framework agreements. Our focus now shifts

to converting the design pipeline into orders

and deliveries as AMP8 mobilisation translates

into on-the-ground activity.

£44bn

estimated new infrastructure investment

overAMP8 cycle

MARSHALLS WATER MANAGEMENT

Robust price and margin realisation

in challenging markets

Disciplined decisions have protected margin

against a backdrop of increased supply and

subdued demand. While we remain confident

in the medium-term opportunity, supported by

a recovery in new housing and a shift towards

lower-carbon products, costs will remain

controlled until activity levels improve.

Trading margins

maintained

year-on-year

MARSHALLS BRICKS &MASONRY

VIRIDIAN SOLAR

Protecting market leadership

Viridian delivered strong growth as housebuilders

implemented Part L, supported by best-in-class

product performance and a differentiated

service model. As Part L adoption becomes

embedded, our priority is to protect and

extend market leadership through continued

investment in product, customer service and

operational resilience, while expanding ArcBox

into international markets.

2025 revenue growth

32%

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 13

Our Markets

Navigating the cycle

Managing the cycle

The UK construction market in 2025 remained structurally under-

supplied in housing and infrastructure but continued to operate

within a cyclical slowdown. While inflation moderated, interest rates

remained elevated relative to the previous decade, constraining

affordability, mortgage approvals and investor confidence.

For Marshalls, the principal headwinds were in private housing and

discretionary RMI. These conditions impacted volumes across

Landscaping and certain Commercial product lines and represented

the most significant drag on Group performance in 2025. The year was

therefore characterised not only by market pressure but by deliberate

operational repositioning.

New build housing – positioned for recovery

Private housing output remained subdued, with developers prioritising

cash generation, disciplined build rates and completion of existing

sites. The Construction Products Association (CPA) forecasts gradual

improvement through 2026 as rates ease; however, recovery is

expected to be measured.

Landscaping demand lags housing starts due to its completion-

driven installation profile. It sits at the intersection of housebuilder

completion schedules, installer capacity and merchant inventory

levels. As a result, volume recovery is influenced not only by housing

starts but by working capital discipline within the distribution channel

and consumer confidence at the point of installation.

In response, we aligned capacity to realistic demand assumptions

and strengthened commercial governance across the business.

Manufacturing optimisation, improved logistics discipline and tighter

pricing architecture have created a leaner and more agile operating

platform. As activity stabilises, we are positioned to translate

incremental market recovery into margin progression through

operating leverage and improved mix discipline.

Housing RMI – strengthening our commercial engine

The RMI market demonstrated a clear divergence between essential

and discretionary spend. Roofing categories remained comparatively

resilient, reflecting maintenance-led demand, regulatory standards

and defined replacement cycles. Marley therefore continues to provide

structural balance within the Group, spanning both new build roofing

and repair activity and reducing reliance on discretionary expenditure.

Larger aesthetic landscaping projects were deferred as households

prioritised essential expenditure. In response, 2025 was a year of

structural commercial reset within Landscaping.

Customer intimacy now means structuring the business around the

needs of the market rather than internal process. We have introduced

a clearer operating rhythm that drives consistent, measurable sales

activity – including improved contact frequency, more mature

commercial conversations and a sharper focus on share-of-wallet

growth. Forecasting discipline is now directly linked to trading and

promotional calendars, ensuring alignment between demand planning,

stock positioning and customer activity.

Operational excellence focuses on making Marshalls easier to trade

with than competitors. We have simplified our manufacturing and

logistics platform, improved availability and service consistency, and

reduced complexity across the network. The objective is consistent

service performance delivered from a cost-efficient platform.

Product leadership balances accessibility and innovation. In a market

requiring both cost sensitivity and differentiation, we have sharpened

our product value ladder – ensuring competitive entry and core ranges

alongside new and innovative solutions that support installers and

merchants in protecting and enhancing their own margins.

Together, these pillars position Marshalls as an enabling partner

– supporting customers in delivering their own strategies more

effectively, rather than competing purely on price. As conditions

stabilise, this integrated commercial engine improves revenue

predictability, margin quality and working capital alignment.

Commercial – disciplined participation

Commercial construction remained mixed, with regeneration and

public realm projects delayed as funding and financing conditions

remained constrained. Education and logistics projects provided

relative resilience, while office and retail activity remained subdued.

Our Commercial Landscaping exposure is weighted towards

specification-led public realm and regeneration schemes, where

planning lead times introduce volatility but offer attractive project

economics. While conversion remains gradual, bidding activity has

improved, supported by strengthened specification relationships

andclearer commercial governance.

How we responded in 2025

• Cost actions: Optimised our manufacturing network to balance

capacity with reduced demand

• Developing commercial and operational excellence: Reset

pricing and discount frameworks, tightened mix management

and focused on higher-value, specification-led opportunities

• Protected cash and capex: Maintained strict control over

working capital and prioritised high-return investments while

deferring non-essential expenditure

• Backed our growth engines: Continued to invest selectively in

Viridian Solar, Water Management and Bricks & Masonry, even

as we controlled costs elsewhere

CPA forecast – total UK construction

2020 2021 2022 2023 2024 2025 2027F2026F

250

200

150

100

£’bn

15%

10%

-5%

-10%

-15%

-20%

Total construction (left-hand scale) Percentage change (right-hand scale)

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 14

Our Markets continued

Infrastructure – regulatory momentum

The transition into AMP8 represents a significant investment cycle

inthe UK water sector. Although deployment has been measured

during the transition year, water companies are planning approximately

£44billion of new infrastructure investment, including substantial

funding for storm overflow mitigation and climate resilience. CPA

forecasts anticipate infrastructure growth of c.4% per annum in 2026

and 2027, with water and sewerage construction growing ahead of

thewider market.

Our Water Management business participates in key AMP8

frameworks and is aligned to flood resilience, SuDS adoption and

surface water management requirements. As frameworks convert into

active delivery, we expect increasing participation in regulatory-driven

infrastructure programmes.

While construction cycles influence near-term performance, Marshalls

is increasingly aligned to structural drivers in infrastructure, regulation

and sustainability.

Our diversified portfolio spans discretionary consumer demand,

essential maintenance categories, specification-led commercial

activity and regulatory-driven infrastructure investment. This

diversification reduces reliance on any single end market and

enhances resilience through the cycle.

Infrastructure and water – structural support

Climate adaptation, flood mitigation and regulatory reform are

drivingsustained investment in water infrastructure. Legislative

focuson Schedule 3 of the Flood and Water Management Act is

accelerating adoption of SuDS, embedding resilience requirements

into planning frameworks.

These drivers directly support our integrated capability in permeable

paving, drainage systems and surface water management solutions.

Decarbonisation and product substitution

The transition to a lower-carbon built environment is reshaping

specification behaviour.

Regulatory developments, including Part L of the Building Regulations

and the forthcoming Future Homes Standard, are increasing energy

efficiency requirements in new housing. This supports structural

penetration growth for roof-integrated solar solutions through Viridian

Solar, even in a subdued housing market.

Embodied carbon considerations are also increasingly material

acrosscommercial and residential construction. Our Bricks & Masonry

business benefits both from lower-carbon product development and

from ongoing substitution dynamics within housing construction,

where cost efficiency and carbon performance influence product

selection. As housing activity stabilises, the business benefits from

operational scale, cost competitiveness and integrated supply

capabilities across the Group, enhancing its ability to compete

effectively in a price-sensitive environment.

Positioned for outperformance

The UK built environment requires renewal across housing supply,

water resilience and energy efficiency.

Marshalls enters 2026 with a simplified structure, leaner cost base

and strengthened commercial operating model. We have clarified

accountability, improved decision speed and embedded a more

disciplined operating model.

The structural actions taken in 2025 have lowered the Group’s

operational breakeven and improved conversion of incremental

revenue into profit, enhancing resilience through the cycle. With

acost base aligned to current demand levels, even modest market

normalisation provides meaningful earnings leverage.

Our objective remains to outperform the UK construction market

through disciplined capital allocation, operational excellence and

structural portfolio rebalancing.

Why diversification matters

• No single market defines our performance: Our exposure to

diverse end markets reduces our reliance on any single sector,

dampening the impact of cyclical downturns

• Balancing the portfolio: While housing and RMI remain core to our

heritage, infrastructure and regulatory-driven demand are growing in

relative importance, providing new avenues for revenue generation

• Aligned to structure, not just cycle: Our growth engines

(Viridian Solar, Water Management and Bricks & Masonry)

aretethered to long-term structural drivers – legislation,

climate adaptation and energy security. These will remain

despite short-term economic fluctuations

• Strategic rebalancing: Our strategy is to proactively

rebalance the Group towards these higher-growth, structural

opportunities over the medium term

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 15

From homes and hospitals to town centres,

roads and water systems, our building

materials and infrastructure solutions power

the projects that shape everyday life.

Enabling the built environment

We transform raw materials into long-lasting, sustainable building

solutions, creating resilient places where communities thrive.

Business Model

‘Building Tomorrow’s World’

OUR KEY RESOURCES…

AND INNOVATIVE SOLUTIONS... ENABLE US TO CREATE LASTING VALUE

We begin with responsibly sourced

andpredominantly British materials that

underpin the quality and performance

ofourproducts.

Raw materials

Our main raw materials are cement, sand, aggregates and

pigments – the majority of which are UK sourced. We also source

goods for resale from overseas locations, which principally relate

to solar solutions and imported dimensional stone.

By combining engineering expertise, innovation

and an uncompromising commitment to

quality, we transform raw materials into reliable

products that last for generations.

Manufacture

We have a geographically diverse network of sites that

manufacture our ranges of concrete, clay, timber and steel

products. We add value through proprietary mix designs that

remove carbon and cost.

94%

raw materials

sourced from UK

Founding

member

of the Solar

StewardshipInitiative -

see page 37

60%

cement replacement achieved

within our concrete products

85%

of our manufacturing sites

with ISO 9001 accreditation

for quality management

66%

type III verified EPD coverage

Group NPS

OUR DIFFERENTIATORS

Carbon leadership and ESG governance Best-in-class technical and design support Leading brands and specification-led model Operational excellence

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 16

Key Performance Indicators

Measuring our performance

The Group’s KPIs monitor progress towards the achievement of our objectives.

Revenue (£’m)

£632.1m

(up 2%)

Adjusted profit before tax (£’m)

£43.7m

(down 16%)

Reported PBT (£’m)

£17.7m

Adjusted EPS (pence)

13.4p

Reported EPS (pence)

5.7p

Adjusted return on capital employed (ROCE) (%)

7.0%

Why is this KPI important?

Delivering sustainable growth is key to the Group’s strategy.

The aim is to outperform the wider UK construction market

by 2–4% per annum in the medium term.

Why is this KPI important?

Sustainable improvement in profitability is a strategic priority.

Why is this KPI important?

Sustainable improvement in earnings per share (EPS)

isastrategic priority.

Why is this KPI important?

ROCE is an important indicator ofthe Group’s ability

togenerate a return on the capital it deploys.

Performance

Increase of 2% despite subdued markets in 2025.

Performance

Profit has been adversely impacted by lower-margin mix

in Landscaping and targeted price investments to secure

volume in key channels. This was partially offset by the

benefits of cost and capacity reduction implemented in 2025.

Performance

EPS has been adversely impacted byweaker operating profit

partially offset by lower finance costs. The effective tax rate

is broadly unchanged.

Performance

Adjusted ROCE for 2025 is 7% (2024: 8.2%) due

to weaker profitability. ROCE is defined as EBITA/

shareholders’ funds plus net debt.

Principal risks

• Competitor activity and new technology

• Macro-economic and political

• Security of raw material supply/raw material shortages

• Threat from new technologies andbusiness models

• Delivery of strategic programmes

Principal risks

• Competitor activity and new technology

• Macro-economic and political

• Cyber systems, security and technology

• Security of raw material supply/raw material shortages

• Delivery of strategic programmes

Principal risks

• Competitor activity and new technology

• Macro-economic and political

• Cyber systems, security and technology

• Security of raw material supply/raw material shortages

• Delivery of strategic programmes

Principal risks

• Competitor activity and new technology

• Macro-economic and political

• Delivery of strategic programmes

Risk mitigation

• Close monitoring of trends and lead indicators

• Diversity of business

• Customer centricity

• Digital strategy

Risk mitigation

• Innovation and new product development

• Focus on cyber security controls

• Proactive supply chain management

Risk mitigation

• Innovation and new productdevelopment

• Focus on cyber security controls

• Proactive supply chainmanagement

Risk mitigation

• Digital transformation

• Operational excellence

• Flexible capital structure

• Capital allocation policy

• Active working capital management

Stakeholder linkage

• Customers

• Suppliers

• Employees

• Communities

Stakeholder linkage

• Shareholders

• Employees

Stakeholder linkage

• Shareholders

• Government

Stakeholder linkage

• Shareholders

• Employees

Links to remuneration Links to remuneration Links to remuneration Links to remuneration

LTIPAI LTIPAI LTIPAI LTIPAI

589.3

719.4

671.2

619.2

632.1

2021 2022 2023 2024 2025

73.3

90.4

53.3

52.2

43.7

2021 2022 2023 2024 2025

29.2

31.3

16.7

16.0

13.4

2021 2022 2023 2024 2025

20.6

13.3

8.4

8.2

7.0

2021 2022 2023 2024 2025

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 17

Key Performance Indicators continued

Pre-IFRS 16 net debt (£’m)

£137.9m

Adjusted operating cashflow

conversion (OCF) (%)

88%

OCF:EBITDA (rolling annual basis)

Health and safety (lost time injury

frequencyrate)**

1.54

** Health and safety performance cannot be directly

compared to years prior to 2024 due to integration

ofMarley data.

190.7

172.9

133.9

137.9

2021 2022 2023 2024 2025

80%

91%

106% 106%

88%

2021 2022 2023 2024 2025

44,689

2.34

42,361

1.54

39,725

37,835

36,756

2021 20242022 20252023 2024 2025

Why is this KPI important?

Marshalls continues to support aprudent capital structure

and is focused on reducing net debt in the medium term.

Why is this KPI important?

The conversion of profit to cash is key to our ‘Transform

&Grow’ strategy and feeds our capital allocation policy.

Why is this KPI important?

The achievement of our carbon reduction targets is central to

our commitment to our ESG strategy and carbon leadership.

Why is this KPI important?

Marshalls is committed to meeting the highest health

and safety standards.

Performance

Pre-IFRS 16 net debt was £137.9million at 31 December 2025

(2024: £133.9 million). The year-on-year increase reflected

lower EBITDA, higher finance cost payments and a greater

working capital investment, alongside increased capital

expenditure and cash outflows associated with adjusting

items, including the final contingent consideration payment

in respect of Viridian Solar and cash restructuring costs.

Performance

Adjusted operating cash flow was88% of EBITDA, reflecting

strong working capital management.

Performance

Our absolute Scope 1 and 2 emissions have decreased in

2025. Absolute emissions remain well within our approved

Group science-based target pathway. Though the KPI related

to remuneration has changed to carbon reduction projects,

itis interlinked with our roadmap to net-zero by 2050.

Performance

In 2025 the lost time injury frequency rate per million

hours worked was 1.54. Having integrated our health

and safety data, we can now report a comparison to

the previous year.

Principal risks

• Macro-economic and political

• Security of raw material supply/raw material shortages

Principal risks

• Macro-economic and political

• Security of raw material supply/raw material shortages

Principal risks

• Security of raw material supply

• Legal and ethical

Principal risks

• Health and safety

• People risks

Risk mitigation

• Close monitoring of trends and lead indicators

• Diversity of business

• Efficient cash and capitalmanagement

Risk mitigation

• Excellent customer serviceand quality

• Customer relationships andbrand value

• Working capital management

Risk mitigation

• Mitigation and adaptation strategy

• Materials research and development

• Climate risk analysis

Risk mitigation

• Positive safety culture

• Compliance procedures and policies

• Employee training

Stakeholder linkage

• Shareholders

• Employees

• Customers

• Suppliers

Stakeholder linkage

• Shareholders

• Customers

• Suppliers

Stakeholder linkage

• Shareholders

• Employees

• Customers

• Suppliers

• Environment

• Regulators

Stakeholder linkage

• Employees

• Customers

• Communities

• Environment

• Regulators

Links to remuneration Links to remuneration Links to remuneration Links to remuneration

Climate change (%)*

decrease in absolute carbon emissions in 2025

* Prior year data restated - see page 39.

Links to remuneration

Annual incentive award

Long-term Incentive Plan

LTIP

LTIPAI LTIPAI LTIPAI

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 18

Summary of Group Performance

Our diversified portfolio

continues to provide

balance through the cycle

The Group delivered a resilient performance in challenging market conditions, with the impact partially mitigated by

decisive management actions taken in 2025 and the benefit of its diversification strategy. The Group’s adjusted results

are set out in the following table.

£’m 2025 2024 Change %

Revenue 632.1 619.2 2%

Adjusted net operating costs (575.7) (552.5) (4%)

Adjusted operating profit 56.4 66.7 (15%)

Adjusted net finance expenses (12.7) (14.5) 12%

Adjusted profit before taxation 43.7 52.2 (16%)

Adjusted taxation (9.7) (11.7) 17%

Adjusted profit after taxation 34.0 40.5 (16%)

Adjusted EPS – pence 13.4p 16.0p (16%)

Proposed full-year dividend – pence 6.7p 8.0p (16%)

Group revenue was £632.1 million (2024: £619.2 million), which is 2% higher than 2024. This reflected growth of 4%

in both Building and Roofing Products, partially offset by a modest contraction of 1% in Landscaping Products. Group

adjusted operating profit was £56.4 million, which is £10.3 million lower than 2024, reflecting a significant reduction

in profitability in Landscaping Products and a modest contraction in Building Products, partially offset by growth in

Roofing Products. Group adjusted operating margin decreased by 1.9ppts to 8.9% (2024: 10.8%).

The adjusted operating profit is analysed between the Group’s reporting segments as follows:

£’m 2025 2024 Change %

Landscaping Products 0.6 10.7 (94%)

Building Products 13.0 14.1 (8%)

Roofing Products 50.2 49.4 2%

Central costs (7.4) (7.5) 1%

Adjusted operating profit 56.4 66.7 (15%)

Further details of the segmental performance are set out on pages 20 to 22.

Adjusted net finance expenses were £12.7 million (2024: £14.5 million). These expenses comprised financing costs

associated with the Group’s bank borrowings of £11.3 million (2024: £12.5 million), IFRS 16 lease interest of £2.0 million

(2024: £1.7 million) and a pension related credit of £0.6 million (2024: £0.3 million charge). The reduction in adjusted

net finance expenses in 2025 reflects the impact of lower average drawn borrowings and base rates, together with a net

benefit from pension interest.

Adjusted profit before tax was £43.7 million (2024: £52.2 million). The adjusted effective tax rate was 22% (2024: 22%),

reflecting the UK headline corporation tax rate partially offset by the benefit of a patent box arrangement. Adjusted

earnings per share was 13.4 pence (2024: 16.0 pence), which is a 16% reduction year-on-year reflecting the

weakerprofitability.

A reconciliation of the Group’s adjusted operating profit to profit before taxation is set out in the following table.

£’m 2025 2024 Change %

Adjusted operating profit 56.4 66.7 (15%)

Adjusting items affecting operating profit (24.4) (12.8) (91%)

Operating profit 32.0 53.9 (41%)

Net finance expenses (12.7) (14.5) 12%

Adjusting items affecting finance expenses (1.6) — —

Profit before taxation 17.7 39.4 (55%)

EPS – pence 5.7 12.3 (54%)

Reported profit before tax was £26.0 million lower than the adjusted result at £17.7 million (2024: £39.4 million),

reflecting the impact of the adjusting items. On a reported basis, the effective tax rate is 18.6%. Reported earnings

per share was 5.7 pence (2024: 12.3 pence), which is lower than the adjusted number due to the adjusting items and

their tax effect. The statutory operating profit is stated inclusive of adjusting items affecting operating profit totalling

£24.4million as summarised in the following table, further details are set out at Note 4.

£’m 2025 2024

Amortisation of intangible assets arising on acquisitions 10.3 10.4

Restructuring and impairment charges 14.1 —

Transformation costs — 2.5

Contingent consideration — 1.6

Significant property sales — (1.7)

Adjusting items within operating profit 24.4 12.8

Adjusting items within net finance expenses 1.6 —

Adjusting items within profit before taxation 26.0 12.8

Adjusting items in 2025 totalled £26.0 million (2024: £12.8 million). Adjusting items within operating profit were

£24.4million (2024: £12.8 million) and comprised non-cash amortisation of intangible assets arising on acquisitions

of£10.3 million (2024: £10.4 million) and restructuring and impairment charges of £14.1 million (2024: £nil) arising

from a partial site closure and other cost reduction actions. In total, adjusting items comprises non-cash charges

of £18.6 million and cash costs of £7.4 million, of which £3.7 million was settled in 2025. Adjusting items within

net finance expenses were £1.6 million (2024: £nil), relating to the write-off of unamortised bank arrangement fees

consequent to the renewal of the Group’s banking facilities.

Further details of the adjusting items arising in 2025 are set out in Note 4.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 19

Segmental Review

Landscaping Products

Improved revenue trend – building blocks in place for improved profitability

Reinforcing the delivery of

the Landscaping Products

improvement plan

Marshalls Landscaping

We have acted with urgency to reset the

profitability of the Landscaping business in

a market that has remained subdued, with

overcapacity and value engineering continuing

to pressure pricing and mix. The Landscaping

Products improvement plan progressed

materially through 2025 and is reshaping the

division into a leaner, more agile operation

aligned to current demand levels.

Execution in 2025 focused on three areas.

First, we accelerated optimisation of the

manufacturing footprint and overhead base,

delivering c.£3 million of cost savings in the year

and remaining on track to deliver £11million of

annualised savings by the end of 2026. Second,

we simplified the product portfolio to reduce

complexity and working capital intensity, reducing

SKU count by c.30% and sharpening sales

focus towards higher-value ranges. Third, we

strengthened commercial discipline through

refreshed leadership, clearer portfolio architecture

(“good-better-best”) and tighter governance of

pricing, discounting and margin. These actions

are supporting volume growth in ourcore

commercial and domestic markets while

building a foundation for a recovery

inprofitability.

Drive greater value from distinctive national

specification pull model

Marshalls Landscaping is a market leader,

differentiated by a national, specification-led

selling model and a broad customer base

across end markets, supported by a national

manufacturing and distribution network. Our

strategic imperative remains to drive greater

value from this model, with an increased focus

on margin recovery and disciplined execution.

Our strategy is to: (i) reinforce leadership

in our commercial heartlands and increase

penetration in higher-margin specified

commercial & infrastructure applications,

where there remains headroom for growth;

and (ii) strengthen our residential proposition,

improving mix and margin through clearer

value tiers and sharper go-to-market execution.

Delivery is underpinned by four priorities:

securing specification earlier in the project

lifecycle, deepening long-term customer

partnerships, reinvigorating the portfolio

through targeted innovation and simplification,

and continuing to improve manufacturing

efficiency and service performance. Over the

medium term, the business continues to target

revenue outperformance versus the wider

market of one to three percentage points per

annum, with improved profitability driven by a

lower cost base, improved mix and operational

leverage as volumes recover. The business is

targeting revenue outperformance of the wider

market by between 1% and 3% per year.

Landscaping Products derives 43% of its revenues

fromcommercial & infrastructure end markets, 28% from

new housing and 29% from housing RMI. The segment

delivered revenue of £265.8 million (2024: £268.3 million)

a reduction of 1% year on year, reflecting continued market

weakness in the segment’s end markets. This performance

comprised volume growth of 4%, offset by price investment

of 1% and a negative mix impact of 4%, as customers

increasingly favoured lower-margin products. This

resulted in market-share gain in 2025.

2025 2024 Change

£’m £’m %

Revenue 265.8 268.3 (1%)

Segment operating profit 0.6 10.7 (94%)

Segment operating margin % 0.2% 4.0% (3.8ppts)

Segment operating profit reduced to £0.6 million

(2024:£10.7 million), primarily driven by the targeted

price investment, an adverse mix effect and cost inflation,

alongside weaker manufacturing efficiency in UK-quarried

natural stone processing. This was partially offset by

the benefit of volume growth and cost savings from

restructuring actions. These factors resulted in segment

operating margins reducing by 3.8 percentage points to

0.2%.We responded swiftly to the reduction in profitability,

accelerating a comprehensive performance improvement

programme. Restructuring actions taken in 2025 are

expected to deliver £11 million of annualised cost savings,

including the exit from UK quarried natural stone processing,

with around £3 million being realised in the year. These

actions materially reduce the fixed cost base and improve

operational flexibility, enabling the Group to deliver its

national, specification driven model more efficiently.

The business is well positioned to deliver an improved

financial performance in 2026 underpinned by cost

savings and improving mix dynamics.

% share of Group revenue

42%

% revenue by end market

Commercial & infrastructure

New housing

Housing RMI

43%

29%

28%

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 20

Segmental Review continued

Building Products

Strong Water Management performance offset by softness in bricks and lower property income

Marshalls Water Management Marshalls Bricks & Masonry

Reposition to access growth and market

headroom in water infrastructure

Water Management is increasingly aligned

to infrastructure-led demand. By securing

framework agreements with Tier 1 contractors,

investing in engineering and design capability,

and backing this with targeted capital investment

to strengthen capacity and service resilience,

we have built a strong platform ahead of the

AMP8 investment cycle. This positioning

supports growth in water infrastructure and

wastewater management, where regulated

programmes and climate adaptation needs

are expected tounderpin sustained long-term

demand. Thebusiness is targeting revenue

outperformance of the wider market by

between 4% and 6% per year.

Accelerate concrete adoption as

lower-carbon alternative

Bricks & Masonry operated in a challenging

new build housing market in 2025, with

volumes affected by weaker demand and

elevated supply-side competition. Despite this

backdrop, we protected operating margins

through disciplined pricing and cost control.

Our conviction in the medium-term opportunity

is unchanged: as housing activity recovers

and embodied carbon considerations continue

to rise, concrete bricks provide a compelling

lower-carbon, cost-effective alternative to

traditional clay. Consistent with our ‘Transform

& Grow’ approach and disciplined capital

allocation, we are maintaining readiness to

scale but will keep discretionary investment

tightly controlled until there is clearer evidence

of a sustained improvement in new housing

demand. The business is targeting revenue

outperformance of the wider market by

between 8% and 12% per year.

Building Products generates 65% of its revenues from

new housing, 31% from commercial & infrastructure, with

the balance being derived from housing RMI. Revenue

increased by 4% driven by strong delivery in our Water

Management and Mortars business units partially offset

by a contraction in revenue in Bricks & Masonry.

Our Water Management business performed strongly,

delivering growth through successful commercial

execution in both its core housing markets and the

widerinfrastructure sector, supported by improvements

in stock availability and service levels. In Mortars, we have

benefited from a strong service proposition and relatively

modest build rates on housing developments that favours

our ready-to-use mortars. Brick revenues contracted in a

competitive market as we maintained a disciplined pricing

strategy, choosing to protect margin rather than chase

volume at lower prices.

2025 2024 Change

£’m £’m %

Revenue 172.0 164.6 4%

Segment operating profit 13.0 14.1 (8%)

Segment operating margin % 7.6% 8.6% (1.0ppts)

Segment operating profit decreased by 8% to £13.0million,

with segment operating margin reducingby 1.0ppts

to 7.6%. Profitability improved in Water Management,

reflecting higher volumes and an improved mix, and in

Aggregates through improved pricing and operational

efficiency. These improvements were more than offset

by a decline in Bricks due to lower volumes and weaker

fixed cost absorption. Mortars profitability reduced

modestly despite stronger volumes, as cost increases

relating to renewal of the logistics fleet were not fully

recovered through price. In addition, the segment received

lower levels of property income than that generated in

recent years.

% share of Group revenue

27%

% revenue by end market

Commercial & infrastructure

New housing

Housing RMI

31%

65%

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 21

Segmental Review continued

Roofing Products

Strong performance from Viridian Solar drives improved profitability

Marley Roofing Viridian Solar

Strengthen roofing heartlands and drive

share in adjacencies

Marley is the market leader in pitched roofing

products. In 2025, trading conditions softened

in the second half across both new build

and RMI markets and, within tiles, the new

build mix continued to evolve as rising solar

penetration reduced demand for traditional

roof tiles. Additional industry capacity also

increased competitive intensity in certain

categories. Against this backdrop, Marley

remained focused on margin protection,

service performance and disciplined trading,

prioritising the value of the proposition rather

than pursuing low-quality volume.

Under ‘Transform & Grow’, Marley’s strategic

focus is to defend and grow its core roofing

heartlands while expanding share in attractive

adjacencies through the rollout of its full

roof system offer and deeper customer

partnerships. Operational self-help is a

key enabler: targeted capital investment is

underway to modernise core manufacturing

lines, improve productivity and reinforce

service resilience, strengthening Marley’s

ability to deliver consistent returns and high

service levels across a range of market

conditions. Thebusiness is targeting revenue

outperformance of the wider market by

between 1% and 2% per year.

Leverage energy transition tailwinds

toaccelerate growth

Viridian Solar is the UK market leader in

roof-integrated solar for pitched roofs,

supplying primarily into new build housing.

Customers choose Viridian for its best-in-class

integrated product, wrap-around technical

and design support, and high standards of

ESG andsupply chain assurance capabilities

that are increasingly important as specifiers

respond to tightening regulatoryrequirements.

Under ‘Transform & Grow’, Viridian’s strategic

priority is to protect and extend market leadership

as regulation-led adoption increases. We are

doing this by continuing to invest in product

innovation, capacity and supply chain resilience,

and service capability to deliver reliably at scale

while deepening partnerships with national and

regional housebuilders. Part L has been a material

driver of adoption and we continue to monitor

the evolving regulatory pathway which we expect

to further reinforce demand for integrated solar

solutions over the medium term. The business is

targeting revenue outperformance of the wider

market by between 8% and 12% per year.

Approximately 51% of revenues in this segment

are generated from new housing and around 39%

from housing RMI, with the balance generated from

commercial and infrastructure end markets. Revenue in

this reporting segment increased by 4% year on year to

£194.3 million. The improved performance was driven

principally by Viridian Solar, which delivered revenue

growth of 32% for the year, offsetting a modest revenue

reduction from Marley. Viridian Solar revenue growth was

driven by the continued adoption of its market-leading

integrated solar systems by national housebuilders in

response to the Part L (2021) building regulations that

require higher levels of energy efficiency in new homes.

We estimate that by December 2025 the majority of

new houses completed were built to the new regulations

and that growth in 2026 will be more modest and will

moderate through the year.

2025 2024 Change

£’m £’m %

Revenue 194.3 186.3 4%

Segment operating profit 50.2 49.4 2%

Segment operating margin % 25.8% 26.5% (0.7ppts)

Segment operating profit increased to £50.2 million

(2024:£49.4 million), delivering a strong operating

marginof 25.8% (2024: 26.5%). This reflected increased

profitability from Viridian Solar driven by strong volume

growth while maintaining pricing discipline. This was offset

by a lower contribution from Marley, where profitability was

affected by several factors. During the year, the business

experienced short-term operational disruption as it executed

planned changes to improve manufacturing processes. This

reduced stock availability and manufacturing efficiency in

certain product categories, which had an associated effect

on revenue. In addition, shifting market dynamics reduced

volumes in other categories. Targeted capital investment

toimprove efficiency and resilience across Marley’s core

manufacturing lines is underway and will remain a key

focus in 2026, supporting a shift to a more efficient

production process and helping to maintain returns

across a range of market conditions.

% share of Group revenue

31%

% revenue by end market

Commercial & infrastructure

New housing

Housing RMI

10%

39%

51%

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 22

S172 Relevant disclosure Reference

The likely long-term

impact of any decisions

The Board sets the Group’s purpose and strategy and ensures they remain aligned with our culture and ambition. ‘Building Tomorrow’s World’

driveseverything we do.

Pages 11 and 65

Our ‘Transform & Grow’ strategy provides the flexibility to balance long-term goals that support our purpose with the more immediate challenges

arising from cyclical market conditions. This agility continues to underpin the Group’s future success while ensuring that the Board carefully considers

the impact of its decisions on all stakeholders.

Page 11

Through the application of the Group’s risk management framework, the Board assesses the potential consequences of decisions in the short,

medium and long term so that mitigation plans can be developed to prevent, reduce or eliminate risks to the business and its wider stakeholders.

Consideration of risk is integral to all business decisions.

Pages 52 to 60

The Board has adopted a clear capital allocation policy, founded on the principles of security, flexibility and efficiency. Investment in organic growth

opportunities, together with strategic investments that strengthen our competitive advantage, focused on leading brands, best-in-class technical and

design support and carbon leadership, supports the long-term sustainability of the Group. Whilst continuing to reduce leverage within our target range,

we will also consider bolt-on M&A opportunities that align with our strategic objectives, reflecting the importance of agility and flexibility in Board

decision making.

Page 51

Our Section 172(1) Statement

The Board of Directors of the Company considers that it, both

individually and collectively, has acted in a way that would be most

likely to promote the success of the Company for the benefit of its

members as a whole in the key decisions it has taken during the year

ended 31 December 2025.

Pages 28 and 29 provide details of who our stakeholders are and how

the Board and the business engage with them, and examples of the

influence this has on our strategy, day-to-day business management

and the way the Board makes decisions.

The Board directly engages with our employees and shareholders

throughout the year. This is through well-established mechanisms

forengagement, details of which are set out on pages 28 to 30.

The Board occasionally engages directly with customers on site

visits but, in general, its engagement with our other stakeholders

is mainly indirect. The Executive Directors ensure the Board is kept

fully informed of any material issues with other stakeholders and

how weconsider their interests in our operation of the business

andinthedecisions we make.

In addition, the Board also receives regular updates from senior

leaders within our business divisions and functions on our progress

with strategic priorities and these updates include relevant

stakeholderconsiderations.

It is through this combination of direct and indirect engagement

that the Board is able to fulfil its Section 172(1) duties and ensures

decision making is driven by a balanced consideration of what makes

us successful and resilient in the short term and sustainable in the

long term.

Although there are established parameters for decisions that

the Boardneeds to approve, the business engages openly and

transparently with the Board, to ensure that key decisions that are

technically outside these established parameters have the benefit

ofthe Board’s knowledge and experience.

In taking key decisions, the Directors of the Company considered

thefactors specified in Section 172(1) of the Companies Act 2006

(the“Act”) including:

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 23

S172 Relevant disclosure Reference

The interests of the

Company’s employees

The execution of ‘Transform & Grow’ is dependent on engaged, capable and motivated colleagues across the Group. The Marshalls Way guides

the investments we make that develop our talent, drive colleague engagement and build a high-performance culture, and make the Group a “great

place to work”.

Page 33

Health, safety and wellbeing within our operations remain standing items on the agenda at every scheduled Board meeting, in addition to anannual

review by the Board reflecting the Board’s commitment to providing a safe working environment. Our goal is continuous improvement, with the

health and safety performance being linked to the remuneration of our Executive Directors and our senior management team.

Page 35

The Board monitors culture through our engagement mechanisms, including our Employee Voice Group (EVG) which, in addition to being attended

by our designated Director for employee engagement, Angela Bromfield, is regularly attended by other Board and senior management team members.

The EVG is established as an effective and representative colleague engagement forum. It ensures the Board understands how the decisions it

makes impact our colleagues and our culture and how actions taken under ‘Transform & Grow’ support colleague performance and wellbeing.

Page 33

Our employee engagement surveys enable the Board to understand how our people feel about working for Marshalls. This has been particularly

important in the aftermath of some of the very challenging decisions we have made during the last year, including implementing the changes in

support of our Landscaping improvement plan. The results of these surveys are shared with the Board, together with details of the actions being

taken to address key topics within the feedback. This provides the platform for the Board to challenge how we are ensuring our strategic goal to be

considered a “great place to work” is being addressed in how the business is operated.

Page 33

Angela Bromfield (our designated Director for employee engagement) and other members of the Board and senior management team engage

withcolleagues through a number of mechanisms, including the EVG, site visits, mentoring and in relation to specific subject areas where they

haverelevant knowledge and/or experience.

Pages 29 and 33

The need to foster the

Company’s business

relationships with suppliers,

customers and others

Customers who value our unique set of capabilities are at the heart of our strategy. Building strong customer relationships requires purposeful

relationship management, grounded in a clear understanding of what drives choice. This has underpinned our success over the longer term and

helped us build our leading brands. The Board has, however, recognised, predominantly through its support of the execution of our Landscaping

improvement plan, that reconnecting with our customers has been a key priority during the last twelve months, ensuring they feel we are showing

up for them day to day.

Pages 11 to 15

Our resilient performance in challenging market conditions during 2025 was supported by regular engagement with both customers and suppliers.

Sector-wide pressure to maintain cost discipline reinforced the need to stay closely connected with these stakeholders to drive short-term

performance and retain agility to continue investing in building long-term relationships.

Page 28

The Group’s strategy is centred on customers who value our unique set of capabilities, with our leading brands, carbon leadership and best-in-class

technical and design support driving this. Operating sustainably and ethically and showing sector leadership are key to achieving this.

Pages 11 and 16

Our Section 172(1) Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 24

S172 Relevant disclosure Reference

The impact of the Company’s

operations on the communities

in which it operates and

theenvironment

Our sustainability journey began more than 20 years ago and continues to evolve. Our updated ESG framework, Built for the Future, drives our

choices and decisions. Through ‘Transform & Grow’ the Board continues to embed environmental and social considerations within operational

improvements and capital investment decisions.

Pages 31 to 40

Our ESG Board Committee oversees and supports the delivery of our ESG strategy, which is driven by our ESG Steering Committee and ensures

that our updated ESG framework, Built for the Future, is aligned with our ‘Transform & Grow’ strategy and our purpose. Our Chief Legal Officer

and Company Secretary leads the implementation of our ESG strategy on a day-to-day basis, with the Board committed to providing constructive

challenge and support.

Pages 31 to 40

Further details of how our ESG framework and its implementation are governed, measured and controlled are set out on page 68.

Page 68

We have an established materiality matrix based on stakeholder engagement, the SASB Standards for Construction and the UN SDGs.

Thissupports prioritisation within our ESG framework and was reviewed during 2025.

Page 32

The regulatory implications

ofany decisions

The Board recognises that transformation and growth must be delivered responsibly. Board decisions are taken with the benefit of prior

consideration by experienced, well-established, specialist functional teams and with the guidance of the Chief Legal Officer and Company Secretary.

Where more specialist advice is required, the Board seeks guidance from its professional advisers.

Page 77

The importance of the Company

maintaining a reputation for high

standards of business conduct

The Marshalls Way defines our culture and, together with our purpose of ‘Building Tomorrow’s World’, drives all our decision making.

Page 26

High standards of governance, transparency and ethical conduct are fundamental to protecting the Group’s reputation and stakeholder trust.

Boardoversight is supported by robust internal controls, risk management and compliance processes.

Our prioritisation of business excellence, leadership in ESG and ensuring Marshalls is a great place to work underpin our purpose and our strategy,

which are, in turn, powered by our ESG commitments and pillars: road to net-zero, skills and community, and trust and transparency.

Pages 31 to 47

Our strategic objectives underpin our purpose and strategy.

Page 11

The need to act fairly as between

members of the Company

The Executive Directors engage with shareholders following the publication of our interim and final results (and periodically throughout the year)

and the Board receives detailed, real-time investor and market feedback from the Executive Directors, our brokers and our PR advisers.

Pages 26 to 30

The Board maintained constructive and transparent engagement with shareholders during 2025, which included open engagement about

performance challenges, leadership changes and our Directors’ Remuneration Policy. The Board recognises that meaningful shareholder

engagement is fundamental to building confidence.

Pages 72 and 73

Our 2025 AGM provided shareholders the opportunity to ask questions and vote in real time to ensure maximum engagement opportunity.

Page 116

Equality of rights attaching to members ensures we meet the obligation to act fairly between them.

Pages 115 and 116

Our Section 172(1) Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 25

Our stakeholders

Intensifying strategic execution, with everyone on board

Stakeholder Engagement

The Marshalls Way

We do the right things, for the right reasons, in the right way

Key

What we do

How we benefit

We generate

value through

sustainable growth

We treat suppliers

fairly, building long-

term relationships

Investment, strategic

guidance and

stewardship

High-quality goods

and services resulting

in products our

customers love

and specify

We deliver valuable

product solutions

We act in support of

the commitments

we make to doing

business responsibly

Customer loyalty,

brand preference and

profitable sales

We see the business

through the lenses

of others

A stretching, exciting,

supportive and

inclusive working

environment

We share knowledge

and sector-specific

expertise

Diverse, talented,

engaged and

productive

colleagues

Government

policy, regulatory

frameworks and

recognition

Shareholders

Communication and dialogue build

confidenceinourpurpose

and strategy with investors

Suppliers

Dynamic dialogue has built a strong supportive

supplierbase which supports our purpose and

whichshares in our success

Customers

Engaging with our customers drives

specificationofourinnovative product

solutionsforthebuiltenvironment

Communities and theenvironment

We have open and honest dialogue,

sharing our goals and progress in

‘Building Tomorrow’s World’

Colleagues

Our two-way dialogue helps Marshalls attract,

developand retain talented people who will help

usachieve our purpose and strategy

Government and regulatorybodies

We engage to build confidence

in how we operate and to support

our continuous improvement

Our purpose: ‘Building Tomorrow’s World’

Our strategic goal: To ‘Transform & Grow’ with customers who value our unique set of capabilities

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 26

Stakeholder Engagement continued

Links to corporate pillars

Shareholder value

Sustainable profitability

Relationship building

Organic expansion

Brand development

Effective capital structure

andcontrol framework

2025 in focus

Our resilience during 2025 demonstrates the

Board and management’s ability to act decisively,

ensuring we remain resilient whilst positioning

ourselves for growth and market outperformance

in the medium and long term.

Our governance structures guide us in seekingto

take advantage of our strong diversified product

portfolio through our brand powerhouses and

growth engines. Our decision making hasregardto

the interests of our stakeholders. This is ingrained

within our governance processes, both at Board

level and throughout our businesses.

Above all else, the Board prioritises the health

and wellbeing of our colleagues and the safety of

our operations. This guides everything we do and,

alongside our commitment to leadership in ESG,

drives our reputation and our brand and is part of

what makes Marshalls a great place to work.

Although 2025 has seen prolonged market

uncertainty and subdued activity in our key end

markets, the Group has remained resilient whilst

driving the structural transformation that is a key

part of our ‘Transform & Grow’ strategy. The key

outcomes of our balanced approach to decision

making during the last year are the Group’s return

to revenue growth and the operational turnaround

of our Landscaping business that is on track to

achieve £11 million of annualised cost savings in

2026. As we now look ahead to intensifying the

delivery of our ‘Transform & Grow’ strategy, we

recognise that engagement with our stakeholders

has never been more vital.

The Board confidently believes that its decisions

during 2025 had regard to the interests of all

relevant stakeholders and were made in The

Marshalls Way.

Section 172(1) of the Act sits at the top of the

Board’s agenda and is central to the Board’s

decision making process. The fulfilment of the

Board’s duty under Section 172(1) sits alongside

its consideration of the Group’s capital structure,

capital allocation policy, internal control frameworks

and resilience to existing and emerging risks.

Further details are set out on pages 23 to 25.

The Board continues to work closely with

theExecutive and senior management teams,

providing the challenge and support that only

come where there is transparency and trust.

Importantly, the Board members have all brought

their knowledge and experience to bear in the

key decisions taken by the Group during the year,

ensuring our decisions are informed, thoughtful

and balanced.

We have set out further details of how we engage

with our key stakeholders on pages 28 and 29.

Stakeholder considerations and outcomes for

some of the key decisions made by the Board

during 2025 are set out on page 30.

Marshalls’ stakeholder relationships

Engagement with our key stakeholders enables us

to understand their expectations, strengthen our

relationships and ensure our strategicdecisions

make us more resilient today and supports

long-term sustainable growth. Identifying these

stakeholders is key to how we manage our

interactions, helping us to engage positively

andconstructively.

At the core of our approach is a commitment to

open and transparent, two-way communication

with our stakeholders. This dialogue builds

trust, enhances confidence in how we operate,

strengthens our brands, drives loyalty and

generates value for all stakeholders and, in the

long term, ensures we are better able to operate

responsibly, minimise environmental impact and

support long-term investment and growth.

Executing our ‘Transform & Grow’ strategy at

pace requires strong governance throughout the

Group, and we recognise that engagement with

our stakeholders as we accelerate the execution

of‘Transform & Grow’ is critical.

How we engaged

‘Building Tomorrow’s World’ and our

‘Transform & Grow’ strategy are best

achieved with active engagement

with all our key stakeholders.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 27

Stakeholder Engagement continued

How we engage

Business engagement

• Ongoing engagement with our major customers, ensuring

we continue to reflect their needs in how we operate. Focus

during 2025 has been reconnecting with customers of our

Landscaping business

• Engagement with a panel of our Accredited Installer scheme,

seeking their feedback on behalf of their peers as we evolved

and relaunched our installer scheme, ensuring it serves our

mutual interests

• Our Chief Executive Officer has met with key customers

throughout the year

• Research with housebuilder customers to better understand

their challenges and requirements

• Customer satisfaction survey with merchants, contractors,

installers and housebuilders, aimed at better understanding

customer expectations

• Service level agreements and quality standards in

customeragreements

• Design and engineering support for specifying customers

• Training and sharing knowledge with customers, e.g. on our

products and greenwashing

• Working with housebuilders to co-develop new products

andsupport emerging construction methods

• Undertaking journey mapping to identify points of friction

anddeliver targeted service improvements

Board engagement

• The Board receives regular updates on commercial

performance and customer engagement from the CEO

andaspart of regular updates from our business divisions

• The Board has visibility of key customer performance indicators

• Annual strategy days with members of the Board and our

senior management team

Links to corporate pillars

Business engagement

• Centralised Group procurement enables optimal buying power,

risk management and strong relationships with all core suppliers

• Effective, regular and honest communication with suppliers,

underpinned by a Code of Conduct, Procurement Policy and

other core Marshalls policies

• Procurement strategies determined by external market

dynamics including transparent, formal and proportionate

tenders and robust but fair negotiation processes

• Contracts agreed on mutually beneficial terms aligned to

internal policies and all applicable laws

• Procurement decisions made on the basis of total value

of goods. Total value considers the end-to-end supply

chain, including inbound and outbound logistics, materials,

manufacturing processes and efficiency, network design,

packaging, indirect costs, quality, service and ESG considerations

• Supply chain risk mapping processes and audits of the

highest supply risks underpinned by a Supplier Relationship

Management (SRM) system

• In-person visits to certain key overseas suppliers in higher-risk

supply chains like China and India seeking assurance over the

manufacturing environment from both a technical and ethical

perspective and supported by an external auditor where necessary

• SRM system as a single source of supplier data, increasing

supply chain transparency

• Engagement with NGOs, governmental institutions and ethical

consultancies

Board engagement

• The Board receives regular updates on our engagement and

relationships with key suppliers

• Supply chain risk incorporated into biannual Group risk reviews

• Board approval of material new or renewed agreements with

suppliers, underpinned by a clear Delegation of Authority Policy

and process

• Feedback reports on supply chain performance and

compliance through regular updates from both the CEO

andour business divisions

• Annual consideration and approval of our Modern Slavery Statement

• Reports on ethical sourcing to the ESG Steering Committee

Links to corporate pillars

Business engagement

• AGM, Annual Report, trading updates and presentations

• Regular phone and video calls, face-to-face meetings, site visits

and investor roadshows

• Shareholder and analyst event at Viridian Solar headquarters

• Investor relations website

• The Chair and Chief Legal Officer and Company Secretary

engage on ESG and sustainability

Board engagement

• The Board engaged extensively throughout 2025 on matters

such as financial performance, Remuneration Policy and

leadership changes

• Through regular feedback to the Board by the CEO, CFO,

brokers and PR advisers, particularly following key reporting

events, for example, our half year and full year results and in

2025, following our July trading update

• Investor site visits

• Regular dialogue and correspondence (e.g. in relation to

policymatters)

• Engagement at the Company’s AGM

Links to corporate pillars

Shareholders CustomersSuppliers

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 28

Stakeholder Engagement continued

Colleagues

Business engagement

• Regular dialogue with Government, regulators and

industry groups

• Active membership of the Construction Products

Association, the Mineral Products Association and

Ceramics UK

• Effective and clear policies against bribery and the

elimination of modern slavery with training for colleagues

and business partners

• Training for colleagues on anti-facilitation of tax evasion

and fraud prevention

• Business-wide engagement on the preparation for the

implementation of the Economic Crime and Transparency

Act and associated Companies Act 2006 changes

• Refresh of our data protection framework

Board engagement

• The Board provides direction to the support of the

UNGlobal Compact’s principles, and policies relating

tomodern slavery and anti-bribery

Links to corporate pillars

Government and regulatory bodies

Business engagement

• Implementation of new ESG reporting software, Envizi,

toimprove data accuracy and processes

• Approved Science Based Targets initiative carbon

reduction targets, including net-zero by 2050

• Tree planting, biodiversity action plans and quarry

restoration programmes

• Sites have a community liaison contact and host local

community meetings, supported by internal procedures

and complaint escalation process as part of our

management systems

• Fundraising and food donations to our charity partner,

The Trussell Trust

• Social value activity aligned with customer priorities

• Engagement with education providers on employability skills

to support the next generation in the construction industry

• Product donations and employee volunteering

• Engagement with UN Global Compact Network UK working

groups on modern slavery and sustainability reporting

• Gold member of Supply Chain Sustainability School

• Sponsored bricklaying training facilities to help address

skilled labour shortages in the construction sector

Board engagement

• Through the ESG Committee, the Board is actively

engaged with the Group’s ESG and sustainability strategy,

including the monitoring of science-based targets

• The ESG Committee receives regular updates on our ESG

programme and commitments

• ESG measures included within Executive Director incentives

• The ESG Committee is now an established part of the

Board programme

Links to corporate pillars

Communities and the environment

Business engagement

• The Employee Voice Group (EVG) represents all business areas and levels

and has evolved with broad representation across the Group

• Regular communication across channels, supporting those employees

working remotely and those without access to Company email, including

thelaunch of our new intranet platform Buzz

• Participation in two Your Voice employee engagement surveys

• Delivery of Insights Discovery training by our internal facilitators as part

ofdriving a high-performance culture

• Development, training and apprenticeship programmes (including

recognition of study completion)

• Continuing to support leadership and talent development programmes

throughout the business

• Working with the Institute of Leadership and Management (ILM) to gain

accreditation of our manager development programme

• Marshalls Learning Zone platform now integrated throughout the Group

• Focus on positive safety culture, supported by health, safety and wellbeing

policies and training programmes

• Leaders can connect with the elected representatives of our recognised

Trade Unions and, via these, the constituents that they represent

Board engagement

• Board participation in the EVG via Angela Bromfield, our designated Director

for employee engagement, with other Board and senior management team

members attending

• Board site visits

• Annual reviews of people, talent and Group reward strategies

• Review of senior management team performance, succession planning

andwider talent development initiatives

• Health and safety reviews at every Board meeting, with an annual review

bythe Board with our Group SHE Director

• Active engagement in mentoring and coaching with both our high-potential

colleagues and other specific cohorts within the business, e.g. female engineers

• Reporting to the Audit Committee on “whistleblowing” reported through the

Serious Concerns Policy and our external independent partner, Safecall

Links to corporate pillars

How we engage continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 29

Stakeholder Engagement continued

Our stakeholders

Shareholders

Suppliers

Customers

Colleagues

Communities and the environment

Government and regulatory bodies

Key Board decisions and stakeholderconsiderations

Multiple stakeholder considerations

Shareholders: Further leadership change was a significant event for the Group.

Engagement with shareholders following the change was a critical part of

rebuilding shareholder confidence, particularly in light of recent performance

challenges. A structured and transparent communications plan ensured

shareholders understood the rationale for the Board’s decision to appoint

Simon as CEO.

Suppliers: A strong and stable supply chain underpins strategic delivery.

TheBoard took into account the need for leadership with deep understanding

ofsupply chain operations and the ability to maintain balanced, mutually

beneficial supplier relationships.

Customers: Given competitive pressures and evolving expectations, customer

relationships were a core consideration, with a need to build on the work we have

done reconnecting with Landscaping customers over the last year. Leadership

that strengthens key relationships, is focused on delivering excellent customer

experience and that responds to customer feedback was essential. Simon’s

previous role as Chief Commercial Officer put him at the centre of our customer

engagement drive meaning continuity isassured under his leadership as CEO.

Colleagues: The Board assessed the impact on our culture and engagement,

recognising that recent restructurings and market conditions have affected

morale. Effective leadership was required to reinforce a high-performance culture

and support colleague motivation and development. Simon’s track record with

the Group provides a platform from which we can rebuild engagement, support

development and re-establish Marshalls as a great place to work.

Communities and the environment: The transformation Simon has overseen

inour operations has contributed to our mission to lower the carbon intensity of

our products and manufacturing. His transition to CEO will support progress with

carbon and ESG leadership and the Group’s broader sustainability commitments.

Government and regulatory bodies: The Board considered the importance

ofleadership that would maintain confidence in Marshalls’ governance, support

compliance and engage constructively on policy and regulatory developments.

Multiple stakeholder considerations

Shareholders: Performance improvement in our Landscaping business underpins

shareholder confidence in the Board and the Group. This has been a consistent

theme in ourengagement with shareholders over the last year. Decisive, sometimes

difficult, actions were taken at various points during the year to optimise performance

of the division. Improving performance will help to rebuild confidence in our ability

to create long-term shareholder value.

Suppliers: Engagement with our supply chain was necessary to understand

theimpact on our materials and logistics requirements across the network and

tohelp strengthen our strategic supply partnerships.

Customers: Understanding customer needs is essential to improving our product

and service proposition which, in turn, should deliver better margins and improved

market share. Feedback from customers shaped targeted improvements in the

Landscaping business, including manufacturing products as close as possible to

where customers need them, reducing operational and logistics costs, which has

resulted in early tangible results, including increased sales volumes in the division.

Colleagues: Early and transparent engagement with colleagues was critical

giventhe significant people impact of the Landscaping improvement plan and

ourcommitment to operating in The Marshalls Way. Capability assessments were

aligned to the wider commercial plan for the division, ensuring our investment is

focused on meeting current and future customer needs. Through the EVG, the

sensitive manner in which this difficult situation was managed was acknowledged.

Communities and the environment: The impact of decisions on our sites

and thecommunities in which they operate was part of our decision making

processes, and the Board challenged the broader social and economic

implications of the proposed changes, which were mitigated by responsible

consultation and support for affected employees. A benefit of our network

optimisation is reducing the distances over which our products travel to get

to their end destinations, which could contribute towards our own and our

customers’ carbon reduction goals.

Government and regulatory bodies: The Board sought assurance that

indelivering the Landscaping improvement plan the Group was honouring

itslegal obligations, particularly those relating to our colleagues.

Leadership changes: Appointment of Simon Bourne as CEO Landscape improvement plan: Optimisation of the Landscaping network

withtheGroup on track to deliver annualised savings of £11 million in 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 30

Sustainability

Vanda Murray OBE

Chair

Built for the Future

Turning ambition into practical action that helps our customers

reduce carbon, build resilient spaces and make responsible choices.

Dear stakeholder

As I reflect on our ESG journey, it is clear that

having a solid foundation, proven track record and

clear action plans has been key to our progress

in this area. While there have been changes and

challenges, we remain focused on our intentions

and the action required to deliver on our priorities.

Last year, I said our focus in 2025 was on ensuring

the safety and wellbeing of our colleagues, reducing

our environmental footprint and making a real

impact to our communities – and that’s exactly

what we’ve done.

Looking after our colleagues is a commitment

that comes from the very top of the organisation,

filtering down to every team member so we all take

responsibility for each other. A great example of this

is our new competency training framework to verify

health and safety aspects for high-risk activities for

which we’re finalists in the 2026 Mineral Products

Association (MPA) Health & Safety Awards.

Early in 2026, we launched our new ESG framework,

‘Built for the Future’, strengthening our commitment

to supporting skills in our industry and providing our

customers with the product sustainability information

they need. On our road to net-zero by 2050, we continue

to reduce our carbon footprint and I’m proud to say

Marshalls has been named a European Climate

Leader for the fourth time.

Our journey continues and I look forward to sharing

our progress with you.

ESG governance

We’re committed to making a material difference

to the built environment. Built for the Future is

our approach to sustainability, turning ambition

into practical action that helps our customers

reduce carbon, build resilient spaces and make

responsible choices.

Underpinned by our ‘Transform & Grow’ strategy

and guided by the United Nations Global Compact’s

principles in the key areas of human rights, labour,

environment and anti-corruption, along with the

UN’s Sustainable Development Goals (SDGs), we

drive our ESG strategy through ‘road to net-zero’, ‘skills

and community’, and ‘trust and transparency’ pillars.

Throughout this section, we will highlight where we

are making a contribution to individual SDGs.

Our ESG strategy is led by our Chief Legal Officer

and Company Secretary and delivered by the ESG

delivery team with support from the ESG Steering

Committee and oversight from the ESG Committee

at Board level.

X ESG Committee Report page 90

On our road to net-zero by

2050, we continue to reduce

our carbon footprint and

I’mproud to say Marshalls

has been named a European

Climate Leader for the

fourthtime.”

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 31

Sustainability continued

Materiality assessment

Review process

Our 2025 ESG materiality matrix is based on the

SASB Standards for Construction Materials and

theUN SDGs, and it’s aligned to our risk heatmap.

We have put in place a documented materiality

review process, with a full review every three years

and alight touch review in the years in between.

2025 is the last year in the cycle for a light touch

review, with a view to conducting a full review in

2026. The 2025 review looked at the issues that

matter most to our key stakeholders and have an

impact on our business. Using a combination of

desktop research and analysis of industry issues,

the matrix was analysed by the ESG delivery team

and reviewed by the ESG Steering Committee.

Carbon reduction and energy management

Product innovation

Supply chain resilience

Health, safety and wellbeing

Talent and inclusion

Human rights and environmental due diligence

Social value

Operational resilience

Regulatory environment and reporting

Circularity and waste management

Anti-corruption and ethics

Water management

Biodiversity management

Impact on the business

Stakeholder interest

Moderate Significant

Low High

Materiality light touch review process

• Desktop research

• SASB Standards for Construction Materials

• Analysis of ESG and sustainability

reporting standards

• Final review and presentation to ESG

Steering Committee

• Sign-off from the Board as part of Annual

Report & Accounts approval

• Publication in Annual Report & Accounts

• Stakeholder analysis

• Analysis of industry issues

• Analysis of broader ESG issues

2025 review

The matrix we present here is a mitigated position

and is aligned with our Risk Register.

Since our last review, a small number of changes

have been made to continue to align with our

‘Transform & Grow’ strategy, as follows:

• Activity on ‘diversity and inclusion’ and ‘talent

and development’ is part of our wider people

strategy so they have been combined as ‘talent

and inclusion’

• ‘Sustainable supply chain’ has been renamed

‘supply chain resilience’, as this better reflects

ourupdated work on climate-related risks

• In the same light, ‘climate adaptation’ has been

renamed as ‘operational resilience’

• Further internal activity on ‘biodiversity management’

means that our mitigated position has changed,

even though it remains relevant to our business

• There has been no change in position for

‘regulatory environment and reporting’, as this

continues to be a mitigated position based on

short-term impact

Our ESG materiality matrix is primarily based on

financial impact on the business but has also taken

into consideration stakeholder interest.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 32

Sustainability continued

Sustainability isn’t just environmental; it’s also about people. Despite a challenging year, we continue

to invest in skills, apprenticeships and communities to help us build a stronger industry. Through

partnerships with training providers and charities, we aim to support the next generation and those

entering the sector. This upholds the same commitment we have to our colleagues to make Marshalls

a great place to work – a key enabling underpin of our ‘Transform & Grow’ strategy. This includes Buzz,

our first Group-wide intranet platform introduced in 2025. Buzz brings the whole Marshalls Group

together in one platform and enables us to be consistent with our messaging and reach everyone

atthe same time.

Learning and development

• Apprenticeships

• Health and safety training

• Data Academy

We aim to build a learning culture that drives high performance, making

Marshalls an even better place to work for our existing colleagues and in

attracting future talent. This commitment is supported by our Learning

and Development Policy, which ensures our colleague development

principles and processes are consistent, fair and efficient.

In 2025, our Marshalls Learning Zone was introduced into Marley

andViridian Solar. This has enabled us to have a consistent and

modern approach to delivery of learning. We continue to support

ourcolleagues through our apprenticeship programme, by addressing

key business needs and supporting early careers. By the end of 2025,

we had 145 apprentices, including twelve new early careers engineering

apprentices and a number of operations, commercial, IT and HR

colleagues graduating from our Leadership Academy, Data

Academyand Production Academy.

Colleague engagement

• Employee survey

• Employee Voice Group

• Toolbox talks and roadshows

Listening to what our colleagues think about working at Marshalls is

important to us. In 2025, we ran two Group-wide Your Voice employee

surveys to measure the key drivers of colleague engagement. Feedback

from our colleagues enables us to build a picture of what’s going well

and what we should work on to make positive change so we can make

Marshalls a great place to work.

The colleague voice is further supported by the Employee Voice Group

(EVG), which meets quarterly and is made up of elected colleagues from

different parts of the business, along with the Unite National Convenor.

Meetings are chaired by our Chief People Officer and attended by members

of the Board and Executive Team who rotate throughout the year. In 2025,

four meetings were held with discussions ranging from strategy, health

and safety, and corporate charity partnership to intranet implementation

and Your Voice survey results and action.

Leadership, talent and succession

• Leadership Academy

• Manager development programme

• Coaching and mentoring

2025 highlights

• Two Group-wide employee surveys

• IOSH Managing Safely training programme

• Launch of Buzz intranet platform

• Increased percentage of female colleagues

2026 priorities

• Focus on positive safety culture through

colleague engagement

• ILM accreditation of Ignite manager

development programme

• Continued recruitment and development

ofearly careers apprentices

• Social value programme

Developing our colleagues to be the best they can be is a priority for

us and we know that managers and leaders play a key role in building

a culture where colleagues can thrive. As we move forward with our

‘Transform & Grow’ strategy, we continue to evolve our approach to

leadership, talent and succession.

We are proud to be working with the Institute of Leadership and

Management (ILM) to achieve accreditation for our Ignite manager

development programme, which has been developed and delivered by

our dedicated learning and development team to provide our managers

with the skills and tools they need to perform at their best. In 2025,

we complemented our approach with the delivery of 33 development

sessions across the business, facilitated by our internal accredited

Insights Discovery practitioners. With a focus on people managers,

thesessions were rolled out to embrace a culture where we appreciate

differences and diversity of thought, and work better together as a result.

SKILLS AND COMMUNITY

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 33

Sustainability continued

SKILLS AND COMMUNITY CONTINUED

2,348

employees

(2024: 2,435)

years

as a Living

Wage employer

145

colleagues in

apprenticeship

programmes (2024: 168)

18%

women colleagues

(2024: 17%)

28%

of women in leadership

roles (2024: 34%)

£80,134

charitable, community

and product donations

(2024: £62,829)

Gender split*

2025 2024 2023

Male 82% 83% 84%

Female 18% 17% 16%

* 2025: male (1,934), female (414).

Disability

2025 2024 2023

No disability 49% 50% 50%

Disability 2% 3% 3%

No disclosure 49% 47% 47%

Ethnicity

2025 2024 2023

White British/White other 76% 78% 80%

Minority ethnic group (Asian,

Black, mixed/multiple

heritageor other minority

ethnic groups)

6% 2% 2%

No disclosure 18% 20% 18%

Age

2025 2024 2023

Aged under 30 13% 13% 11%

Aged 30–39 25% 25% 25%

Aged 40–49 23% 23% 22%

Aged 50–59 27% 27% 29%

Aged 60+ 12% 12% 13%

Each day at Marshalls I’m feeling a bit

more confident in every aspect of work.

I’m shadowing experienced engineers

and being taught key principles. I like

working here and feel confident my

knowledge of engineering will improve

due to the continued support from

Marshalls. I couldn’t be more pleased

with my decision to apply for an

apprenticeship at Marshalls and am

certain this was the best choice for me.”

Max Pickles

Engineering Apprentice

Social value and developing skills

Our approach to social value is focused on

engaging with community and education projects.

From our early careers engineering apprenticeships

to the work we do with further education colleges,

we engage directly with people who are building

careers in the construction industry.

We have several engagement programmes in place

with education providers, including Leeds College

of Building, which includes donation of building

materials for their construction courses and running

mock interviews with bricklaying students to

promote employability skills.

We also continue to support the National

Housebuilding Council (NHBC) Tamworth

TrainingHub with donations of concrete bricks

fortheir groundworker apprenticeship programme,

and Marley has partnered with the School of

Architecture, Design and the Built Environment

at Nottingham Trent University to support and

encourage the next generation of undergraduate

architectural technologists.

Social value partnership with

Morgan Sindall Construction

In 2025, Marshalls was chosen to join the

Morgan Sindall Construction Responsible

Business Charter. As a member of Morgan

Sindall’s North West supply chain family, we

have joined the social value pilot initiative

aimed at delivering measurable impact that

benefits local communities, businesses

and the North West region. This includes

employee volunteering and partnerships

withconstruction training providers.

Data reporting

The data we report represents the whole Group

for the majority of metrics shown. Due to data

collection limitations, disability and ethnicity

data apply to the Marshalls business only.

Women in leadership roles are senior leaders

reporting directly into the Executive Team.

During the year, we made over £80,000 of

charitable, community and product donations,

which are supporting local community projects

including a primary school in Lancashire, a

children’s charity in Glasgow and a further

education college in Gwent.

Our colleagues also engage in volunteering and

in 2025 activities ranged from tree planting at our

Howley Park quarry and conservation work with

the City of Trees charity to supporting a number of

different charities, including our charity partner for

the last three years, The Trussell Trust. We extend

our thanks to The Trussell Trust and wish them well

in the great work they do to tackle food poverty in

the UK. In 2026, we look forward to working with

our new corporate charity partner, Building Heroes.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 34

Sustainability continued

Health, safety and wellbeing

Marshalls continues to operate in an environment

where the health, safety and wellbeing of our

people are key priorities, through the use of

strong governance and procedures. This is further

supported by having clear objectives in place to

demonstrate the progress we are making.

Strong performance

In 2025, we met our Group combined lost time

injury frequency rate (LTIFR) target of 2.99, with an

LTIFR of 1.54. The achievement of annual health

and safety improvement targets is directly linked

to the remuneration of the Executive Directors

and senior management, as explained in the

Remuneration Report on pages 92 to 112.

The focus in 2025 has been to strengthen our

positive safety culture by empowering our colleagues

to look out for themselves and their colleagues.

This has been further supported by the rollout of

SKILLS AND COMMUNITY CONTINUED

IOSH Managing Safely training and further progress

on our high-risk activity programme. The concern

reporting, safety conversations and incident modules

in our Benchmark digital compliance management

tool have been rolled out across the business.

This provides us with live data, enabling us to

manage the health and safety of our colleagues

inaconsistent way.

Priorities for 2026 include strengthening our

controls around high-risk activities, improving our

health and safety training and continued focus on

safety culture through employee engagement.

Good catch — Small actions make a big difference

In 2025, we launched “Good catch: Small actions make a big difference” across our operations.

Thiscampaign was aimed at spotting risks early and stepping in before something goes wrong.

Thepremise is that everyone at Marshalls is a safety champion and no matter your role, your actions

count. This campaign is built on three ideas:

• We’re all responsible for safety

• Small actions can prevent big accidents

• Sharing real stories helps us all learn and care

The campaign was supported by posters, toolbox talk guides and videos of colleagues relating

theirpersonal accounts of why it is vital to make safety part of what we do every day.

Our Health and Safety Policy is approved by the

Board and reviewed annually. Our CEO is the Board

Director responsible for the health and safety

performance of the Group.

2025 2024 2023

LTIFR (per million hours worked) 1.54 2.34 —

Group manufacturing/quarry sites with ISO 45001 for

healthandsafety management 85% 85% 82%

Employee/contractor fatalities — — —

Note: 2023 LTIFR not available due to full Group reporting starting in 2024.

Note: 2024 and 2025 ISO 45001 data is for the Group and not directly comparable to 2023.

The safety of our people matters

Nothing we do is worth getting hurt

for and thatstarts with the right

behaviours – but those won’t happen

if we don’t care enough to look after

ourselves and our colleagues. This is

why health and safety are everyone’s

responsibility. We can put in place rules

and processes, and these are absolutely

necessary, but they won’t work if we

don’t take accountability by looking after

ourselves and each other. Our focus

is on empowering our colleagues to

stop andthink, byembracing a positive

safetyculture.”

Simon Bourne

Chief Executive Officer

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 35

Sustainability continued

TRUST AND TRANSPARENCY

We believe how we do business matters as much

as what we make. When it comes to responsible

sourcing, we map suppliers, assess ethical risks, set

expectations, support factory training programmes

and share practical guidance so customers can

make informed, trusted decisions.

2025 highlights

• Creation of AI strategy and launch of Ethical

Use of AI Policy and training

• Continued Fair Tax Mark accreditation and

Living Wage employer

• Fraud prevention training programme

2026 priorities

• Code of Conduct refresh

• AI awareness and training programme

• Supplier engagement programmes for solar

and stone

Internally, we train teams to spot signs of modern

slavery, and listen and act on their feedback through

our EVG and colleague surveys. As a Living Wage

employer since 2014 and holder of the Fair Tax

Mark since 2015, we’re committed to doing the

rightthing – consistently.

2025 2024 2023

Group manufacturing/quarry sites with ISO 9001 for

qualitymanagement 85% 85% 82%

Group manufacturing/quarry sites with ISO 14001 for

environmentalmanagement 100% 100% 92%

Note: 2024 and 2025 data is for the entire Group and not directly comparable to 2023.

Compliance and training

Our compliance training modules are delivered

annually and they cover modern slavery, anti-bribery

and corruption, GDPR, non-facilitation of tax evasion,

cyber security, sexual harassment and our Code

of Conduct.

In preparation for the Economic Crime and

Corporate Transparency Act, we developed

and refined our internal procedures. We also

rolled out training to help our colleagues feel

more confident about spotting and stopping

suspicious activity. In 2026, we will be further

refining our Fraud Prevention Plan, which includes

a review programme every two years or as and

when needed.

Ethical use of AI

In 2025, we launched our AI strategy that balances

managing risk and driving opportunity through

responsible AI use. We followed up our Cyber

Awareness Month with training on AI, which was

rolled out to all digitally connected colleagues to

communicate our new Ethical Use of AI Policy and

to engage people on the risks and opportunities

presented by using AI in the workplace.

2026 will see a programme of activity led by

our CIO and AI Steering Committee focusing on

strengthening internal controls and harnessing

thevalue that AI can bring to our business.

Paying our fair share of tax

Since 2015, Marshalls has proudly displayed the

Fair Tax Mark, which signifies that we pay the right

amount of tax at the right time. This accreditation

highlights our dedication to transparency and

responsible business practices, reassuring

stakeholders of our integrity.

Fair Tax is integral to Marshalls because we’re

committed to being a responsible business. This

commitment aligns with our participation in the

UN Global Compact and our efforts to contribute

tothe UN SDGs.

Anti-bribery and corruption

Our Anti-Bribery Code sets out our definition of

bribes and the different ways bribes can be evident

in business. We have a Serious Concerns Policy

which is based on our commitment to creating a

working environment where everybody feels able

to raise legitimate concerns about any wrongdoing

without fear of criticism, discrimination or reprisal.

Since 2019, we have operated Safecall, our

independent whistleblowing service, which enables

any of our people, contractors, suppliers and other

stakeholders to raise their concerns. Safecall is

in place to enhance a culture of openness and to

demonstrate that malpractice is taken seriously

anddealt with at the highest level.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 36

Sustainability continued

Solar supply chain mapping

In 2025, Viridian Solar continued to map its polysilicon supply chain, visiting silica mines and quarries

for the first time, as well as purification and processing plants. This marked a significant milestone as

we’ve now visited manufacturers in all eight layers of our polysilicon supply chain.

At each location, we’ve carried out ethical interviews and site tours, with the support of our direct suppliers.

This has helped us start to build relationships and understand the local challenges. We plan to continue our

visits to ultimately cover every polysilicon related supplier and will be promoting our standards as we go.

As a founding member of the Solar Stewardship Initiative (SSI), a pan-European industry collaboration

promoting responsible sourcing for the solar sector, we continue to work towards SSI certification standards.

In 2025, we started a joint collaboration with a direct supplier towards ESG certification with SSI.

Modern slavery awareness training in UK operations

In 2025, we rolled out modern slavery awareness training in online sessions for digitally connected

colleagues, as well as new toolbox talks for those working in our manufacturing facilities. We also

delivered tailored in-person sessions for site managers and senior leaders in our UK operations.

The training explored the workplace factors that contribute to worker exploitation. It also analysed

case studies of events leading up to two major modern slavery prosecutions in the UK, where criminal

gangs had infiltrated the supply chains in construction and food production. Discussion centred around

signs and red flags to look out for in day-to-day operations as well as onboarding procedures. A similar

presentation was made to our people team.

TRUST AND TRANSPARENCY CONTINUED

Supply chain due diligence

Having been a signatory to the United Nations Global Compact since 2009, we understand the importance

of promoting and upholding ILO principles of fair and decent work, both in our operations and with our

suppliers. We also understand the local factors behind labour exploitation, and that our approach needs

tobe adapted to the cultural, economic and social norms of the regions in which we do business.

We manage our supply chains through a detailed onboarding process, with an enhanced focus on higher-risk

regions and sectors. Our Business and Human Rights Lead works closely with procurement teams across

the Group to promote responsible sourcing and to understand risk for new and existing suppliers. This

is achieved through a variety of activities, including desk research, independent ethical audits and supply

chain mapping, as well as visits, interventions and supplier training. Where improvements need to be made,

weissue corrective action plans. In the cases where suppliers fail to work to the required ethical standards,

we explore alternative sourcing strategies.

As a UK manufacturer, the majority of our spend is with direct suppliers in the UK. As part of our

accreditation as a Living Wage employer, we monitor the living wage across our UK locations, although our

use of temporary labour is relatively low. In 2025, only 14% of our spend was with suppliers based overseas,

and eight out of our top ten suppliers by spend were based in Europe.

We have identified three sectors as presenting a higher risk of human rights concerns: solar panels,

natural stone and ceramics. In 2025, we made progress in all three categories, increasing the number of

independent audits commissioned on the previous year. China, which accounted for our largest overseas

spend, remained the focus of our ethical initiatives. We also continued to develop new strategies for India,

our second largest overseas spending region, and audited a supplier in the Gulf region.

X Modern Slavery Statement on marshalls.co.uk/modern-slavery-statement

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 37

Sustainability continued

ROAD TO NET-ZERO

2025 highlights

• Scope 1 and 2 emissions under SBTi trajectory

line for near-term goals

• Implementation of ESG reporting software

• Publication of our Carbon Reduction Plan

• Biodiversity action plan programme in place for

all our extractive sites

2026 priorities

• Development of analytical capability of ESG

reporting software

• EPD development programme

• Re-accreditation to ISO 14001 for

Environmental Management

We’re reducing emissions

across our operations,

productsand supply chain,

guided bySBTi-approved

targets. From renewable energy

and captured-carbon bricks

toourlower-carbon concrete

technology and widespread

EPD coverage, we’re making

iteasier for customers

tospecify lower-carbon

solutionswith confidence.

Overall net-zero target

Marshalls plc commits to reach net-zero GHG

across the value chain by 2050.

Near-term targets

We commit to reduce absolute Scope 1 and

2 GHG emissions 50.5% by 2030 from a 2018

base year* and to reduce absolute Scope 3

GHG emissions 37.5% by 2033 from a 2018

base year*.

Long-term targets

We commit to reduce absolute Scope 1 and

2 GHG emissions 90% by 2040 from a 2018

base year and to reduce absolute Scope 3

GHG emissions 90% by 2050 from a 2018

base year*.

* The target boundary includes land related emissions

and removals from bioenergy feedstocks.

Measuring our carbon footprint

We measure our emissions according to the criteria

of the Greenhouse Gas Protocol and we outline here

what the different scopes mean to us:

• Scope 1 refers to our direct fuel usage, including

diesel, petrol, liquefied petroleum gas (LPG),

heating oil, kerosene and natural gas. We measure

this through statements, invoices, meter readings

and third-party supplier data

• Scope 2 refers to our indirect emissions, which

isthe electricity we have purchased

• Scope 3 refers to all other emissions across

ourentire value chain

X Carbon Reduction Plan on marshalls.co.uk/sustainability

Net-zero by 2050

Our carbon reduction targets have been approved

by the Science Based Targets initiative (SBTi).

These targets are driving our activity and this is

particularly important for us because we know

the role we play as a manufacturer in reducing

our carbon footprint. We want our targets to be

meaningful and for our progress to stand up to

scrutiny. With approved science-based targets,

weare clear that our near and long-term targets

willenable us to reach net-zero by 2050.

Marshalls has a mandatory duty to report

annualgreenhouse gas (GHG) emissions under

the Companies Act 2006 (Strategic Report and

Directors’ Report) Regulations 2013. We use The

Greenhouse Gas Protocol: A Corporate Accounting

and Reporting Standard (revised edition) and the

Department for Energy Security and Net Zero

published conversion factors (June 2025) to

measure GHG emissions.

Our work is underpinned by our Carbon and

Climate Change Policy and two-thirds of the

electricity we consume as a Group is sourced

from renewable sources. We disclose information

according to mandatory reporting requirements

from Streamlined Energy and Carbon Reporting

(SECR), Task Force on Climate-related Financial

Disclosures (TCFD) and Climate-related Financial

Disclosures (CFD).

Progress against targets

Progress against our targets over a five-year period

is reflected in the bar charts overleaf. The target line

shown here is based on our science-based targets

for the Group.

Whilst reduction in production activity does

lead to a broadly commensurate drop in energy

consumption, a combination of individual fuel type

mixes and fixed baseloads means this is not always

linear. Our 2025 data is in line with expectations

and our absolute emissions remain well within the

approved 1.5°C science-based target pathway.

We use an intensity ratio in order to define

emissions data in relation to our business and we

report this as kg CO

e per tonne of production. We

report three years of intensity (relative) Scope 1 and

2 market based emissions data as Marshalls and

Marley previously used different intensity ratios.

These are now aligned.

IBM Envizi software

With SBTi-approved targets firmly in place for

the Group, we wanted to enhance our capability

for measuring our emissions and improve the

accuracy of our data. To help us stay on track with

our net-zero by 2050 target, we started working

with IBM in 2025 to integrate their ESG reporting

platform, Envizi, into our systems. Moving from

manual data capture to a more automated system

was a natural step for us.

The Envizi platform will enable us to get a clear,

real-time view of our carbon impacts at Group

andsite level. We will be able to track our progress,

spot improvement opportunities and make faster,

better-informed decisions. With more accurate data,

we’ll be in a stronger position to further reduce our

environmental impact and ensure transparency for

customers and stakeholders.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 38

Sustainability continued

Marshalls Group absolute Scope 1 and 2 emissions Restatement of information

We have historically reported our Scope 2 emissions as market

based (using supplier emissions factors) and location based (using

Government emissions factors). We are restating information for

Scope 2 market-based emissions (2023 and 2024) due to a change in

our source of electricity on commencement of Marley’s new contract

in 2023, which did not include green electricity. This resulted in an

increase in our market-based emissions compared to the previously

reported figures. As we report Scope 2 as a separate line item, we are

restating this information for both absolute and relative emissions.

We are also restating Scope 3 emissions for 2024 due to the improved

accuracy of third-party supplier data (see page 47 for further details).

Further information on our reporting parameters and methodology can

be found in our Basis for Reporting Guide, available on our website.

Group absolute Scope 3 emissions

We continue to measure emissions for eleven out of the 15 Scope 3

categories – the remaining four categories are considered; however,

they are not relevant for our business. Our emissions profile is shown

in the pie chart below, with a clear majority of Scope 3 emissions

coming from purchased goods and services. Our total Scope 3

footprint in 2025 was 477,428 tonnes – a 14% reduction on 2024

(2024 restatement: 554,118 tonnes).

Marshalls Group relative Scope 1 and 2 emissions

Cat 1: Purchased goods

andservices

391,313 tonnes

Cat 2: Capital goods 3,303 tonnes

Cat 3: Fuel and energy

related activities

6,699 tonnes

Cat 4: Upstream

transportation

anddistribution

58,218 tonnes

Cat 12: End of life

treatment ofsold

products

12,984 tonnes

Other (Categories 5, 6,

7, 9, 11 and 13)

4,911 tonnes

12.00

10.00

8.00

6.00

4.00

2.00

0.00

Kg CO

e per tonne of production

2023 2024 2025

8.28

8.21

60,000

50,000

40,000

30,000

20,000

10,000

Tonnes CO

2021 2022 2023 2024 2025

Scope 1 Target

Scope 2 (market based)

44,689

42,361

39,725

37,835

36,756

ROAD TO NET-ZERO CONTINUED

2025

Streamlined Energy and Carbon Reporting (SECR)

In accordance with the SECR framework, we are reporting annual

Scope 1 and 2 GHG emissions, energy use, five-year trend disclosure

of data, intensity ratios for both emissions and energy, details of

methodology used and energy reduction activities.

Group energy consumption

Relative energy consumption

kWh per tonne

2023 2024 2025

60.00

43.82

43.23

350

280

210

140

kWh (millions)

2021 2022 2023 2024 2025

325.63

321.23

287.78

202.43

193.55

8.19

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 39

Sustainability continued

ROAD TO NET-ZERO CONTINUED

Group self-generated energy from renewables

Energy reduction

Our net-zero target to 2050 is driving our carbon reduction journey.

While we continue to focus on the actions needed to reduce emissions

that cause climate change, we also work towards managing the risks

of climate change impacts. We do this by continuing to work towards

our science-based targets through energy reduction, manufacturing

efficiencies, product mix design and better use of technology to drive

efficient decision making.

The main focus for 2025 has been the implementation of our IBM

Envizi ESG reporting software. This has involved a number of internal

and external stakeholders, working together to enable us to be more

automated and better informed about our energy consumption. Data

quality is key and we work with our Energy Champions who drive

energy efficiency and improvement at our manufacturing sites.

As we continue on our journey, we’re rolling out several projects to

reduce our environmental impact, including continuing to engineer

high-emissions fuels out of the business, increasing collaboration

andinnovation with key supply chain partners, and moving from

dieselforklifts to electric and LPG-powered models.

X Carbon Reduction Plan marshalls.co.uk/sustainability/document-library

Waste

We’re committed to driving circular approaches. We measure and

monitor waste performance and have a set target to achieve zero

waste to landfill by 2030. We work with our sites and suppliers to

identify and implement circular economy initiatives and undertake

regular waste audits to help improve waste management. In 2025,

the absolute waste total decreased and the percentage sent to

landfill slightly increased from 0.13% in 2024 to 0.19% in 2025.

The calculation for the percentage of waste going off-site does not

currently include hazardous waste or waste used for restoration on

Marshalls sites. Restoration waste, such as waste concrete and stone

rejects, fulfils our obligations within planning consents to restore

ourquarries.

This chart shows self-generated energy from the solar arrays

atfivelocations.

Approach to ESOS

Marshalls complies with the mandated Energy Savings Opportunity

Scheme (ESOS) legislation which requires us to submit an assessment

every four years, reviewing energy consumption across a representative

selection of our buildings, processes and transport.

Under ESOS, organisations must carry out comprehensive energy audits

in order to identify cost-effective, energy-saving measures. Through

a combination of direct site observations and supplier-based data,

we identify and categorise opportunities to save energy, carbon and

cost. As part of our compliance with ESOS, we track our identified and

completed opportunities and submit these as action plans and progress

reports to the Environment Agency at the end of every year. Our ESOS

assessments are carried out and verified by a certified, external ESOS

lead assessor prior to submission. Our last assessment was submitted

in 2023 and our next assessment will take place in 2027.

1,200,000

1,000,000

800,000

600,000

400,000

200,000

kWh

2021 2022 2023 2024 2025

413,449

421,975

583,959

1,051,496

1,090,612

Packaging

Over many years, we have conducted trials to remove plastic from

ourpackaging where we can, whilst maintaining the safety and integrity

of the product for our customers. We’ve also looked to reduce the

thickness of the plastic we use in our packaging where it can’t be

removed safely. One example of our approach to circularity is our

wooden pallets. We work with different recovery services that collect

any Marshalls or Marley branded pallets free of charge. Those pallets

go to a repair hub, which allows them to be repaired, repatriated and

then delivered back into our manufacturing plants.

Water

We use water at our sites for hygiene, for washing our site vehicles

andin some of our manufacturing processes. Many of our sites harvest

and recycle water, and we use quarry water and boreholes to minimise

mains water use, where appropriate in our operations. We use World

Resources Institute (WRI) data to identify areas of water stress. Based

on this data, we have assessed that we have one manufacturing site

inan area of high water stress in Beenham, Berkshire.

Biodiversity

Our approach to biodiversity is to use a process to assess, prioritise,

measure, act and track progress, linking into the Taskforce on

Nature-related Financial Disclosures (TNFD) framework to guide our

thinking on dependencies, impacts, risks and opportunities. We have

classified all our sites using a tier system in order to prioritise activity

and developed a roadmap for these activities. Working with the Royal

Society for the Protection of Birds (RSPB), we continued to work on

our target to have biodiversity action plans in place for all extractive

sites, with a limited number of sites to be completed in 2026. We were

proud to be awarded a Special Commendation by the MPA Quarries

and Nature Awards 2025 for the imaginative integration of geology,

nature conservation and interpretation at our Birkhams quarry.

X ESG data sheet marshalls.co.uk/sustainability/document-library

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 40

Task Force on Climate-related Financial Disclosures

Marshalls plc has complied with

therequirements of LR 6.6.6(8R)

byincluding climate-related financial

disclosures consistent with the

TaskForce on Climate-related

Financial Disclosures (TCFD)

recommendations and

recommended disclosures.

The climate-related financial disclosures made

by Marshalls plc comply with the requirements

of the Companies Act 2006 as amended by the

Companies (Strategic Report) (Climate-related

Financial Disclosure) Regulations 2022 (CFD).

Outlined on the following pages is our 2025 TCFD

and CFD disclosure. We continue to evolve our

disclosures in a phased approach and we comply

with all eleven recommended TCFD disclosures

andall the CFD expected disclosures.

TCFD and CFD index table

TCFD pillar Recommended disclosure Page reference Companies Act 2006 414CB

1. Governance a. Describe the board’s oversight of climate-related

risks and opportunities.

Page 42 a. A description of the company’s governance

arrangements in relation to assessing and

managing climate-related risks and opportunities.

b. Describe management’s role in assessing and

managing climate-related risks and opportunities.

Page 42

2. Strategy a. Describe the climate-related risks and opportunities

the organisation has identified over the short,

medium, and long term.

Pages 44 to 46 d. A description of:

i. The principal climate-related risks and

opportunities arising in connection with the

company’s operations

ii. The time periods by reference to which those

risks and opportunities are assessed

b. Describe the impact of climate-related risks and

opportunities on the organisation’s businesses,

strategy, and financial planning.

Pages 44 to 46 e. A description of the actual and potential impacts of

the principal climate-related risks and opportunities

on the company’s business model and strategy.

c. Describe the resilience of the organisation’s

strategy, taking into consideration different climate-

related scenarios, including a 2°C or lower scenario.

Page 43 f. An analysis of the resilience of the company’s

business model and strategy, taking into

consideration different climate-related scenarios.

3. Risk management a. Describe the organisation’s processes for

identifying and assessing climate-related risks.

Page 43 b. A description of how the company identifies,

assesses, and manages climate-related risks

andopportunities.

b. Describe the organisation’s processes for

managing climate-related risks.

Pages 43 and 44

c. Describe how processes for identifying, assessing,

and managing climate-related risks are integrated

into the organisation’s overall risk management.

Page 44 c. A description of how processes for identifying,

assessing, and managing climate-related risks

are integrated into the company’s overall risk

management process.

4. Metrics and targets a. Disclose the metrics used by the organisation to

assess climate-related risks and opportunities in

line with its strategy and risk management process.

Pages 44 to 46 h. A description of the key performance indicators

used to assess progress against targets used to

manage climate-related risks and realise climate-

related opportunities and of the calculations on

which those key performance indicators are based.

b. Disclose Scope 1, Scope 2, and, if appropriate,

Scope 3 GHG emissions, and the related risks.

Page 39

c. Describe the targets used by the organisation to

manage climate-related risks and opportunities

andperformance against targets.

Pages 44 to 47 g. A description of the targets used by the company

to manage climate-related risks and to realise

climate-related opportunities and of performance

against those targets.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 41

Task Force on Climate-related Financial Disclosures continued

Governance

2025 progress: Integrating management of

climate-related risks with site-level activity

andmanagement systems

The Board has ultimate responsibility for

climate-related risks and opportunities. The Board

monitors and oversees progress against goals

and targets, including science-based targets for

carbon reduction. Board oversight is through the

ESG BoardCommittee, with support from the

ESGSteering Committee.

The ESG Board Committee met three times

in2025 and is due to meet three times in 2026.

Each year, the ESG Board Committee is briefed

bythe Chief Legal Officer and Company Secretary

on climate-related matters and ESG/climate

reportingdevelopments.

X ESG Committee Report page 90

Review of carbon reduction

remuneration moderator

In 2025, a review was undertaken by the Board

to decide on the best way to link environmental

targets to remuneration. The decision was

taken to base the remuneration moderator on

the delivery of agreed decarbonisation projects

that form part of our net-zero roadmap.

X Remuneration Committee Report page 92

In assessing and managing climate-related issues,

climate-related responsibilities are assigned

as follows:

• ESG Steering Committee: Climate-related issues

form part of the agenda and this Committee

istasked with assessing climate-related issues.

In 2025, the ESG Steering Committee held

fivemeetings – chaired by the Chief Legal

OfficerandCompany Secretary and attended

by the Chief Executive, CFO, CCO and the ESG

delivery team, as permanent members

Keyoutput:ESGmateriality matrix

• ESG delivery team: This cross-functional team

attends and reports directly to the ESG Steering

Committee and is responsible for the delivery

of the ESG strategy, including working on

climate-related issues in terms of best practice,

regulation, compliance and horizon scanning

Keyoutput:ESG update in Annual Report

• Group Risk Register: Managed by the CFO and

with input from senior leaders, the Risk Register

incorporates climate change in different risks.

Meetings are held twice a year and key points

arefed back to the Board via the CFO

Keyoutput:RiskRegister

• Climate Disclosures Working Group:

Thiscross-functional group identifies and

examines climate-related issues. Outputs from

the group are fed back to the CFO and ESG

Steering Committee. This group is attended

by senior colleagues from legal, operations,

sustainability, procurement, marketing and

finance teams. In 2025, the group reviewed

andranked climate-related risks in order to

beginthe processof classifying risks based

onfinancial impact to the business

Keyoutput:Climate-related risks in

TCFDdisclosure

• Sustainability team: This team has the overall

responsibility to manage and monitor climate-

related issues operationally, including delivering

on science-based targets for carbon reduction

and energy performance at site level, and

implementation of new ESG reporting software

Key output: Verification of environmental data

andproduct EPDs

• Operations: Various teams within the operations

function contribute to the management of

climate-related risks and opportunities, including

technical (innovation and product cement

reduction programme), and Energy Champions

(monitoring of progress against targets at site)

2026 focus: Embedding of IBM Envizi ESG reporting

software for improved accuracy

Evolution of reporting

In 2025, we took the decision to consolidate

our sustainability reporting. This decision was

taken as preparation for the adoption by the

UK Government of the ISSB Sustainability

Disclosure Standards (SDS) as part of the

UK Sustainability Reporting Standards (SRS),

where all material information needs to be

published in the Annual Report & Accounts.

Our disclosure is supported by our Carbon

Reduction Plan, Basis for Reporting Guide,

and ESG data sheet – all are available

onour website.

Key discussions and

activity in 2025

Oversight

• Regular monitoring of our progress against

our approved science-based targets

• Update to the Board ESG Committee and

ESG Steering Committee on approach to

climate-related risks and opportunities

• Review of climate metrics for remuneration

Strategy

• Publication of our Carbon Reduction Plan

• Update of ESG reporting plan further to

potential introduction of International

Sustainability Standards Board (ISSB)

intheUK

• Review of ESG strategy to align activity

oncarbon leadership

Management

• Review and consolidation of our climate-

related risks as part of the work of our

internal Climate Disclosures Working

Group(CDWG)

• Initial internal controls testing for ESG

• Integration of management of climate-

related risks with site-level activity and

management systems

Metrics and targets

• Review of metrics and KPIs in line with

‘Transform & Grow’ strategy

• Review of ESG data for reporting approach

• Implementation of carbon accounting and

ESG software solution

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 42

Task Force on Climate-related Financial Disclosures continued

Strategy

2025 progress: Refinement of our carbon

reductionroadmap and addition of first-hand

datatoscenario analysis

After having set up our internal process to assess

climate-related risks and opportunities in 2023,

we continue to focus on refining our approach.

Our longer-term view towards assessing transition

and physical risks is set out here and it outlines

our approach, methodology and outputs. This

is an iterative process which we expect to refine

year-on-year.

As a UK-based manufacturer, our focus for physical

risk of climate change is our direct operations in the

UK. Our future aim is to include the supply chain in

our analysis. For transition risk, we are looking at

each climate-related risk individually and this tends

to take into consideration the whole value chain as

well as our direct operations.

Management of climate-related

risks at site

In 2025, we fully incorporated climate-related

risks into our management systems. Climate

change risk considerations are now included in

all site management systems for international

standards. This has been complemented by

a qualitative process of gathering observational

first-party data from eleven key operational sites.

Scenario analysis

When assessing the use of climate scenarios,

wecontinue to take a phased approach. Using

data and research from external sources including

the Environment Agency and WRI Aqueduct, we

identified a risk calculation based on risk exposure

and the impact of relevant future scenarios: SSP1

(Sustainable Future) and SSP5 (Fossil Fuelled

Development). These scenarios were chosen

as they give an indication of how key risks may

changealong very different trajectories, from

below2°C (SSP1) to over 4°C (SSP5).

Identifying, assessing and managing

climate-related risks

Integrate

Risks that have been identified and assessed

to be significant to the overall risk process are

added to the Risk Register

Identify

Climate-related risks are identified by ESG

delivery team, finance, operations and Climate

Disclosures Working Group

Manage

Agreed risks are managed by the relevant

teams, with ESG Steering Committee oversight

Assess

Significant risks are discussed by the Climate

Disclosures Working Group and assessed by

the ESG Steering Committee

Resilience and impact on

FinancialStatements

Our carbon reduction roadmap is based on our

approved Scope 1, 2, 3 and net-zero science-based

targets and aligned to a 1.5°C trajectory, but it is

subject to transitional challenges. Our initial scenario

analysis has applied a number of assumptions, some

of which are based on a number of unknowns in

thetransition to net-zero.

More specifically to Marshalls, SSP1 was selected

to assess the potential impact of our current

environmental roadmap and the likelihood of

increased transition risks, and SSP5 to look at

thepotential impact of increased physical risks.

Scenarios

SSP1: Increased carbon pricing, faster

regulatory activity, transition risks, decreased

physical risks

SSP5: Slower regulatory activity, need for

transformation, increased physical risks

As outlined last year, we further refined our

approach in 2025 by adding first-party data to our

analysis of physical risk. The focus remained on key

operational sites (identified by production tonnage

and significance to the Group). Qualitative data was

collected from site managers to add another layer

of analysis in order to extend our understanding of

key physical site risk.

For our UK key operational sites, longer-term risk

centres around flooding and temperature increase

(though not for all sites). The approach taken to

analyse site physical risk and the application of

scenario analysis has been reviewed in 2025 but

not changed. Our plan at this stage is to analyse

physical site risk every three to four years (review

due in 2026–2027) and review first-hand data every

three years (review due in 2028).

Qualitative scenario analysis is subjective and

may be subject to change as we mature and

evolve our processes and analysis. We have

made assumptions in our qualitative scenario

analysis and we have also made assumptions

and omissions in our quantitative analysis in

order to focus on materiality and not to hinder the

analysis due to unavailability of data. This is not

an exact process and relies on assumptions and

uncertainty and therefore will continue to be refined

moving forward.

2026 focus: Refine analysis of physical site risk

based on revised time horizons

Based on this initial work, we assess that the

‘Transform & Grow’ strategy is resilient against

scenarios used. This assessment is based on a

robust risk management process that is embedded

in the organisation, an understanding of climate-

related risks for the organisation, the mitigations

we have in place and a phased approach to

adaptation based on materiality and the overall

approach to risk.

Our ‘Transform & Grow’ strategy is based on

providing sustainable solutions for the built

environment and the transition to a low-carbon

economy. This is a clear opportunity for the Group.

The actions we are taking to mitigate our climate-

related risks, including our ‘Transform & Grow’

strategy, setting science-based targets for carbon

reduction and analysing our sites for impact of

physical risk, are consistent with the actions

required to align to a 1.5°C world. Initial scenario

analysis tells us that some climate-related issues

may impact financial planning and capex; however,

this is already being considered as part of our

carbon reduction roadmap development.

Climate-related risks outlined on pages 44 and 45

have been considered and assessed in preparation

of the Consolidated Financial Statements for

the year ended 31 December 2025. We assess

that there is no significant short-term impact

on financial planning or forecasting or capital

commitments. This is based on our risk heatmap,

internal Risk Register and climate-related risk

management processes.

There continues to be no current financial

reportingimpact of the net-zero announcement

in 2024; however, we are mindful of the changing

nature ofclimate-related risks and the potential for

impacton Financial Statements in the future.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 43

Task Force on Climate-related Financial Disclosures continued

Risk

2025 progress: Review of risks and time horizons

based on simplification of process

We have formal ongoing processes to identify,

assess and analyse risks and these are integrated into

the Group Risk Register. Climate risks are considered

separately to the risk heatmap (see page 53) as the

assessment is run on a different cycle.

The way in which we approach climate-related risk

is different to our approach to overall risk. Welook

at climate-related risk through a different lens and

scoring methodology and use different timehorizons.

X Risk heatmap page 53

Review of time horizons

In 2025, we reviewed the time horizons used

to identify climate-related risks. This was

prompted by an internal assessment that the

time horizons we had originally set out at the

start of our climate-related risk reporting journey

were no longer appropriate. Our understanding

and maturity levels in this area are growing and

therefore are dictating a realistic approach. This

assessment was taken to the CDWG in 2025

and the group agreed to shift our time horizons

a little more towards the future to better reflect

the potential longer-term impacts of climate

change on our business.

Our new time horizons: short-term

(0–3years), medium-term (4–10 years)

andlong-term(10+ years).

2026 focus: Development of financial modelling

based on scenario analysis and net-zero roadmap

Key climate-related risks

As previously stated, we have reviewed the time horizons by which we identify and assess climate-related risks: short-term (0–3 years), medium-term (4–10 years)

and long-term (10+ years). These time horizons have been chosen as they reflect the dynamics of our industry and our internal processes. They are different to the

ones used for financial reporting due to the nature of the risks.

In 2025, we reviewed our climate-related risks. This process was led by the CDWG which met three times in the year to discuss climate disclosure sign-off, review and

ranking of climate-related risks, and review of time horizons. The review process involved engagement with a number of different teams in the business, with alignment

with the Risk Register process, and was driven by the evolution of our approach to the climate change risk assessment and our future intention around the financial

quantification of climate-related risk. Our review identified three priority key risks relating to supply chain resilience, regulatory and market transition risk and physical

site risk. While we now have three risks instead of five, the key categories of market, policy and legal, reputation, technology, and physical risk remain covered by

these three key risks. We have expanded our narrative of the risks and mitigations to better explain our position. Our assessment of the current potential impact is

based on a short-term mitigated position.

Technological advancement is not specifically mentioned here; however, we have amalgamated this risk into our overall approach as it is a key driver and enabler

forour ‘Transform & Grow’ strategy.

We track relevant externally generated metrics and are putting in place internally generated metrics as explained below. We have not reported progress against these

metrics but will consider doing so in future disclosures as our reporting processes further develop.

Risk, type, category

andtimeframe Explanation, mitigation and metric Potential impact

Supply chain

resilience

Transition

risk (market,

technology):

medium

to long term

Risk: Given our reliance on raw materials and the potential impact of the climate on operations and supply

chains,this is a very tangible risk for Marshalls. The key risk is around the availability of materials, both for

cement and replacement materials, due to fluctuations in price and accessibility. This necessitates flexibility in

our manufacturing processes and the need for appropriate use of technology as we continue to explore the use

ofalternative materials. In the longer term, there is also a risk attached to the decarbonisation of the business

onour road to net-zero which includes the potential impact of fluctuating prices on energy and haulage.

Mitigation: This is a transition risk that we mitigate by having a strong focus on supplier relationships, a

centralised purchasing function, flexible contracts and long-term supply agreements. Our cement replacement

programme for concrete products decreases our reliance on cement, which helps to mitigate some of the risk

on fluctuating pricing and availability. This is further supported by materials research and development and

research into technological advancement in materials and processes, including cement-free and alternative

fuels for vehicles and manufacturing. Our new ESG reporting software, Envizi, also enables us to pinpoint

energy-savingopportunities.

2025 metrics: Manufacturing site energy use (internal), difference between price of standard cement and lower-carbon

alternatives (external)

Potential impact on the business, strategy and financial planning: Disruption to supply and price of materials.

Ourstrategy continues to focus on lower-carbon solutions and we have several projects that enable us to mitigate,

including cement replacement and new product innovation. In the medium to long term, impact may be around

increased fluctuation of price of materials and energy prices, and the resulting financial implication.

Current: low

SSP1: increased risk

SSP5: reduced risk

but increased need

foradaptation

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 44

Task Force on Climate-related Financial Disclosures continued

Risk, type, category

andtimeframe Explanation, mitigation and metric Potential impact

Regulatory

and market

Transition risk

(market, technology,

policy and legal,

reputation): medium

to long term

Risk: As decarbonisation accelerates and consumer demand shifts, there will be impact on regulation and

changes in legislation, for example carbon pricing or stricter emissions standards, alongside the shift in market

demand towards lower-carbon product solutions and adaptation. Our ‘Transform & Grow’ strategy is clear on

the importance of providing lower-carbon product solutions for our customers and this is a focus for Marshalls

moving forward.

Mitigation: We mitigate this risk by having internal processes for product development and manufacturing

processes, specialist design and engineering capability, and development of Environmental Product Declarations

(EPDs), along with our approved science-based targets on which our net-zero roadmap is based and therefore

our carbon reduction activities. This is supported by close collaboration between internal teams of sustainability

subject matter experts, ESG reporting compliance plan, implementation of ESG reporting software for

transparency, horizon scanning, and engagement with external bodies.

2025 metrics: EPD coverage across product range (internal), carbon prices and levies (external)

Potential impact on the business, strategy and financial planning: Planning for rise in price of carbon via any

current mandatory schemes like UK Emissions Trading Scheme (ETS), and UK Carbon Border Adjustment Mechanism

(CBAM) coming into force in the medium term. Supplier readiness may be a risk if they are not ready for regulatory

changes. Loss of sales if our strategy is not well executed; however, this is core to the business strategy sowill be

closely monitored.

Current: low

SSP1: increased risk

SSP5: reduced risk but

increased physical risk

Physical site risk

Physical risk

(acute): medium

to long term

Physical risk

(chronic): long term

Risk: Acute physical risk of extreme weather events, such as flooding and heavy winds, and chronic physical risk

of longer-term changes in weather patterns that may cause heat or water stress may impact our own sites in the

UK and our overseas supply chain.

Mitigation: Our work to mitigate the impact of physical climate risk continues to focus on our own sites, with

site-level climate risk analysis which includes the use of internal and external data, flooding mitigation activities

atsite, and stakeholder engagement.

2025 metric: Cost of lost production due to weather events (internal)

Potential impact on the business, strategy and financial planning: Need for flood resilience plans for low-risk sites

and potential for investment for higher-risk sites. There may be longer-term weather impact on sales and impact on

financial planning if any sites experience major changes in flooding or other climate-related events.

Current: low

SSP1: decreased risk

SSP5: increased risk

Risk continued

Key climate-related risks continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 45

Resource efficiency – Energy source – Products and services – Markets – Resilience

Potential impact: Brand preference, increased product sales, reduced costs from efficiencies, reputation, investment proposition, business unit and project synergies, opportunities across the value chain

Task Force on Climate-related Financial Disclosures continued

Risk continued

Climate-related opportunities

Sustainability is increasingly a driver of commercial advantage for Marshalls. The markets we serve are

increasingly influenced by long-term structural growth drivers associated with climate change. Demand

for lower-carbon construction materials, green urbanisation and resilient water management continues to

accelerate across residential, commercial and infrastructure sectors. Our ‘Transform & Grow’ strategy is

aligned to these drivers.

Underpinning these opportunities is the Marshalls brand, which is strongly supported by our ESG and

sustainability credentials – giving us an opportunity to strengthen our position in order to be an attractive

investment proposition. From a heritage in landscaping to an increasingly diversified group of businesses,

Marshalls continues to evolve. Whether it’s our integrated solar roofing system or our lower-carbon concrete

bricks, our innovative rain garden kerbs or our water management and drainage systems, we provide

sustainable product solutions.

Decarbonising the built environment

We are progressing towards our carbon reduction targets while strengthening our competitive position

in carbon-sensitive specifications. Resource efficiency is key and we continue to look at different ways to

reduce our environmental impact. The majority of our core product range is supported by verified EPDs,

enabling customers to make informed material choices in projects where embodied carbon is a critical

factor. Having implemented a new energy management system and invested in a new ESG reporting data

platform means we are also improving the accuracy of our data. There is an opportunity here to more

accurately measure and report our carbon footprint data, especially relating to Scope 3 emissions.

Product focus: Innovation in lower-carbon concrete bricks, solar roofing systems and material efficiency

supports growing demand for reduced embodied carbon in buildings.

Headline metric example: Coverage of EPDs across our product range

Adapting to a changing climate

Our ‘Transform & Grow’ strategy sets out clearly our intention to unlock our potential growth and

value creation through leading brands delivering pioneering systems and solutions. As cities adapt to

climate pressures and density challenges, integrated landscaping and roofing systems play a critical

role in improving energy efficiency and biodiversity. Our portfolio supports greener, more resilient urban

environments while meeting evolving planning and regulatory requirements. These structural growth

drivers present a multi-year opportunity for Marshalls, supported by our portfolio of leading brands,

technical capability and system-based solutions.

Product focus: Increasing rainfall intensity and flood risk are driving infrastructure investment in

surfacewater management. Our Water Management division continues to secure major project

specifications by delivering engineered solutions that address flood resilience, regulatory compliance

andlong-term durability.

Headline metric example: Performance against near and long-term science-based targets for

carbon reduction

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 46

Task Force on Climate-related Financial Disclosures continued

Metrics and targets

2025 progress: Implementation of new ESG

reporting software

The metrics we use to assess climate-related risks

and opportunities are detailed on pages 44 to 45.

As our climate strategy centres on achieving our

approved Scope 1, 2, 3 and net-zero science-based

targets, we also use metrics to measure absolute

and relative emissions (see page 39).

Our approved science-based targets are aligned

to 1.5°C and are supported by a roadmap. The

current Group roadmap is subject to transitional

challenges and dependent on new technologies.

The way we run our operations will be impacted

byour new targets as reaching net-zero will require

new technology: for example, the potential use of

hydrogen. We continue to engage with our suppliers

and refine our roadmap in order to stay on track

with our targets.

As we set out last year, our focus during 2025 was

to put in place the processes required to collect

appropriate data and begin the implementation of

new ESG reporting software. The implementation

ison track and our 2025 data has been generated

by our IBM Envizi platform.

2026 focus: Further refine net-zero roadmap

Targets

Our targets are outlined here in order to give an overview of the metrics we have tracked to measure our environmental performance. The quantification and

reporting of our carbon, energy, water and waste data has been independently verified by BSI (except Scope 3). The verification activity has been carried out

inaccordance with ISO 14016:2020.

Further information on our reporting parameters and methodology can be found in our Basis for Reporting Guide, available on our website.

Targets Target type Target year Status

50.5% reduction of absolute Scope 1 and 2 emissions against a 2018 baseline (tonnes CO

e) Absolute 2030 On track

80% of the way to 2030 target

37.5% reduction of absolute Scope 3 emissions against a 2018 baseline (tonnes CO

e) Absolute 2033 On track

92% of the way to 2033 target

Zero waste to landfill Absolute 2030 On target

Emissions data (tonnes CO

As stated on page 39, we are restating information for Scope 2 market-based emissions for 2023 and 2024. This restatement only materially affects the Marley

Scope 2 market based performance and therefore has no impact on the 2023 and 2024 links to remuneration as these were for the Marshalls business only. We also

restate Scope 3 for 2024 due to improved accuracy of third-party supplier data.

We also reported last year that we had to adjust our Scope 1 and 2 Group total emissions to align with our science-based targets, taking into consideration the move

of our logistics to Wincanton (and therefore from Scope 1 to Scope 3), and to enable like-for-like comparison year-on-year.

2023

reported

2023

restatement

2024

reported

2024

restatement 2025

Total Group Scope 1 36,470 — 32,678 — 31,336

Total Group Scope 2 (market based) 2,590 3,255 3,237 5,157 5,420

Total Group Scope 2 (location based) 9,932 — 9,476 — 7,943

Total Group Scope 1 and 2 (market based) 39,060 39,725 35,915 37,835 36,756

Total Group Scope 1 and 2 (location based) 46,402 — 42,154 — 39,279

Scope 3 Cat 1: Purchased goods and services — — 436,799 437,088 391,313

Scope 3 Cat 2: Capital goods — — 7,988 7,969 3,303

Scope 3 Cat 3: Fuel and energy related activities — — 10,489 8,367 6,699

Scope 3 Cat 4: Upstream transportation and distribution — — 78,366 89,280 58,218

Scope 3 Cat 12: End of life treatment of sold products — — 9,706 9,715 12,984

Scope 3 other categories (5, 6, 7, 9, 11, 13) — — 2,671 1,699 4,911

Total Scope 3 — — 546,019 554,118 477,428

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 47

Financial Review

We strengthened our funding

position during 2025 through a new

four-year £270 million syndicated

banking facility with no change

incommercial terms.

Introduction

The Group returned to revenue growth in 2025 led

by Building and Roofing Products and supported

bya much-improved revenue performance by

Landscaping Products. However, adjusted

operatingprofit was impacted by a materially

weaker performance in Landscaping Products.

Inresponse to this performance, we accelerated

ournetwork optimisation plans to allow us to

deliver our national specification-driven model in a

more cost-effective way. These actions are expected

tounderpin an improved financial performance in 2026.

The lower adjusted operating profit fed through into

a reduction in adjusted earnings per share of 16%,

with a modest benefit from lower finance costs.

Adjusted profit before tax of £43.7million (2024:

£52.2 million) included adjusting items totalling

£26.0 million and details of these are set out on

page 135. Operating cash flow conversion remained

robust at 88% of EBITDA due to strong working

capital management. We were also pleased to

refinance the Group’s syndicated bank facility well

ahead of its maturity date with unchanged commercial

terms, which extended this medium-term source

ofcapital to November 2029. The Balance Sheet

continues to be robust with pre-IFRS 16 net debt

marginally higher year-on-year at £137.9 million.

Alternative performance measures and adjusting items

The Group uses alternative performance measures (APMs) which are not defined or specified under IFRS.

The Group believes that these APMs, which are not considered to be a substitute for IFRS measures, provide

additional helpful information. APMs are consistent with how business performance is planned, reported

and assessed internally by management and the Board and provide additional comparative information.

Adjusting items are items that are unusual because of their size, nature or incidence and which the Directors

consider should be disclosed separately to enable a full understanding of the Group’s results and to

demonstrate the Group’s capacity to deliver dividends to shareholders.

Trading performance

Revenue

Group revenue in 2025 was £632.1 million (2024: £619.2 million), which represents a year-on-year increase

of 2%. Group revenue by reporting segment is summarised below.

2025 2024 Change

Analysis of revenue by segment £’m £’m %

Landscaping Products 265.8 268.3 (1%)

Building Products 172.0 164.6 4%

Roofing Products 194.3 186.3 4%

Group revenue 632.1 619.2 2%

Adjusted operating profit and margins

Adjusted operating profit reduced by 15% to £56.4 million (2024: £66.7 million), which reflected weaker

profitability in Landscaping Products due to investment in rebuilding market share and unrecovered input

cost increases. In response and alongside our strategy of improving customer relationships, we accelerated

our network optimisation plans and expect to remove around £11 million from the cost base by the end

of 2026, with around £3 million of this being realised in 2025. A summary of adjusted operating profit by

segment is set out in the following table and commentary of each segment is set out on pages 20 to 22.

2025 2024 Change

Analysis of adjusted operating profit by segment £’m £’m %

Landscaping Products 0.6 10.7 (94%)

Building Products 13.0 14.1 (8%)

Roofing Products 50.2 49.4 2%

Central costs (7.4) (7.5) 1%

Adjusted operating profit 56.4 66.7 (15%)

Justin Lockwood

Chief Financial Officer

Summary

• Group revenue growth of 2%: Building and

Roofing Products delivered growth of 4%

partially offset by a modest contraction in

Landscaping Products

• Adjusted operating profit contracted by 15%

driven principally by a weaker performance

in Landscaping Products

• Earnings per share reduced by 16% due

toweaker operating profit, partially offset

bya lower tax rate

• Cash conversion robust at 88% of

EBITDA reflecting strong working

capitalmanagement

• Balance Sheet robust with leverage of

1.8 times and debt facility extended to

November 2029

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 48

Financial Review continued

Trading performance continued

Adjusted operating profit and margins continued

The Group’s adjusted operating margin decreased by 1.9 percentage points to 8.9% (2024: 10.8%), which

reflects the weak performance in Landscaping Products and a modest reduction in Building Products. This

reduction is summarised as follows.

Revenue

Adjusted

operating

profit

Margin

impact

Analysis of revenue by segment £’m £’m %

2024 619.2 66.7 10.8%

Landscaping Products (2.5) (10.1) (1.6%)

Building Products 7.4 (1.1) (0.3%)

Roofing Products 8.0 0.8 —

Central costs — 0.1 —

2025 632.1 56.4 8.9%

Adjusting items

Adjusted operating profit is stated after adding back adjusting items totalling £24.4 million (2024: £12.8 million)

inaccordance with the Group’s accounting policy, as summarised in the following table.

2025 2024

£’m £’m

Amortisation of intangible assets arising on acquisitions 10.3 10.4

Redundancy and similar costs 9.6 —

Impairment of property, plant and equipment 4.5 —

Transformation cost — 2.5

Contingent consideration — 1.6

Significant property sales — (1.7)

Adjusting items within operating profit 24.4 12.8

Adjusting items within net finance expenses 1.6 —

Adjusting items within profit before tax 26.0 12.8

Adjusting items in 2025 comprise the non-cash amortisation of intangible assets arising on the acquisition

of subsidiary undertakings of £10.3 million (2024: £10.4 million) and restructuring and impairment charges

of £14.1 million (2024: £nil) arising from a partial site closure and other actions. The adjusting item in net

financial expenses of £1.6 million related to a write-off of unamortised bank arrangement fees consequent

to the renewal of the Group’s banking facilities. Details of the adjusting items arising in 2025 are set out

at page 135.

Profit and loss account

The Group’s profit and loss account from reported operating profit through to profit after taxation on both

anadjusted and a reported basis is set out in the following table.

Adjusted Reported Adjusted Reported Adjusted Reported

2025 2025 2024 2024 change change

£’m £’m £’m £’m % %

Operating profit 56.4 32.0 66.7 53.9 (15%) 40%

Net finance costs (12.7) (14.3) (14.5) (14.5) 12% 1%

Profit before taxation 43.7 17.7 52.2 39.4 (16%) (55%)

Taxation (9.7) (3.3) (11.7) (8.4) 17% 61%

Profit after taxation 34.0 14.4 40.5 31.0 (16%) (54%)

Earnings per share – pence 13.4p 5.7p 16.0p 12.3p (16%) (54%)

Net finance costs

Adjusted net finance expenses were £12.7 million (2024: £14.5 million). These expenses comprised

financing costs associated with the Group’s bank borrowings of £11.3 million (2024: £12.5 million), IFRS 16

lease interest of £2.0 million (2024: £1.7 million) and a pension-related credit of £0.6 million (2024: £0.3 million

charge). The reduction in adjusted net finance expenses in 2025 reflects the impact of lower base rates and

a net benefit from pension interest.

Taxation

The adjusted effective tax rate was 22% (2024: 22%), reflecting the higher headline corporation tax rate

partially offset by the benefit of a patent box arrangement. On a reported basis the effective tax rate was

19%. The Group paid £9.0 million (2024: £8.8 million) of corporation tax during the year.

For the twelfth year running, Marshalls has been awarded the Fair Tax Mark, which recognises social

responsibility and transparency in a company’s tax affairs. The Group’s tax approach has long been

closely aligned with the Fair Tax Mark’s objectives and this is supported by the Group’s tax strategy and

fully transparent tax disclosures. Considering not only corporation tax but also PAYE and NI paid on our

employee wages, aggregate levy, VAT, fuel duty and business rates, the Group has funded total taxation

inthe UK economy of £107 million (2024: £103 million).

Earnings per share

Basic earnings per share after adding back adjusting items of 13.4 pence (2024: 16.0 pence) per share

is calculated by dividing the adjusted profit attributable to Ordinary Shareholders for the financial year of

£34.0 million (2024: £40.5 million) by the weighted average number of shares in issue during the period of

252,868,921 (2024: 252,807,833).

Basic earnings per share from total operations of 5.7 pence (2024: 12.3 pence) per share is calculated

by dividing the profit attributable to Ordinary Shareholders for the financial year, of £14.4 million (2024:

£31.0 million) by the weighted average number of shares in issue during the period of 252,868,921 (2024:

252,807,833).

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 49

Financial Review continued

Cash flow

The Board has continued to focus on the proactive management of cash given a challenging

market backdrop.

2025 2024

£’m £’m

Adjusted operating profit 56.4 66.7

Depreciation and amortisation 28.6 31.1

Adjusted working capital and other movements (10.1) 5.9

Adjusted cash generated from operations 74.9 103.7

Net finance expenses (16.1) (11.7)

Taxation (9.0) (8.8)

Adjusted items paid – acquisition cash flows (6.6) —

Other adjusting items paid (4.3) (6.4)

Net cash flow from operating activities 38.9 76.8

Dividends (19.2) (21.0)

Net capital expenditure and acquisition of property through corporate structure (15.7) (9.8)

Derecognition of leases — 24.4

Other items (11.7) (22.1)

Change in net debt (7.7) 48.3

Opening net debt (169.3) (217.6)

Closing net debt (177.0) (169.3)

Operating cash flow conversion in 2025 was 88% of adjusted EBITDA (2024: 106%), which demonstrates

the consistently strong cash generative nature of the Group’s businesses. The proactive management of

working capital and capital expenditure supported continued strong cash generation; however, adjusted

pre-IFRS 16 net debt increased by £4.0 million to £137.9 million at 31 December 2025 (2024: £133.9 million).

The year-on-year movement principally reflects lower EBITDA, larger finance cost payments, and higher

working capital. Net debt was also impacted by increased capital expenditure and cash outflows associated

with adjusting items, including restructuring cash costs and the final contingent consideration payment in

respect of Viridian Solar.

In November 2025, the Group successfully refinanced its core banking facilities with a new £270 million

syndicated facility, extending the maturity profile. At 31 December 2025, the Group had significant available

headroom against committed facilities (including an undrawn revolving credit facility of £125 million),

providing capacity to fund strategic and operational plans. Adjusted pre-IFRS 16 net debt to EBITDA was

1.8times (2024: 1.5 times) and the Group remained comfortably compliant with all covenant requirements

at the year end.

Balance Sheet

Total capital employed at December 2025 was £832.7 million, which represents a year-on-year increase

of £2.1 million. The movement reflects the settlement of the final Viridian Solar contingent consideration

payments of £6.6 million and a higher investment in working capital. Net working capital increased by

£12.5million, principally due to a reduction in trade and other payables. This was mitigated by modest

reductions in inventories and trade and other receivables reflecting continued discipline in cash collection

which reduced debtor days and a reduction of inventories held by Landscaping Products. Offsetting

movements included the amortisation of acquired intangibles and a reduction in property, plant and

equipment consistent with lower capital expenditure.

2025 2024

£’m £’m

Goodwill 324.4 324.4

Intangible assets 206.0 217.8

Property, plant and equipment and right-of-use assets 262.6 267.2

Net working capital 99.4 86.9

Net pension asset 24.9 24.1

Deferred tax (78.4) (81.6)

Other net balances (6.2) (8.2)

Total capital employed 832.7 830.6

Reported net debt (177.0) (169.3)

Net assets 655.7 661.3

Goodwill and intangible assets

Goodwill is not amortised and subject to an impairment review on at least an annual basis. The latest review

was conducted at December 2025 and this did not indicate an impairment of the asset. Details of this review

are set out on pages 131 and 138 within the Financial Statements. Intangible assets principally comprise

assets that arose on the acquisition of subsidiaries and software, and are amortised over their useful lives.

The amortisation charge in 2025 totalled £12.3 million, and of this £10.3 million related to the amortisation

of assets arising on acquisitions of subsidiaries which are accounted for as an adjusting item in the profit

and loss account.

Pensions

The Balance Sheet value of the Group’s defined benefit pension scheme (the Scheme) was a surplus of

£24.9 million (2024: £24.1 million). The amount has been determined by the Scheme’s pension adviser using

appropriate assumptions which are in line with current market expectations. The fair value of the scheme

assets at 31 December 2025 was £225.8 million (2024: £228.3 million) and the present value of the scheme

liabilities is £200.9 million (2024: £204.2 million). The total gain recorded in the Statement of Comprehensive

Income net of deferred taxation was £0.1 million (2024: £10.0 million). The last formal actuarial valuation of

the defined benefit pension scheme was undertaken on 5 April 2024 and resulted in a surplus of approximately

£15 million, on a technical provisions basis, which was a funding level of 107%. The Company has agreed

with the Trustee that no cash contributions are payable under the current funding and recovery plan. The

next actuarial valuation will be undertaken as at 5 April 2027.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 50

Financial Review continued

Debt funding

Debt funding is summarised in the following table.

2025 2024

£’m £’m

Net borrowings on a pre-IFRS 16 basis (137.9) (133.9)

Leases (39.1) (35.4)

Reported net debt (177.0) (169.3)

Reported net debt was £177.0 million at 31 December 2025 (2024: £169.3 million), including £39.1 million

(2024: £35.4 million) of IFRS 16 lease liabilities. On a pre-IFRS 16 basis, net debt was £137.9 million (2024:

£133.9 million). The total bank facility at December 2025 was £270 million, comprising a £120 million term

loan and £150 million revolving credit facility (RCF), maturing in November 2029. £125 million of the RCF

was undrawn at December 2025, which provides the Group with significant liquidity to fund its strategic and

operational plans going forward.

The facility is charged at variable rates based on SONIA, plus a margin and interest rate hedging is in place at

aSONIA rate of around 3% for £95 million of nominal borrowings for various durations out to August 2027.

TheGroup’s bank facilities continue to be aligned with the strategy to ensure that headroom against

available facilities remains at appropriate levels and is structured to provide balanced and committed

medium-term debt.

At December 2025, on an adjusted, pre-IFRS 16 pro forma covenant test basis and after adding back

theimpact of adjusting items, the relevant ratios were achieved comfortably and were as follows:

• EBITA: interest charge – 5.7 times (covenant test requirement – to be greater than 3.0 times)

• Net debt: EBITDA – 1.8 times (covenant test requirement – to be less than 3.0 times)

Return on capital employed

2025 2024

£’m £’m

Adjusted EBITA 58.4 68.4

Capital employed 832.7 830.6

Adjusted ROCE 7.0% 8.2%

Adjusted ROCE was 7.0% (2024: 8.2%) with the year-on-year reduction in EBITA arising from the weaker

performance in Landscaping Products. We expect adjusted ROCE to increase progressively in the medium

term to around 15% as volumes recover and we successfully execute the ‘Transform & Grow’ strategy.

Capital allocation policy

Marshalls continues to recognise the three guiding principles of security, flexibility and efficiency in the

determination of its capital structure. The Group’s optimal capital structure supports the Group’s current

strategic objectives but also reflects the economic background and the cyclical nature of the construction

sector. The Group’s capital allocation policy is to maintain a strong Balance Sheet and flexible capital

structure and the key elements are:

1. Invest in organic growth opportunities – the Board expects to invest between £20 and £30 million

incapital expenditure a year to finance the ‘Transform & Grow’ strategy

2. Invest to enhance the Group’s competitive advantage – this will be focused on leading brands, best-in-class

technical and design support and carbon leadership

3. Maintain dividend cover of two times adjusted earnings – the proposed full year dividend of 6.7 pence

pershare (2024: 8.0 pence) is in line with this policy

4. Focus on deleveraging the Balance Sheet – the Board aims to maintain leverage within a range of 0.5

and1.5 times EBITDA to provide optimal Balance Sheet flexibility (2025: 1.8 times)

5. Consider sensitive bolt-on M&A opportunities to support the execution of the strategy

Going concern

In assessing the appropriateness of adopting going concern basis in the preparation of the Annual Report,

the Board has considered the Group’s financial forecasts and its principal risks for a period of at least twelve

months from the date of this report. The forecasts included projected profit and loss, balance sheet, cash

flows, headroom against debt facilities and covenant compliance. The financial forecasts have been stress

tested in downside scenarios to assess the impact on future profitability, cash flows, funding requirements

and covenant compliance. The scenarios comprise a more severe economic downturn (which represents

the Group’s most significant risk) than that included in the base case forecast and a reverse stress test

on our financial forecasts to assess the extent to which an economic downturn would need to impact on

revenues in order to breach a covenant. This showed that revenue would need to deteriorate significantly

from the financial forecast and the Directors have a reasonable expectation that it is unlikely to deteriorate

to this extent. The Group’s Viability Statement can be found on page 54.

Details of the Group’s funding position are set out in Note 20. The Group has a syndicated bank facility

of £270 million that matures in November 2029 and at December 2025, £125 million of the facility was

undrawn. There are two financial covenants in the bank facility that are tested on a semi-annual basis and

the Group maintains good cover against these with pre-IFRS 16 net debt to EBITDA of 1.8 times (covenant

maximum of three times) and interest cover of 5.7 times (covenant minimum of three times).

Taking these factors into account, the Board has the reasonable expectation that the Group has adequate

resources to continue in operation for the foreseeable future (a period of at least 12 months from the

date of this report) and for this reason, the Board has adopted the going concern basis in preparing this

Annual Report.

Justin Lockwood

Chief Financial Officer

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 51

Risk Management and Principal RisksRisk Management and Principal Risks

Achievements in 2025

Marshalls is exposed to a wide range of risks that,

should they materialise, could have a detrimental

impact on our financial performance, reputation

or operational resilience. There continue to be

external risks and significant volatility in UK

and world markets driven by conflicts around

the world. In addition to the macro-economic

environment, the key risks for the Group continue

to be cyber security, severe macroeconomic

downturn, competitor activity and climate change.

All these areas are considered in more detail on

pages 55 to 60. Mitigating controls continue to be

reviewed as appropriate. The Group’s risk function

has placed particular emphasis on the following

areas during the year:

• Acceleration of the ‘Transform & Grow’ strategy

against a market backdrop that remains subdued.

This strategy is based on a robust assessment of

the expected market drivers and trends in the UK

construction industry

• The Group’s internal financial controls review

resulted in the refinement of the Risk and Control

Matrices (RACMs), including testing and reporting

processes, and ahead of changes to corporate

governance rules from 2026

• Cyber risk has continued to evolve throughout 2025,

with a market increase in both the frequency and

sophistication of attempted attacks. In response,

we have focused on strengthening and aligning

cyber security controls across the Group and

have advanced our multi-year action plan, which

includes targeted investment in people, processes

and technology. Key initiatives include enhanced

employee awareness and training programmes,

regular independent vulnerability and penetration

testing, and the introduction of improved

monitoring and detection capabilities

The Group completed a number of targeted

internal audit projects during 2025 covering

thefollowing areas:

• Supply chain ethics and resilience

• IT vendor risk management

• Delegation of Authority design

• Landscaping Products improvement plan

• Continued support on the Group’s readiness

forcorporate governance rules from 2026

The internal audits include “risk-based” audits,

identified as a result of assessing the Group’s key

risks. They also include audits identified to cover

key operational, financial, IT and regulatory areas

subject to routine cyclical coverage.

Effective risk management

We recognise that effective risk management and internal control are fundamental

tohelping to protect shareholder value and deliver our strategic objectives.

The Board plays a central role in the Group’s risk management process

whichcoversallforms of strategic, operational and financial risk.

Priorities for 2026

The priorities for the Group’s risk function

in2026 include the following areas:

• Provision 29 compliance

• Further review of the risk register

toenhance alignment with key

strategicobjectives

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 52

Risk Management and Principal Risks continued

Approach to risk management

Risk management is the responsibility of the

Board and is a key factor in the delivery of the

Group’s strategic objectives. The Board establishes

the culture of effective risk management and is

responsible for maintaining appropriate systems

and controls.

The Board sets the risk appetite and determines

the policies and procedures that are put in place

to mitigate exposure to risks. The Board plays a

central role in the Group’s risk review process, which

covers emerging risks and incorporates scenario

planning and detailed stress testing.

Process

There is a formal ongoing process to identify, assess

and analyse risks, and those of a potentially significant

nature are included in the Group Risk Register.

The Group Risk Register is updated by the Executive

Team at least every six months and the overall process

is the subject of regular review by the Board. Risks

are recorded with a full analysis, and risk owners

are nominated that have authority and responsibility

for assessing and managing the risk. KPMG LLP, as

the Group’s internal auditor, attends the risk review

meetings alongside Deloitte LLP, the Group’s external

auditor. The process continues to be a robust

mechanism for monitoring and controlling the

Group’s principal risks, and for challenging the

impact of new emerging risks.

All risks are aligned with the Group’s strategic

objectives, each risk is analysed in terms of

likelihood and impact to the business and the

determination of a “gross risk score” enables

riskexposure to be prioritised.

The Group seeks to mitigate exposure to all

forms of strategic, financial and operational risk,

both external and internal. The effectiveness and

impact of key controls are evaluated, and these

are used to determine a “net risk score” for each

risk. The process is used to develop detailed action

plans that are used to manage, or respond to, the

risks, and these are monitored and reviewed on a

regular basis by the Group’s Audit Committee and

the Board.

The Group has a formal framework for the ongoing

assessment of operational, financial and IT-based

controls. The overriding objective is to gain assurance

that the control framework is complete and that

the individual controls are operating effectively.

This assurance will be enhanced in response to

the change to the Corporate Governance Code

thatbecomes effective from January 2026.

Risk management framework

The Board:

• Determines the Group’s approach to risk, its policies and the procedures that are put in place to mitigate

exposure to risk

The Audit Committee:

• Has delegated responsibility from the Board to

oversee risk management and internal controls

• Reviews the effectiveness of the Group’s risk

management and internal control procedures

• Monitors the effectiveness of the internal

auditfunction and the independence of the

external audit

Operational managers:

• Are responsible for the identification of

operational and strategic risks

• Are responsible for the ownership and control of

specific risks

• Are responsible for establishing and managing

the implementation of appropriate action plans

• Are responsible for the impact of controls

(netbasis)

Executive Directors:

• Are responsible for the

effective maintenance of

the Group’s Risk Register

• Oversee the

management of risk

• Monitor risk mitigation

and controls

• Monitor the effective

implementation of

action plans

Internal audit:

• Independently

reviews the

effectiveness of

internal control

procedures

• Reports on

effectiveness of

management

actions

• Provides

assurance to the

Audit Committee

1 Macro-economic and political

2 Cyber systems, security and technology

3 Security of raw material supply/raw

material shortages

4 Legal and ethical

5 Competitor activity and new technology

6 Delivery of strategic programmes

7 Health and safety

8 People risks

Risk heatmap (net risk scores)

Impact

Likelihood

Low HighMedium

<£2m £2–£5m >£5m

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 53

Risk Management and Principal Risks continued

Approach to risk management continued

Risk appetite

The Group is prepared to accept a certain level of

risk to remain competitive but continues to adopt

a conservative approach to risk management. In

assessing risk appetite, the aim is to ensure that

internal controls and risk mitigation measures are

designed to reduce the net risk score to a point that

aligns with the identified risk appetite. The aim is

to ensure that we continue to channel resources

to those mitigation measures and controls that

specifically reduce risk to areas where we have a

net risk score that lies outside our acceptable risk

appetite. The risk framework is robust and provides

clarity in determining the risks faced and the level

of risk that we are prepared to accept. Marshalls’

strategies are designed to either treat, transfer or

terminate the source of the identified risk.

Viability Statement

After considering the principal risks on pages 55

to60, the Directors have assessed the prospects of

the Group over a longer period than the period of at

least twelve months required by the “going concern”

basis of accounting. The Directors consider that

the Group’s risk management process satisfies the

requirements of Provision 31 of the UK Corporate

Governance Code.

The Board considers annually, and on a rolling basis,

a strategic plan, which is assessed with reference

to the Group’s current position and prospects,

the strategic objectives and the operation of the

procedures and policies to manage the principal

risks that might threaten the business model, future

performance and target capital structure. In making

this assessment, the Board considers emerging

risks and longer-term risks and opportunities.

The aim is to ensure that the business model is

continually reviewed to ensure it is sustainable over

the long term. Security, flexibility and efficiency

continue to be the guiding principles that underpin

the Group’s capital structure objectives. The Group’s

funding strategy is to ensure that headroom

remains at comfortable levels under all reasonable

planning scenarios.

For the purposes of the Viability Statement, the

Board continues to believe that three years is an

appropriate period of assessment as this aligns with

the current planning horizon. Although our central

forecasting models cover a five-year period, it remains

the case that there is less visibility beyond three years.

The Construction Products Association’s (“CPA”)

forecasts currently go out to 2027. This remains

compatible with the five-year strategy and the

longer-term objectives for our strategic growth pillars

over a five-year period. The Group’s financial forecast

includes an integrated model that incorporates the

Income Statement, Balance Sheet and cash

flowprojections.

The detailed stress testing reflects the principal

risks that could impact the Group and could

conceivably threaten the Group’s ability to continue

operating as a going concern. The assessment

concluded that the deteriorating macro-economic

environment is the key risk for this purpose and,

in response to this, two scenarios have been run,

namely a “reasonable worst-case scenario” and a

“reverse stress test”.

The reasonable worst-case scenario comprises

asignificant stress test sensitivity run against the

base case model. This sensitivity reflects a scenario

that is worse than the volume assumptions in the

CPA’s lower scenario from the 2026/2027 winter

forecast and price realisation is materially worse

than our budgeting assumptions. This scenario

results in a cumulative revenue reduction of 6%

during 2026 and 2027 against the base case forecast.

An operating ‘drop-through’ rate has been applied

based on the operational gearing of each business

unit. Under the downside model, pre-IFRS16 is

forecast to be c.£135 million at the end of 2026,

and bank covenants are still comfortably met. The

net effect of reduced operating profit and increased

interest is mitigated by reduced tax and dividend

cash flows. There remains headroom against bank

facilities and bank covenants are still comfortably

met with the pre-IFRS 16 net debt to adjusted

EBITDA covenant peaking at around three times

inDecember 2026.

In practice, under such a downside scenario the

Group could instigate certain mitigation measures

to reduce costs and capacity and to manage cash

throughout the viability period, to December 2028.

We also ran a reverse stress test scenario to identify

a deeper downside trading performance that would

give rise to a covenant breach. Against the base

budget revenue, a reduction of 18% alongside an

operating profit “drop-through” of around 40% would

be required during 2026 to breach a covenant at

31December 2026. This is after assuming a reduction

in capital expenditure and pausing dividends. This

reverse stress test scenario reduces revenue compared

to budget by approximately £120 million during 2026.

In this scenario, there remains reasonable headroom

against bank facilities, but EBITA: finance costs

would breach the covenant minimum of three times

at December 2026.

In undertaking its review, the Board has considered

the appropriateness of any key assumptions,

considering the external environment and

the Group’s strategy and risks. Based on this

assessment and taking account of the Group’s

principal risks and uncertainties, the Directors

confirm that they have a reasonable expectation

that the Group will be able to continue in operation

and meet its liabilities as they fall due for the next

three years.

The reverse stress test scenario provides an

indication of the scale of downturn that could be

absorbed by the Group. The analysis provides the

required evidence that the Directors’ assessment of

the going concern assumption remains appropriate

and supports a positive conclusion for the longer-

term Viability Statement.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 54

Risk Management and Principal Risks continued

Principal risks and uncertainties

The Directors have undertaken a robust, systematic assessment of the Group’s emerging and principal risks. These have been considered within the timeframe of three years,

whichaligns with our Viability Statement on page 54. The risk process has increasingly allocated greater focus on emerging risks and risk outlook.

The reporting includes more detailed assessments of proximity (how far away in time the risk will occur) and velocity (the time that elapses between an event occurring and the point

atwhich the effects are felt).

X Read more about our strategy

on page 54

X Read more about our business

model on page 16

1. Macro-economic and political

Nature of risk and potential impact

• The Group is dependent on the level of activity in its end markets

within the UK construction industry

• Consequently, it is susceptible to economic downturn, the impact of

UK Government policy and volatility in UK and world markets

• UK Government policies have the potential to have an impact on

the Group’s end markets through spending priorities and changes in

fiscal policy

• Continued volatility in geopolitical factors (for example, war

in Ukraine and the Middle East or trade wars arising from the

implementation of tariffs) poses further risks to the UK economy

• Weak market demand has compressed the profit pool in the

sector, which results in increased credit risk in the customer base,

particularly those with highly leveraged capital structures

Potential impact

• Potential reduction in consumer and business confidence leading to

reduction in demand and lower activity levels

• This could lead to an adverse effect on the Group’s financial results

and the need to take further action to manage costs, which may

impact on delivering the Group’s strategic priorities

• A continuation of market volatility and global uncertainty, along with

a prolonged period of normalised interest rates and higher inflation,

could lead to disrupted markets over a more sustained period with

pressures on liquidity and profitability

Key risk indicators

• Industry forecasts and

reductions in consumer

confidence and in

orderpipeline

• Failure of Government to

contain interest rate increases

and cost inflation

• An escalation of the war in

Ukraine and the Middle East

and other increased global

uncertainty

• Increase in UK tariffs on

imports from India and China

• Signs of credit risk stress in

our supply chain

Mitigating factors

• The Board has set out a clear ‘Transform & Grow’ strategy

for delivering market outperformance in the medium term

across its portfolio of market leading businesses. This

strategy is based on a robust assessment of the expected

market drivers and trends in the UK construction industry

• The Group monitors its external operating environment,

market trends and leading indicators. The Group regularly

reviews its financial performance and position and prepares

periodic financial forecasts that incorporate this market

intelligence and updated operating trends. The forecasts

are tested against downside scenarios that assess the

impact of the crystallisation of the Group’s principal risks

on the forecast financial performance and position of the

Group. Action is taken following the evaluation of these

scenarios to make changes to the business including

managing costs, cash flow and capital allocation

• Use of credit insurance and constant monitoring of

uninsured balances

• The acceleration of the network optimisation and cost

reduction plan in Landscaping Products has reduced the

Group’s breakeven point which provides further flexibility

Change

No change in risk

• The UK construction market volumes have shown little

growth in 2025 and have decelerated in the second

half. Market forecasters expect modest growth in 2026;

however, there is little sign of this in current business

volumes

• Stronger medium-term prospects due to a cyclical

recovery and structural drivers of demand. Government

policy, lower inflation and interest rates expected to

support increased demand for new build housing and

result in an improvement in consumer confidence that

will be positive for private housing RMI

• The US administration’s approach to tariffs has evolved

during 2025 and remains subject to change. The

UK Government has not responded with retaliatory

tariffs, although the EU has amended tariffs for certain

products. The Group is relatively insulated from the

direct impact of this at present and secondary impacts

continue to be difficult to predict

Priorities

• Maintaining our strong levels of diversification to

ensure we remain as resilient as possible to individual

market forces

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 55

Risk Management and Principal Risks continued

Principal risks and uncertainties continued

2. Cyber systems, security and technology

Nature of risk and potential impact

• Fast growing and indiscriminate risk of a cyber attack

• Inadequate controls and procedures over the protection of service

and data

• Failure to improve controls quickly enough, given rapid pace of change

• Heightened risk as digital footprint of the organisations grows

including corporate and manufacturing areas

• AI continues to accelerate speed of an attack and threat base

• Legacy technology environment makes for higher likelihood of target

• Heightened risk as our digital ecosystem grows (supplier/customer)

• Heightened dependency on third-party technology and service

providers, expanding supply chain exposure

Potential impact

• Operational disruption and financial loss – failure to manufacture

and distribute product to satisfy customer demand

• Fraud, denial of trade and loss of sensitive data – financial and

reputational risk/damage to the brand

• Risk of fines from external bodies

• Reputational damage

Key risk indicators

• Emergence of new cyber

security risks including more

sophisticated AI-based attacks

• More data security breaches

in the wider market, and

particularly in construction

• Alerts have been issued by the

NCSC asking UK companies

to bolster their defence

mechanisms

• Increased targeted attacks at

Marshalls

• Trends in internal phishing

resilience, vulnerability,

management performance

and security monitoring alerts

Mitigating factors

• Increased technology to manage, detect and respond

tothreats

• Mandated employee awareness through training

• Cyber insurance strengthening to cover business

interruption, loss of earnings and response

• Growing cyber capability through additional resources

• Business Continuity Plan (BCP) committee established

and in operation

• Security operations centre employed to support current

environment/monitoring

• Full cyber maturity assessment in progress against

industry framework

• Modernising legacy environment, as this is a key

component of reducing inherent risk

Change

No change in risk

• Marshalls’ cyber maturity assessment has continued to

improve – although cyber risk has continued to increase

• We are witnessing more incidents, particularly in

construction and increasingly in relation to ransomware

• The cyber control environment in Marley is not as mature

as that of Marshalls and is an area of focus

Priorities

• Continue to evaluate and prioritise actions to improve

theGroup-wide cyber security posture

• Continue to align to the principles and guidelines laid out

inNIST guidelines

• Continue to strengthen incident response and monitoring

3. Security of raw material supply/raw material shortages

Nature of risk and potential impact

• Construction materials often originate from naturally occurring

minerals which are finite and in fixed locations

• Geopolitical tensions raise the stress in supply chains through

availability or inflationary pressures which impact material availability

• There continue to be market capacity stresses at category level

• Solar panels are imported and future tariffs or changes in export

subsidies could impact supply

• Single points of reliance within the supply chain

Potential impact

• Cost inflation or interruption of supply could lead to customer

dissatisfaction and reduce demand and margins

• Risk of interruption of supply chain could lead to customer

dissatisfaction

Key risk indicators

• Cost inflation, impacting

materials

• Geopolitical activity/tariff

implementation impacting

global supply and competition

• Frequency of enforced

material changes/actions

tomitigate temporary loss

ofsupply

Mitigating factors

• Centralised procurement team

• The Group benefits from the diversity of its business

and end markets

• Dual sourcing supplier strategy wherever possible

• Maintaining adequate, but not excessive, stocks

• Collaboration with all EU-based Tier 1 and Tier 2

suppliers to ensure any supply risks are minimised

• Re-engineering product mix designs to engineer out

materials that are: 1) difficult to source; 2) strategically

compromised; and/or 3) expensive. Consideration

of alternative technologies including the reduction of

cementcontent

• The digitalisation of the supply chain through the use of

best-in-class supply relationship management system

• Focus on supplier relationships, fixed pricing agreements,

flexible contracts and long-term supply agreements

Change

No change in risk

• Continued weak demand has led to reduced availability issues,

although cost inflation remains a feature in some categories

• The risk of temporary shortages is mitigated by proactive

supply chain management and the use of alternative suppliers

Priorities

• Increase productivity and manufacturing efficiency

• Aggregate blending to reduce reliance on single points

offailure

• Acceleration of mix redesigns to focus on carbon

reductionand improved availability especially around

cement and cement substitutes – investment in low-carbon

substitutematerials

• Retain importation options as a backup to domestic supplies

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 56

Risk Management and Principal Risks continued

Principal risks and uncertainties continued

4. Legal and ethical

Nature of risk and potential impact

• Inadvertent failure to comply with significantly increased

governance, legislative and regulatory requirements

• Exposure heightened by business complexity and increasingly

complex law and regulation

• Sourcing from overseas suppliers with complex regional issues and

high human rights risks, including China and India, that challenge

our drive to ethically and efficiently source and to be leaders in

ESGstandards

• Impact of an unexpected reputational event, e.g. an issue in the

supply chain or due to a health and safety incident, media or NGO

exposé on a sector, region or supplier

Potential impact

• Significant increases in the penalty regimes across all areas of the

business could lead to significant fines and/or prosecution in the

event of a breach

• Such incidents could lead to prosecutions and increased costs and

have a negative impact on the Group’s reputation and share price

• Supply chain/customer disruption if materials/traded items are

ethically compromised or orders rejected on ethical grounds

Key risk indicators

• Increased regulatory and

compliance requirement

• Penalty regimes generally

becoming more punitive for

many regulatory breaches,

e.g. data protection, modern

slavery, etc.

• Reputational harm and

associated share price

impact of major incidents or

compliance failures

Mitigating factors

• Centralised legal and other specialist functions, the use of

specialist advisers and ongoing monitoring and mandatory

compliance training programmes

• Supplier onboarding process and ethical risk assessment

ofall sourcing countries

• Regular reviews of policies and procedures

• Regular compulsory training (e.g. data protection, modern

slavery, bribery and corporate criminal offence)

• Regular reviews of policies and procedures

• The Group employs compliance procedures, policies, ISO

standards and independent audit processes which seek to

ensure that local, national and international regulatory and

compliance procedures are fully complied with

• Programme of independently verified audits in

high-riskjurisdictions

Change

No change in risk

• In the near term, a new governance code, listing rules,

and reporting requirements need to be addressed.

Strategic commitment to leadership in ESG governance

and standards increases stakeholders’ expectations,

challenging our commitment to achieving this, with

ethical sourcing a key part of this

Priorities

• Continue to renew all compliance processes and

control effectiveness with the support of the

Executive Team, drive greater cross-functional/team

collaboration and awareness to increase early-stage

engagement with the legal and human rights team

• Continue training and engagement to strengthen

escalation procedures for raising ethical concerns

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 57

Risk Management and Principal Risks continued

Principal risks and uncertainties continued

5. Competitor activity and new technology

Nature of risk and potential impact

• Weaker market volumes and over-capacity can result in increased

competition and downward pricing pressure

• Competitor investment in capacity in certain categories may

increase competitive intensity

• The price premium that Marshalls commands within its product

categories is justified through perceived quality, service, innovation,

design capability and trusted brand reputation. An inability to

maintain and demonstrate this differentiation may result in loss

ofmarket share

• Entry of new competitors in higher growth markets

• Concentration of sales with large national merchant partners

andcontractors

• Technological innovation that changes the way public realm,

infrastructure or residential landscape solutions are specified

anddelivered

• Changes to market channels or logistics models introduced

bynewentrants

• Digital and technological advances that result in new apps or

software that differentiates the service or product proposition

Potential impact

• Increased competition could reduce volumes and margins

onmanufactured and traded goods

• Insufficient customer insight could result in lower revenues at lower

prices. Failure to deliver service in line with customer expectations

(both market and wider industry norms) could negatively impact

customer perception and revenue performance

• Reputational damage and consequential financial impact if the

Group’s competitive differentiation were to weaken over time

Key risk indicators

• Entry of new

low-costcompetitors

andnewtechnologies

• Changes in demand patterns

for traditional products

and the emergence of new

product or digital solutions

• Loss of market share

• Brand health

• Customer experience scores

• Margins under pressure

Mitigating factors

• Regular monitoring of customer performance, proactive

management of customer deals and regular interaction

tomaintain customer intimacy

• External market intelligence, CPA, ABI Barbour, etc., to

anticipate market developments and support forward planning

• The Group focuses on quality, service, reliability and ethical

standards alongside its independently verified ESG credentials,

which differentiate Marshalls products from competitor

products. Monitoring of brand health, customer experience

and market share data with agile response totrends

• Strong specification and design engagement with architects,

engineers and contractors, embedding Marshalls products

early in the project lifecycle and supporting long-term demand

for the Group’s solutions

• Long-standing relationships with architects, designers,

engineers and contractors support early project engagement

and reinforce Marshalls’ role as a trusted partner on complex

or design-led projects

• The Group has a continuing focus on new product

development and innovation in response to evolving

customer and market needs

• The continued development of the Group’s digital strategy

• Continuous improvement initiatives across manufacturing,

logistics and service to ensure Marshalls remains competitive

on cost, reliability and customer experience

• Refresh of Group strategy to maintain focus on key

priorities and growth opportunities

• Continued investment in innovation and intellectual

property to support differentiated product solutions and

maintain Marshalls’ leadership in key market segments

Change

Reduced risk

• The Group has regained market share over the last

twelve months through disciplined commercial

execution and improved operational performance

Priorities

• Continued focus on minimising cost per unit through

network optimisation

• Reduce complexity within the business and focus on

simplifying our processes and being easier to deal with

• Continued development of the Group’s brands

• Increase pace of digital change and technologicalsolutions

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 58

Risk Management and Principal Risks continued

Principal risks and uncertainties continued

6. Delivery of strategic programmes

Nature of risk and potential impact

• Failure to optimise profitable growth or incurring losses from

strategic programmes failing to deliver to agreed scope, time,

costand quality measures or failing to realise projected benefits

• Ineffective management of major development projects, from

initial scoping to final delivery and benefits management, due to

constraints that may impact the Group’s ability to absorb change

• The speed of change leads to increasing pressure on the business

and challenges our ability to manage and stress test all aspects of

our business model

• Failure to realise expected benefits from strategic business programmes

• Ineffective prioritisation results in the Group trying to deliver too

much change with insufficient resource

Potential impact

• The extent and complexity of numerous planned business initiatives

cause delays and inefficiency

• The Group fails to optimise profitable growth from executing its

strategic plans

• Reputational damage, cost over-runs, service under-delivery and

staff retention risks

Key risk indicators

• Delays to the delivery of

strategic programmes

• Inefficiencies in

resourceutilisation

• Cost and time over-runs

onprojects

Mitigating factors

• Project management framework and governance in place,

managed through the Strategy Programme Management

Office function

• Robust and standardised project appraisal processes

• Programmes are continually reviewed with strong

governance of all major strategic business projects,

with third-party specialist assurance utilised as required.

This includes Executive oversight and project-specific

steeringcommittees

• Ability to dynamically respond to emerging business

strategies and challenges to ensure that resource and

governance are directed where required: for example,

theLandscaping Products improvement plan

Change

No change in risk

• Managing strategic change programmes alongside

business challenges creates risk of trying to deliver too

much change

• Group leadership team reviews progress of strategic

programmes versus the plan monthly, ensuring

alignment of priorities and resource allocation

Priorities

• Strong prioritisation of resources to support key

change projects

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 59

Risk Management and Principal Risks continued

Principal risks and uncertainties continued

7. Health and safety

Nature of risk and potential impact

• Unexpected health and safety incident, possibly caused by human

error or the actions of a subcontractor

• High-risk activities that if uncontrolled may lead to a serious injury

• Welfare and mental health of employees

Potential impact

• Risk of harm to all stakeholders, including on-site employees and

subcontractors

• Major workforce accident. Death, or significant injury, leading to

corporate manslaughter charge/prohibition notice on plant

• New penalty regime is significantly more onerous. Increased risk of

significant economic penalty, prosecution and reputational damage

Key risk indicators

• Significant increases in the

penalty regime

• Increase in HSE

contraventionnotices

Mitigating factors

• Centralised specialist functions and clear policies in place

• Group-wide health and safety strategy

• Regular communication and support for employees.

Largenumber of mental health first aiders covering the

whole network

• A digital management system for enhanced data collection

and analysis

• Ongoing monitoring, training and health and safety audits

• IOSH Managing Safely training for managers

• Improved accident investigations leading to better

understanding of root causes and relevant treatment

• Crisis management/BCP process

• Preventative maintenance for work equipment and machinery

• Integrated health and safety structure

• Fair and just approach implemented to understand

humanfailures

Change

No change in risk

• Risk level reduced based on the implementation of

HRAcontrols to date, and the plan to continue to

improve controls

Priorities

• Continuing employee welfare improvement

programmes

• Introduction of good catch programme and formal

tracking of behavioural safety conversations

8. People risks

Nature of risk and potential impact

• Manager capability – ability to cope with ambiguity and fast pace

ofchange

• Diversifying our workforce and future proofing for skills and capabilities

• Attraction and retention

Potential impact

• Inability to recruit and retain people with required skills, calibre

andpotential

• Risk of reduced skills and inadequate training potentially leading to

reduced productivity and efficiency

• Inability to drive the right culture to drive performance and outcomes

with the right/desired behaviours

• Implications for employee health and wellbeing and overall

workforce morale and capability

• Potential risk to the Group’s brands

Key risk indicators

• Absence and turnover trends

• Reducing employee

engagement scores

• Employee relations climate

Mitigating factors

• Prioritise supporting the business as it accelerates the

‘Transform & Grow’ strategy

• Strong communication channels and employee feedback

through the Employee Voice Group

• Regular feedback questionnaires supported by third-party

provider “Your Voice”

• Independent “Safecall” helpline for employees to report

serious concerns

• Ongoing focus and commitment to training,

apprenticeships and staff development

• Manager capability and development programmes

Change

No change in risk

• Reduced investment in people development could lead

to higher attrition

• Risk of losing talented people

Priorities

• Deliver manager development programmes as well as

driving skills development

• Develop strategies and plans for high-potential leaders

who we know can do bigger or more diverse roles

• Continued focus on succession planning and for

planning for talent moves to build capability

• Continue with focus on communications and

engagement activities

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 60

Non-financial and Sustainability Information Statement

As required by the Companies Act 2006, the table below sets out where the key content requirements of the Non-financial and Sustainability Information Statement

can be found within this document (or required by Sections 414CA and 414CB of the Companies Act 2006).

Reporting requirements Relevant policies Section within Annual Report

Approach to climate change TCFD and CFD disclosures

SECR disclosure

TCFD and CFD (pages 41 to 47)

SECR (pages 39 and 40)

Environmental matters Environmental Policy*

Carbon and Climate Change Policy*

Transport Policy

ESG strategy (page 31)

Road to net-zero (pages 38 to 47)

Social Code of Conduct*

Corporate Responsibility and Social Value Policy*

Human Rights Policy

Modern Slavery Statement*

Children’s Rights Policy

Trust and transparency (pages 36 and 37)

Skills and community (pages 33 and 34)

Human rights (page 37)

Stakeholder engagement (pages 28 and 29)

Governance Anti-Bribery Code*

Tax Policy*

Trading Policy*

Schedule of Matters Reserved for the Board*

Board Committee Terms of Reference*

Trust and transparency (page 36)

Corporate Governance Statement (pages 74 and 75)

Corporate Governance Statement (page 71)

Employees Health and Safety Policy*

Serious Concerns Policy*

Diversity and Inclusion Policy

Mental Health and Wellbeing Policy

Health and safety (page 35)

Audit Committee Report (pages 86 and 87)

Gender diversity (page 34)

Health and safety (page 35)

Principal risks Description of risk process (page 53)

Risk framework (page 53)

Principal risks and uncertainties (pages 55 to 60)

Business model Our business model (page 16)

Non-financial KPIs Key performance indicators (page 18)

Strategy (pages 11 to 13)

Full versions of the policies referred to above form part of the Group’s Policy Framework that supports the Marshalls Code of Conduct.

These can be found on the Group’s website at marshalls.co.uk/about-us/policies.

* Key policies referred to in this Annual Report.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 61

Board of Directors

Vanda Murray OBE

Chair

Date of appointment 9 May

2018 Re-elected in May 2025

Experience Vanda Murray OBE

has over 30 years’ experience

at a senior level across a range

of industry sectors in the UK

and internationally. Her previous

executive roles include serving as

Chief Executive of Blick plc from

2001 to 2004, where she led the

company through a successful

sale to Stanley Works Inc. From

2004 to 2006, she was Managing

Director of Ultraframe plc,

delivering a successful turnaround.

Vanda won the Sunday Times

Award for “Non-Executive

Director of the Year” in 2018 and

was nominated for the shortlist

again in 2025. In 2002, she was

appointed an OBE for Services to

Industry and to Exports.

External appointments

Non-Executive Director and Chair

of the Remuneration Committee

of Howden Joinery Group plc,

Chair of Yorkshire Water and

Board member for the English

National Opera.

Justin Lockwood

Chief Financial Officer

Date of appointment 26 July2021

Re-elected in May 2025

Experience Previously Chief

Financial Officer of International

Personal Finance plc, having held

senior financial roles for seven

years prior to his appointment

as CFO in 2017. Justin spent

four years at Associated British

Ports in senior financial roles

and worked in a variety of

business and head office roles

for Marshalls between 2002 and

2006. Chartered Accountant,

having qualified and worked for

PwC during the first ten years of

his career.

External appointments

None.

Overview

The Board has strong ethical

values, combined with great

depth of experience and skill

covering leadership, strategy,

manufacturing, operations,

marketing, finance, M&A,

business transformation and

digital technology.

The Board acts responsively

and dynamically, applying its

experience, skill and knowledge

whilst bringing constructive

challenge to the table, ensuring

the long-term sustainability of

the Group. This benefits all key

stakeholders of the Group.

The Board is focused on

supporting the development

and execution of the Group’s

‘Transform & Grow’ strategy,

whilst demonstrating its ability

to be agile and alive to the

opportunities and risks that

ournew strategy presents.

Simon Bourne

Chief Executive Officer

Date of appointment 1 April 2022

Re-elected in May 2025

Experience Experienced

manufacturing, supply chain

and operations director. Simon

was appointed Chief Executive

Officer of Marshalls in January

2026, supporting our focus on

the execution and accelerated

delivery of our ‘Transform &

Grow’ strategy. Simon joined

Marshalls in 2015 as Group

Operations Director, was

appointed to the Board as Chief

Operating Officer in 2022 and

assumed additional commercial

responsibilities from 2024. Prior

to joining the Company, Simon

held senior operational and

supply chain roles across various

sectors. Before his appointment

at Marshalls, Simon spent six

years at Burton’s Biscuits as

Manufacturing Director and three

years at Betts Group Holdings as

Group Director of Manufacturing.

External appointments

Member of MPA Board.

E E EN R I

Board composition

Ethnic diversity

White – 7

Mixed Asian and White – 1

Length of service

0–2 years – 1

3–4 years – 4

5+ years – 3

Gender composition

Female – 4

Male – 4

* Female Chair and Remuneration

Committee Chair.

Committee membership

Audit Committee

ESG Committee

Nomination Committee

Remuneration Committee

Chair of the Committee

Independent Director

Board skills

Key skills Corporate pillars

Leadership

Strategy

Manufacturing

Operations

Marketing

Finance

M&A

Business transformation

Digital technology

Shareholder value

Sustainable profitability

Relationship building

Organic expansion

Brand development

Effective capital structure

and control framework

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 62

Board of Directors continued

Board changes in 2025

Paul Inman joined the Board on 15 September 2025

as a Non-Executive Director and Audit Committee

Chair designate.

Matt Pullen stepped down from the Board and as

Chief Executive with effect from 27 November 2025,

with Simon Bourne being immediately appointed

as Chief Executive Officer on an interim basis

andthen permanently with effect from

19January 2026.

A AE EN NR RI I

Paul Inman

Non-Executive Director

Date of appointment

15 September 2025

Experience Most recently

served as CFO of Yorkshire

Water. Previously, Paul served

as the Financial Director for

the air sector at BAE Systems,

having held multiple roles at

Rolls-Royce. Paul has extensive

cross-sector financial experience

and brings strong operational

experience to the Board,

particularly from businesses

dependent on critical high-value

assets. Paul has led several

transformations and change

programmes, as well as having

significant experience in M&A,

restructuring and finance. Paul

is a member of the Institute

of Chartered Accountants in

England and Wales.

External appointments

Consultant to Keld

Group Limited.

Diana Houghton

Non-Executive Director

Date of appointment

1January 2023

Re-elected May 2025

Experience Most recently,

Group Head of Strategy at

Smiths Group plc. Previous roles

include Corporate Development

Director of Allied Domecq plc

and Strategy Director roles with

Bass plc. Extensive cross-sector

experience from retail, leisure

retail, consumer goods and

industrial manufacturing

industries covering M&A,

turnarounds, organic business

improvement and strategy. Diana

was Senior Adviser to the National

Audit Office between 2010 and

2015 and spent seven years on

the Board of Thornton’s plc as

Chair of the Audit Committee and

Senior Independent Director.

External appointments

Board member for the

Monteverdi Choir & Orchestras.

Shiv Sibal

Chief Legal Officer

and CompanySecretary

Date of appointment 26 May 2020

Experience Corporate finance

lawyer with over 20 years’

experience, the last ten of

which have been in industry at

FTSE 250 businesses. Shiv has

extensive leadership and legal

experience and is a member

of the Group’s Executive Team.

Formerly a corporate partner

with international law firm

Womble Bond Dickinson LLP,

focused on cross-border mergers

and acquisitions and equity

capital markets transactions.

Also spent eight years working

for international law firm Pinsent

Masons LLP and qualified with

international law firm CMS.

External appointments

None.

A E N R IA E N R I

Angela Bromfield

Non-Executive Director

Date of appointment

1 October 2019

Re-elected in May 2025

Designated Non-Executive Director

for employeeengagement.

Experience Broad-based

international career in

manufacturing, distribution and

construction. Formerly, Strategic

Marketing and Communications

Director at Morgan Sindall plc

until 2013 and prior to that held

senior roles at the Tarmac Group,

Premier Farnell plc and ICI plc.

External appointments

Senior Independent Non-

Executive Director and Chair

of the Remuneration and ESG

Committees of Harworth Group

PLC and Independent Non-

Executive Director and Chair of

the Remuneration Committee of

C&C Group plc.

Avis Darzins

Non-Executive Director

Date of appointment 1 June 2021

Re-elected in May 2025

Experience A management

consultant and formerly a Partner

at Accenture focusing on the retail

and consumer products sector.

Delivered successful profitable

growth engagements with

many well-known national and

international brands. Previously

worked as Director of Business

Transformation at Sky in addition

to leadership roles at Arcadia, BHS,

Mothercare and Littlewoods. Most

recently served as Non-Executive

Director at Moss Bros Group PLC.

Currently providing independent

management consultancy on

transformational change strategy

and execution support.

External appointments

Senior Independent Non-Executive

Director of Barnardo’s, Non-

Executive Director for Grafton

Group PLC and Safestore Holdings

plc and Director of Avis Business

Consulting Limited.

Graham Prothero

Senior Independent

Non-Executive Director

Date of appointment 10 May 2017

Re-elected in May 2025

Experience Chartered Accountant

and Chief Executive Officer of

MJ Gleeson plc. Previous roles

include Chief Operating Officer

of Vistry Group PLC and Chief

Executive of Galliford Try plc. Also

on the Board of The Jigsaw Trust,

a charitable trust committed to

autism awareness. Extensive

senior management experience in

the sector, including with leading

property developer Development

Securities plc (now part of Land

Securities plc), Taylor Woodrow,

the listed contractor/developer,

and Blue Circle Industries plc.

Graham spent seven years as

a Partner in the Real Estate,

Hospitality and Construction

Group of Ernst & Young LLP.

External appointments

Chief Executive Officer of

MJGleeson plc and Board

member for The Jigsaw Trust.

A E N R I

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 63

Corporate Governance Statement

Accelerating strategic

execution with

purpose and clarity.

Dear shareholder

The Group performed resiliently during 2025,

demonstrated by our return to revenue growth,

despite the prolonged challenges facing some

of the markets we operate in. The Board remains

focused on ensuring that the Group is well positioned

to take advantage of the strength in our diversified

portfolio and our attractive end markets, which

will drive our long-term growth and also provide

us the opportunity to benefit from structural and

regulatory tailwinds. Accelerating the execution

of our ‘Transform & Grow’ strategy will drive our

performance over the medium term and will be

central to the Board’s work over the coming year.

2025 saw the appointment of Simon Bourne as

our Interim Chief Executive Officer, with Simon’s

appointment being made permanent early in

2026. Simon succeeds Matt Pullen, who stepped

down from the Board in November 2025. Under

Matt’s leadership, we successfully launched

our ‘Transform & Grow’ strategy, and Simon’s

knowledge and experience of the Group, and as

an established Board member, mean he is well

placed to ensure we execute the strategy with

purpose and clarity and take full advantage of

ourgrowthopportunities.

Throughout the year, the Board challenged and

supported the decisions that underpinned our

performance improvement plan in our Landscaping

Products business. These included the closure of

our UK-based Natural Stone Products business and

further reductions in the Landscaping Products

business’ cost base that not only ensure capacity

and demand are more closely aligned but also

represent a more fundamental reshaping of the

business and its leadership that should drive

Summary

• Resilient performance supported by decisive

action to drive performance improvement in

Landscaping Products

• Completed “deep dive” reviews of strategic

progress within our Landscaping, Roofing

and Building Products segments

• Simon Bourne appointed Chief Executive

Officer to intensify the execution of our strategy,

leveraging his knowledge and experience

• Implemented Board succession plan, with Paul

Inman appointed to succeed Graham Prothero

as Audit Committee Chair on retirement

and Diana Houghton to become our Senior

Independent Non-Executive Director

Vanda Murray OBE

Chair

Responsible governance

isat the heart of our culture.

The Board’s decisions during

the last year evidence its

commitment to positioning

the Group for growth and

market outperformance

through transformation

andturnaround.”

(the UK Code) that apply from the beginning of the

current financial year. Paul’s extensive financial,

operational and leadership experience, which is

set out in more detail in his biography on page63,

evidence the range of skills that he brings to the

Board table as we look to take advantage of the

growth opportunities that will drive our future

sustainable growth. Paul has completed a tailored

induction (further details of which are set out on

page 83) and is now well established as a member

of our Board team. In addition, Diana Houghton

has agreed to take on the vital role of Senior

Independent Non-Executive Director, when Graham

retires, ensuring I have the challenge and support

necessary to effectively lead the Board. As part of

our wider succession planning, Graham has begun

the process of searching for my successor, well

ahead of my anticipated retirement in 2027.

As the business transforms, we continue to

engage beyond our formal duties and see this as

a priority as it ensures our decisions are guided by

a deeper understanding of the Group’s day-to-day

operations. These interactions, whether through

“deep dives” into the strategic plans of our brand

powerhouses and growth engines, site visits or

additional interactions on a one-to-one basis or with

small teams, demonstrate the Board’s commitment.

Diana Houghton, for example, has mentored a

group of site-based female engineers, sharing

her extensive experience and supporting their

development. Improving diversity within operational

roles is something we have acknowledged as a

real challenge within our sector, and this supports

our commitment to being an inclusive employer

that identifies development opportunities for all our

colleagues. All Board members continue to engage

with our people through our Employee Voice Group

(EVG), with Angela Bromfield continuing to lead in

this regard. This underpins the Board’s commitment

to assessing and monitoring our culture through

engagement, as we accelerate the execution of our

strategic plans during 2026, and beyond.

customer engagement and future performance.

We also looked in depth at the progress each of our

businesses is making with its strategic plans, which

underpin our performance in the medium term.

Financial discipline as we navigate continued

market uncertainty enables the application of

our capital allocation policy, including organic

investment in the business that will drive future

growth and profitability. The refinancing of our

banking facilities last November and careful

management of costs, net debt and cash flow

arecritical parts of this. The Board has monitored

these carefully whilst balancing the need to

supporta sustainable dividend policy.

In spite of the challenging environment in

which we are currently operating, we recognise

that customers who value the strengths in our

business are critical to our ambition and the Board

governs through not only the lens of the rules and

regulations we must adhere to but also through the

lens of our strategic pillars, and the standards and

principles that underpin these: business excellence,

leadership in ESG, and making Marshalls a great

place to work. More detail on the Group’s progress

in these areas is set out on pages 33 to 40.

In support of this, maintaining the expertise, skills

and experience on our Board ensures we can

challenge and support the business in a way that

gives our shareholders, customers and colleagues

confidence that the decisions we make create a

foundation for future success. As part of our Board

succession planning, we announced in August

2025 that Graham Prothero, Senior Independent

Non-Executive Director and Audit Committee Chair,

will retire from the Board at the end of our 2026

AGM. Graham’s sector knowledge and experience

have proved invaluable in helping navigate several

challenges and changes to the governance

landscape over his tenure. In appointing Paul

Inman as Graham’s successor, we are well placed

to continue Graham’s excellent work and have

ensured there is an orderly handover, which is

especially significant as we finalise our preparation

for changes to the UK Corporate Governance Code

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 64

Board

• Board meetings

• AGM

• Strategy execution

• Business and stakeholder engagement

• Designated NED for employee engagement

• Shareholder engagement on strategy,

performance and governance

• Applying UK Code principles

Audit

Committee

Read more on

pages 84 to 89

Nomination

Committee

Read more on

pages 79 to 83

Executive Committee

• Committee meetings

• AGM

• Chief Executive transition

• Monthly meetings

• Weekly update calls

• Strategy implementation and review

• Monthly business reviews

• Bi-monthly ESG Steering Committee

meetings

• Regular EVG meetings

Our governance framework

Remuneration

Committee

Read more on

pages 92 to 112

ESG

Committee

Read more on

pages 90 and 91

Programme of activities

ESG

Steering

Committee

Group

businesses

Employee

Voice

Group

Read more on page 33

Culture:

The Marshalls

Way

(

)

Governance at Marshalls

Our culture is at the heart of everything we do: The Marshalls Way.

Ourpurpose drives our strategy. These operate as a virtuous circle with

regular reflection by the Board and the business. The operation of our

business and the decisions we make have regard to the interests of our

stakeholders. This approach to governance enables dynamic decision

making and agility but ensures we never lose sight of the elements within

that drive sustainable long-term growth.

’

‘

’

We recognise that our leadership as a Board sets the tone for

the Group as a whole and gives our stakeholders confidence

that we are equipped to make the decisions that will drive

sustainable future growth. In addition to engaging Lintstock to

facilitate an external performance review of the Board and its

Committees (further details of which are set out on page77)

Iengaged Russell Reynolds Associates to undertakea review

of Board culture and dynamics, which has resulted in some

developments in the Board’s ways of working and inhow

weallocate timeto monitoring and supporting the execution of

our strategy. Further details of this review are set out on page 77.

Maintaining the trust and cohesion that have defined the culture

of the Board and ensure alignment on the Group’s key priorities

are central toour commitment to responsiblegovernance.

The composition of the Board continues to comply with the

Listing Rules that require UK listed companies to disclose

on a “comply or explain” basis against set diversity targets.

Details of the current composition of the Board by gender,

ethnic diversity and length of service are on page 62.

The Board will continue to dynamically respond to

opportunities and threats as we accelerate the execution

of our strategy. Balanced decision making and open

communication, reflective of our culture and purpose, are

what “good governance” means to Marshalls. This is central

to our application of the UK Code, including the changes

thatapply to the financial year ended 31 December 2025

andthose that we will adopt during 2026.

This Corporate Governance Statement explains how

Marshalls’ governance framework supports the principles

ofintegrity, strong ethical values and professionalism which

are integral to our business.

The Board recognises that we are accountable to shareholders

for good corporate governance. This report, together with

theReports of the Nomination, Audit, Remuneration and ESG

Committees on pages 79 to 112, seeks to demonstrate our

commitment to high standards of governance that are

recognised and understood by all.

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 65

Activities in 2025

Activity Outcome Link to strategy

Performance: Landscaping

Products improvement plan

Following our comprehensive review of performance within Landscaping Products, encouraging progress has been made with the

structural transformation that provides a foundation for its future profitability, and the Board continues to carefully track performance

inthe short term and will monitor execution of the medium to long-term growth plan within our ‘Transform & Grow’ strategy.

Customers who value our unique set

of capabilities

Business excellence

Leading brands

Governance: financial discipline,

robust Balance Sheet and liquidity

In a year of significant change and continued market challenges, the Board has overseen a return to revenue growth, with disciplined

stewardship safeguarding liquidity, cash generation and capital discipline, underpinning the Group’s resilience. Continued focus on cash

flow resulted in strong cash conversion, controlled year-end leverage and helped us maintain our robust Balance Sheet. The Group

also has significant liquidity to fund its strategic and operational growth plans through the recent successful £270m refinancing of its

bankingfacilities.

Business excellence

Governance: leadership transition The Board, with support from the Nomination Committee, Chief People Officer, Company Secretary and independent external search

consultants, managed the appointment of Simon Bourne, initially as Interim and then permanent Chief Executive Officer after Matt Pullen

stepped down in November 2025. Simon’s appointment reflects his extensive business, leadership and Board experience and supports

our focus on execution as the Group seeks to intensify its delivery of the ‘Transform & Grow’ strategy.

Great place to work

Customers who value our unique set

of capabilities

Business excellence

Governance: succession of Audit

Committee Chair and Senior

Independent Non-Executive Director

We have managed the succession of Graham Prothero (who retires at the end of this year’s AGM) as Audit Committee Chair and Senior

Independent Non-Executive Director. Paul Inman joined the Board as a Non-Executive Director and Audit Committee Chair designate,

and Diana Houghton will take on the important role of Senior Independent Non-Executive Director when Graham retires. The skills and

experience that both Paul and Diana bring to their roles are invaluable to the Board.

Business excellence

Great place to work

Leadership in ESG

Strategy: brand powerhouses,

growth engines, business

excellence and great place to work

We have completed reviews of strategic progress by our brand powerhouses and growth engines (as described on pages 12 and 13),

recognising the need to drive execution at pace, supporting our growth in the medium term. With our recently appointed Chief Information

Officer, Marie Banks, we have considered progress with the development of our technology strategy, including a review of the Group’s

Enterprise Resource Planning (ERP) systems, and decided to pause the rollout of phase 2 of Microsoft Dynamics 365 so we can consider

future technology needs across the entire Group.

Customers who value our unique set

of capabilities

Leading brands

Business excellence

Governance: impact of changes

tothe UK Code

The Group continued its preparation for implementing changes to the UK Code, particularly those relating to internal controls. This

included reviewing the design, operation and effectiveness of the Group’s control frameworks and environment to ensure that they

continue to be robust and the identification of material controls. Further details are set out in the Audit Committee Report on page 86.

Leadership in ESG

Business excellence

Governance: ESG Committee The ESG Committee is focused on providing oversight and supporting the delivery of the ESG strategy. During 2025, the Committee

critically reviewed our updated ESG framework and its alignment with our purpose, Building Tomorrow’s World, and our ‘Transform

&Grow’ strategy. Further details are set out in the ESG Committee Report on pages 90 and 91.

Leadership in ESG

Carbon leadership

Governance: capital

allocation policy

Against continued market uncertainty, the business maintained strong cash generation and financial discipline and efficiently managed

borrowings, finance costs and ultimately leverage, supporting the Board’s decision to maintain dividend cover in line with our current

capital allocation policy. The Board’s approval of the refinancing of the Group’s banking facilities during 2025 ensures we can continue

toinvest in organic growth opportunities that will help us achieve our strategic goals.

Business excellence

Governance: externally facilitated

Board performance and

culture reviews

With the support of Lintstock, we completed an externally facilitated Board and Committee performance review. Working in collaboration

with the Chief Legal Officer and Company Secretary, Lintstock designed bespoke questionnaires that built on key objectives from the

previous year’s internal review. Further details are set out on page 77. Working with Russell Reynold Associates, we conducted a review

of Board culture and dynamics with the findings reflected in future Board planning and directed at ensuring the Board operates as

ahigh-performing team.

Leadership in ESG

Great place to work

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 66

Priorities in 2026

Activity Outcome/activity Link to strategy

Strategy: accelerated execution

of‘Transform & Grow’

The Board will support and challenge the pace at which the business is executing its strategy, which will include greater assurance

onwhat is being prioritised and how performance is being measured.

‘Transform & Grow’

Great place to work

Performance: Landscaping

Products transformation

The Board will carefully monitor the turnaround and transformation in Landscaping Products, including the improvement in its profitability. Customers who value our unique set

of capabilities

Leading brands

Performance: economic outlook

and market dynamics

The Board will continue to carefully monitor market and sector dynamics ensuring the business is well placed to take advantage of the

strength of our diversified product portfolio.

Customers who value our unique set

of capabilities

Business-wide excellence

Governance: Board succession The Board will support Simon after his recent appointment as Chief Executive Officer and implement our Chair succession plan, reflecting

on the skills, knowledge and experience we need to drive our strategic goals and maintain a Board culture that gives all our stakeholders

confidence that we can make the decisions that will drive sustainable long-term growth, whilst navigating the risks the businesses faces.

Great place to work

Leadership in ESG

Strategy: attracting and

retaining talent

The Board will consider the Group’s evolved people strategy that will underpin ‘Transform & Grow’. Ahead of this, the Board will consider

current leadership and talent development within the Group and challenge whether these will help us create the next generation of leaders

within the Group. Making Marshalls a great place to work is vital in attracting, motivating, developing, progressing and retaining diverse

talent and to fostering a performance driven culture.

Business excellence

Great place to work

Governance: Directors’

Remuneration Policy review in 2026

Following our extensive consultation with major shareholders, other key stakeholders and advisory bodies, we will finalise and table our

proposed new Directors’ Remuneration Policy for approval by our shareholders at our 2026 AGM.

Business excellence

Great place to work

Leadership in ESG

Governance: effectiveness of

risk management and internal

control framework

Following the extensive preparatory work undertaken by the Group ahead of the changes to the UK Code, the Audit Committee, on behalf

of the Board, will continue to monitor the effectiveness of the Group’s risk management and internal control frameworks, providing

appropriate challenge where necessary. This will cover all material controls and will include consideration of the Group’s work in applying

Provision 29 of the UK Code and the assurances the Board will provide to shareholders.

Leadership in ESG

Business excellence

Governance: ESG Committee The ESG Committee will continue to oversee the ESG strategy, with a focus on how our ESG framework, Built for the Future, is resonating

with our customers and whether they value the differentiation in our product offer.

Leadership in ESG

Carbon leadership

Governance: internal Board

performance review

With the support of the Company Secretary, we will conduct a Board performance review to reflect on performance and progress against

the objectives identified in our externally facilitated review in 2025.

Leadership in ESG

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 67

ESG priorities

Our ESG framework, Built for the Future, has been

considered in line with our ‘Transform & Grow’

strategy and ensures a clear link to our strategic

objectives. Carbon leadership within each of

our divisions is one of the Group’s core strategic

pillars and is underpinned by our leadership in ESG

governance and standards – something we have

prioritised and championed for more than 20 years.

A report of the work of our ESG Committee is set

out on pages 90 and 91 and a summary of how our

ESG activities are governed is on page 90.

Operating responsibly and sustainably is a

foundation of our business and pages 31 to 40

of the Strategic Report include further detail on

how this is represented in our day-to-day business

operations and the outcomes this drives. Stakeholder

trust is built on the actions we take and our ESG

commitments and credentials demonstrate this.

• Environmental – we take our environmental

impact seriously. We have a clear science-based

SBTi approved net-zero target across all emission

scopes by 2050. This covers the whole of the

Group. Carbon leadership is a core pillar of our

‘Transform & Grow’ strategy

• Social – we have a comprehensive human rights

due diligence programme across our high-risk

supply chains, including solar. Respect for the

rights and wellbeing of employees, their families

and the wider communities in which we operate

will be central to the social value programme we

are developing

• Governance – leadership in ESG governance

and standards underpins our strategy. We aim to

ensure that our processes and controls enable us

to operate ethically and responsibly

X For further details see our ESG Committee Report on

pages 90 and 91 and the Sustainability section within

our Strategic Report on pages 31 to 40

The Board

ESG oversight

ESG Board Committee

Supported by

• ESG metrics

• ESG Board updates

• Shareholder engagement

• ESG reporting

• Risk Register

• Climate-related risks

andopportunities

• Climate Disclosures WorkingGroup

• Sustainability Report

• Science-based targets

• Metrics and targets

Executive Team

• The Chief Executive Officer is ultimately accountable for the delivery of the ESG

strategy that underpins both our carbon leadership and our leadership in ESG

governance and standards

• The Chief Legal Officer and Company Secretary has responsibility for day-to-day

oversight of our ESG strategy including the ESG Steering Committee

• The Executive Team members are individually responsible for reviewing and

confirming risks in their own areas, including climate-related risks

ESG Steering Committee

• Chaired by the Chief Legal Officer and Company Secretary and attended by

ChiefExecutive Officer and CFO

• Responsible for ensuring the ESG strategy remains fit for purpose, plans are in place

and progress is measured and reported

• Advises the Board on ESG-related risks and opportunities

Board-level oversight of ESG strategy and ESG risk management, including climate-related risks and opportunities

Group risk management

• Responsible for implementing the Group risk management framework and

RiskRegister

• See risk management framework and governance on pages 52 to 54

ESG delivery team

• Responsible for driving progress along our plans, including science-based targets

• Updates the ESG Steering Committee and the ESG Committee on progress

againsttargets

Operational teams

• Responsible for managing and resourcing approved activities that drive carbon and ESG leadership

• Advise on operational feasibility of projects

• Collaborate on ESG and sustainability projects

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 68

Safety and agility at the heart of

how we work

Reviewing health and safety performance and

practices remains core to the Board’s agenda,

being reviewed at every scheduled Board meeting.

Our performance over the last year evidences the

progress we have maintained. Our Chief Executive

Officer is responsible at Board level for health and

safety and his operational experience means he

has a deep understanding of the risks we face

and how to drive improvements in our health and

safety culture. Ultimately, we want all colleagues to

always look out for each other’s safety, to celebrate

good behaviours and performance, to share good

practice and improvement ideas and to invest in

systems, processes and equipment that ensure

our colleagues get home safely and injury free

after each working day. Further details are set

outonpage 35.

Flexibility and agility in working practices remain an

important tool in attracting and retaining diverse talent,

but this must be balanced with the developmental

benefits, particularly for colleagues in new roles or

just joining the business, of collaborating with their

teams in person. The Board actively monitors the

Group’s culture, with the Employee Voice Group

(EVG) being a key enabler for this, in addition to the

colleague engagement surveys we commission and

the other ways in which the Board engages with the

business. At its core, Marshalls is a manufacturing

business, and we must be mindful of this and

recognise that many of our colleagues do not have

the option of working flexibly. We use technology

toimprove agility and reduce costs and our carbon

footprint, but not at the cost of driving our culture

and ensuring colleagues feel Marshalls is a great

place to work.

The Board and Committees continue to hold all

scheduled meetings in person and have taken the

opportunity, where our sites can accommodate,

to combine Board meetings with site visits, which

provide insight into our culture across the Group.

The Board continues to leverage technology

when we need to meet at short notice or if

there is business need, for example to manage

the transition between Chief Executive Officers

lastNovember.

The good practices we have adopted over the last

few years make us more agile and ensure the Board

is there when the business needs it most. This has

been evident with the challenges the business has

faced during the last year. This not only improves

our control environment but facilitates the dynamic

decision making that is central to the way the Board

governs and to how the senior management team

operates the business. The Board sets the culture

for effective risk management and, together with

the senior management team, ensures that we

are having regard to our key stakeholders when

makingdecisions.

Diversity

Although we have increased female representation

across the Group, and have a very active and

successful apprenticeship programme, making our

business more representative of the communities

in which we operate, and taking advantage of

the opportunity greater diversity presents, remains

an area of challenge and one where there is more

work to do. The Nomination Committee Report on

pages79 to 83 sets out the measures we have in

place, with our focus being on inclusivity across the

Group. The evolution of our people strategy during

2026, whilst presenting an opportunity to shape our

future ambition in this area, will need to balance

our aspiration with the challenges of the sector we

operate in, particularly when it comes to diversity

inour operational teams.

At Board level, gender diversity was maintained

during 2025. Including me, a female Chair, we have

50% female representation on our Board overall and

one Director from an ethnic minority background.

Board performance review

As required by the UK Code, we conducted an

externally facilitated Board and Committee

performance review during 2025, led by our Chief

Legal Officer and Company Secretary and facilitated

by Lintstock. In addition, with the support of Russell

Reynolds Associates, we carried out a review of

Board culture and dynamics, recognising that the

Board continuing to operate as a high-performing

team is critical to our ability to take advantage of

our near and long-term strategic opportunities.

Further details of these reviews are set out

on page 77.

Responsibility Statement

In the opinion of the Directors, these annual

Financial Statements present a fair, balanced

and understandable assessment of the Group’s

position and prospects and provide the information

necessary for shareholders to assess the Group’s

position and performance, business model and

strategy. The respective responsibilities of the

Directors and the auditor in connection with the

Financial Statements are explained in the Statement

of Directors’ Responsibilities and the Auditor’s

Report on pages 115 and 116 and 117 to 123.

The Strategic Report was approved by the Board

and signed on behalf of the Board.

Vanda Murray OBE

Chair

16 March 2026

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 69

Board leadership and Company purpose

This Corporate Governance Statement has been prepared in accordance with the principles of the UK

Corporate Governance Code dated January 2024 (the UK Code) which applies to the financial year 2025.

We have complied with the principles and provisions of the UK Code throughout 2025. The UK Corporate

Governance Code is available at www.frc.org.uk.

Our governance sections over the following pages explain how the Group has applied the principles

throughout the year and up to the date of this Annual Report.

Compliance Statement

Division of responsibilities

• Open and transparent communication and

information drive trust and support dynamic

decision making

• Relationship between Board and senior

management team underpinned by regular

engagement. Chair and Chief Executive Officer

supplement an already strong relationship as

we intensify the execution of our strategy

• Robust challenge and support provided and

well received by management, all evidenced in

the reviews of the culture and performance of

the Board conducted during the last year

• Clear, proportionate decision-making

parameters balance Board control and

operational flexibility, with clear and timely

information supporting the effective and

efficient functioning of the Board

Composition, succession and evaluation

• Balanced Board with breadth of experience,

knowledge and skills, with focused effective

succession planning sustaining this

• Majority of independent Directors and

experienced Committee Chairs

• Succession plan with robust procedure for

appointments supported by experienced

external search consultants

• Externally facilitated performance review

reflecting on Board performance during 2025

and including assessment of how the Board

addressed objectives from the 2024 internal

review. Recommendations reflected in Board

planning for 2026

• Engagement with shareholders on

performance and governance, which during

2025 centred on performance, Remuneration

Policy and leadership change

Audit, risk and internal control

• Clear oversight of external and internal audit

functions and planning, including key areas of

audit focus and ensuring internal audit planning

addresses key risks and controls

• Effective oversight of internal control

environment, and the programme of work to

assess and test the design, completeness and

effectiveness of the Group’s control framework,

including how this satisfies the requirements of

Provision 29 of the UK Code, which will apply to

the 2026 reporting year

• Detailed consideration of our reporting under

TCFD and prospective requirements under

other emerging standards

• Ensuring effectiveness of the Group’s risk

management framework and participating in

the risk review process, including a NED only

risk assessment

• Maintaining the improvement in the

processes by which we ensure we act upon

recommendations and monitor outcomes,

allowing us to continuously improve

• Oversight of financial reporting, including

judgements made in preparing this Annual

Report and Accounts and notably those

relating to management override of controls,

our goodwill impairment review and disclosure

of adjusting items

Remuneration

• Overseeing the review of our Directors’

Remuneration Policy and comprehensive

engagement with shareholders and other key

stakeholders on proposed changes

• Reviewing incentive scheme targets, ensuring

they support attraction and retention of talent,

drive good behaviours and create alignment

with stakeholder interests

• Appropriate and proportionate consideration

ofperformance and reward outcomes

X Read more on pages 74 and 75

X Read more on pages 72 and 73

X Read more on pages 76 and 77

X Read more on page 78

• A very experienced female Chair who provides

pragmatic leadership, and drives inclusive and

robust debate and dynamic decision making,

all with the purpose of driving the long-term

sustainable success of the Group

• Experienced Board with a good balance

of technical and industry knowledge and

experience and a demonstrable ability to address

both the critical issues facing the Group in the

near term and its long-term sustainability

• 2025 focus on transformation and turnaround

in Landscaping Products, Board succession

and the appointment of a new CEO, monitoring

execution of our strategy, core business

performance and cost and cash management

• Our culture, The Marshalls Way, and purpose,

“Building Tomorrow’s World”, guide our strategy

and decision making and the way the business

is operated and controlled

Corporate Governance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 70

Role of the Board

The Board currently comprises an independent

Non-Executive Chair, four independent Non-

Executive Directors and two Executive Directors.

Their biographical details are on pages 62 and 63.

Our Schedule of Matters Reserved for the Board

(summarised opposite) is reviewed annually and

is available on our website. It ensures we retain an

appropriate balance between Board oversight and

the day-to-day running of the business.

Delegation to Board Committees

The Audit Committee Report on pages 84 to 89

provides details of the Board’s application of UK

Code principles in relation to financial reporting,

audit, risk management and internal controls.

The Nomination Committee Report on pages79

to83 reports on how Board and senior management

composition (including diversity), succession

and development are managed to reflect UK

Codeprinciples.

The Remuneration Report on pages 92 to 112

explains how the Group’s current Remuneration

Policy has been implemented and the changes we

are proposing to the Policy that we will be asking

shareholders to approve at our 2026 AGM. It sets

out Directors’ remuneration outcomes for 2025 and

also provides gender pay and balance information.

The ESG Committee Report on pages 90 and 91

explains how the Committee has provided oversight

and support for the Group’s ESG strategy and the

ESG Steering Committee (which comprises certain

members of the senior management and ESG

delivery teams).

Ad hoc Board Committees are established for

specific purposes: for example, during 2025, Board

Committees were established to approve the

preliminary and half year results and our trading

update in July; and to approve the appointments

of Simon Bourne as Interim Chief Executive Officer,

Paul Inman as Non-Executive Director and Audit

Committee Chair designate, and Diana Houghton

as our Senior Independent Director with effect from

the end of our 2026 AGM.

Delegation to the Executive Directors

and management

The day-to-day management of the business and

the execution of the Group’s strategy are delegated

to the Executive Directors.

The Group’s reporting and governance structure

(see page 65) and controls below Board level

are designed so that decisions are made by the

most appropriate people in an effective and

efficient manner.

In deciding what is “appropriate” for these purposes,

we consider the scale and complexity of our

business and reflect how these have developed

over time.

Business management teams report to the

Executive Team, which comprises the senior

management team, including the two Executive

Directors. The Executive Directors, members of

the Executive Team and business management

teams give regular briefings to the Board in relation

to strategic progress and specific business issues

anddevelopments.

Clear and measurable KPIs are in place to enable

the Board to monitor progress. This structure, our

controls and open and transparent information

and communication enable the Board and its

Committees to make informed decisions on key

issues, whilst having regard to the interests of all

our key stakeholders. These include the execution

of our ‘Transform & Grow’ strategy, remuneration,

financial reporting and capital structure, internal

control and risk frameworks and risk appetite.

Group operations

andmanagement

andcontrol structure

Network optimisation and

exit of our UK quarried natural

stone operations

Terms of Reference

and key policies

Embedded in Board

agenda cycle

Approving

financialreports,

internal control

and riskmanagement

Half and full year results,

July 2025 trading update,

monitoring effectiveness

ofinternal control frameworks,

standalone riskmanagement

and risk reviews including

aseparatereview

by NEDs

Group strategy

and budgets

Landscaping Products

improvement plan,

budget approval

Approving major

transactions

Refinancing £270m bank

facilities, capital approvals

for network optimisation,

strategic property disposals

Board composition

andsuccession

Appointments of

PaulInman as Audit

Committee Chair designate,

Diana Houghton as Senior

Independent Non-Executive

Director and Simon Bourne

as Chief Executive Officer

Changes to capital

orcorporate structure

orconstitution

Financial discipline,

cost control and cash

management protecting

Group’sresilience

Culture, governance

and remuneration

Designated Director for

employee engagement,

externally facilitated

Board performance

review, Remuneration

Policy review and

implementation

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 71

Board leadership and

Company purpose

Leadership and purpose

Intensifying the execution of our strategy,

whilst facing into prolonged uncertainty in our

end markets, requires strong leadership and

engagement guided by our purpose of Building

Tomorrow’s World. The transformation and

turnaround in Landscaping Products is progressing

well and provides a foundation for an improvement

in profitability but required the Board and the

Executive Team to take decisive strategic action

during the last year, guided by The Marshalls Way.

These actions included ceasing our UK quarried

natural stone operations and commencing a

network optimisation programme which more

closely aligns our manufacturing operations with

customer demand. Whilst these actions are aimed

at ensuring we are well positioned to capitaliseon

a market recovery in this segment, the Board was

mindful of the impact on our colleagues and our

culture, even though these actions represented the

execution of our strategy. Our resilient performance

during 2025 and the strength in our diversified product

portfolio provide a platform for future growth.

Simon Bourne’s appointment as Chief Executive

Officer supports our desire to unlock, at pace,

thefuture growth and shareholder value creation

opportunities our strategy presents. Simon’s knowledge

and experience of the Group, our customers, our

operations and importantly our people ensure he

iswell placed to deliver this value which will, in turn,

be shared with our colleagues. Ensuring our Board

culture facilitates both challenge and support to

Simon and the Executive Team means we can

leverage the Board’s knowledge, skills and experience,

which our succession planning seeks to maintain.

As we do each year, the Board, Executive and

business management teams have undertaken

a detailed review of our strategic progress under

‘Transform & Grow’ and remain confident that

disciplined execution will improve performance in

the current market and position us well as demand

improves. The Executive Directors have engaged

with colleagues across the Group in a series of

roadshows to build alignment and momentum

behind the objectives we have set ourselves and

to help them understand the vital part they play in

helping us achieve these.

The Board uses all channels available to it to

ensurethe Company’s purpose, values and strategy

are aligned with our culture. Our established EVG,

which continues to evolve, is a conduit for this, and

the Directors can choose any other engagement

mechanism that fits a particular need. During 2025,

Directors also engaged through site visits and by

meeting members of our EVG, business management

teams, and other aspiring leaders more informally.

Directors also engage in one-to-one meetings with

senior leaders in a mentoring capacity or where

their specific knowledge and experience can

support the development of those leaders or a

particular project or strategic challenge they are

addressing. Avis Darzins, for example, has engaged

with our new Chief Information Officer, Marie Banks,

on technology developments and our ERP strategy

and Diana Houghton has mentored a group of

site-based female engineers. All Directors share

details of theirengagement with the business at

each Board meeting, which supports a deeper

understanding ofour people and operations. This

engagement supplements updates received at

Board and Committee meetings throughout the

year. The Board’s continuing engagement with the

businesses has informed its decision making and

enabled the Board to monitor the Group’s culture.

We engaged extensively with shareholders

throughout the year as we navigated significant

change and business performance challenges

driven by subdued end markets. We are confident

that the progress we have made with our

improvement plan for Landscaping Products and

Simon’s appointment as Chief Executive Officer

will help to rebuild shareholder trust and enable

us to drive the strategic progress that will build

shareholder value in the medium term. In addition

to our engagement at the time of our full year and

half year results, we consulted with shareholders

after our trading update in July and after Simon

was appointed Interim Chief Executive Officer in

November. We also consulted key shareholders on

proposed changes to our Directors’ Remuneration

Policy that will be voted on at our 2026 AGM.

We have shared shareholder feedback with the

Board and, where relevant, our wider business

management teams so they can reflect on this in

the execution of their strategic plans and how they

operate from day to day. This approach supports

balanced and dynamic decision making at Board

level, and by our senior leaders within the business.

Our Strategic Report on pages 1 to 61 explains how

we seek to fulfil our purpose, how this is supported

by our policies and procedures, and how we identify,

monitor and manage our key risks.

Maintaining an open Board culture with trust

and transparency between management and the

Board will build confidence in how the business

is operated and controlled and how performance

is measured. The time invested by the Board, not

only in preparation for and attendance at meetings

and in engaging with the business, but also

through participation in the externally facilitated

performance review and the separate review of

Board culture and dynamics, demonstrates the

Board’s commitment to operating as a high-

performing team This commitment underpins our

Board culture and decision making. It will support

and challenge the execution of our strategy,

holding management to account as we seek to

maintain our resilience today and take advantage

of the opportunities to grow sustainably, which are

driven by our diversified product portfolio and our

exposure to scale markets with long-term growth

drivers. Dynamic decision making enabled us to

recognise the need to refocus the business and

intensify the execution of our strategy.

The reports of our Board Committees give further

detail on how our policies and processes, and the

principles of the UK Code, have been applied during

the year in particular areas and how this relates to

our culture and strategy.

Our ESG framework, Built for the Future, is driven by

our commitment to operate the business sustainably.

Our ESG Committee oversees, supports and challenges

the work driving our carbon leadership strategic pillar,

which is underpinned by our commitment to leadership

in ESG. Our ESG Committee Report on pages 90

and91 and pages 31 to 40 in the Strategic Report

set out further details of our activities during the

last year.

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 72

Leadership and purpose continued

We continue to support investment in the business,

with the focus on investment that delivers the

most value. Whilst our commitment to continuous

improvement remains, we ensured that capital

expenditure plans during the last year were

aligned with demand and the need to maintain

costdiscipline.

The Board receives regular updates from the

Executive Directors on the agreed KPIs set out

on pages 17 and 18 that enable it to assess

performance against the targets the Group

sets itself. As we intensify the execution of our

‘Transform & Grow’ strategy, the information the

Board receives is being enhanced to ensure the

Board can track progress with the live projects that

support this and see how they are being prioritised.

This directly addresses feedback received as part

of the externally facilitated Board performance

review and will allow the Board to assess whether

the projects will deliver the performance and

valueexpected.

Our EVG is firmly established as an effective

andrepresentative colleague engagement

forum. Attendance by our designated Director

for employee engagement, Angela Bromfield,

and other members of the Board and senior

management team at our Group-level EVG ensures

the Board understands how the actions we take

are impacting colleagues and our culture and,

where appropriate, how effective they are. It also

allows the Board to assessgeneral engagement

levels and the correlation with our people related

risks, for example our ability to attract and retain

talent. During 2025, the EVG focused on supporting

colleagues through change and gaining a deeper

understanding of ‘Transform & Grow’ and the

role they play in communicating this across the

Group. The EVG also supported the launch of our

new colleague communication platform, Buzz,

and with the behavioural change programmes our

health and safety team is implementing across

the Group. Membership of our Group-level EVG

was refreshed in 2025, providing an opportunity

toexpand its reach and widen representation from

across the Group. This ensures that the Board and

management have a broad a picture of what is

important to our people and how they are feeling

and also gives our EVG members the opportunity

tochallenge our approach.

Further details of how we engage with employees

are set out on page 29.

Good governance is supported at Marshalls

by robust systems and processes and a good

understanding of risk and risk appetite. The

Group’s internal control and risk management

frameworks are reviewed annually and have been

critically reviewed during the year. We review our

Risk Register at least twice a year and our internal

audit plan factors in the results of these reviews.

The Board and the Audit Committee receive

periodic reports from the internal auditor on a

range of topics each year that are given careful

consideration by the Audit Committee.

Further details of our approach to risk identification

and management and internal controls are set out

on pages 52 to 60 and 88 and 89 respectively.

The Board remains confident the Group’s application

of the UK Code principles during 2025 will drive its

long-term sustainable success by providing a platform

to implement the Group’s ‘Transform & Grow’ strategy

and fulfil its purpose of Building Tomorrow’s World.

Conflicts and concerns

The Board maintains a conflicts register that

identifies situations in which conflicts may arise,

which is reviewed regularly. In situations where an

actual conflict is identified, the affected Director

may be excluded from participating in relevant

Board meetings or voting on decisions. There is no

shareholder with a holding of sufficient significance

to exercise undue influence over the Board or

compromise independent judgement.

Concerns about the running of the Company or

proposed action would be recorded in the Board

minutes. On resignation, if a Non-Executive Director

did have any such concerns, the Chair would invite

the Non-Executive Director to provide a written

statement for circulation to the Board.

Whistleblowing

The Group’s Serious Concerns Policy sets out

the principles under which employees can raise

concerns in confidence. This is supported by an

independent whistleblowing telephone and online

reporting service, through which concerns may

be reported anonymously if preferred. The Audit

Committee receives reports on matters raised

under this policy and the outcome of investigations.

Any concerns raised are investigated appropriately

by individuals whose judgement is independent

and who are not directly involved with the

matters raised.

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 73

Division of responsibilities

Roles and division of responsibilities

There is a clear division between Executive leadership and leadership of the Board expressed in the written Terms of Reference of the Chair and Chief Executive Officer.

The Chair leads the Board and is responsible for its overall effectiveness. She was independent

on appointment in 2018 and brings her judgement, experience and skills to the role. Our externally

facilitated Board performance review assessed the Board’s performance during 2025, Board

composition and succession, the Board’s strategic oversight and the Board’s strengths and

development areas. The review concluded that, during 2025, the Board performed well in

a challenging year and there was a high degree of alignment on the key issues facing the

Group and the importance of driving performance and the execution of the Group’s strategy.

Aseparate review, commissioned by the Chair, focused specifically on assessing Board

dynamics and culture and the importance of maintaining and developing these.

The Chief Executive Officer has responsibility for all operational matters which include

theimplementation of strategy and decisions approved by the Board.

The Senior Independent Director provides a sounding board for the Chair and also acts

asanintermediary for other Directors and shareholders.

The Board has determined each of the Non-Executive Directors to be independent

inaccordance with Section 2, Provision 10 of the UK Code.

At least once a year the Chair meets the Non-Executive Directors without the Executive

Directors being present. The Senior Independent Director meets the other Non-Executive

Directors annually without the Chair to appraise the Chair’s performance.

On appointment, the expected time commitment for Board members is made clear. The Chair

and other Non-Executive Directors disclosed their other commitments prior to appointment

and agreed to allocate sufficient time to the Company to discharge their duties effectively

and ensure that these other commitments do not affect their contribution. The current

commitments of the Chair and other Directors are shown on pages 62 and 63.

overboarding

Evaluating

performance

NED

independence

Senior

Independent

Director

Chief

Executive

Officer

Chair

Board meetings and attendance*

Key = Present Board

Audit

Committee

Remuneration

Committee

Nomination

Committee

ESG

Committee

Vanda Murray OBE

(Non-Executive Chair)

—

Matt Pullen

— — —

Justin Lockwood

— — —

Simon Bourne

— — —

Graham Prothero

(Non-Executive)

Angela Bromfield

(Non-Executive)

Avis Darzins

(Non-Executive)

Diana Houghton

(Non-Executive)

Paul Inman

(Non-Executive)

—

* The Board held seven scheduled meetings during the year. In addition to these scheduled meetings, the Board convened for

shorter virtual meetings on three other occasions to address specific matters arising at those times.

The Chair, Chief Executive Officer and Chief Financial Officer are not members of the Audit Committee but normally attend

Audit Committee meetings by invitation. The Non-Executive Directors also meet the external auditor in private.

The Chief Executive Officer and Chief Financial Officer attend Remuneration Committee meetings by invitation. The

Chief Executive Officer also attends the Nomination Committee by invitation. The Company Secretary attends Board and

Committee meetings as Secretary. Board members also participate in the Group’s annual strategy review with the senior

management team, which during 2025 was held in June. In addition, the Board participates in site visits, training sessions,

the EVG and other business activities where they have relevant expertise and experience.

Matt Pullen stepped down as Chief Executive and from the Board on 27 November 2025. Matt was unable to attend the

Board meeting and ESG Committee in May 2025 due to ill health.

Paul Inman joined the Board and all of its Committees on 15 September 2025. His attendance reflects this.

Diana Houghton was unable to attend the January Board and Committee meetings due to unforeseen events in her capacity

as Group Head of Strategy and Communications at Smiths Group.

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 74

Board meetings

There is an established format and programme for

scheduled Board meetings, which were all held in

person last year.

This programme is supported by a forward-looking

planner that focuses on Board business for the

year ahead and ensures an appropriate balance

between the Board’s consideration of strategy,

performance and governance. The Chair, Chief

Executive Officer and Company Secretary review

this planner on a regular basis to ensure it reflects

current business priorities alongside our strategic

plan and any recommendations from internal and

externally facilitated Board performance reviews.

During 2025, this enabled dynamic consideration

of performance in our Landscaping Products

business, the acceleration of network optimisation

under our ‘Transform & Grow’ strategy, our decision

to exit our UK quarried natural stone operations and

leadership change.

For 2026, our planner supports clear Board

oversight of the accelerated execution of our

strategic plans, including the performance driven by

the implementation of our Landscaping Products

improvement plan and consideration of our revised

people strategy.

The Chief Executive Officer and the Chief Financial

Officer report on strategic, financial, and commercial

and operational performance respectively at each

Board meeting. The Chief Executive Officer also

updates the Board, at each meeting, on wider industry,

sector and competitor considerations that are

relevant to ensuring that decision making has

regard to all stakeholder interests.

As Chief Executive Officer, Simon also reports to the

Board on health and safety, including the progress of

our health and safety strategy. Health and safety is

prioritised, reported on and considered on a

standalone basis at every scheduled Board meeting.

The safe operation of our sites, our safety culture

and any incidents or accidents at oursites are

constantly monitored. Everything wedo in respect

of health and safety is guided by The Marshalls

Way, i.e. “we do the right things, for theright

reasons, in the right way”.

In addition to the standing items on the Board’s

agenda, the principal areas of focus considered

bythe Board in 2025 were:

• Execution of ‘Transform & Grow’ strategy, including updates from each of our brand powerhouse

andgrowth engines

• Updates on implementation of strategic projects through our Strategic Project Management Office

• Standalone review of Landscaping Products improvement plan including network optimisation

• Exit from our UK quarried natural stone operations

• 2026 budget

• Technology including ERP roadmap and cyber maturity and resilience

• Group vision, purpose and brand architecture

• People and culture, including reward, succession and talent development

• Debt refinancing

• Logistics update

• Asset disposals: surplus real estate assets

• Capital structure and dividends

• Market, sector and competitor updates and outlook

• Broker and financial adviser updates

• Defence strategy and planning

• Health and safety

• Supply chain, procurement and logistics performance

• People: culture, engagement and morale

• Interim and final results and dividends

• Leadership change

• Board composition and succession

• Externally facilitated Board, Committee, Chair and individual Director performance review

• EVG feedback and NED engagement

• Policy reviews in accordance with matters reserved for the Board

• Whistleblowing

• Stakeholder engagement

• AGM voting and guidance

Strategy

Operations

Governance and risk

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 75

Composition, succession

and evaluation

Our Nomination Committee leads our transparent and formal process

for appointments to the Board, supported by our Chief People Officer

and Company Secretary. Additional rigour is provided by specialist

independent executive search firms we engage to ensure we are

able to maintain and develop the skills, experience and knowledge

required by the UK Code and which will support the execution of our

strategy. Board succession planning is reviewed at least annually by

the Nomination Committee, while senior management succession

planning at Executive level is reviewed by the Board with the support

ofour Chief People Officer.

During 2025, the Board, guided by the Chief Executive Officer and

ourChief People Officer, considered senior management succession,

both in the context of the execution of our strategic plan and the level

of business change this is driving, including the transformation in

our Landscaping Products business. Talent management, including

our talent quality, mobility and retention, is challenging when facing

a prolonged period of market uncertainty and our focus has been on

ensuring we have the right people to underpin our current resilience

and who can drive sustainable growth in the future.

The Board also received an update on talent management and

succession for our leadership tiers beyond the senior management

team, including our business management and functional senior

leaders. Our Risk Register acknowledges our capability, diversity,

attraction and retention challenges, together with the current

mitigating factors. The Board recognises that the development

of “home grown” talent and future leaders is fundamental to the

execution of our strategy and the sustainable growth of the Group.

Our Board remains diverse with a good balance and depth of

skills, experience and knowledge. Our externally facilitated Board

performance review concluded that our Committees continue to

be well led by suitably experienced Chairs with recent and relevant

expertise. Paul Inman’s appointment as Graham Prothero’s successor

as Audit Committee Chair, and Diana Houghton succeeding Graham

as Senior Independent Non-Executive Director, when Graham retires

after the AGM this year, mean that we will be able to maintain this

leadership strength. The Committees are also well supported by our

Chief Financial Officer, Chief People Officer and Chief Legal Officer

and Company Secretary. During the year, Simon Bourne succeeded

Matt Pullen as Chief Executive Officer, building on his Board role

as Chief Commercial Officer. Simon’s appointment reflects his

extensive business and leadership experience with the Group, and

supports the Board’s focus on execution as the Group intensifies

delivery of the ‘Transform & Grow’ strategy. The Board does not

intend to appoint a separate Chief Commercial Officer. Commercial

leadership is now embedded within the Executive team and divisional

leadership structure, with the Chief Executive Officer retaining overall

accountability for the Group’s commercial agenda.

The Board is currently 50% female, with a female Chair and one

Director from an ethnic minority background. Board composition

is reviewed annually, and we assess whether the current skills,

experience and knowledge are aligned with the Group’s strategy and

expected future leadership needs. Further details of the Board and its

skills and experience are set out on pages 62 and 63.

Our succession plan is designed to ensure that Board members’

terms expire or they retire over clearly defined periods, normally not

exceeding nine years. All Directors stand for election or re-election (as

appropriate) at every Annual General Meeting, and all current Directors,

with the exception of Graham Prothero, who will be retiring from the

Board following the conclusion of the 2026 AGM, will stand for election

or re-election at the 2026 Annual General Meeting. The Directors’

biographical details on pages 62 and 63 show their roles, dates of

appointment and lengths of service on the Board.

During 2025, we conducted an externally facilitated Board

performance review led by the Chief Legal Officer and Company

Secretary. See page 77 for further details.

Directors have access to the advice and services of the Chief Legal

Officer and Company Secretary who is responsible for ensuring that

Board procedures are complied with and, through the Chair, advises

the Board on governance matters. The appointment or removal of the

Company Secretary is a matter for the whole Board.

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 76

Our 2025 externally facilitated Board performance

review was led by the Chief Legal Officer and

Company Secretary, with the support of Lintstock

Limited, and a summary of this is set out below.

We made progress against the priorities identified

in the 2024 internal performance review, against

a backdrop of further significant business change

during 2025. This required careful prioritisation and

demonstrated the Board’s commitment to operating

dynamically to reflect the needs of the Group at any

given time and we continue to believe this is critical

to the effectiveness of our Board.

The engagement by the whole Board with the

business and our people is a key strength that

supports the Board’s decision making.

Executing brilliantly

• The transformation and turnaround of our

Landscaping Products business has been an area

of focus for the Board and, in addition to being

considered at every Board meeting, the processes

the business adopted to manage execution of this

important strategic goal were the subject of an

internal audit review

• The Board has monitored strategic progress within

each of our brand powerhouses and growth engines,

having the opportunity to challenge priorities in each

business area

• Recognising the importance of accelerating the

execution of our ‘Transform & Grow’ strategy in

driving shareholder value and confidence, the Board

acted decisively to appoint Simon Bourne, initially

as Interim and then as permanent Chief Executive

Officer, having received support from independent

executive search consultancy Teneo

Building trust

• The Chair commissioned Russell Reynolds

Associates to undertake a review of Board culture

and dynamics to ensure the Board continues to operate

as a high-performing team. The recommendations

of this review have been built into the Board and

Committees’ ways of working and forward agendas

• The Chair and the Chief Executive Officer are

building on their existing relationship, supporting

Simon’s transition into his new role and the

development in his relationships with the rest

oftheBoard

Communicating effectively

• Managing change during the last year has meant

that, in addition to scheduled Board meetings,

the Board has committed significant additional

unscheduled time to challenge and support

key decisions, particularly in relation to the

transformation and turnaround of Landscaping

Products. Effective communication with the Board

throughout the year has underpinned the Board’s

ability to operate dynamically in these situations

• We have communicated in a structured and

compassionate way with colleagues throughout the

implementation of the various change programmes

throughout the year and upheld the commitment

to commission another colleague engagement

survey halfway through the year. The results of

this evidenced how being a great place to work

underpins the delivery of our strategy and that

there remains much work to do, as evidenced by

the people risks identified in our principal risks

and uncertainties on page 60. There is clear

accountability for addressing the key priorities

identified in our engagement survey

• The Executive Directors hosted a series of colleague

roadshows across our network to explain our

strategic plans with colleagues, creating a shared

understanding of these and the roles they each

play in helping the Group achieve its objectives. As

part of these roadshows, the change programmes

initiated across the business were addressed, with

emphasis placed on how remaining resilient now

willsupport our future growth

People

• We have successfully managed the succession of

Graham Prothero when he retires at the 2026 AGM.

Planning for the Chair’s succession is progressing

well and is being led by Graham Prothero until his

retirement, when Diana Houghton (who is currently

working closely with Graham) will take over in her

new role as Senior Independent Non-Executive

Director. Simon Bourne was appointed initially as

Interim and then permanent Chief Executive Officer

• Our current Chief People Officer, Louise Furness,

who retires in April this year, will be succeeded by

Jo Hodge. Working alongside the Board, Jo will

carry on the crucial work of Louise in evolving and

implementing the Group’s people strategy, as we

recognise that our employee value proposition

is critical to attracting, developing, retaining and

engaging talented colleagues who drive our

performance and share in our success

How Board priorities were addressed during the year

In accordance with the UK Code, we review Board

performance each year to assess and develop

Board effectiveness and to identify Board priorities

for the following year. As we last commissioned

an externally facilitated review in 2022, we

commissioned Lintstock Limited to support us

in reviewing Board, Committee and individual

Director performance during 2025.

Lintstock is an advisory firm that specialises

in Board performance reviews and has no

other connection with Marshalls or any of our

Directors. Having undertaken Marshalls’ last

externally facilitated review in 2022, Lintstock was

well placed to track progress in key areas over

recent years.

The scope and objectives of the performance

review were agreed following a briefing meeting

with Lintstock and Lintstock collaborated with

the Company Secretary to design bespoke

questionnaires tailored to the Group’s needs,

building on the key areas explored during the

internal reviews in 2023 and 2024.

As well as covering core aspects of governance

such as information, composition and dynamics,

the review considered people, strategy and risk

areas relevant to the performance of Marshalls.

The review had a particular focus on the

following areas:

• Maintaining robust oversight during a period

ofleadership transition

• Overseeing and supporting the success of

the‘Transform & Grow’ strategy

• The Board’s understanding of drivers

ofperformance

• Monitoring ESG strategies and targets

• Evolving the Group’s culture to support the

execution of strategic priorities

Board members completed surveys assessing

the performance of the Board and each of its

Committees. Each Director also completed a

self-assessment questionnaire addressing their

own performance. Lintstock analysed the findings

from the surveys and delivered a focused report

documenting the findings, including a number of

recommendations to increase effectiveness.

Lintstock’s findings were shared with the Board

and then discussed at the January 2026 Board

meeting. The Chair, Chief Executive Officer and

Chief Legal Officer and Company Secretary will

ensure the actions and recommendations are

reflected in the Board’s agenda and priorities

for the year ahead and that our progress is

monitored and reflected on as part of the 2026

performance review.

2025 Board performance review

Corporate Governance Statement continued

Compliance Statement continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 77

Corporate Governance Statement continued

Compliance Statement continued

Audit, risk and internal control

The Board has established written policies and

procedures for external and internal audit functions

designed to ensure that they remain independent

and effective and these are regularly reviewed.

Annual questionnaire-based evaluations are

conducted of both our internal and external audit

partners with the Board and members of the

senior management team participating. The Board

scrutinises financial and narrative statements in

accordance with best practice, supported by the

advice of our auditor.

The Board has a well-established procedure to

identify, monitor and manage risk, and has (with the

support of the Audit Committee) conducted reviews

of the Group’s risk management and internal control

systems and the effectiveness of all material controls,

including financial, operational and compliance controls

and the mitigation of material risks. These reviews

considered the Group’s preparation in implementing

changes to the UK Code that will apply to the current

financial year, further details of which are set out on

pages 88 and 89. We are confident our preparation

will support the assurances the Board will be required

to provide in relation to our risk management

andinternal control frameworks, and the Board

acknowledges that such systems are designed

tomanage, rather than eliminate, the risk of failure

to achieve businessobjectives.

Remuneration

Our current Directors’ Remuneration Policy waslast

approved by shareholders in 2023, and a revised

Policy, which is set out in the Remuneration Committee

Report on pages 92 to 112, will be submitted to

shareholders for approval at this year’s AGM. The

revised Policy addresses the relevant requirements

of the UK Code and was prepared in consultation

with Company shareholders and external

votingagencies.

The Remuneration Committee Report describes

how the current Remuneration Policy has been

implemented during 2025 and the outcomes

achieved. It also describes how the Remuneration

Committee has fulfilled its responsibilities

during the year.

The Remuneration Committee continues to

effectively discharge the duties delegated to it by

the Board under the leadership of the Committee

Chair, ensuring outcomes reflect performance and

taking a holistic view of remuneration across the

Group, having consulted employees appropriately,

the importance of which is recognised by the Board.

X Read the Remuneration Committee Report on

pages92to 112

Vanda Murray OBE

Chair

16 March 2026

The Strategic Report comments in detail (pages 52

to 60) on the principal risks facing the Group, in

particular those that would threaten our business

model, future performance, solvency or liquidity,

and, where possible, how these are mitigated. The

Board conducts a rigorous assessment of these

risks, particularly operational risks that might affect

the Group’s viability in the short term and emerging

risks that might impact the medium to longer term.

The Group’s Risk Register is reviewed by the

Boardand Audit Committee every six months and

our risk disclosures in this report are also reviewed

as part of the approval of this report. In addition,

the Chair and Non-Executive Directors conducted

a standalone risk review in January2026, the

outcome of which has been incorporated into the

Risk Register. Our internal and external auditors

are also invited to all risk review meetings and

participated in our most recent meeting in

November 2025.

The Board’s risk and viability review incorporates

stress testing, by envisaging scenarios that might

arise during the financial year and/or the planning

cycle, and considering, with financial impact

modelling where appropriate, the likely effect on

the business and its prospects. Additionally, the

outcomes of our risk reviews drive our internal audit

planning, ensuring our resources are being directed

at the most appropriate areas.

Our approach underpins our commitment to

transparency in managing risk and internal controls

and lends additional efficacy to our procedures.

The Audit Committee Report on pages 84 to 89

describes the Group’s internal control system, how

the Board assures itself of the independence and

effectiveness of internal and external audit functions

and how they are managed and monitored.

X Read the Audit Committee Report on pages 84 to 89

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 78

Nomination Committee Report

Succession planning

that supports our

culture and growth.

Dear shareholder

I am pleased to report to

shareholders on the main

activities of the Committee and

how it has performed its duties

during 2025. I chair Nomination

Committee meetings but would

not do so where the Committee

was dealing with my own

reappointment or replacement

as Chair.

2025 highlights

• We recommended the appointment of Simon

Bourne, initially as Interim CEO, after Matt Pullen

stepped down from the Board in November 2025,

and then as permanent CEO in January 2026,

following a robust search and selection process

which included the evaluation of internal and

external candidates. This was conducted with

the support of independent search adviser Teneo

(which has no other connection with the Company

or its Directors). Whilst the Committee and the

Board have supported Simon’s transition into

his new role, he is an established member of the

Board and a longstanding member of the Group’s

executive management team and fully immersed in

all aspects of the Group’s business. His knowledge

of the Group and his operational and commercial

leadership experience, together with his role in

developing our ‘Transform & Grow’ strategy, will give

impetus to our desire to accelerate its execution

as he understands the strengths and opportunities

within our diversified portfolio of businesses

• We continued to give detailed consideration to

the Board’s short to medium-term succession

needs, given my tenure and that of our Senior

Independent Non-Executive Director and Audit

Committee Chair, Graham Prothero. This included

proactive engagement with shareholder governance

teams throughout January 2025 to enable them

to share their views

• Our succession planning culminated in the

Committee’s recommendation, and the Board’s

approval, of Paul Inman’s appointment to the

Board as a NED and Audit Committee Chair

designate in September 2025. In addition to

Paul’s recent and relevant financial experience,

as CFO of Yorkshire Water, he brings extensive

manufacturing, operations and commercial

leadership experience to the Board (as highlighted

in his biography on page 63). Paul’s depth of

experience, including of the anticipated investment

needed in the water industry, will support a much

wider contribution to the Board and our strategy

and enhance the Board’s sector experience,

knowledge and skills. Paul was appointed

following a comprehensive search and selection

process carried out with the support of Russell

Reynolds Associates (which has no other

connection with the Company or its Directors).

This included interviews with the whole Board

and supported the Committee’s assessment

of whether Paul’s appointment would help us

maintain our positive Board culture. Details

ofPaul’s induction are set out on page 83

• With Graham Prothero’s planned retirement

from the Board after the 2026 AGM, as both

Audit Committee Chair and Senior Independent

Non-Executive Director (SINED), the Committee

recommended that Diana Houghton be

appointed to succeed Graham as SINED. Diana

is an established Board member with a wealth

of relevant strategic leadership experience,

and we are delighted that she has accepted

this opportunity. This will ensure Graham’s

exceptional work in this role is continued. Diana

will take over as SINED, when Graham retires

from the Board after the 2026 AGM

• In his role as SINED, Graham Prothero is

leadingthe planning for my succession, with the

intention of concluding our search and selection

of a successor during 2026, to enable an orderly

handover until my anticipated retirement from

the Board in 2027. Independent search firm

MWM Consulting (which has no other connection

with the Company or its Directors) has been

engaged to support us in finding my successor.

Critical to this search is the desire to maintain our

positive Board culture, in which robust challenge

and support coexist, and the balance of skills,

experience and cognitive diversity that makes us

resilient today and equips us to drive sustainable

growth tomorrow. Progress with our strategic

and governance agenda will be supported by the

successful conclusion of this process. I will not

chair the Committee when it is dealing with the

appointment of my successor

• With the support of Russell Reynolds Associates,

the Chair undertook a review of Board culture

and dynamics recognising that, in order to take

advantage of our near and long-term strategic

opportunities, whilst maintaining the discipline

that underpins the Group’s financial position,

it is critical to ensure the Board continues to

operate as a high-performing team. The outcome

of this exercise was to make some changes to

the Board agenda and specifically how time is

allocated to each of the core elements of our

‘Transform & Grow’ strategy so the Board can

monitor progress and support its execution. In

addition, the Executive Directors and the Chief

Legal Officer and Company Secretary each

received individual feedback on how their roles

contribute to overall Board effectiveness

Members and attendance

Meetings

Vanda Murray OBE – Chair

Graham Prothero – SID

Angela Bromfield

Avis Darzins

Diana Houghton

Paul Inman* —

* Paul Inman joined the Nomination Committee in

September 2025 but all the Committee meetings in

2025 were held before he joined.

X Find our Terms of Reference and Nominations Policy at:

www.marshalls.co.uk/about-us/corporate-governance

Vanda Murray OBE

Chair of the Nomination Committee

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 79

Nomination Committee Report continued

Our Board is well equipped

to challenge and support

theaccelerated execution

ofthe Group’s strategy and

its succession planning will

help it build on this.”

• Led by our Chief Legal Officer and Company

Secretary, we completed an externally facilitated

Board performance review with Lintstock’s support

(with it having no other connection with the

Company or its Directors). In completing this, we

asked the Board to not only reflect on performance

over the previous year but also to project forwards,

given the Board’s critical role in ensuring we take

advantage of the strategic opportunities that position

us for growth, both in the near and long term.

Committee and individual Director performance

was also addressed in the review. A summary

ofthe Board performance review is set out on

page77 in the Governance section of this report.

The review also provided the opportunity for

Board members to share their views on the

performance of this Committee, which received

very strong ratings throughout, with the Committee

seen to be effective and flexible to the needs of the

business. Committee discussions were assessed

as being helpful and constructive (e.g.succession

planning and recruitment activities for the relevant

groups that are governed through the Committee’s

actions). The support provided to the Committee,

particularly from the Chief People Officer, continues

to be very effective and the Committee is well

briefed and benefits from access to expertise as

and when required. The appointments of Simon

Bourne, Paul Inman and Diana Houghton are the

outcome of the Committee’s work over the

lastyear

• As part of our succession planning, we have

mapped the Board’s skills and experience against

our strategic agenda. This work has driven the

appointment of Paul Inman to succeed Graham

Prothero as Audit Committee Chair and Diana

Houghton’s appointment as SINED, both when

Graham retires from the Board

• With the support of our Chief People Officer,

Louise Furness, the Committee reflected on the

performance, strengths and development areas

for the Executive Team. The Committee, and the

Board, continued to ensure we have visibility of

the leadership development programmes the

Group has in place that ensure we are nurturing

our talent and how these have been impacted by

the challenges of a subdued market and business

performance. Understanding whether we have

the people and a talent pipeline to support our

transformation and growth is critical to the future

sustainability of the Group

• I review individual Director performance through

biannual one-to-one review meetings and the

SINED meets the other Directors (without me being

present) to discuss my performance. As part of

these reviews we also assess whether Directors

have sufficient time to perform their duties

effectively and are not, in our opinion, “overboarded”.

In addition to considering performance and

supporting their re-election at the 2026 AGM, these

reviews are central to preserving and enhancing

Board dynamics and its strong culture. This

underpins the Board’s commitment to operating

as a high-performing team that seeks to deliver

enhanced shareholder value, whilst having regard

to the interests of all our key stakeholders

• Our key goal within diversity, equity, respect

and inclusion (DERI) remains improving female

representation in senior management roles within

the business given the challenge it presents to

the sector. My fellow Non-Executive Directors and

I are also actively mentoring and coaching other

female leaders in the Group, with Diana Houghton

currently working with a team of female engineers

operating across our manufacturing network

• We reviewed and approved the Group’s

Nominations Policy and reflected on how we

implemented it

2026 priorities

• Implementing our Board succession plan,

including the recruitment of my successor, who

will drive the Board’s future agenda and support

the Group’s execution of its strategic plan, whilst

ensuring delivery of shareholder value in a way

that considers our culture and the interests of all

our key stakeholders. In implementing this plan,

we will seek to build on the skills and experience

of the Board, ensuring we have the breadth and

depth to challenge and support the execution of

the ‘Transform & Grow’ strategy and to navigate

the risks this presents

• Continuing to consider Executive Team retention,

development and succession. This underpins our

ability to take advantage of the Group’s attractive

end markets and to maintain the discipline that

ensures we have the platform to do this

• As our current Chief People Officer, Louise

Furness, retires in April this year, working closely

with Louise and her successor, Jo Hodge, and

the Board to evolve and implement the Group’s

people strategy. Under Simon Bourne’s Executive

leadership, we will drive our strong safety culture

and continue to invest in the skills and provide

the experience and knowledge that will equip

our colleagues to deliver today’s transformation

and tomorrow’s growth. Our employee value

proposition will be critical to attracting,

developing, retaining and engaging talented

colleagues who drive our performance and share

in our success

• Monitoring the development, support and

retention of colleagues in our high-potential

category, as well as our approach to recruitment

for senior leadership positions, which will

continue to prioritise succession from within and

provide a sustainable platform for future growth

• Whilst we continue to aspire to greater gender,

cultural and cognitive diversity, particularly by

increasing the proportion of women in senior

leadership roles, this remains a huge opportunity

for the Group. We will look to build on the

progress made in certain areas, for example

Diana Houghton’s mentorship of a group of

female engineers working across the Group’s

operations. Whilst our recruitment practices

and those of any partners we work with do not

discriminate, we need to go further to build a

more inclusive and diverse organisation. We

must, however, do this in a realistic and balanced

way that recognises the challenges our sector

presents and start by educating our colleagues

on the advantages this brings

• Although we continue to lead the way at Board

level, with a female Chair and SINED designate,

50% female representation on the Board and one

Board member from a non-White ethnic minority

background, there is more to do beneath Board

level and in senior leadership positions across

the Group. We continue to comply with the

Listing Rules that require us to publish an annual

“comply or explain” statement regarding the

achievement of the targets on Board diversity

• We will act upon any recommendations of the

externally facilitated review of the Committee’s

performance, building any recommendations

into the Committee’s agenda planning for the

yearahead

2025 highlights continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 80

Nomination Committee Report continued

Marshalls’ Nominations Policy

The table below summarises the key features of our Nominations Policy and how it is applied.

Policy principle Supporting measures How implemented in 2025

• Recruitment and succession

reflect the strategic needs of

thebusiness

• Recruitment contributes to

desired values and culture

• Nomination Committee

conducts an annual skills review

aligned with three to five-year

strategic plans

• New Directors agree

commitment to strategic

direction and Group policies

• Paul Inman’s recruitment as Audit Committee Chair designate and Diana Houghton’s agreement to become Senior Independent

Non-Executive Director after the 2026 AGM help us maintain the Board’s breadth and depth of relevant skills

• Simon Bourne’s appointment as Interim and then permanent Chief Executive Officer reflects the Group’s desire to accelerate the

execution of its strategy with Simon’s proven operational and commercial leadership skills providing the perfect platform for him to

drivethis

• Our priorities in finding a successor to the Chair have been identified. We have also reviewed the tenures, skills and performance of the

rest of the Board against our strategic needs, which demand resilience today that supports tomorrow’s growth

• Recruitment to achieve diversity

in the widest sense

• Policy sets direction and

givesleadership

• Brief for search consultants

for new Board and senior

management appointments

• Diversity initiatives/succession

plans at Executive level reviewed

and targets monitored

• 50% of the Board is female, with a female Chair and SINED designate, and one Director is from a non-White ethnic minority background

• All search briefs for Board and senior management roles continue to emphasise the importance of diversity in the broadest sense and

we hold our third-party partners to account on this expectation

• Our key focus area is continuing to improve female representation in senior management roles within the business despite the

challenges the sector presents. 40% of our Executive Team is now female, with Marie Banks having joined as our Group Chief

Information Officer during 2025

• We remain focused on diversity in hiring as well as open and inclusive assessment processes for internal promotions

• There should be a clear formal

Board succession plan based on

objective criteria

• Annual review of terms of office

• Annual individual evaluation

• Use of independent external

search advisers

• Succession is under continuous review as evidenced by the appointments of Paul Inman and Diana Houghton. We monitor tenure

andhave started the succession process for our Chair, Vanda Murray, who we anticipate will rotate off the Board in 2027

• Terms of office are reviewed annually, supported by individual Director evaluations that were last conducted between December 2025

and January 2026. The Chair held additional one to ones with Directors during the year and regularly dedicates additional time to these

meetings where they support the effective functioning of our Board

• We select external search advisers for Board appointments based on relevant expertise. Teneo supported the appointment of Simon

Bourne as Chief Executive Officer. We worked with Russell Reynolds Associates in appointing Paul Inman to succeed Graham Prothero

and MWM Consulting has been engaged to support the appointment of a succession to our Chair. The Amrop Partnership is retained for

senior management team recruitment

• Beneath Board level, we have, with the support of the Chief Executive Officer and our Chief People Officer, reviewed the performance and

succession of our Executive Team, including our ability to develop a talent pipeline that supports our desire to promote from within

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 81

Nomination Committee Report continued

Policy principle Supporting measures How implemented in 2025

• Directors must devote sufficient

time to perform effectively and

familiarise themselves with

thebusiness

• Limit on other Board appointments

• Detailed induction, site

visits, training and employee

engagement programme

• Existing commitments and the risk of “overboarding” are considered as part of our Director recruitment process and in the Chair’s annual

performance reviews with individual Directors. For example, Paul Inman only had one other consultancy commitment on appointment

• As part of our 2025 Board performance review, we reflected on the time committed to Board and Committee business and, given the changes

to the UK Corporate Governance Code and the fact that our Remuneration Policy is to be tabled with shareholders this year, we allocated more

time during 2025 to both the Audit Committee and the Remuneration Committee. The requirement for Directors to devote sufficient time to

their roles is also included in their appointment terms and is something the Chair monitors with them on a one-to-one basis

• Our new Director induction process is well established and well received by incoming Directors. We look for opportunities to evolve

and improve this and also to tailor it to the needs of the role each Director performs. With Paul Inman joining as Audit Committee Chair

designate, his induction allowed for time with senior leaders in our finance team whose work supports the Audit Committee in discharging

its duties under the UK Corporate Governance Code. Given the pivotal role of the Chair of the Audit Committee and the specific skills

required, we ensured Paul’s appointment allowed sufficient time for an orderly handover until he succeeds Graham Prothero later this year

• Board training is included as part of Director induction together with site visits. All Directors are supported by the Chief Legal Officer and

Company Secretary, who also arranges additional Board training on relevant topics, for example mergers and acquisitions and takeover

defence planning

• Directors all commit time outside scheduled Board and Committee meetings. During the last year they have: participated in the first full

review of our ‘Transform & Grow’ strategy since its launch in November 2024; participated in discussions on risk and internal controls;

visited manufacturing sites; attended EVG meetings; and mentored colleagues, including mentorship of a group of female engineers

working across our manufacturing network

• Compliance/good governance • Conflicts policy and register

reviewed no less than six monthly

• Annual re-election of Directors

• Reviews in June and December 2025

• All Directors stood for election/re-election in May 2025

Marshalls’ Nominations Policy continued

Feedback was sought on the performance of all our

Board Committees as part of our externally facilitated

Board performance review, details of which are set

out on page 77. This review considered the feedback

received as part of our internal performance review

in 2024. The Committee Terms of Reference were

reviewed in December 2025. No material changes

were made, and the terms continue to reflect the

requirements of the UK Code.

During the year, the Nomination Committee held five

meetings. There were additional ad hoc meetings

and discussions between Committee members in

connection with succession planning and recruitment.

Evaluation and reappointment of Directors

Each Non-Executive Director was, on joining,

provided with a description of their role and

responsibilities, and received a detailed business

induction, which is managed by our Chief Legal

Officer and Company Secretary and our Chief People

Officer. All Directors have biannual one-to-one review

meetings with the Chair to appraise the composition

and performance of the Board and their individual

contributions, behaviours and participation, both at

Board and Committee meetings and through their

wider engagement with the business.

In addition, these meetings provide an opportunity

for the Directors to give their views on the topics the

Board is currently focusing on and on the broader

strategic, governance, macro-economic and market

considerations and risks that should be factored into

setting the Board’s future agenda. This demonstrates

the Chair’s commitment to regular reflection on

Board and individual Director performance.

Before any Director is proposed for re-election, or

has their appointment renewed, the Committee

considers the outcome of the reviews to ensure

that the Director continues to be effective and

demonstrates commitment to the role. The Chair

provides an explanation to shareholders as to why

the Director should be re-elected and confirming

that a formal performance evaluation has taken

place when the Resolution to re-elect is circulated.

It is the Company’s policy that Executive Directors can

only hold one external listed company non-executive

directorship. Voluntary service on the governing

board of a social, trade or charitable organisation is

also permitted. Details of the external appointments

held by the Executive Directors are included in the

biographical notes on pages 62 and 63.

Governance

The Committee has acted throughout 2025

in accordance with the principles of the UK

Code. In addition, Committee performance was

considered as part of our externally facilitated

Board performance review for 2025. The outcome

of this is summarised on page 77. The Committee

continues to effectively manage Board composition

and succession, supporting Simon Bourne in

succeeding Matt Pullen as Chief Executive Officer

and welcoming Paul Inman to the Board and

recognising the need to tailor his induction to

reflectthe responsibilities he will assume when

Graham Prothero retires after the 2026 AGM.

Led by Graham Prothero and, on Graham’s

retirement, Diana Houghton, the Committee will

focus on my succession and, working closely with

our appointed search consultants, we will seek to

maintain the skills, experience and culture we have

now that will support and challenge the execution

of the Group’s ‘Transform & Grow’ strategy. The

framework for the refreshment of skills, experience

and diversity to support the needs of the business

and its stakeholders in the future is transparent and

well understood.

Vanda Murray OBE

Chair of the Nomination Committee

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 82

Nomination Committee Report continued

Director induction

Our induction process focuses on informing,

engaging and supporting new Directors when they

join the business to ensure they understand the

Group’s culture, business, strategy and stakeholders

and are equipped to fulfil the duties of their

individual roles.

We feel this knowledge gained through our tailored

induction programme, combined with their skills

and experience, provides the right foundation for

them to make an effective contribution to the Group

and to fulfil their statutory duties as Directors.

This induction process is a key building block

ofeffective governance and reflects our purpose,

Building Tomorrow’s World, and The Marshalls Way –

“we do the right things, for the right reasons, in the

right way”. For Paul Inman’s induction, we prepared

a tailored induction plan, using our established

plan as the foundation and reflecting his needs

as Graham Prothero’s successor. The additional

elements are referenced opposite.

The Marshalls Way

We do the right things, for the right reasons, in the right way

OUR DIRECTOR INDUCTION

INFORM ENGAGE SUPPORT

• Summary of the Group’s history

• Introduction to the Group’s strategy

• Details of our investor relations programme

• Details of the work supporting our

compliance with Provision 29 of the

UKCorporate Governance Code*

• Latest investor feedback and current

shareholder register

• Biographies of the senior

managementteam

• Employee engagement survey

• Sustainability Report

• ESG update

• Board evaluations completed in 2024

and 2025

• Access to key corporate documents

• Market research, including indicators

anddrivers

• Pre-joining engagement with Audit

Committee Chair and Chief Financial Officer

• Board one to ones

• Executive management one to ones

• Finance leadership team one to ones*

• Deloitte audit partner one to one*

• FIT Remuneration Consultants one to one,

including introduction to Remuneration

Policy and our incentives*

• Introduction to our risk management

framework and processes*

• Site visit programme

• Introduction to our markets

• Introduction to investor relations

• Meetings with brokers and key advisers*

• EVG attendance

• Orderly handover from our retiring Audit

Committee Chair, Graham Prothero*

• Core compliance and additional

topicaltraining

• Appointment documentation support

• Company Secretary support

• Organograms

• Key contacts

• Details of key advisers

• Payroll and administration support

* Tailored elements of Paul Inman’s induction plan.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 83

Marshalls has

astrong focus

oncontrol, risk

management and

governance to

support the delivery

of its strategic

objectives.

Dear shareholder

On behalf of the Audit

Committee, I am delighted

topresent the Committee’s

report for the year ended

31December 2025.

Chair’s statement

The Audit Committee has fulfilled a busy agenda

during the year, with the regular activities expanded

by detailed preparations for the implementation of

requirements under Provision 29. The Committee

delivered throughout 2025 on its responsibilities

to monitor and review the integrity of financial

information and reporting, and to provide assurance

to the Board that the Company’s internal controls

and risk and compliance processes are appropriate

and regularly reviewed.

The Committee engaged regularly and at an

appropriate level of detail, with our external auditor,

internal auditor and other third-party advisers as

necessary. This enabled members to maintain an

appropriate understanding of how the auditors

and advisers interact and test our approach to

risk, along with ensuring the Financial Reporting

Council’s (FRC) evolving reporting requirements

were adhered to.

The Audit Committee also oversees the work of

the external auditor, monitors its independence,

approves its remuneration and recommends its

appointment. It also assessed whether the 2025

Annual Report and Accounts, taken as a whole,

is fair, balanced and understandable and, having

concluded that it was, it made a recommendation

to the Board.

It has continued to oversee the project to enhance

the Group’s control environment ahead of the

new Provision 29 disclosures that will be required

in 2026 Annual Report and Accounts, details of

which are set out on pages 88 and 89. It also

monitored and reviewed the effectiveness of the

existing control environment. The scope of work

of the internal audit function was approved by

the Committee, reports were reviewed, and the

completion of actions was monitored.

Role and composition

The Committee consists of independent

Non-Executive Directors and met four times

during the year. Members and their attendance

atmeetings are set out opposite. The Chair of the

Committee is a Chartered Accountant, and the

Board is satisfied he is independent and has recent

and relevant financial experience as required by

the UK Code. Other members also have relevant

sectoral and financial experience. Their biographical

details are on pages 62 and 63.

The Chief Executive Officer and Chief Financial

Officer, together with the external auditor (Deloitte

LLP) and internal auditor (KPMG LLP), are all invited

to attend the meetings of the Committee. The

Committee Chair meets with the Chief Financial

Officer and both the external and internal auditors

on a regular basis outside the formal meetings. The

external auditor met with the Committee without

the Executive Directors being present at both the

August 2025 and March 2026 meetings.

The Committee acknowledges and embraces its

role of protecting the interests of shareholders as

regards the integrity of the financial information

published by the Company and the effectiveness

of the audit. The Committee’s responsibilities are

outlined in its Terms of Reference which are available

on the Group’s website (www.marshalls.co.uk).

TheCommittee’s main responsibilities are to:

• Review the integrity of formal announcements

relating to the Group’s financial performance,

including assessing the significant financial

reporting judgements contained within them

and the description of those judgements in the

Financial Statements

Graham Prothero

Chair of the Audit Committee

Members and attendance

Meetings

Graham Prothero – Chair

Angela Bromfield

Avis Darzins

Diana Houghton

Paul Inman*

* Paul Inman joined the Audit Committee on his

appointment in September 2025. Three of the four

meetings were held before he joined.

X Find our Terms of Reference and Nominations Policy at:

www.marshalls.co.uk/about-us/corporate-governance

Audit Committee Report

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 84

Role and composition continued

• Provide advice to the Board on whether the

Annual Report and Accounts, taken as a whole, is

fair, balanced and understandable, and provides

the information necessary for shareholders

to assess the Group’s financial position and

performance, business model and strategy

• Review and monitor the independence

and objectivity of the external auditor and

effectiveness of the external audit process

• Make recommendations to the Board, for the

Board to put to shareholders in general meeting,

on the appointment, reappointment and removal

of the external auditor and to approve its terms

ofappointment and fee

• Monitor the Group’s systems of internal control

including financial, operational and compliance

and risk management systems, and perform an

annual review of their effectiveness

• On behalf of the Board, review and monitor the

Group’s risk management process, in particular

the assessment of principal risks and the

associated mitigating actions included in the

Group Risk Register

• Review and approve the internal audit programme,

and monitor its delivery during the year

• Review the effectiveness of the internal auditor

and the internal audit programme

Performance evaluation

During the year, as part of the externally facilitated

Board performance review, an evaluation of the

Committee’s performance was also undertaken.

A summary of the Board performance review is

set out in the Corporate Governance Statement

on page 77. The review found the Committee

to be effective, benefiting from comprehensive

information and support, both from the business

and advisers. In addition, the review found the

Committee to have clear Terms of Reference and to

be well led, with the Committee Chair’s succession

plan well executed and progressing as anticipated.

The Committee’s composition provides a strong

foundation for the challenge and support that

underpins the assurances it provides the Board

regarding the integrity of the Company’s financial

and narrative statements. No areas of concern

werehighlighted during the review.

Significant issues related to the

Financial Statements

In preparing the Financial Statements, the Committee

has been mindful of potential issues arising from

uncertainty over a range of macro-economic and

other factors. The significant judgements considered

by the Committee are set out below.

Goodwill impairment review

The Group’s Balance Sheet includes goodwill

totalling £324.4 million that is required to be

subject to an annual impairment review under

IAS 36 “Impairment of Assets”. The Committee

received a paper from management that set out

details of the impairment review. The key areas

of judgement considered by the Committee are

the reasonableness of the future cash flows that

are forecast to be generated by the Group’s cash

generating units (CGUs) and the rate used to

discount the cash flows into their present value.

The Committee concluded that management’s

assessment that no impairment charge was

required was appropriate.

Disclosure of adjusting items

The Group’s Income Statement includes adjusting

items totalling £26 million and the Annual Report

and Accounts includes performance reporting

that highlights both statutory results and results

stated after adding back adjusting items. The

Group has an accounting policy for adjusting items,

which states that they are items that are unusual

because of their size, nature or incidence and which

Directors consider should be disclosed separately

to enable a full understanding of the Group’s results

and to demonstrate the Group’s capacity to deliver

dividends to shareholders. The Committee received

a paper from management setting out details of

those items that were assessed to meet the criteria

of the policy. The Committee challenged the paper

and received feedback from the external auditor and

concluded that the proposed items met the criteria

of the policy. The Committee also considered the

use of adjusting items in performance reporting

and concluded that there was no undue prominence

given to adjusted results compared to the

statutory results.

Fair, balanced and understandable

The Committee has considered whether, in its

opinion, the 2025 Annual Report and Accounts is,

taken as a whole, fair, balanced and understandable,

and whether it provides the information necessary

for shareholders to assess the Group’s position,

performance, business model and strategy. As

part of its review, the Committee considered

the disclosures in the Strategic Report together

with the disclosures relating to the Group’s ESG

objectives, sustainability and climate-related risks,

opportunities and targets. The Committee also

considered the adequacy of the disclosures made

in relation to the measures undertaken by the

Group to mitigate identified risks. After making

this assessment, the Committee has advised the

Board in relation to the statement required by

the UK Code. The Committee has concluded that

the disclosures, and the process and controls

underlying their production, were appropriate to

enable it to determine that the 2025 Annual Report

and Financial Statements is fair, balanced and

understandable.

External audit

Deloitte LLP tenure and audit partner

Deloitte LLP was reappointed as the external

auditor in 2024 following a competitive tender

process. Deloitte LLP has processes in place

designed to maintain independence, including

regular rotation of the audit partner. The current

audit partner is Bashir Bahaj and the 2025 audit is

the third year of his rotation. For the financial year

under review, the Company has complied with the

Competition and Markets Authority’s Statutory Audit

Services for Large Companies Market Investigation

(Mandatory Use of Competitive Tender Processes

and Audit Committee Responsibilities) Order 2014.

Audit Committee Report continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 85

Audit Committee Report continued

External audit continued

Provision of non-audit services

The Committee has adopted policies to safeguard

the independence of its external auditor, Deloitte LLP.

It is the policy of the Company that the external auditor

should not provide non-audit services, other than the

half yearly review. Any other non-audit services require

the specific approval of the Committee. Where the

Committee perceives that the independence of the

auditor could be compromised, the work will not be

awarded to the external auditor. Details of amounts

paid to the external auditor, and its entire network,

for audit and non-audit services in 2025 are analysed

in Note 3 on page 134. Other than the half yearly

review of Marshalls plc, for which a fee of £42,000

was charged (2024: £40,000), no amounts were

paid fornon-audit work during 2025.

External audit effectiveness

The Committee considered the effectiveness of

the 2025 audit by critically assessing the scope of

work and the results of the audit work undertaken

and concluded that the audit was effective, and

the audit process was well managed by both

management and Deloitte LLP.

Risk management and internal control

Risk management process

The Committee, along with the Board, reviewed

andassessed the Group’s risk management

framework and the output of the biannual risk

reviews. The continuous improvement plans

developed by management to enhance risk

management, compliance and governance are

monitored by the Committee and the Board.

Internal controls

The Committee is responsible for monitoring the

Group’s systems of internal control, including

financial, operational and compliance related

controls, and risk management systems, and for

performing an annual review of their effectiveness.

It performed the following work in respect of

thisresponsibility:

• Reviewed and challenged a paper presented

to the Committee covering the Group’s internal

control framework

• Received a report from management on the output

of the internal controls self-assessment process

• Reviewed the external auditor’s findings and its

use of data analytics in the revenue cycle of the

business unit audits

• Considered the internal control framework when

assessing deployment of internal audit resource

The Committee concluded that the internal control

systems were working effectively.

Internal audit

Internal audit function and plan

The internal audit function is undertaken by KPMG

LLP, and the annual internal audit programme

uses a risk-based assessment that considers the

Risk Register and management input. KPMG LLP

attends the Group’s Risk Register review meetings

on a regular basis. This risk-based assessment is

reviewed and approved by the Audit Committee,

and the process is overseen by the Chief Financial

Officer. KPMG LLP is independent from the

Company’s external auditor.

The internal audit programme includes both regular

audit checks and assignments to look at areas of

critical importance. Control weaknesses that are

identified through this process prompt a detailed

action plan and a follow-up review to confirm that

agreed actions have been completed. Instances of

fraud or attempted fraud (if any) and preventative

action plans are also reported to the Committee

and recorded in a fraud register.

The 2025 internal audit plan comprised a review of

the Supply Chain Ethics and Resilience, IT vendor

risk management, the Delegation of Authority

design, and the Landscape Products Improvement

Plan. This is in addition to support on the Group’s

project to refine its internal control environment

in line with the revised UK Code, clarifying and

codifying on internal controls components.

Internal audit effectiveness

An annual review of internal audit effectiveness and

of the performance of KPMG LLP as independent

internal auditor was undertaken by the Committee

in 2025. This included feedback from colleagues

who engaged with KPMG directly on the audits and

the conclusion was that the current internal audit

process continues to be an efficient and effective

means of fulfilling the internal audit function.

Whistleblowing and anti-bribery

The Audit Committee monitors, on behalf of

the Board, reported incidents under the Serious

Concerns Policy (our Whistleblowing Policy),

which is available to all colleagues. A third-party

organisation, Safecall, provides an independent and

confidential channel on behalf of the Group for any

concerns to be reported.

These procedures are embedded into the

Group’s Code of Conduct and are relevant to all

stakeholders including suppliers, partners and

colleagues. The policy and the Safecall process are

displayed on operating site noticeboards and on the

Company’s intranet and set out the procedure for

employees to raise legitimate concerns about any

wrongdoing without fear of criticism, discrimination

or reprisal.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 86

Audit Committee Report continued

Whistleblowing and

anti-bribery continued

The Committee, on behalf of the Board, receives

regular updates from the Company Secretary

regarding any matters of material concern

and an annual summary of matters raised

throughout the relevant year including the nature

of matters reported, the outcome of any material

investigations and details of any actions taken

to address concerns raised. The Committee is

satisfied that arrangements are in place for the

proportionate and independent investigation of

such matters and for appropriate follow-up action.

The Company is committed to a zero-tolerance

position with regard to bribery, made explicit through

its Anti-Bribery Code and supporting guidance on

hospitality and gifts. The policy and procedures are

published on the Company’s website and displayed

on operating site noticeboards. The Board reviews

and approves any changes to the Anti-Bribery

Code annually. Online training is available to all

employees to reinforce the Anti-Bribery Code and

procedures and is part of our core compliance

training programme for relevant colleagues. There

is a maintained record of gifts and hospitality with

arequirement for these to be reported quarterly.

I would like to thank our shareholders for their

continued support during the year. I will be available

at the Company’s 2026 AGM to answer any

questions in relation to this report.

The Audit Committee Report has been approved by

the Board and signed on its behalf by:

Graham Prothero

Chair of the Audit Committee

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 87

Audit Committee Report continued

Provision 29 readiness

Throughout the year, the Audit Committee

closely monitored the effectiveness of the

Group’s risk management and internal control

framework, receiving regular updates on

control performance, developments in the

risk environment and progress against the

internal control enhancement programme.

This ongoing work included reviewing first-line

self-assessment outcomes, second-line

oversight activity and third-line internal

audit reporting, all of which informed the

Committee’s understanding of control

operationduring the year.

The Group invested effort to strengthening its

internal control environment in preparation for

Provision 29. During 2025, the Group ran a full

pilot of its enhanced assurance programme,

allowing management and the Board to test and

refine both process and documentation. This

included substantial work to develop, validate

and embed the Group’s Risk and Control

Matrix (RACM) across financial, operational,

reporting and compliance controls, ensuring

that it functions as a dynamic, up-to-date

recordofthecontrolenvironment.

During the year, the Group also undertook detailed

work to identify and agree its material controls.

Drawing on the principal risks, management

prepared proposals which were reviewed through

a Board-led sub-group before approval by the full

Board. This work was supported by assurance

mapping and in-year testing, ensuring that the

controls identified as material were appropriately

evidenced and aligned with the Group’s risk appetite

as well as its long-term sustainability priorities.

The Committee received reports at each meeting

summarising the in-year assurance work

undertaken across the three lines of defence

including progress with control testing, emerging

findings, remediation activities and the development

of the Group’s internal control framework.

Supported by the outputs of the pilot programme,

the Board concluded that the Group is well

positioned to provide the required declaration on

the effectiveness of material controls for the year

ending 31 December 2026.

Provision 29 declaration

The Chief Financial Officer provides an update on

material scope and assurance programme activities

at each Board and Audit Committee meeting.

Further information has been presented to the

Board at regular intervals to allow the monitoring

and review of the effectiveness of the control

framework. This additional information supports

the Board’s declaration of effectiveness of the

material controls as at the Balance Sheet date.

As part of the preparatory work towards compliance

with Provision 29 of the Code, the Group treated

2025 as a “pilot year” by operating the assurance

programme as it intends to do in 2026. The pilot

year provided an opportunity to make refinements

to the design and operation of both material and

core controls using outputs from the Group’s

assurance approach. At the conclusion of the 2025

assurance programme the Board prepared a mock

declaration to conclude on the assurance activities

and agree on the anticipated wording for the 2026

Provision 29 declaration.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 88

Audit Committee Report continued

Lines of defence

Board

Ultimate responsibility for the Group’s risk management and internal control framework and the

review of its effectiveness.

Audit Committee

It is the Committee’s responsibility, on behalf of the Board, to review and monitor the Group’s

risk management process, in particular the assessment of principal risks and the associated

mitigating actions included in the Group Risk Register. The Committee, on behalf of the Board,

monitors the Group’s systems of internal control including financial, operational and compliance

and risk management systems, and performs an annual review of their effectiveness.

First line

Control owners

and operators

Second line

Group risk

and controls

Third line

Internal audit

Fourth line

External independent bodies including our

external auditors

Control owners and operators have

responsibility for managing risks as part of

their everyday activities. This responsibility is

performed through the operation of controls

and the requirement to identify, measure,

manage and report on risks and controls at

anoperational level. The first line is further

responsible for identifying the need to add,

modify or remove a control. The first line

completes self-assessment exercises to

provide assurance over the design and

operating effectiveness of all internal

controlsin the Risk and Control

Matrix (RACM).

The second line encompasses risk management

and compliance functions responsible for

establishing policies, providing oversight and

guidance to the first line, creating a strong

controls environment and operating the

internal programme of control assurance

forthe Board. The second line is responsible

for facilitating the ongoing operation of the

risk and control framework including the

identification and assessment of risks,

andreporting to management and

theAuditCommittee.

The second line is responsible for

maintainingthe Risk and Control Matrix

(RACM), managing the internal control

self-assessment programme, operating

thesecond line assurance programme

andsupporting control remediation.

The third line primarily relates to the internal

audit function, currently undertaken by KPMG

LLP. The annual internal audit programme

uses a risk-based assessment that considers

the Risk Register and management input.

The internal audit programme includes both

regular audit checks and assignments to

look at areas of critical importance. Internal

audit additionally provides advisory support

on the enhancement of the internal control

environment in-line with the revised Corporate

Governance Code including assistance in

the development of the RACMs. The third

line may additionally be represented by

external third parties who are engaged to

undertake audits or assurance activities

over specialist areas as guided by either

management, the Board, Audit Committee

orregulatory/legislativerequirements.

Senior management and risk owners

Responsible for embedding and operating the risk management and internal control framework within

theirrespective business areas and developing an effective risk culture.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 89

Dear shareholder

The ESG Committee is now

entering its third year and we

remain committed to providing

oversight and supporting the

delivery of the ESG strategy.

With a focus on our strategic objectives and how

our carbon leadership can help us drive commercial

advantage, we were heavily invested in reviewing

the new ESG framework, Built for the Future, its

alignment to our ‘Transform & Grow’ strategy and

its contribution to commercial success.

During 2025, the ESG Committee comprised all the

Company’s Directors, with our Chief Legal Officer

and Company Secretary acting as Secretary to the

Committee. Specialist colleagues were also invited

to join Committee meetings when their expertise

supported the Committee’s understanding of the

matters being considered.

In this report, we outline our governance structure,

the main matters considered by the ESG Committee

in 2025 and our priorities for the year ahead.

Vanda Murray OBE

Chair of the ESG Committee

Members and attendance

Meetings

Vanda Murray – Chair

Graham Prothero

Angela Bromfield

Avis Darzins

Diana Houghton

Paul Inman*

Simon Bourne, ChiefExecutiveOfficer

Justin Lockwood, ChiefFinancial

Officer

Matt Pullen, FormerChiefExecutive

* Paul Inman joined the ESG Committee on his

appointment in September 2025. Two of the three

meetings during 2025 were held before he joined.

X Find our Terms of Reference at:

www.marshalls.co.uk/about-us/corporate-governance

Governance

Our Terms of Reference set out specifically the

areas of responsibility for the Committee, including:

• Supporting and challenging the development of

the Group’s ESG strategy

• Providing oversight of our progress and

performance on key ESG commitments

andtargets

• Providing advice and direction on the

implementation of our ESG strategy

• Reviewing ESG corporate communications

With sponsorship from our Chief Legal Officer and

Company Secretary, the ESG strategy is delivered

by the ESG delivery team. This team is made up

of colleagues from the Finance, Sustainability,

Legal and Marketing functions. The ESG delivery

team feeds into the ESG Steering Committee

which scrutinises and ensures ESG strategy

implementation is on track, and is responsible for

any material ESG-related decisions and investments.

Outputs and actions from the ESG Steering Committee

are reported directly to the ESG Committee.

ESG Board Committee

Oversight of ESG strategy for the Marshalls Group

ESG Steering Committee

Scrutinises ESG strategy implementation across the Group

ESG Delivery Group

Delivery of ESG strategy and led by KPIs/metrics

ESG Strategy

Tied to our ‘Transform & Grow’ strategy and informs internal updates/reporting

Strategy

In 2025, we reviewed our ESG framework in line

withour ‘Transform & Grow’ strategy to ensure

aclear link to our strategic objectives, priorities

within our growth engines and brand powerhouses

(as described on page 2) and our overall purpose of

Building Tomorrow’s World, as well as maximising

opportunities for competitive advantage.

Our new ESG framework, Built for the Future,

isfocused on three areas:

• Environmental – shaping our road to net-zero

toachieve our science-based target of net-zero

by 2050

• Social – doing the right thing for our colleagues

and promoting skills and community activity for

the next generation in our industry

• Governance – ensuring we prioritise trust

and transparency in our interactions with

ourstakeholders

Our strategy continues to focus on ensuring

our customer needs are front and centre, and

supporting our individual businesses with their

ESGpriorities.

X Find out more on page 11

ESG Committee Report

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 90

ESG Committee Report continued

2025 highlights

The Committee met three times in 2025 and

discussions touched all areas of environmental,

social and governance activity at Marshalls,including:

• ESG strategy review

• Science-based targets update

• Annual activity plan review and new

ESGframework

• Product marketing strategy

• Approach to climate-related risks

andopportunities

• Non-financial reporting frameworks

andstandards

• Setting of KPIs

During the year, the Board also considered and

approved the Group’s Carbon and Climate Change

Policy, Environmental Policy, Health and Safety

Policy and Corporate Responsibility and Social

Value Policy.

2026 priorities

The ESG Committee will continue to provide

oversight of the ESG strategy, with a focus on

commercialising our sustainability initiatives,

ESG metrics, internal ESG controls, ESG

data, social value and non-financial reporting

alongside monitoring progress on our validated

carbon reduction targets and supply chain

auditprogramme.

I look forward to sharing our progress with you

innext year’s Annual Report.

Vanda Murray OBE

Chair of the ESG Committee

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 91

Remuneration Committee Report

Annual Statement

Evolving our

Remuneration Policy

to focus on driving

sustainable long-term

growth

2025 highlights

• Undertook a comprehensive review of the

Directors’ Remuneration Policy (Policy) including

engagement with shareholders, in readiness for

the Policy to be put to shareholders for approval

at the Company’s 2026 AGM

• Agreed the leaver arrangements for Matt Pullen

when he stepped down from the Board in

November 2025. At the same time, agreed the

remuneration terms for Simon Bourne’s Interim

CEO appointment, and then in January 2026, for

his appointment as permanent CEO

• Delivered a pay award of 3% from 1 January 2026

for the vast majority of our colleagues. Executive

Team and senior leaders allocated differentiated

pay awards based on performance from an

overall budget of 3%. The Chair, Non-Executive

Directors and CFO received a 3% increase

• Agreed the incentive plan outcomes for 2025,

taking into account the formulaic outturn and the

wider stakeholder experience

• Applied downward discretion, in line with the

Remuneration Policy, on the 2022 Management

Incentive Plan (MIP) B Award given the financial

underpin, over the three-year vesting period, was

not achieved

• Agreed provisional incentive plan targets for 2026

• As part of the externally facilitated Board

performance review, we undertook a review of

the Committee’s performance with a positive

outcome and areas for development built into the

Committee’s agenda for 2026

• Continued engagement with the Employee Voice

Group (EVG), which operates as a forum for

feedback and consultation on employee matters

and wider business change. Board and Executive

Team members rotate attendance during the year

to listen to and understand colleague viewpoints

• Maintained our commitment to the Real

LivingWage

Angela Bromfield is the Company’s designated Non-

Executive Director for employee engagement. The

Chair of the Board and other NEDs also regularly

attend EVG meetings.

2026 priorities

• Monitor developments in corporate governance

and reporting requirements

• Seek shareholder approval for our Directors’

Remuneration Policy and a new long-term

incentive scheme (as anticipated by the revised

policy) at our 2026 AGM

• Set and communicate incentive scheme targets

for 2026

• Oversee focus on wider workforce reward for all

colleagues in the context of the policy review, a

continuously competitive market for talent and

our ‘Transform & Grow’ strategy

• Continue to engage with colleagues, shareholders

and other stakeholders on remuneration to

ensure it remains effective

• Continue to support the running of the EVG

Angela Bromfield

Chair of the Remuneration Committee

Members and attendance

Meetings

Angela Bromfield – Chair

Vanda Murray OBE

Graham Prothero

Avis Darzins

Diana Houghton

Paul Inman*

* Paul Inman was appointed to the Remuneration

Committee in September 2025. Six of the eight

meetings during 2025 were held before he joined.

The CEO and CFO may attend the Committee

meetings by invitation but may not participate

in discussions about their own remuneration.

The Company Secretary acts as Secretary

to the Committee and attends Committee

meetings, along with the Chief People Officer.

X Find our Terms of Reference at:

www.marshalls.co.uk/about-us/corporate-governance

Dear shareholder

On behalf of the Board, I am

pleased to set out in this report

how the Committee has

carriedout its objectives and

responsibilities during 2025.

The report consists of:

• My Annual Statement, as Chair of the Committee

• The Annual Report on Remuneration, which sets

out additional detail on the remuneration outcomes

for the Executive Directors, disclosures required

by the remuneration reporting regulations, and

considerations in respect of pay for colleagues

• The 2026 Directors’ Remuneration Policy, which will

be put to shareholders for approval at our 2026 AGM

Our Directors’ Remuneration Policy was approved

by shareholders in May 2023 and 2025 marked the

final year of the three-year Policy. During 2025, the

Committee undertook a comprehensive review of

senior executive and workforce remuneration with

a focus on achieving our strategic objectives and

driving sustainable long-term growth. Iam grateful

for the feedback we received from our shareholders,

which has been incorporated into the final design of

the proposed 2026 Directors’ Remuneration Policy.

This Policy will be put to a binding shareholder vote

at the 2026 AGM, alongside the usual advisory vote

on the Directors’ Remuneration Report and a vote to

approve the new Long Term Incentive Plan (LTIP).

We were pleased to see c.98% of votes cast in favour

of the advisory vote on the Remuneration Report at the

2025 AGM. We look forward to your continued support.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 92

Remuneration Committee Report continued

Annual Statement continued

Business performance

As noted in the Strategic Report, the Group’s end

markets continued to be challenging in 2025 and

whilst the Group returned to revenue growth,

adjusted profit before tax was lower than the

Board’s original expectations at £43.7 million.

Significant action was taken in 2025 in the

Landscaping Products reporting segment to

improve the Group’s financial performance including

strengthening the leadership team and customer

relationships alongside reducing complexity and

the cost base by an annualised £11 million. The

Group has continued to focus on closely managing

working capital and optimising cash flow, which

resulted in strong cash conversion at 88%.

The Group’s key strategic KPIs are shown on

pages17 and 18 of the Strategic Report.

2025 incentive outcomes

During the year, the Company operated the MIP.

At the start ofthe year, the Committee set Earnings

Per Share (EPS) and cash conversion (being the

ratio of operating cash flow to EBITDA) measures.

Two moderators which could reduce the financial

outcome, also applied and these were based

oncarbon objectives and health and safety.

The EPS measure had a weighting of 75% and the

2025 outcome was 13.4 pence. Reflecting the weak

activity levels in our key end markets and lower than

expected profitability in Landscaping Products, this

outcome was below the threshold set and therefore

there was no MIP contribution in respect of the EPS

measure. The cash conversion measure determined

25% of the MIP contribution. The operating cashflow

to EBITDA ratio was 88% and this was above the

maximum target set. Accordingly, this element

wasmet in full.

Based on the financial outcomes, the MIP outturn

of 25% of maximum was subject to two ESG

moderators. For 2025, these were:

• A carbon reduction target, linked to the

Company’s sustainability strategy and based on

a group of projects in support of continuing to

reduce carbon consumption across the Group.

These were all successfully delivered

• A Group-wide health and safety measure, based

on the lost time injury frequency rate for 2025. The

injury rate was lower than 2.99 (and the previous

year) so this moderator was alsoachieved

As a result of achieving both of these objectives,

there was no downwards moderation applied to

theMIP financial outcome of 25% of maximum.

The Committee considered whether any discretion

was required to adjust the formulaic outcome given

the profit measure was not achieved. The Committee

determined that this was not necessary and, in doing

so, we considered the following factors:

• Management acted decisively in response to the

challenges that the weaker market presented

and took action to improve agility, align capacity

with demand, and reduce costs whilst ensuring

sufficient capacity to cope with any reasonable

upturn in activity levels

• Management continued to execute the ‘Transform

& Grow’ strategy which: (i) re-established positive

customer relationships in Landscaping Products

and returned the business to volume growth;

(ii) achieved record revenues in Viridian Solar

alongside a significant growth in profit; and

(iii)resulted in Water Management revenues

growing by 15%

• High levels of cash flow preservation in a year

when EBITDA was lower through effective

working capital management, management

ofcapital expenditure and asset sales

Reflecting the resilient performance of the

management team during a challenging period, the

Committee believes the MIP outturn is appropriate

for 2025. Therefore, no discretion has been applied.

The MIP A Plan contribution for Executive Directors

was, therefore, 25% of maximum (or 37.5% of

salary) and a corresponding MIP B grant to the

value of 25% of salary will be granted in 2026.

The business performance in 2022 resulted in

a MIP B share award being granted in March

2023. An EPS underpin is attached to this award

which provides the Committee with the ability to

reduce vesting if it deems it appropriate. The EPS

underpin was not achieved. The Committee applied

downward discretion, in line with the Directors’

Remuneration Policy, reducing the element of the

award subject to discretion by 40% (20% of the

total award). When combined with share price

movements, the value of the vesting award is more

than 50% lower than the original grant value. The

Committee believes this reduction is appropriate

after taking into account the share price movement

over the period and that the awards were based on

performance that had been achieved in 2022.

The Committee did not apply malus or clawback to

any incentive awards during 2025.

Board changes

On 26 November 2025, Matt Pullen stepped down

from the Board and the role of Chief Executive.

In accordance with his service agreement, Matt

receives a payment in lieu of notice comprising

salary and pension allowance for the duration of

his notice period, paid in monthly instalments,

together with outplacement fees. He continues

to receive medical cover until the end of the

current insurance policy period and a contribution

towards medical cover until the end of his notice

period. In accordance with our current Directors’

Remuneration Policy, he did not receive a MIP

contribution for 2025. The value of the notional

shares that had accrued in Matt’s MIP A Plan

Account in respect of past performance, were paid

in cash. Matt’s 2025 MIP B awards (which were also

based on performance in 2024) will vest on their

normal vesting date subject to the satisfaction of

the underpin and a pro-rata reduction. This is in line

with the 2023 Directors’ Remuneration Policy.

Simon Bourne, who was the Group’s Chief

Commercial Officer, was appointed Interim Chief

Executive Officer on 27November 2025. Following

an internal and external search, Simon was

appointed Chief Executive Officer on 19January

2026. Simon’s base salary has been set at the same

level of his predecessor and his salary will next be

reviewed in 2027.

Review of the Directors’

Remuneration Policy

A major focus of the Committee over the course

of 2025 was to undertake a detailed review of the

Policy to ensure that our new Policy continues to

support Marshalls ‘Transform & Grow’ strategy and

our culture effectively.

Policy review context

In 2024, the Board undertook a rigorous wide-

ranging review of the Group’s businesses and this

culminated in the launch of the ‘Transform & Grow’

strategy. The strategy centres around the Group’s

customers who value our unique set of capabilities,

namely leading brands, best in class technical

and design support and carbon leadership. This is

underpinned by business excellence, leadership in

ESG and being a great place to work. The Group’s

business units are categorised as either “brand

powerhouses” or “growth engines” and each has a

strategic imperative that acts as a “north star” for

strategic delivery.

Clear medium-term market outperformance revenue

growth targets were set out for each business

unit alongside medium-term targets for Group

operating margins, cash conversion and return on

capital employed. The management team is now

accelerating on execution of the strategy.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 93

Remuneration Committee Report continued

Annual Statement continued

Review of the Directors’

RemunerationPolicy continued

Policy review context continued

The Group’s business units are investing in the

building blocks that will enable them to access the

growth drivers that are expected to support their

market outperformance targets. However, key end

markets continue to be weak, and this has impacted

the timing of profit recovery and resulted in an

acceleration of the network optimisation elements

of the Landscaping Products improvement plan.

The cyclical nature of the Group’s end markets,

combined with the operational leverage inherent

in our operations, makes it very challenging to

set medium-term profit targets that act as an

incentive to the management team. This is because

variations in the recovery profile of key end markets

can materially impact profitability, with changes in

business volumes affecting operational leverage.

Proposed changes to remuneration – moving to

an annual bonus and restricted shares

The Remuneration Committee review sought feedback

from a number of internal and external stakeholders

and it became clear, as part of the review, that

the MIP was no longer the optimal structure for

Marshalls. The main drawbacks of the MIP are:

• Complexity: the MIP’s delivery mechanisms are

complicated (short-term cash, deferred cash,

notional shares all held in a Plan Account (PartA)

and deferred shares (granted under Part B of

theMIP))

• Lack of long-term reward and limited retention:

the long-term element of the MIP (Part B) is

linked to the annual outturn which results in

limited long-term alignment and retention when

annual outcomes are modest

• Lack of understanding: it is not well understood

by participants below executive level or investors,

and it presents reporting challenges

In light of the above, the Committee has decided

tomove to the UK PLC standard model of operating

an annual bonus scheme alongside a three-year

long-term incentive scheme.

The Committee considered introducing

performance shares but feel that it is very difficult

to set robust medium-term targets at the current time

in light of the uncertain economic and political climate

impacting our sector/industry, the cyclical nature of

the Group’s end markets and the uncertain timing of a

market recovery.

While the MIP has several drawbacks, it did not

require the Committee to set three-year targets as

MIP outcomes were based on an annual assessment

of performance. The Committee is keen to retain

the benefit of not setting three-year targets for the

purposes of remuneration in the current challenging

circumstances, at the same time, introduce a focus

on longer-term performance by implementing a

restricted share scheme as the sole long-term

incentive vehicle.

In doing so, the Committee considered two

other factors:

• Strategic alignment: our remuneration strategy

needs to provide the management team with

flexibility to focus on the evolving longer-term

strategic priorities within ‘Transform & Grow’,

which will benefit shareholders over a much

longer timeframe than is reflected in a typical

three-year performance period under a classic

LTIP (performance shares). Restricted shares will

help encourage a mindset which is aligned to the

shareholder experience through long-term value

creation throughout the industry cycle

• Stewardship, simplicity and retention: as

mentioned above, the MIP is not well understood

beyond our leadership team and, therefore, is not

incentivising and motivating employees in the way

we originally intended. Restricted shares are clear

and understandable and provide participants with

direct alignment with shareholders and long-term

stewardship of the share price. In the current

market environment, retaining senior talent has

become an even more critical challenge. The move

to restricted shares strengthens our ability to

retain and incentivise key leaders

The annual bonus will be based on measures

determined by the Committee at the start of each

financial year and stretching targets and objectives

willbe set. In line with expected and typical practice,

one-third of any bonus earned will be deferred

in Marshalls shares which vest after two years.

Consistent with recent developments in this area,

the proportion of bonus deferred will be linked to

the achievement of the 200% of salary shareholding

guideline for Executive Directors so that, if the

guideline has been met, the proportion of bonus

that is deferred is reduced to 20%.

Restricted share awards will vest after three years

and a two-year post-vesting holding period will

apply for Executive Directors. Awards will vest

contingent on the participant still being employed at

the vesting date and the satisfaction of an underpin.

Annual bonus and restricted share quantum

In moving from the MIP structure to a more

traditional annual bonus and long-term incentive

structure, the Committee considered market rates

to ensure proposed pay levels are fair but not

excessive for this size of company.

A benchmarking exercise looking at main market

companies of a similar size to Marshalls showed the

median CEO bonus and performance share levels

to be 150% and 163% of salary respectively. In line

with the generally accepted principle of taking a 50%

discount to the performance share quantum, the

equivalent mid-market restricted share quantum is

c.81% of salary. The Committee is proposing to set

the bonus opportunity at 150% of salary (in line with

market levels) and the restricted share maximum

at 75% of salary (i.e. slightly below market). The

restricted share quantum is also at the lower end

of the market range of award levels in comparable

listed construction and building supplies companies.

The Committee appreciates that there are a

number of different approaches when conducting

benchmarking analysis and is confident that

the approach we have taken is appropriate and

proportionate for the business.

CEO Annual Bonus Max (% of salary)

Median: 150% of salary

Proposed: 150% of salary

(unchanged)

300%

250%

200%

150%

100%

50%

CEO LTIP Face Value – PSP equivalent (% of salary)

Median: 162.5% of salary

300%

250%

200%

150%

100%

50%

Proposed: RSP 75%

of salary equivalent to

PSP 150% of salary

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 94

Remuneration Committee Report continued

Annual Statement continued

Review of the Directors’ Remuneration Policy continued

Restricted share underpin

Restricted shares are granted at a lower quantum than is the case for performance shares. The reduction

in award level takes into account that there are no performance measures. Nevertheless, the Committee

will apply an underpin to restricted share awards which will enable it to reduce vesting if, in the round, there

has been material underperformance. The Committee has developed an underpin assessment framework

that includes consideration of strategic delivery, financial health, governance and the broader stakeholder

experience. Performance against this underpin framework will be reviewed annually by the Committee.

 Factors the Committee may consider:

Strategic priorities Delivery of key strategic objectives over the vesting period including

operational performance

Financial health The overall financial health of the business, which may have regard

toCompany KPIs. This could include profitability, revenue and cash

generation, return on capital and Balance Sheet strength. The Committee

will also consider shareholder experience (share price and dividends).

The financial and shareholder assessments may consider absolute and/

or relative performance against the market

Governance A consideration of the control environment and our commitment

tosustainability

Stakeholder experience Consideration of key stakeholders including employees, customers,

suppliers and shareholders

We recognise the challenges in setting and assessing performance against an underpin but believe the

above framework will result in a structured and robust assessment while also providing more clarity to

participants and investors. It will also provide a safeguard which avoids payments for failure.

Employees

For the vast majority of our colleagues a pay rise of

3% has been applied in 2026. We have maintained

our commitment to the Voluntary Living Wage.

Senior leaders have their pay determined by their

performance and contribution but within an overall

pot of 3%. We have increased our minimum life

assurance cover and extended the scheme to

colleagues in Viridian Solar. We introduced, on a

pilot basis in certain parts of the Group, a holiday

buying scheme. If this pilot delivers the benefits

we believe it will, we will consider extending it

further in 2027.

Implementation of Remuneration

Policy in 2026

As set out above, Simon Bourne’s base salary

has been set at the same level of his predecessor

(£597,400) and will next be reviewed in 2027. Justin

Lockwood’s base salary has been increased by 3%

in line with the workforce rate.

• Simon Bourne – £597,400

• Justin Lockwood – £468,971

The pension contribution remains aligned to the

workforce contribution rate of 5% of salary and

there are no changes to benefits.

The 2026 annual bonus opportunity will be 150%

of base salary and will be based on EPS, cash

conversion and strategic objectives. Full details

of the targets and their outcomes will bereported

retrospectively in next year’s report.

The first restricted share awards will be granted

following shareholder approval of this Policy and our

new LTIP at the 2026 AGM. The face value of awards

will be 75% of salary. In future years, the Committee

will consider the prevailing share price at the date

of grant relative to grants in previous years when

determining the actual award level. As this is the first

award of restricted shares, such an assessment is

not possible.

In line with the wider workforce, the NED and Chair

fees have been increased by 3%.

Conclusion

The business delivered a resilient performance

inchallenging market conditions and this resulted

in a relatively modest MIP contribution. Reflecting

the fall in earnings over the last three years, the

Committee has applied downward discretion on

theoutcome of the MIP Element B award granted

inMarch 2023.

The Committee has undertaken a comprehensive

review of remuneration and is grateful to investors

for sharing their views on the new incentive

structures. I hope you will be supportive of

the remuneration resolutions being tabled at

the 2026 AGM.

I would like to thank our shareholders for their

support during the year. I will be available at the

Company’s 2026 AGM to answer any questions in

relation to this Remuneration Committee Report.

Angela Bromfield

Chair of the Remuneration Committee

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 95

Remuneration Committee Report continued

Annual Report on Remuneration

Implementation of the Policy in 2026

Subject to shareholder approval of the Directors’ Remuneration Policy at the 2026 AGM, the Policy will be implemented as follows during 2026:

Element of pay How we will implement the Policy in 2026

Salary Simon Bourne’s base salary has been set at the same level of his predecessor at £597,400 and will next be reviewed in 2027. Justin Lockwood’s base salary has been increased by 3% in line with

the workforce rate.

• CEO, Simon Bourne – £597,400

• CFO, Justin Lockwood – £468,971

Benefits and pension The Executive Director’s pension contribution is 5% of salary, which is aligned with the majority of the wider workforce.

Annual bonus Maximum opportunity of 150% of salary with target set at 50% of opportunity and threshold at 0%. The performance measures are:

• EPS (60%)

• Cash conversion: Ratio of OCF to EBITDA (20%)

• Strategic objectives (20%)

Restricted shares Restricted share awards with a face value of 75% of salary will be granted to Executive Directors. These awards will vest after three years subject to continued service and achieving an underpin.

Vested awards will be subject to a two-year holding period.

MIP B awards The final MIP B award will be granted in March 2026. The value is based on the 2025 performance outcome (25% of maximum). The awards, with a face value of 25% of base salary, will be granted

in March 2026. Awards will vest after three years and will be subject to the achievement of an average EPS underpin. Vested MIP B awards are subject to a two-year holding period.

Non-Executive

Directors’ fees

Chair and Non-Executive Director fees increased by 3%. The fee increases are effective from 1 January 2026.

• Chair fee – £245,625

• Non-Executive Director base fee – £61,167

• Chair of a Committee fee (other than for the ESG Committee) – remains at £10,000

• Senior Independent Director fee – remains at £10,000

• Employee Engagement Director fee – remains at £10,000

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Annual Report on Remuneration continued

Single total figure of remuneration in 2025: Executive Directors (audited)

 Fixed      

Salary Other benefits

Salary supplement

(in lieu of pension)

Annual bonus Long-term incentive

MIP A MIP B MIP A and B Total Total fixed Total variable

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

Simon Bourne 448 409 9 23 22 20 84 169 56 112 87 87 706 821 479 452 227 369

Justin Lockwood 455 442 5 11 23 22 85 182 57 122 99 90 724 869 483 475 242 394

Matt Pullen (e) 538 569 69 50 27 28 — 235 — 156 136 — 771 1,038 634 647 136 391

Total 1,441 1,420 83 84 72 70 169 586 113 390 322 177 2,201 2,728 1,596 1,574 605 1,154

   Note (a) Note (b) Note (c)   Note (d)      

Notes:

a) The value of benefits includes car/car allowance, fuel/fuel allowance, private medical insurance and travel and accommodation expenses. Matt Pullen received an allowance, payable monthly, for travel to and from his primary work location. These were

subject to tax and National Insurance deductions. He was also paid his contractual holiday entitlement balance (pro-rated to the leave date).

b) The Executive Directors each received a salary supplement in lieu of contributions into the Group’s pension scheme. No Director had any entitlement under the defined benefit section of the pension scheme and no additional benefit was received

asaresult of early retirement.

c) The outcome of the 2025 MIP was 25% of maximum. MIP A for 2025 reflects the amount to be released in cash in relation to the MIP A plan contribution (i.e. 50% of the total 2025 MIP A Plan contribution). The residual balance is held until March 2027.

MIP B reflects the 50% of the MIP B awards to be granted in March 2026 in relation to 2025 performance which are not subject to forfeiture.

d) The long-term incentives column shows: (i) the value of the MIP A Plan Account to be released as cash in March 2026 less half of the MIP A Plan contribution for 2025 (shown as Bonus MIP A); plus (ii) the estimated vesting value of the 2023 MIP B award

(which was subject to an underpin based on performance end 31 December 2025) valued using the three-month average share price to 31 December 2025 (173.9 pence).

e) The salary and benefits reported for Matt Pullen have been pro-rated to the date he stepped down as Chief Executive on 26 November 2025. There was no contribution made to MIP A for 2025 performance. The payment within the MIP A and MIP LTI

column represents the brought forward balance of the MIP A Plan Account from 2024 that was paid upon his stepping down as Chief Executive (see page 98 and 99 for more details).

Single total figure of remuneration in 2025: Non-Executive Directors (audited)

Board fee Committee fees Taxable expenses (a) Total



2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

2025

£’000

2024

£’000

Vanda Murray OBE

Chair, Chair of Nomination Committee, Chair of ESG Committee and member of Remuneration Committee 238 232 10 10 10 15 258 257

Graham Prothero

Senior Independent Director, Chair of Audit Committee and member of Remuneration, ESG and Nomination Committees 59 58 20 20 1 — 80 78

Angela Bromfield

Chair of Remuneration Committee, member of Audit, ESG and Nomination Committees and designated NED for employee engagement 59 58 20 20 5 8 84 86

Avis Darzins

Member of Audit, Remuneration, ESG and Nomination Committees 59 58 — — 4 4 63 62

Diana Houghton

Senior Independent Director designate and member of Audit, Remuneration, ESG and Nomination Committees 59 58 — — 3 2 62 60

Paul Inman

Audit Committee Chair designate and member of the Remuneration, ESG and Nomination Committees 17 — — — 1 — 18 —

Total 491 464 50 50 24 29 565 543

Note:

a) The Non-Executive Directors reclaim travel and accommodation expenses incurred in the performance of their duties. Where this is a taxable benefit it is shown as a grossed-up taxable amount.

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Outcomes of incentive schemes in 2025 (audited)

2025 MIP performance conditions



Threshold

(0% payable)

Maximum

(100% payable)

Actual

2025

Outcome

(% total award)

EPS (75% of maximum) 14.8p 18.1p 13.4p 0%

OCF to EBITDA ratio (25% of maximum) (a) 67% 82% 88% 25%

Non-financial targets (carbon reduction/health and safety) — — Achieved —

Aggregated total — — — 25%

Note:

a) The 2025 OCF % to EBITDA target was set with reference to budget and the assumed reversal of a one-off item that

temporarily benefited working capital in 2024. As noted in the 2024 Remuneration Committee Report, the 2024 outturn

ofthis measure was adjusted downwards due to this one-off item.

Non-financial targets

The financial outcome of MIP A was subject to two modifiers that could reduce the MIP A contribution.

These related to carbon reduction objectives and health and safety. The carbon reduction target is aligned

to the Company’s commitment to our sustainability strategy. For 2025, the target was based on a suite of

project deliverables (relating to usage of diesel and LPG in both our mobile (yellow) plant and our forklift

truck fleet) to support that reduction. These were all successfully completed.

The Group continued to make good progress against its stated health and safety objective of keeping the

lost time injury frequency rate to a minimum. The measurement for the 2025 incentive schemes required

this rate for the year, to be no worse than 2.99. The outcome was 1.54.

As both the carbon and health and safety objectives were met, there was no downwards reduction to the

MIP contribution. The MIP A contribution for 2025 was 25% of maximum (or 37.5% of salary).

MIP awards relating to 2025 performance

MIP A

Third year of MIP A cycle 4

 Matt Pullen Justin Lockwood Simon Bourne

Value of brought forward balance (1 January 2025) £234,712 £233,842 £213,988

Share price impact (£98,281) (£101,153) (£92,565)

Brought forward balance (current share price) £136,431 £132,689 £121,423

Dividends added during 2025 — £5,720 £5,234

Released at time of cessation (26 November 2025) £136,431 — —

Value of MIP A contribution for Plan year 2025

25% of 150% of salary maximum (i.e 37.5% of salary) — £170,742 £168,062

Plan Account balance after 2025 MIP A contribution — £309,151 £294,719

Cash element to be released in March 2026

(half of Plan Account) — £154,575 £147,360

Closing balance at 31 December 2025 — £154,575 £147,360

Number of notional shares represented by closing balance

(based on average 30 day share price to 31 December

2025 176.3 pence) — 87,677 83,584

Notes:

a) Matt Pullen did not receive a MIP A contribution in respect of 2025 performance. The value of the notional shares that

had accrued in Matt’s MIP A Plan Account in respect of past performance were paid to him. The balance of Matt’s MIP

A Plan Account comprised 75,543 shares, the value of which at the time of cessation, using the mid-market share price on

27 November 2025 (180.6 pence) was discharged as a cash payment subject to normal deductions of tax and National

Insurance. No notional dividends were applied to his brought forward balance.

b) The closing balance is converted into notional shares by reference to the mid-market average value for the 30-day period

ended 31December 2025 (176.3 pence).

c) 50% of the earned MIP A Plan Account (including the addition of the 2025 MIP A Plan contribution) is released to the

participant in cash following the year end; the remaining 50% is retained into the participant’s MIP A Plan Account and

converted into notional shares. The residual balance is held until March 2027.

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MIP awards relating to 2025 performance continued

MIP B (2026 award to be granted in respect of 2025 performance)

 Matt Pullen Justin Lockwood Simon Bourne

Total number of shares to be awarded — 64,564 63,551

Percentage of salary — 25% 25%

Face value - not subject to any further conditions (£) — £56,914 £56,021

Face value - subject to EPS forfeiture conditions (£) — £56,914 £56,021

30-day average share price at the performance year end n/a £1.763 £1.763

Notes:

a) An underpin applies to MIP B awards which can result in up to half of the awards being forfeited. For the single figure table,

the Annual Bonus MIP B values reflect 50% of the 2026 grant of MIP B awards which are not subject to an underpin. The

value of the other half is shown under long-term incentives at the time of vesting. The remaining 50% plus any dividends

accrued are included on vesting and will feature in the 2028 single figure (subject to the underpin assessment).

b) The EPS underpin has been set and will be declared retrospectively at the point of vesting. In line with normal practice, the

Committee will monitor the outcomes at vesting to ensure they are appropriate. If the underpin is not met, up to 50% of the

MIP B options are forfeited.

c) MIP B awards vest after three years and a two-year post-vesting holding period applies.

d) MIP B awards are nil-cost options and the exercise price is £nil. The number of awards is based on the 30-day average

share price during December 2025 (176.3 pence).

e) Matt Pullen will not receive a MIP B award in 2026 relating to 2025 performance.

MIP B award (2023 awards vesting)

MIP B awards were granted on 15 March 2023 which vest after three years subject to the achievement of

an EPS underpin which was set at 22.4 pence (based on average performance over 2023–2025). The actual

average EPS over the period was 15.2 pence and therefore the underpin was not met. The Remuneration

Committee applied downward discretion, in line with the Directors’ Remuneration Policy, reducing the

element of the award subject to discretion by 40% (20% of the total award). The Committee believes this

reduction is appropriate after taking into account the share price movement over the period.



Number

of awards

granted

Notional

dividends

added

during

vesting

period

Total

award

EPS

underpin

requirement

(pence)

Actual EPS

(2023–

2025

pence)

Downward

discretion

on vesting

Number of

awards

forfeited

Number of

awards

vesting

Vesting

date

Simon Bourne 35,294 3,732 39,026 22.4 15.2 (20%) 7,805 31,221 March 2026

Justin Lockwood 44,905 4,748 49,653 22.4 15.2 (20%) 9,931 39,722 March 2026

Awards vesting are subject to a further two-year holding period.

Directors’ outstanding share interests in MIP B awards

The following table sets out Executive Directors’ MIP B awards:

 Grant date

Interests at

31 December

2024

Awards

granted during

the year

Awards

vesting during

the year (d)

Awards

lapsed during

the year

Interest at

31December

2025 (e) Date of vesting

Simon Bourne March 2022 26,180 29,199 — March 2025

 March 2023 35,294 35,294 March 2026

 March 2024 37,850 37,850 March 2027

 March 2025 72,399 72,399 March 2028

Justin Lockwood March 2022 23,759 26,499 — March 2025

 March 2023 44,905 44,905 March 2026

 March 2024 43,068 43,068 March 2027

 March 2025 78,251 78,251 March 2028

Matt Pullen (a) March 2025  100,739  79,929 24,108 March 2028

Notes:

a) Matt Pullen’s 2025 options in relation to 2024 performance were pro-rated from the grant date to the leave date. The

awards will vest on their original vesting date (March 2028) and remain subject to an underpin. The 2023 Executive

Director Remuneration Policy requires Executive Directors to maintain a shareholding equivalent of 200% of leaving salary

for the first year after cessation and 100% for the second year. Matt Pullen’s actual shareholding is below the minimum

requirement and therefore his interest in the 2025 MIP B awards will remain until the date of vesting.

b) An underpin applies to the MIP B awards. If an underpin is not met up to half of the MIP B awards may lapse. The underpin

for the March 2023 award was not met based on the three-year average EPS over the relevant periods.

c) There is a two-year holding period following the vesting of all MIP B options.

d) Awards vesting during the year include the value of dividend equivalents.

e) For the March 2023 MIP B award the figures in this table are before the forfeiture that will be applied on vesting as shown

in the MIP B award (2023 awards vesting) table adjacent.

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Directors’ shareholdings and share interests

The following table sets out, in respect of each of the Directors:

• The number of shares the Director holds unconditionally

• The number of shares subject to unvested incentive awards as at 31 December 2025



Shareholding requirement

(a)

Beneficially

owned

(d)

Deferred

(b)

Deferred and

contingent

(c)

Total interests

in shares

(including

contingent

interests)

 % of salary

Number of

required

Number of

Executive Directors      

Simon Bourne (e) 200 677,708 118,656 72,772 107,208 298,636

Justin Lockwood (e) 200 516,520 123,041 83,112 120,744 326,897

Matt Pullen 200 677,708 27,173 50,370 50,370 127,912

Non-Executive Directors

Vanda Murray OBE — — 39,891 — — 39,891

Graham Prothero — — 2,602 — — 2,602

Avis Darzins — — 6,738 — — 6,738

Angela Bromfield — — 9,091 — — 9,091

Diana Houghton — — — — — —

Paul Inman — — — — — —

Notes:

a) The number of shares required has been calculated using the mid-market average value for the 30-day period ended

31December 2025 (173.9 pence).

b) This column includes the 50% proportion of share interests awarded in 2023, 2024 and 2025 under element B of the MIP

inthe form of nil-cost options that may be exercised after the three-year deferral period but where vesting is only dependent

on continuing employment throughout the three-year deferral period with no other performance conditions.

c) This column comprises 50% of the notional shares balance under MIP A which will be settled in shares and 50% of the

outstanding MIP B awards that may be lapsed if the financial performance criteria is not met. These awards are subject

tocontinued employment over the relevant deferral periods.

d) The table above includes the interests of “persons closely associated” as defined under the Financial Services and Markets

Act (Market Abuse) Regulations 2016.

e) Simon Bourne and Justin Lockwood are building their shareholdings after their appointments to the Board in April 2022

and July 2021 respectively. Matt Pullen’s shareholding is shown as at the date he stepped down from the Board.

Simon Bourne and Justin Lockwood have acquired additional share interests between 31 December 2025

and the date of this report through their participation in the Company’s Share Incentive Plan. The number of

shares acquired is as follows:

Simon Bourne 179

Justin Lockwood 179

Payments to past Directors/payments for loss-of-office

Matt Pullen stepped down as Chief Executive on 26 November 2025. In accordance with his service

agreement, Matt receives a payment in lieu of his twelve months notice period which is paid in monthly

instalments to 26 November 2026. The payment in lieu of notice includes base salary, pension and

acontribution towards medical cover.

Matt did not receive a MIP contribution in respect of 2025. His MIP A Plan Account balance of 75,543 notional

shares brought forward from 2024, was paid in a cash amount of £136,431 to Matt in December 2025 in line

with the shareholder-approved Remuneration Policy. His MIP B awards which were granted in March 2025

and were earned based on performance in 2024 will vest on their normal vesting date in March 2028. These

awards will be pro-rated and be subject to the underpin assessment. Matt received a contribution of £30,000

towards outplacement fees.

As previously disclosed, Martyn Coffey retained an interest in his 2023 MIP B Awards. Consistent with

the approach taken for other Executive Director participants, the Remuneration Committee has applied

discretion and reduced Martyn Coffey’s vested number of awards by 20%.

Setting pay in context

The following graphs illustrate the relationship between total expenditure on remuneration and other

disbursements from profit over the past three years.

The four elements represent the most significant outgoings for the Company during the financial year.

Inaddition to colleague pay and shareholder distributions, capital investment and taxation are shown for

thefollowing reasons:

• Investment: the Company’s strategy is to invest in organic growth opportunities in order to ensure that

the business grows in a sustainable manner with a corresponding long-term benefit for all stakeholders

• Tax: the Company is a UK taxpayer and feels that it is beneficial to demonstrate to all its stakeholders its

total UK tax contribution. The most significant elements of the Company’s UK tax contribution are VAT,

employer’s NI, corporation tax, fuel duty and aggregates levy. As profitability increases, corporation tax

willalso increase. In 2025 the Group was re-accredited with the Fair Tax Mark

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Relative importance of spend on pay (percentage change)

Staff pay

(£’m)

£109.2m

-0.7%

Distributions to shareholders

(£’m)

£19.2m

-8.6%

Capital investment

(£’m)

£16.5m

+42.2%

Tax

(£’m)

£106.5m

+3.2%

2021 2022 2023 2024 2025

127.4

109.1

125.5

110.0

109.2

2021 2022 2023 2024 2025

38.7

17.9

31.6

21.0

19.2

2021 2022 2023 2024 2025

28.4

23.5

19.0

11.6

16.5

2021 2022 2023 2024 2025

108.6

96.5

101.1

103.2

106.5

Pay comparisons

CEO ratio

The ratio of CEO pay (based on the single total figure of remuneration) to that of UK employees for the five years is shown in the table below. The calculation has been performed using the methodology in Option A

oftheLarge and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) in line with best practice and is based on the single total figure of remuneration.

 CEO pay ratio Employee salary Employee total pay and benefits

 25th percentile 50th percentile 75th percentile

CEO salary

£’000 25th percentile 50th percentile 75th percentile

CEO total pay

and benefits

£’000 25th percentile 50th percentile 75th percentile

2025 25:1 21:1 17:1 597 31 38 47 840 (a) 33 40 51

2024 32:1 25:1 22:1 569 30 38 44 1,038 32 41 48

2023 40:1 32:1 28:1 676 31 39 44 1,246 31 39 45

2022 30:1 23:1 19:1 621 31 40 51 1,002 33 43 53

2021 54:1 42:1 37:1 532 29 40 45 1,685 31 40 45

2020 71:1 46:1 39:1 485 23 35 42 1,695 24 37 44

Note:

a) The 2025 CEO total pay and benefits represents the annual remuneration which would have been paid to Matt Pullen. For the purposes of comparison reporting it has not been pro-rated even though Matt stepped down as Chief Executive

on26November 2025.

The 25th, 50th and 75th percentiles have been calculated using actual pay for the year ended 31 December 2025, increased where appropriate to give full-time equivalent remuneration for part-time workers or those

working only part of the year.

• Our Chief Executive pay is made up of a higher proportion of performance related incentives than that of our employees, in line with the expectations of our shareholders. This introduces a higher degree of variability

inChief Executive pay each year which affects the ratio

• Long-term incentives are provided in shares and, therefore, a change in the Company’s share price during any deferral or vesting period impacts the value of a long-term incentive award in the year in which it vests

• We recognise that the ratio is mainly driven by the different structure of the Chief Executive’s pay versus that of our employees, as well as the make-up of our workforce

• Where the base structure of remuneration is similar, for example on comparison between the Executive Team pay and that of the Chief Executive, the ratio is much more stable over time

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Percentage change in Directors’ remuneration

The table below shows the percentage change in Executive Director and Non-Executive Director total remuneration compared to the change for the average of UK-based employees of the Group excluding Executive

Directors and Non-Executive Directors:

 Salary/Fees Taxable benefits Short-term variable pay

 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021 2025 2024 2023 2022 2021

Executive Directors               

Simon Bourne (Appointed CEO 19.01.2026) 9.6% 5.1% 40.8% n/a n/a (63.0%) 91.7% 50.0% n/a n/a (50.2%) 131.6% 44.5% n/a n/a

Justin Lockwood (CFO) 3.0% — 6.8% 8.1% n/a (57.8%) (8.3%) 9.1% n/a n/a (53.2%) 120.0% 25.6% (47.2%) n/a

Non-Executive Directors               

Vanda Murray OBE (Chair) 2.9% — 8.0% 26.3% 1.4% (35.4%) 400.0% — n/a n/a n/a n/a n/a n/a n/a

Graham Prothero (NED) 2.2% — 6.8% 14.1% 1.4% — — — n/a n/a n/a n/a n/a n/a n/a

Angela Bromfield (NED) 2.2% — 11.4% 25.0% 1.4% (31.5%) — — n/a n/a n/a n/a n/a n/a n/a

Avis Darzins (NED) 3.0% — 7.4% 80.0% 1.4% 5.1% — — n/a n/a n/a n/a n/a n/a n/a

Diana Houghton (NED) 3.0% — — n/a n/a 60.8% — — n/a n/a n/a n/a n/a n/a n/a

Paul Inman (NED) — — — n/a n/a — — — n/a n/a n/a n/a n/a n/a n/a

Employees 5.9% — 6.2% 3.6% 0.3% 47.5% (53.1%) (87.0%) (26.4%) 7.3% 139.7% (18.9%) 18.1% 27.1% 81.0%

Notes:

a) The percentage increase reflects that Simon was appointed Interim CEO on 27 November 2025. His appointment salary was £597,400.

b) For employees, the calculation is based on total pay and the average number of employees during the year. We have included all UK employees from all employing entities, including Marshalls plc, in order to provide a fair reflection across the Group.

c) The bonus is the non-deferred amount earned for the relevant year taken from the single figure remuneration table on page 97.

d) The change in the short-term variable pay for employees of 139.7% is not representative of the actual change. As disclosed in the 2024 Directors’ Remuneration Report, the vast majority of colleagues received a non-consolidated pay award for 2024

(treated as short-term variable pay), resulting in the average per employee being significantly lower in 2024 when compared to 2025 where short-term variable pay for employees consisted only of bonus scheme payments.

CEO single total figure of remuneration history

This table shows how pay for the CEO role has changed in the last ten years:

£’000 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016

Single figure remuneration 771 1,038 1,246 1,010 1,685 1,695 2,216 1,602 2,383 1,913

% of maximum annual bonus earned 25% 55.0% 25.0% 30.2% 100.0% — 99.6% 98.0% 100.0% 96.9%

% of maximum LTIP/MIP awards vesting n/a n/a n/a 100.0% 100.0% — 99.6% 98.0% 100.0% 100.0%

Note:

a) The 2024 and 2025 figures relate to Matt Pullen who replaced Martyn Coffey as Chief Executive on 29 February 2024. Matt Pullen did not receive an annual bonus in relation to the 2025 performance year.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 102

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Annual Report on Remuneration continued

Total shareholder return

This chart shows the Group’s total shareholder return (TSR) performance compared to the FTSE 250 Index.

This index has been chosen as Marshalls is a constituent of the FTSE 250. TSR is defined as share price

growth plus reinvested dividends. This chart shows the value at 31 December 2025 of £100 invested in

Marshalls plc on 31 December 2015 compared with the value of £100 invested in the FTSE 250. The other

plotted points are the intervening financial year ends.

Total Shareholder Return Value (£)

External advisers

The Remuneration Committee was advised during the year by FIT Remuneration Consultants LLP (FIT).

FITattended meetings of the Committee by invitation.

Advisers’ fees are agreed by the Remuneration Committee according to the work performed and terms

of engagement. FIT was appointed after a tender process by the Committee in 2023 and its terms of

engagement are available on request from the Company Secretary. The Committee is satisfied that the

remuneration advice from FIT is objective and independent as it provides no other services to the Group.

The Committee was also satisfied that there is no connection between the advisers and the Company or

individual Directors. FIT is a signatory to the Remuneration Consultants Group’s Code of Conduct.

The amount paid to FIT in respect of remuneration advice received during 2025 was £79,232 (2024: £40,658).

Wider workforce considerations

The Committee carries out an annual review of the wider workforce remuneration, incentives and policies

to inform the approach applied to the remuneration of the Executive Directors and senior management. In

particular, the Committee is focused on whether the approach is consistent with that applied to the wider

workforce. The Committee also receives feedback from regular employee surveys and from site visits made

by the Executive Directors and senior management.

Marley colleagues continue to participate in accordance with their relevant remuneration policies which

arecurrently separate to the Marshalls arrangements.

As Chair of the Remuneration Committee and designated Non-Executive Director for employee engagement,

Angela Bromfield attends the EVG. The EVG met four times during 2025 and, amongst other things,

provides valuable input into a range of topics including reward and the Remuneration Policy. The meetings

are chaired by the Chief People Officer and attended by a mixed group of colleagues from across the

different parts of the Group. Colleagues from Marley have an open invitation to participate. The attendees

of the meeting are elected by their colleagues to be their representatives. Other Non-Executive Directors and

members of the Marshalls Executive Team also attend EVG meetings on a rotational basis. Asummary of

the EVG’s activities is set out in the Corporate Governance Statement on pages 72 and 73.

Incentive schemes

Dependent on role and level of seniority, colleagues are able to share in the success of the Company

throughincentive compensation. The incentive approach applied to the Executive Directors aligns with the

wider Company policy on incentives, which is to apply a higher percentage of at-risk performance pay for

more senior roles, and also to increase the amount of the incentive that is deferred, provided in equity and/

or measured over the longer term for roles with greater seniority. The key incentive schemes are the MIP

and the Bonus Share Plan (BSP). Participation in the MIP and BSP schemes extends to senior management.

Sales bonuses apply to those in relevant roles. All employees have the opportunity to join the Sharesave

andthe Share Incentive Plan as noted below.

Widening employee share ownership

Employees can become shareholders through employee share plans, including:

Sharesave Scheme

A new Sharesave Scheme was launched in 2024 to encourage wider ownership of Marshalls plc shares, so

that colleagues were able to participate in the Group’s success in a way that aligns their interests with those

of shareholders.

Share Incentive Plan

The Share Incentive Plan is open to all colleagues and provides the opportunity to purchase shares in the

market on a monthly basis out of gross salary.

Living Wage employer

The Group is proud to be a Living Wage employer having received accreditation for the last ten years,

underscoring its commitment to its colleagues.

Summary

In summary, the Committee is satisfied that the approach to remuneration across the wider workforce is

consistent with the Company’s Remuneration Policy and the wider principles of fairness and sustainability

that are fundamental to the Group’s culture. Further, in the Committee’s opinion, the approach to Executive

remuneration aligns with the approach taken in the wider Company pay policy.

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Remuneration Committee Report continued

2026 Directors’ Remuneration Policy

The Directors’ Remuneration Policy (Policy) has been prepared in accordance with Schedule 8: The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) and the UK

Listing Rules of the Financial Conduct Authority. This Policy will be put to a binding shareholder vote at the Company’s AGM on 13 May 2026 and, subject to its approval, will be effective for three years from the date of approval.

Key considerations when determining the Remuneration Policy

The Remuneration Committee designed the Policy with the following reward principles in mind:

• Incentive structures should reward the successful delivery of the Group’s strategic ambition, long-term decision making and value creation in a cyclical market

• There should be an appropriate balance between short and long-term reward, and between cash and share-based remuneration

• The arrangements should be simple to understand and easy to communicate both internally and externally

• The value of remuneration packages should be positioned appropriately against market levels to ensure they are fair and competitive without being overly generous

• Incentives should cascade through the Group, to ensure alignment across the business

• Pay arrangements should support our need to retain employees in challenging market conditions and be sufficient to attract new talent

In seeking to achieve the above objectives, the Committee is mindful of the views of a broad range of stakeholders in the business and accordingly takes account of a number of factors when setting remuneration.

Thisincludes market conditions, pay and benefits in relevant comparator organisations, terms and conditions of employment across the Group, the Group’s risk appetite, the expectations of institutional shareholders

andfeedback from key shareholders and other stakeholders.

Key changes to the Policy

• The previous MIP scheme comprising Elements A and B will no longer form part of the new Policy

• An annual bonus is being introduced under which Executive Directors may receive a bonus delivered in cash and deferred shares. The maximum bonus opportunity will be 150% of base salary

• Restricted share awards may be granted to Executive Directors under the Marshalls LTIP. The maximum restricted share grant is 75% of salary or 100% of salary in exceptional circumstances

Remuneration Policy table

The table below sets out, for each element of pay, a summary of how remuneration is structured and how it supports the Company’s strategy.

Purpose and link to strategy Operation Maximum opportunity Performance metrics

Base salary

To recruit and retain Executives of

the highest calibre who are capable

of delivering the Group’s strategic

objectives, reflecting each individual’s

experience and role within the Group.

Base salary is designed to provide

an appropriate level of fixed income

to avoid an over-reliance on variable

pay elements that could encourage

excessive risk taking.

Salaries are normally reviewed annually, and changes are

generally effective from the start of the financial year.

The annual salary review of Executive Directors takes

arange of factors into consideration, including:

• General salary rises for employees

• Remuneration practices within the Group

• Any change in scope, role and responsibilities

• The general performance of the Group

• The experience of the relevant Director

• The economic environment

• Market competitiveness, taking into account

pay atcompanies in the comparator groups for

remuneration benchmarking

Whilst there is no prescribed formulaic maximum, any

increases will take into account prevailing market and

economic conditions and the approach to colleague pay

throughout the organisation.

Base salary increases are awarded at the discretion of the

Remuneration Committee; however, salary increases will

normally be no greater than the general increase awarded

to the wider workforce, in percentage of salary terms.

Percentage increases beyond those granted to the wider

workforce may be awarded in certain circumstances,

such as when there is a change in the individual’s role

or responsibility or where there has been a fundamental

change in the scale or nature of the Company or to

address salaries that have fallen behind market rates.

In addition, a higher increase may be made where an

individual had been appointed to a new role at below-

market salary whilst gaining experience. Subsequent

demonstration of strong performance may result in a

salary increase that is higher than for the wider workforce.

Executive Directors’ performance is a factor considered

when determining salaries.

No recovery or withholding provisions apply.

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2026 Directors’ Remuneration Policy continued

Benefits

Benefits in kind offered to

ExecutiveDirectors are provided

tobe competitive and to assist

withretentionandrecruitment.

The Company aims to offer benefits that are in line with

typical market practice.

Benefits may include:

• Private medical insurance (including annual health

assessment)

• Life assurance

• Company car/car allowance

Under certain circumstances, the Group may offer

relocation allowances or assistance. Expatriate benefits

may be offered where required.

Travel and any reasonable business related expenses

(including tax thereon) may be reimbursed, including any

tax paid on such expenses.

Executive Directors may become eligible for other

benefits which are introduced for the wider workforce on

broadly similar terms.

There is no maximum cap on the value of benefits. The

value of each benefit is not predetermined and is typically

based upon the cost to the Group.

Not performance related.

No recovery or withholding provisions apply.

Pension

To enable Executive Directors to make

appropriate provision for retirement.

Directors are eligible to receive employer contributions

to the Company’s pension plan (which is a defined

contribution plan) or a salary supplement in lieu of

pension benefits, or a mixture of both.

The maximum Company contribution or pension

allowance for all Executive Directors is in line with that

provided to the majority of employees, which is currently

5% of salary.

Not performance related.

No recovery or withholding provisions apply.

Remuneration Policy table continued

Purpose and link to strategy Operation Maximum opportunity Performance metrics

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2026 Directors’ Remuneration Policy continued

Annual Bonus Plan

The Annual Bonus Plan rewards the

achievement of stretching objectives

that support the Group’s corporate goals

and delivery of the business strategy.

Delivery of a proportion in deferred bonus

shares provides a retention element and

alignment with shareholders.

Bonuses are determined based on measures and targets

that are agreed by the Remuneration Committee. Bonus

measures are typically based on performance over the

relevant financial year.

The annual bonus will be payable in cash following the

end of the financial year, except for one-third which will

be deferred into shares for two years. The proportion

deferred into shares may reduce to 20% of the total

bonus earned if the Executive Director has met the

shareholding guideline.

At the discretion of the Remuneration Committee,

participants may also be entitled to receive the value

of dividends paid between grant and vesting on vested

shares. The payment may assume dividend reinvestment.

Bonus payments, including deferred bonus awards, are

subject to recovery and withholding provisions (see

“Recovery and withholding” in the notes to the Policy

table for further detail).

The maximum annual bonus opportunity is 150%

ofsalary for Executive Directors.

Performance measures are determined by the

Remuneration Committee each year and may vary to

ensure that they promote the Company’s strategic goals

and long-term shareholder value.

The majority of the annual bonus will be based on financial

measures. This may be a single measure, such as profit,

or a mix of measures as determined by the Remuneration

Committee. Personal objectives and/or strategic KPIs may

also be chosen.

Where a sliding scale of targets applies to financial

measures, up to 20% of that element may be payable for

threshold performance.

The bonus measures are reviewed annually, and the

Remuneration Committee has the discretion to vary the

mix of measures or to introduce new measures taking into

account the strategic focus of the Company at the time

subject to at least 50% being financial in nature.

The Remuneration Committee may alter the bonus

outcome if it considers that the payout is inconsistent with

the Company’s overall performance, taking account of any

factors it considers relevant. This will help to ensure that

the payout reflects overall Company performance during

the period.

Remuneration Policy table continued

Purpose and link to strategy Operation Maximum opportunity Performance metrics

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2026 Directors’ Remuneration Policy continued

Long-Term Incentive Plan (LTIP) – restricted shares

Restricted shares granted under the

LTIP are designed to incentivise the

successful execution of business

strategy over the longer term, provide

stewardship of the share price and

aidretention.

It facilitates share ownership to provide

further alignment with shareholders.

Restricted share awards will typically be granted annually

to Executive Directors in the form of nil, nominal cost

options or conditional awards that vest subject to an

underpin, normally measured over three financial years.

The Remuneration Committee will consider the prevailing

share price when deciding on the number of shares

tobeawarded as part of any LTIP grant.

Awards will normally be subject to an additional

post-vesting holding period, which requires awards

toberetained for a period of two years from the end

ofthe vesting period, except for shares sold to pay

personal tax upon vesting or exercise.

At the discretion of the Remuneration Committee,

participants may also be entitled to receive the value

of dividends paid between grant and vesting (or, if

applicable, between grant and the earlier to occur

of the expiry of any holding period and the exercise

of an award) on vested shares. Additional dividends

will normally be delivered in shares and may assume

dividendreinvestment.

Awards are subject to recovery and withholding provisions

(see “Recovery and withholding” in the notes to the Policy

table for further detail).

The individual plan limit is 75% of base salary

inany financial year or 100% of salary in

exceptionalcircumstances.

The Committee will apply a qualitative underpin to

restricted share awards which will enable it, exceptionally,

to reduce vesting if, in the round, there has been material

underperformance. In this regard, the Committee will

consider performance annually over the course of

the underpin assessment period against a framework

comprising strategic delivery, financial health, governance

and the broader stakeholder experience.

• Strategic priorities: delivery of key strategic objectives

over the vesting period including operational

performance

• Financial health: the overall financial health of the

business, which may have regard to Company KPIs.

This could include profitability, revenue and cash

generation, return on capital and Balance Sheet

strength. The Committee will also consider shareholder

experience (share price and dividends). The financial and

shareholder assessments may consider absolute and/or

relative performance against the market

• Governance: a consideration of the control environment

and our commitment to sustainability

• Stakeholder experience: consideration of key

stakeholders including employees, customers, suppliers

andshareholders

All-colleague share schemes

Encourages colleague share ownership

and therefore increases alignment

withshareholders.

The Company may, from time to time, operate tax-approved

share plans (such as the HMRC-approved Save As You

Earn Option Plan and Share Incentive Plan) for which

Executive Directors could be eligible.

The schemes are subject to the limits set by HMRC from

time to time.

Not performance related.

No recovery or withholding provisions apply.

Remuneration Policy table continued

Purpose and link to strategy Operation Maximum opportunity Performance metrics

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2026 Directors’ Remuneration Policy continued

Share ownership guidelines

Encourages Executive Directors to build

a meaningful shareholding in the Group

so as to further align their interests with

those of shareholders.

Executive Directors are required to retain at least half

of any share awards vesting as shares (after the sale

of any shares to settle tax due) until they have reached

the required level of holding. Adherence to these

guidelines is a condition of continued participation

intheincentivearrangements.

Shares owned outright by the Executive Director or

aconnected person are included. Shares or share

optionswhich remain subject to a performance condition

or underpin are not included. Unvested deferred bonus

shares and vested LTIP awards which remain unexercised

may count towards the in-employment guideline on

anetof tax basis.

During employment: Executive Directors are required to

build and retain a shareholding in Marshalls equivalent to

at least 200% of their base salary.

Post-employment: Executive Directors are required to

retain the minimum shareholding requirement of 200% of

base salary for one year post-cessation and 100% of base

salary for a further year. Where their actual shareholding

at departure is below the minimum shareholding

requirement, the Executive Director’s actual shareholding

is required to be retained on the same terms and for the

same periods.

Not performance related.

Chair and Non-Executive Directors’ fees

To attract Non-Executive Directors

who have a broad range of experience

and skills.

To provide the Group with access

to independent judgement on

issues including (inter alia) strategy,

performance, governance and standards

of conduct.

Fees reflect the time commitment and

responsibilities of the roles.

Non-Executive Directors may receive fees paid monthly

in cash, which consist of an annual basic fee. They may

also receive additional fees for additional responsibilities

including chairing Committees, being the Non-Executive

Director for employee engagement or holding the position

of Senior Independent Director.

The Chair’s fee is reviewed annually by the Remuneration

Committee (without the Chair present).

Fee levels for the Non-Executive Directors are determined

by the Chair and Executive Directors.

In exceptional circumstances if there is a temporary,

yet material, increase in the time commitments for

Non-Executive Directors, the Group Board may pay

extrafees to recognise that additional workload.

Non-Executive Directors do not participate in any pension,

bonus or share incentive plans.

Travel, accommodation and other business related

expenses incurred in carrying out a Non-Executive role

will be paid by the Company including, if relevant, any

“gross-up” for tax.

When reviewing fee levels, account is taken of market

movements in the fees of Non-Executive Directors,

Group Board Committee responsibilities and ongoing

timecommitments.

Actual fee levels are disclosed in the annual

Remuneration Report for the relevant financial year.

Not performance related.

No recovery or withholding provisions apply.

Remuneration Policy table continued

Purpose and link to strategy Operation Maximum opportunity Performance metrics

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2026 Directors’ Remuneration Policy continued

Notes to the Remuneration Policy table

Recovery and withholding

Robust recovery and withholding provisions (i.e. “clawback” and “malus”) operate in respect of annual bonus,

deferred bonus and the proposed new LTIP.

The following provisions apply:

• Prior to the payment of an annual bonus or vesting of a deferred bonus or LTIP award, the Committee

may operate malus to lapse the award in full or in part

• For up to two years following the payment of an annual bonus award, the Committee may operate

clawback to require the repayment of any cash amount paid

• Prior to the vesting of deferred bonus award the Committee may cancel or reduce any deferred bonus award

• For up to two years after the vesting of a LTIP, the Committee may operate clawback to cancel the award

during the holding period (or require repayment of the award if it has been released prior to the end of the

holding period); reduce future vesting under the Company’s share plans; or reduce the number of shares

already vested but unexercised

The relevant events to which malus and clawback could apply are as follows:

• Discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or

any Group company

• Discovery that the assessment of any performance target or condition or award level in respect of an

award was based on error, or inaccurate or misleading information

• Action or conduct of a participant which amounts to fraud or gross misconduct

• A material failure of risk management

• Insolvency or other corporate failure

• Events or the behaviour of a participant have led to the censure of a Group company by a regulatory

authority or have had a significant detrimental impact on the reputation of any Group company provided

that the Board is satisfied that the relevant participant was responsible for censure or reputational

damage and that the censure or reputational damage is attributable to the participant

The now retired MIP also contains robust recovery and withholding provisions.

Performance conditions

Executive Directors may earn annual bonuses depending on the Company’s financial performance and

performance against individual performance targets designed to deliver strategic goals. The bonus

measures in place may include financial metrics such as profit, and cash flow/cash conversion or other

relevant financial, non-financial or strategic measures that reflect near-term financial priorities.

The metrics and weightings may change from year to year to reflect the priorities at the start of each

performance year. The annual financial performance measures and targets are set by the Committee

usually in the first quarter of each year following an analysis of external and internal expectations. The

Committee sets targets it believes to be appropriately stretching, but achievable. A portion of the bonus may

be based on strategic or individual objectives which provides a more rounded assessment of performance.

Committee discretion in operation of variable pay schemes

Under the annual bonus scheme and the long-term incentive plans, the Company uses judgement and has

standard discretions to take appropriate action in the event of unforeseen events which affect the schemes.

Such judgement and discretions include:

• Who participates in the plan, the quantum of an award and/or payment and the timing of awards

and/or payments

• Determining the extent of vesting

• Treatment of awards and/or payments on a change of control or restructuring of the Group

• Whether an Executive Director is a good/bad leaver for incentive plan purposes and whether the

proportion of awards that vest do so at the time of leaving or at the normal vesting date(s)

• How and whether an award may be adjusted in certain circumstances (e.g. for a rights issue, a corporate

restructuring, a material acquisition or divestment or for special dividends)

• What the weighting, measures and targets should be for the annual bonus plan awards from year to year

• The assessment of the restricted share underpin

The Committee also retains the ability, if events occur that cause it to determine that the conditions set in

relation to incentive schemes are no longer appropriate, or unable to fulfil their original intended purpose:

• To adjust targets, and/or

• Set different measures or weightings, and/or

• Override formulaic outcomes in line with the Policy

Any such changes would be explained in the subsequent Directors’ Remuneration Report and, if appropriate,

be the subject of consultation with the Company’s major shareholders.

Legacy arrangements

The Committee may make any remuneration payments and payments for loss of office (including exercising

any discretions it has relating to such payments) even though they are not in line with the Policy set out

in this report. This will apply where the entitlement to the payment arose: (i) at a time when the relevant

individual was not a Director of the Company and, in the opinion of the Committee, the payment was not

in consideration for the individual becoming a Director of the Company; or (ii) under a Remuneration Policy

previously approved by the Company’s shareholders.

For these purposes entitlements arising under the Company’s previous remuneration policies will be

incorporated into this Policy; “payments” includes the Committee satisfying awards of variable remuneration,

including those under the MIP.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 109

Remuneration scenarios for Executive Directors

The charts below show an estimate of the 2026 remuneration package for each Executive Director under

four performance scenarios, which are based on the Remuneration Policy set out above.

Assumptions:

Performance scenario

Minimum Target Maximum Maximum with share price growth

Base salary As at 1 January 2026

Benefits Estimated value for 2026 based on 2025 actual value

Pension 5% of salary

Bonus 0% of

maximum

50% of

maximum

100% of maximum

(being 150% of salary)

Restricted

0% of

maximum

100% of

maximum

100% of maximum

(being 75% of salary)

As per the maximum,

plus a 50% share price

increase over three

years is assumed

Remuneration Committee Report continued

2026 Directors’ Remuneration Policy continued

Illustrations of application of Remuneration Policy

CEO CFO

2,500

2,000

1,500

1,000

500

£’000

Below

threshold

On target Max Max with

growth

Below

threshold

On target Max Max with

growth

Total fixed remuneration Annual bonus Restricted shares Share price growth

£2,210

£1,688

£1,986

£1,518

£1,538

£1,176

£642

£493

10%

30%

22% 20%

30%

22% 20%

29%

45% 41%

29%

45% 40%

100% 42% 32% 29%

Recruitment policy

Where it is necessary to appoint or replace an Executive Director, the Committee’s approach when

considering the overall remuneration arrangements in the recruitment of a new Executive Director is to take

account of the calibre, expertise and responsibilities of the individual, his or her remuneration package in

their prior role, and market rates. Remuneration will be in line with our Policy and the Committee will not pay

more than is necessary to facilitate recruitment.

The remuneration package for a new Executive Director will be set in accordance with the terms of

the Company’s approved Remuneration Policy in force at the time of appointment. Further details are

provided below:

Base salary The Committee will set a base salary appropriate to the calibre, experience and

responsibilities of the new appointee. In arriving at a salary, the Committee may

take into account, amongst other things, the experience of the individual, the

market rate for the role, internal relativities and his or her salary level prior to

joining the Board.

The Committee has the flexibility to set the salary of a new Executive Director

at a lower level initially, with a series of planned increases implemented over

the following few years to bring the salary to the desired positioning, subject to

individual performance.

Benefits Benefits will normally be consistent with the principles of the Policy set out

inthePolicy table.

In instances where the new Executive Director is required to relocate or spend

significant time away from their normal residence, the Company may provide

one-off compensation to reflect the cost of relocation for the Executive Director.

The level of the relocation package will be assessed on a case-by-case basis but

will take into consideration any cost of living differences/housing allowance and

schooling. No relocation allowances will apply for a period greater than two years.

Annual bonus The maximum bonus opportunity is 150% of base salary.

Long-term incentives The maximum restricted share award level is 75% of base salary or 100% of base

salary in exceptional circumstances.

Replacement awards An award made in respect of a new appointment to “buy out” existing incentive

awards forfeited on leaving a previous employer. In such cases the compensatory

award would typically be a like-for-like award with similar time to vesting, performance

conditions and likelihood of those conditions being met. The fair value of the

compensatory award would not be greater than the awards being replaced. To facilitate

such a buyout, the Committee may use an award under a different structure or

anadditional award under the LTIP.

Notice periods Notice periods shall be up to twelve months.

Depending on the timing and responsibilities of the appointment, it may be necessary to set different annual

bonus performance measures and targets from those applicable to other Executive Directors.

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2026 Directors’ Remuneration Policy continued

Recruitment policy continued

Where an existing employee is promoted to the Board, the Policy set out above would apply from the date

of promotion but there would be no retrospective application of the Policy in relation to subsisting incentive

awards or remuneration arrangements. Accordingly, prevailing elements of the remuneration package for an

existing employee would be honoured and form part of the ongoing remuneration of the person concerned.

These would be disclosed to shareholders in the Remuneration Report for the relevant financial year.

The Company’s policy when setting fees for the appointment of new Non-Executive Directors is to apply the

policy which applies to current Non-Executive Directors.

Directors’ service contracts

Date of appointment Notice by Company Notice of Director

Simon Bourne April 2022 12 months 12 months

Justin Lockwood July 2021 12 months 12 months

Vanda Murray May 2018 6 months 6 months

Graham Prothero May 2017 6 months 6 months

Angela Bromfield October 2019 6 months 6 months

Avis Darzins June 2021 6 months 6 months

Diana Houghton January 2023 6 months 6 months

Paul Inman September 2025 6 months 6 months

In accordance with Policy, Executive Directors’ service contracts do not contain liquidated damages

clauses, nor any contractual arrangements that would guarantee a pension with limited or no abatement

onseverance or early retirement or providing for compensation for loss of office or employment that occurs

because of a takeover bid. The maximum notice period for an Executive Director is twelve months. Executive

Director service contracts are not of a fixed duration and therefore have no unexpired terms.

Non-Executive Directors, including the Chair, are appointed under letters of appointment, usually for a term

of three years. Either the Company or the Non-Executive Director may terminate the appointment before

theend of the current term on six months’ notice. If the unexpired term is less than six months, notice does

not need to be served. No compensation is payable if a Non-Executive Director is required to stand down.

AllDirectors are subject to annual re-election.

The Board believes that it may be beneficial to the Group for Executives to hold Non-Executive Directorships

outside the Group. Executive Directors are permitted to hold one external plc Board appointment. Any such

appointments are subject to approval by the Board and the Director may retain any fees received at the

discretion of the Board.

Termination and loss-of-office payments

The Group’s policy on remuneration for Executive Directors who leave the Group is consistent with general

market practice. The Company is unequivocally against rewards for failure; the circumstances of any departure,

including the individual’s performance, would be taken into account in every case. The Committee will exercise

judgement when determining amounts that should be paid to leavers, taking into account the facts and

circumstances of each case.

The Committee will honour Executive Directors’ contractual entitlements. It is the Company’s policy that the

period of notice for Executive Directors will not normally exceed twelve months. Service agreements may

be terminated without notice and without payment in lieu of notice in certain circumstances, such as gross

misconduct. The Committee retains the right to terminate an Executive Director’s service agreement by

making a payment in lieu of notice which comprises the value of base salary, benefits and pension together

with accrued holiday entitlement. It is the Company’s policy to have regard to the Executive Director’s duty

tomitigate their loss in respect of those contractual rights that they would otherwise be entitled to receive.

Service contracts do not contain liquidated damages clauses. There are no contractual arrangements

that would guarantee a pension with limited or no abatement on severance or early retirement. There

is no agreement between the Company and its Directors or employees providing for compensation for

loss of office or employment that occurs because of a takeover bid. The Committee reserves the right to

make additional payments where such payments are made in good faith in discharge of an existing legal

obligation (or by way of damages for breach of such an obligation), or by way of settlement or compromise

of any claim arising in connection with the termination of an Executive Director’s office or employment.

Statutory redundancy payments may be made, as appropriate.

Except in the case of gross misconduct or resignation, the Company may at its absolute discretion

reimburse for reasonable professional fees relating to the termination of employment.

Ordinarily, Executive Directors have no entitlement to a bonus payment in the event they cease to be

employed by the Group or are under notice of termination of employment at the date that their bonus would

otherwise be paid. However, they may be considered for a bonus payment by the Committee in “good leaver”

circumstances (i.e. death, injury, disability, retirement, their employing company or the business for which

they work being sold out of the Group or in other circumstances at the discretion of the Remuneration

Committee). Any such bonus payment would ordinarily be subject to a pro-rata reduction based on the

period worked in the relevant year, and there would be no requirement for any portion of such bonus

payment to be deferred into an award over shares under the deferred bonus element of the LTIP.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 111

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2026 Directors’ Remuneration Policy continued

Termination and loss-of-office payments continued

In the event of an Executive Director’s departure, any outstanding share awards will be treated in accordance

with the plan rules as follows:

Deferred bonus

share award

element of the LTIP

As a general rule, deferred bonus share awards will lapse upon a participant ceasing

to hold employment or ceasing to be a Director within the Group (where relevant).

In the event of a participant’s death, injury, disability, retirement, their employing

company or the business for which they work being sold out of the Group or in other

circumstances at the discretion of the Remuneration Committee, awards will not be

forfeited but will instead normally vest in full on the original vesting date (or on the

date of cessation if the Remuneration Committee so determines).

Restricted share

award element of

the LTIP

As a general rule, an unvested LTIP award will lapse upon a participant ceasing to

hold employment or ceasing to be a Director within the Group (where relevant).

However, if the participant ceases to be an employee or a Director within the Group

because of their death, injury, disability, retirement, their employing company or the

business for which they work being sold out of the Group or in other circumstances

at the discretion of the Remuneration Committee, then their award will vest on

the date when it would have vested if they had not so ceased (or in exceptional

circumstances, the Committee may decide to vest the award upon cessation). The

extent to which an award will vest in these situations will depend upon two factors:

• The extent to which any underpin conditions have been satisfied at that time

• The pro-rating of the award by reference to the period of time served in

employment during the normal vesting period, although the Remuneration

Committee can decide to reduce or eliminate the pro-rating of an award if it

regards it as appropriate to do so in the particular circumstances

HMRC all employee

awards

Payments may be made in the event of a loss-of-office under the Sharesave scheme

and SIP, which is governed by their rules and the applicable legislation and which

does not provide discretion in the case of leavers.

In the event of a change of control, in accordance with the relevant scheme rules:

• Unvested deferred bonus awards will vest on the date of a change of control

• Unvested LTIP awards will vest on the date of a change of control, to the extent to which any underpin

conditions have been satisfied and after a pro-rata reduction for time elapsed during the three-year

vesting period although the Remuneration Committee can decide to reduce or eliminate the pro-rating

ofan award if it regards it as appropriate to do so in the particular circumstances

Consideration of shareholders’ views

In its review of Executive remuneration as part of the approval of the 2026 Directors’ Remuneration Policy,

the Committee conducted a comprehensive consultation exercise which elicited feedback from the

Company’s largest shareholders. The Committee was very grateful for the views received. The feedback,

which was largely positive, was used constructively to shape the 2026 Directors’ Remuneration Policy.

The Committee is committed to an ongoing dialogue with shareholders and welcomes feedback on

Directors’ remuneration. The Committee seeks to engage directly with major shareholders and their

representative bodies on changes to the Policy. The Committee also considers shareholder feedback

received in relation to the remuneration related resolutions each year following the AGM. This, together with

any additional feedback received from time to time (including any updates to shareholders’ remuneration

guidelines and those from the major proxy voting agencies), is then considered as part of the Committee’s

annual review of the Remuneration Policy and its implementation.

Statement of consideration of employment conditions elsewhere in Company

The Committee is regularly updated throughout the year on pay and conditions applying to Group

employees, including any significant changes to employment conditions.

The Committee has arrangements in place to receive and review the views of the Company’s employees

on Executive remuneration and the application of the Directors’ Remuneration Policy. This is through the

EVG meetings attended by the designated Non-Executive Director for employee engagement. Additionally,

detailed reports and presentations from the Chief People Officer are provided to the Committee to keep

them appraised of the wider pay, benefits, policy and practices across the Group. The Committee takes into

consideration external benchmarking data for the relevant roles as one of the factors when considering pay

levels and also considers the internal relativities of pay levels across the Group.

The overall approach to reward for employees across the workforce is a key reference point when setting

the remuneration of the Executive Directors. When reviewing the salaries of the Executive Directors, the

Committee pays close attention to pay and employment conditions across the wider workforce and

increases for Executive Directors will be set in the context of increases for the general workforce.

Senior management participate in annual bonus plans. The performance criteria and payouts under these

schemes are usually based on the same measures and targets applying to Executive Directors. The bonus

opportunity varies by employee grade.

A key difference between the remuneration of Executive Directors and that of our other employees is

that, overall, at senior levels, remuneration is increasingly long term and “at risk”, with an emphasis on

performance related pay linked to business performance and share-based remuneration. This ensures

thatremuneration at senior levels will increase or decrease in line with business performance and provides

alignment between the interests of Executive Directors and shareholders. In particular, long-term incentives

are provided to the most senior employees, as they are reserved for those considered to have the greatest

potential to influence overall levels of performance.

Angela Bromfield

Chair of the Remuneration Committee

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 112

Directors’ Report – Other Regulatory Information

The information required by the Disclosure Guidance and Transparency Rules (DTRs) 4.1.8R is contained

inthe Strategic Report and the Directors’ Report.

Marshalls plc is registered with company number 5100353.

Directors and Board composition: The Directors of the Company are listed on pages 62 and 63.

As at 31 December 2025, the Company had met the targets on Board diversity set out in UKLR 6.6.6 R(9).

Board and executive management composition at that date was as follows:

Gender identity or sex

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(Chief Executive,

CFO, SID and Chair)

Number in

executive

management

Percentage of

executive

management

Men 4 50 3 3 60

Women 4 50 1 2 40

Not specified or preferred not to say n/a n/a n/a n/a n/a

Ethnic background

Number

of Board

members

Percentage

of the Board

Number of

senior positions

on the Board

(Chief Executive,

CFO, SID and Chair)

Number in

executive

management

Percentage of

executive

management

White British or other White (including

minority White groups) 7 87.5 4 4 80

Mixed/multiple ethnic groups 1 12.5 — — —

Asian/Asian British — — — 1 20

Black/African/Caribbean/Black British — — — — —

Other ethnic group — — — — —

Not specified or preferred not to say n/a n/a n/a n/a n/a

For the purposes of the disclosures set out above, made pursuant to UKLR 6.6.6R(9) and (10), the Company

collected the relevant data from the Board directly and, in the case of executive management, the data

is contained within the Group’s human resources management system, Marshalls Connect. The data is

provided with the consent of the relevant individuals.

Political donations: The Group made no donations during the year to any political party or political

organisation or to any independent election candidate, whether in the UK or elsewhere (2024: £nil).

Charitable donations: The Group made £80,134 of charitable, community and product donations

(2024: £62,829).

Risk management: The Group’s risk management objectives, its approach to managing risk generally and

its use of financial instruments are described in the Strategic Report on pages 52 to 60. Further details of

the Group’s risk management in relation to financial risks and its use of financial instruments to mitigate

such risks are set out in Note 20 on pages 141 to 145.

Greenhouse gas emissions: The Group’s disclosure in respect of the SECR requirements can be found in

the Strategic Report on page 39.

Employees: Details of how the Directors have engaged with colleagues, the engagement channels used

and the outcomes from the engagement are set out on page 29. The Company is an equal opportunities

employer and is committed to ensuring that all colleagues are treated fairly and are valued irrespective of

disability, race, gender, sexual orientation, marital status, nationality, religion, employment status, age or

membership or non-membership of a trade union. The Company recognises its responsibility to employ

disabled persons in suitable employment and gives full and fair consideration to such persons, including any

employee who becomes disabled, having regard to their skills and competencies. Provisions are made under

the Company’s equal opportunities and dignity at work policies within the Company employee handbook.

Where practicable, disabled employees are treated equally with all other employees in respect of their

eligibility for training, career development and promotion. A copy of the Company’s Diversity and Inclusion

Policy is available at https://www.marshalls.co.uk/about-us/policies and details of colleague involvement

and communication are explained in the Strategic Report on pages 33 and 34.

Stakeholders: Details of how the senior management team and the Directors have engaged with

shareholders, customers, suppliers and other stakeholder groups are set out on pages 28 to 30, along

with engagement channels used. Details of the Group’s stakeholder engagement strategy are explained

on pages26 to 30. The statement by the Directors in relation to their statutory duties under Section 172(1)

ofthe Companies Act 2006 is found on pages 23 to 25.

Corporate governance: Details of how the Group complies with and applies the UK Corporate Governance

Code are set out on pages 64 and 65.

Post-Balance Sheet events of importance since 31 December 2025: None.

Research and development: Activity and likely future developments for the business are described in the

Strategic Report on pages 14 and 15.

Dividends

The Board is recommending a final dividend of 4.5 pence (2024: 5.4 pence) per share, which, together with

the interim dividend of 2.2 pence (2024: 2.6 pence) per share, makes a combined dividend of 6.7 pence

(2024: 8 pence) per share. Payment of the final dividend, if approved at the Annual General Meeting, will be

made on 1 July 2026 to shareholders registered at the close of business on 5 June 2026. The ex-dividend

date will be 4 June 2026.

The dividend paid in the year to 31 December 2025 and disclosed in the Consolidated Income Statement

was 7.6 pence (2024: 8.3 pence) per share, being the previous year’s final dividend of 5.4 pence and the

interim dividend of 2.2 pence per share in respect of the year ended 31 December 2025.

Share capital and authority to purchase shares

The Company’s share capital at 31 December 2025 was 252,968,728 Ordinary Shares of 25 pence each. No

new Ordinary Shares were issued during the year ended 31 December 2025. Details of the share capital are

set out in Note 24 on page 150.

The Ordinary Shares of the Company carry equal rights to dividends, voting and return of capital on the

winding up of the Company, as set out in the Company’s Articles of Association. There are no restrictions

on the transfer of securities in the Company and there are no restrictions on any voting rights or deadlines,

other than those prescribed by law, nor is the Company aware of any arrangement between holders of its

shares which may result in restrictions on the transfer of securities or voting rights, nor any arrangement

whereby a shareholder has waived or agreed to waive dividends (other than the EBT – see below).

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 113

Directors’ Report – Other Regulatory Information continued

Share capital and authority to purchase shares continued

The Marshalls plc Employee Benefit Trust (EBT) generally holds shares for the purposes of satisfying future

awards that may vest under the Company’s share-based incentive schemes. The EBT may purchase shares

in the Company from time to time to satisfy awards granted to Directors and senior Executives (subject

to the achievement of performance targets under the Company’s incentive schemes) or to facilitate the

satisfaction by employees of their tax liabilities arising from any rewards. Details of outstanding incentive

awards are set out in Note 21 on pages 146 to 148.

Where shares are acquired by the EBT, these are accounted for by the Company as a purchase of own

shares. During the year ended 31 December 2025 the EBT acquired 390,000 shares for a total consideration

of £905,035.

At 31 December 2025, the EBT held 80,004 Ordinary Shares in the Company (2024: 116,291 Ordinary

Shares) in respect of future incentive awards under the Company’s employee share schemes.

The EBT has waived its right to receive dividends on shares that it holds beneficially in respect of future

awards. The Trustee of the EBT exercises any voting rights on such shares in accordance with the

Directors’recommendations.

UK-based employees of the Group with more than six months’ service may participate in the Marshalls plc

Share Purchase Plan during any offer period. Employees purchase Ordinary Shares in the Company with

their pre-tax salary. The shares are purchased in the market and then held in trust by Computershare Investor

Services plc. Employees receive dividends on these shares and may give voting instructions to the Trustee.

At the Annual General Meeting in May 2025 shareholders gave authority to the Directors to purchase up

to 37,920,012 shares, representing approximately 14.99% of the Company’s issued share capital in the

Company, in the market during the period expiring at the next Annual General Meeting at a price to be

determined within certain limits. No Ordinary Shares in the Company were purchased during the year or

between 31 December 2025 and 16 March 2026 under this authority, which will expire at the 2026 Annual

General Meeting. The Directors will seek to renew the authority at that meeting.

Contracts of significance and related parties

There were no contracts of significance between any member of the Group and (a) any undertaking in

which a Director has a material interest, or (b) a controlling shareholder (other than between members of

the Group). There have been no related party transactions between any member of the Group and a related

party since the publication of the last Annual Report.

There are a number of agreements that take effect, alter or terminate upon a change of control of the Group. None

of these are considered to be significant in terms of their likely impact on the business of the Group as a whole.

Articles of Association

The Company’s Articles of Association give powers to the Board to appoint Directors. Newly appointed

Directors are required to retire and submit themselves for election by shareholders at the first Annual

General Meeting following their appointment.

The Board of Directors may exercise all the powers of the Company, subject to the provisions of relevant

laws and the Company’s Memorandum and Articles of Association. These include specific provisions and

restrictions regarding the Company’s power to borrow money. Powers relating to the issuing and buying

back of shares are included in the Articles of Association and such authorities are renewed by shareholders

each year at the Annual General Meeting.

The Articles of Association may be amended by Special Resolution of the shareholders.

The Group has granted indemnities to its Directors to the extent permitted by law (which are qualifying

indemnity provisions under Section 236 of the Companies Act 2006) and these remained in force during

the year in relation to certain losses and liabilities that the Directors may incur to third parties in the course

of action as Directors or employees of the Company, any subsidiary or associated company, or a Director

of the pension scheme Trustee Board. Neither the liability insurance nor the indemnities provide cover in

the event of proven fraudulent or dishonest activity. The Group has not indemnified any Director under the

indemnities currently in place.

Directors’ interests

Details of Directors’ remuneration, their interests in the share capital of the Company and the share-based

payment awards are contained in the Remuneration Committee Report on pages 96 to 103.

Listing Rule requirements

The applicable requirements of UKLR 6.6.1R in respect of long-term incentive schemes and contracts of

significance are included in this Annual Report.

Substantial shareholdings

The Company has no controlling shareholder. As at 16 March 2026, the Company had been notified, in

accordance with DTR 5, of the following disclosable interests of 3% or more in its voting rights:

As at As at

28 February 31 December

2026 2025

% %

Inflexion Private Equity Partners 8.72 8.72

Jupiter Asset Management 8.53 8.11

Vanguard Group 5.04 5.01

M&G Investments 4.97 4.72

Royal London Asset Management 4.88 4.89

Janus Henderson Investors 4.57 4.57

Allianz Global Investors 4.32 4.32

BlackRock 4.13 4.21

Liontrust Asset Management 3.77 3.77

Aberdeen 3.29 3.34

The Directors’ Report, comprising the Strategic Report, the Corporate Governance Statement and the

Reports of the Audit, Remuneration and Nomination Committees, has been approved by the Board and

signed on its behalf by:

Shiv Sibal

Group Company Secretary

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 114

Statement of Directors’ Responsibilities

in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the Group and Parent Company Financial

Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company Financial Statements for each

financial year. Under that law they are required to prepare the Group Financial Statements in accordance

with United Kingdom adopted International Accounting Standards and International Financial Reporting

Standards (IFRSs) as issued by the International Accounting Standards Board (IASB). The Directors have

elected to prepare the Parent Company Financial Statements in accordance with UK Accounting Standards,

including FRS 101 “Reduced Disclosure Framework”.

Under company law the Directors must not approve the Financial Statements unless they are satisfied that

they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or

loss for that period. In preparing each of the Group and Parent Company Financial Statements, the Directors

are required to:

• Select suitable accounting policies and then apply them consistently

• Make judgements and accounting estimates that are reasonable and prudent

• For the Group Financial Statements, state whether they have been prepared in accordance with IFRSs

• For the Parent Company Financial Statements, state whether Financial Reporting Standard 101 “Reduced

Disclosure Framework” has been followed, subject to any material departures disclosed and explained in

the financial statements

• Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that

the Group and the Parent Company will continue in business

In preparing the Group Financial Statements, IAS 1 requires that Directors:

• Properly select and apply accounting policies

• Present information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information

• Provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient

to enable users to understand the impact of particular transactions, other events and conditions on the

entity’s financial position and financial performance

• Make an assessment of the Company’s ability to continue as a going concern

The Directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the Parent Company’s transactions and disclose with reasonable accuracy, at any time, the financial

position of the Parent Company and enable them to ensure that its Financial Statements comply with the

Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them

to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report,

Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with

that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information

included on the Company’s website. Legislation in the UK governing the preparation and dissemination of

Financial Statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors on the Annual Report and Accounts

The Directors who held office at the date of approval of this Directors’ Report and whose names and

functions are listed on pages 62 and 63 confirm that, to the best of each of their knowledge:

• The Financial Statements, prepared in accordance with the applicable set of accounting standards,

give a true and fair view of the assets, liabilities, financial position and profit of the Company and the

undertakings included in the consolidation taken as a whole

• The Strategic Report contained in this Annual Report includes a fair review of the development and

performance of the business and the position of the Company and the Group taken as a whole, together

with a description of the principal risks and uncertainties that they face

• The Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and

provides the information necessary for shareholders to assess the Group’s position and performance,

business model and strategy

Disclosure of information to the auditor

The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they

are each aware, there is no relevant audit information of which the Company’s auditor is unaware, and each

Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware

of any relevant audit information and to establish that the Company’s auditor is aware of that information.

Going concern

The Directors have adopted the going concern basis in preparing these Financial Statements in

accordance with the Financial Reporting Council’s “Guidance on Risk Management, Internal Control and

Related Financial and Business Reporting”, issued in September 2014. The Directors considered that

it was appropriate to do so, having reviewed any uncertainties that may affect the Company’s ability to

continue as a going concern for at least the next twelve months from the date these Financial Statements

were approved.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 115

Statement of Directors’ Responsibilities continued

in respect of the Annual Report and the Financial Statements

Cautionary statement and Directors’ liability

This Annual Report 2025 has been prepared for, and only for, the members of the Company, as a body,

and no other persons. Neither the Company nor the Directors accept or assume any liability to any person

to whom this Annual Report is shown or into whose hands it may come except to the extent that such

liability arises and may not be excluded under English law. Accordingly, any liability to a person who

has demonstrated reliance on any untrue or misleading statement or omission shall be determined in

accordance with Section 90A of the Financial Services and Markets Act 2000.

This Annual Report contains certain forward-looking statements with respect to the Group’s financial

condition, results, strategy, plans and objectives. These statements are not forecasts or guarantees of

future performance and involve risk and uncertainty because they relate to events and depend upon

circumstances that will occur in the future.

There are a number of factors that could cause actual results or developments to differ materially from

those expressed, implied or forecast by these forward-looking statements. All forward-looking statements

in this Annual Report are based on information known to the Group as at the date of this Annual Report and

the Group has no obligation publicly to update or revise any forward-looking statements, whether as a result

of new information or future events. Nothing in this Annual Report should be construed as a profit forecast.

Annual General Meeting

The Notice convening the Annual General Meeting to be held at the offices of Walker Morris, 33 Wellington

Street, Leeds, West Yorkshire LS1 4DL, together with explanatory notes on the Resolutions to be proposed,

is contained in a circular to be sent to shareholders with this Annual Report.

By Order of the Board:

Shiv Sibal

Group Company Secretary

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 116

Independent Auditor’s Report

to the members of Marshalls plc

Report on the audit of the Financial Statements

1. Opinion

In our opinion:

• the Financial Statements of Marshalls plc (the Parent Company, the Company) and its subsidiaries (the

Group) give atrue and fair view of the state of the Group’s and of the Company’s affairs as at 31 December

2025 and of the Group’s profit for the year then ended;

• the Group Financial Statements have been properly prepared in accordance with United Kingdom adopted

International Accounting Standards and IFRS Accounting Standards as issued by the International

Accounting Standards Board (IASB);

• the Company Financial Statements have been properly prepared in accordance with United Kingdom

Generally Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure

Framework”; and

• the Financial Statements have been prepared in accordance with the requirements of the Companies Act2006.

We have audited the Financial Statements which comprise:

• The Consolidated Income Statement

• The Consolidated Statement of Comprehensive Income

• The Consolidated and Company Balance Sheets

• The Consolidated Cash Flow Statement

• The Consolidated and Company Statements of Changes in Equity; and

• The related Notes 1 to 42

The financial reporting framework that has been applied in the preparation of the Group Financial

Statements is applicable law, United Kingdom adopted International Accounting Standards and IFRS

Accounting Standards as issued by the IASB. The financial reporting framework that has been applied in

the preparation of the Company Financial Statements is applicable law and United Kingdom Accounting

Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted

Accounting Practice).

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those standards are further described in the Auditor’s

responsibilities for the audit of the Financial Statements section of our report.

We are independent of the Group and the Parent Company in accordance with the ethical requirements that

are relevant to our audit of the Financial Statements in the UK, including the Financial Reporting Council’s

(the FRC’s) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other

ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group

and the Parent Company for the year are disclosed in Note 3 to the Financial Statements. We confirm that

we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the

Parent Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our opinion.

3. Summary of our audit approach

Key audit matters

The risk of impairment of goodwill within Landscaping Products is a newly identified

key audit matter along with revenue which was also a key audit matter last year.

Materiality

The materiality that we used for the Group Financial Statements was £3.0

million which represents 6.8% of adjusted profit before tax and 0.6% of revenue.

Scoping

We have considered the scope of our audit on a Financial Statement line item

basis with our final scope covering 99% of Group revenue, 96% of Group net

assets and 100% of profit before tax.

Significant changes

in our approach

Other than new key audit matter described above there have been no other

significant changes to our audit approach since the prior year.

4. Conclusions relating to going concern

In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis

ofaccounting in the preparation of the Financial Statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to continue to

adopt the going concern basis of accounting included:

• Obtaining an understanding of controls over forecasts

• Evaluating the availability of adequate funding through assessment of repayment terms

• Assessing the historical accuracy of forecasts prepared by management and key assumptions

underpinning the forecasts

• Checking the mathematical accuracy of the model used to prepare the forecasts

• Assessing the assumptions used in the forecasts, including performing sensitivity analysis in relation

toassumptions for future market growth

• Understanding and evaluating the financial and non-financial covenants for the Group

• Evaluating the amount of headroom over liquidity, through review of cash flows, and covenants, through

recalculation of covenant ratios

• Assessing whether the Directors have considered and reflected the Group’s principal risks, including the

impact of climate risks and opportunities and the downturn in the construction industry, in the Group’s

going concern assessment

• Evaluating the appropriateness of the going concern disclosures in the Financial Statements

Based on the work we have performed, we have not identified any material uncertainties relating to

events or conditions that, individually or collectively, may cast significant doubt on the Group’s and Parent

Company’s ability to continue as a going concern for a period of at least twelve months from when the

Financial Statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the Directors’ statement in the Financial Statements about

whether the Directors considered it appropriate to adopt the going concern basis ofaccounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described

inthe relevant sections of this report.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 117

Independent Auditor’s Report continued

to the members of Marshalls plc

Report on the audit of the Financial Statements continued

5. Key audit matters

The key audit matters communicated below are those matters that, in our professional judgement, were

of most significance in our audit of the Financial Statements of the current year and include the most

significant assessed risks of material misstatement (whether or not due to fraud) that we identified.

These matters included those which hadthe greatest effect on: the overall audit strategy; the allocation

ofresources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the Financial Statements as a whole,

andinforming our opinion thereon, and we do not provide a separate opinion on these matters.

5.1. Risk of impairment of goodwill in Landscaping Products

Key audit matter

description

In the Financial Review on page 48 the Board of Directors (the Board) discusses the

performance of the Landscaping Products segment, itsdecline in profitability in 2025

and the actions it expects to undertake toaddress it.

Management has evaluated the performance of this segment in preparing its

impairment review of the Landscaping Products Cash Generating Unit (CGU) and on

page 85 the Audit Committee describes its review and challenge of it.

As described in Note 10 to the Financial Statements, the goodwill associated with the

Landscaping Products CGU is £34.8m (2024: £34.8m), with the value in use having

headroom of £60m in excess of its net assets,

The recoverable amount of the CGU net assets was assessed with reference to the

Board’s estimate of the value in use of the CGU. This requires estimates, including

significant assumptions regarding future cash flows and discount rates. The cash

flow forecasts are derived from the Group’s business plan which considers variables

such as future price expectations, volume assumptions, margins and inflation. We

consider this a key audit matter for 2025.

Our focus for this key audit matter is the key assumptions that drive earnings, in

particular management’s future revenue cash flows. These are principally derived

from inputs such as estimated price and future demand in the Group’s end markets.

The Group’s goodwill accounting policy is disclosed in Note 1 to the Financial

Statements. This is considered a source of estimation uncertainty by the directors

with further detail in Note 1. Details of the impairment review are set out in Note 10.

How the scope

of our audit

responded to the

key audit matter

To address the risk of impairment of goodwill within the Landscaping Products CGU

our procedures were as follows:

• We obtained an understanding of relevant controls related to the impairment

review of goodwill

• We assessed the mathematical accuracy of the impairment models and whether

the impairment methodology including the duration of the cash flows applied by

management was acceptable under IAS 36 Impairment of Assets

• We evaluated the key assumptions, including sales volumes, price increases

and cost saving measures, and assessed retrospectively whether prior year

assumptions were appropriate

• We have compared management’s assumptions to externally available industry

metrics including new housebuilding forecasts and other market analysis

• With the assistance of our valuation specialists, we evaluated the methodology

applied in calculating the discount rate

• We evaluated all changes to key assumptions between prior year and current year

forecasts and assessed whether market conditions in the current year had been

appropriately considered in the assumptions

• We assessed the accuracy of management’s cash flow forecasts by comparing

historical forecasts with actual cash flows, and external industry benchmarks.

We assessed whether projected cash flows were consistent with Board-approved

forecasts. We also assessed whether management’s impairment forecasts

are consistent with other forecasts used by management, including the going

concernmodel.

• We also assessed the appropriateness of the disclosures and their compliance

with the requirements of IAS 36, Impairment of Assets

Key observations

Based on our procedures we concluded that the key assumptions made by

management in performing its impairment review are reasonable and the associated

disclosures are appropriate.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 118

Independent Auditor’s Report continued

to the members of Marshalls plc

5.2. Revenue

Key audit matter

description

The main source of revenue for the Group is the sale of construction materials as set

out by management in the Strategic Report and Note 1 to the Financial Statements.

Total Group revenue for 2025 is £632.1 million (2024: £619.2 million), and

management’s accounting policy is to recognise revenue typically on despatch,

withdeliveries usually made on the same day.

Due to the significant size of the balance and proportion of audit effort spent

onauditing revenue we have identified this as a key audit matter.

How the scope

of our audit

responded to the

key audit matter

To address the risks of misstatement within revenue our procedures were as follows :

• We obtained an understanding of relevant controls in relations to revenue

recognition from ordering to cash collection, including both manual and automated

controls within the cycle

• We developed a data matching analytic in order to match the revenue recorded

to the related sales orders, invoices, delivery notes and bank statements. For a

sample of the exceptions, we assessed the consistency of the revenue recognised

with the documentation available including evaluating the rationale for the

exception reported, and

• We assessed the accuracy and completeness of the data sets used in the data

matching analytic, by agreeing a sample through to third party documentation

Key observations

Based on the audit procedures performed we concluded that revenue was not

materially misstated.

6. Our application of materiality

6.1. Materiality

We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable

that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We

use materiality both in planning the scope of our audit work and in evaluating the results of our work.

PBT

Group materiality

Adjusted PBT

£44m

Group materiality

£3.0m

Component performance

materiality range

£0.5m to £1.7m

Audit Committee reporting threshold

£0.15m

Report on the audit of the Financial Statements continued

5. Key audit matters continued

Based on our professional judgement, we determined materiality for the Financial Statements as a whole

as follows:

Group Financial Statements Company Financial Statements

Materiality £3.0 million (2024: £3.5 million). £1.5 million (2024: £1.7 million).

Basis for

determining

materiality

Materiality was determined based on two

primary benchmarks – adjusted profit

before tax and revenue – , and equates to

6.8% of adjusted profit before tax and 0.6%

of revenue (2024: 6.7% of adjusted profit

before tax).

The reconciliation of adjusted profit before

tax has been presented within Note 4 to the

consolidated Financial Statements.

Company materiality has been capped

at 50% of the Group materiality.

This represents 0.2% of net assets

(2024:0.3% of net assets).

Rationale for

the benchmark

applied

We used revenue as an additional primary

benchmark owing to the increased focus

of users on this metric. Adjusted profit

before tax and revenue are considered key

performance indicators by management

and users of the Financial Statements

when assessing the performance of

the Group.

As a holding company, net assets are

considered to be the primary benchmark.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 119

Independent Auditor’s Report continued

to the members of Marshalls plc

Report on the audit of the Financial Statements continued

6. Our application of materiality continued

6.2. Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate,

uncorrected and undetected misstatements exceed the materiality for the Financial Statements as a whole.

Group Financial Statements Company Financial Statements

Performance

materiality

70% (2024: 70%) of Group materiality 70% (2024: 70%) of Companymateriality

Basis and

rationale for

determining

performance

materiality

In determining performance materiality, we considered the following factors:

a. Our risk assessment, including our assessment of the quality of the

controlenvironment

b. The impact of the current macroeconomic environment onthebusiness and its

operating environment

c. The low number of corrected and uncorrected misstatements identified

inprevious audits

6.3. Error reporting threshold

We agreed with the Audit Committee that we would report to it all audit differences in excess of

£0.15million (2024: £0.2 million), as well as differences below that threshold that, in our view, warranted

reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we

identify when assessing the overall presentation of the Financial Statements.

7. An overview of the scope of our audit

7.1. Identification and scoping of components

We have obtained an understanding of the Group and its environment, including how components are

organised within the Group and the existence of Group-wide controls.

Our audit scoping has been performed utilising professional judgement to obtain sufficient coverage over

significant account balances identified at the group level. We identified three components in the group:

Marshalls, Marley and Viridian, which are made up of multiple legal entities. We performed audits of the

entire financial information of each of these components, using component performance materialities

between £0.5m and £1.7m. We have considered the overall scope of our audit on a financial statement line-

item basis with our final scope covering 99% (2024: 100%) of group revenue, 96% (2024: 100%) of group net

assets and 100% (2024: 100%) of profit before tax.

In addition to the above, we also performed audit work on the Group Financial Statements, including but not

limited to the consolidation of Group results, consolidation and post-closing journal entries and preparation

of the Financial Statements. All work has been performed by the Group engagement team.

7.2. Our consideration of the control environment

During our audit we obtained an understanding of the relevant controls within the key business cycles for the

Group, in particular the order-to-cash and make-to-deliver cycles.

With involvement of our IT specialists, we have evaluated the IT environment of the Group and obtained

anunderstanding of relevant IT systems and the automated controls within these systems.

In evaluating the environment in the Building Products and Landscaping Products segments, we have:

• Obtained an understanding of the IT systems within the finance IT environment, Microsoft AX and D365.

These systems are used for the entity’s financial reporting process and include all finance, payroll andHR

modules

• Tested the Data Warehouse system which houses the inventory database

• Tested the following general IT controls for Microsoft AX, D365 and Data Warehouse: access security

(joiners, movers, leavers (JML), passwords, privileged access and user access reviews), and change

management (change process and segregation of duties)

In evaluating the Roofing Products environment, we have:

• Obtained an understanding of the key IT systems within the finance IT environment, being SAP ECC

andSAP BW. These systems are used for the component’s financial reporting process for monitoring

theirindividual entities and reporting to Marshalls plc Group

• Tested the following general IT controls for SAP ECC and SAP BW: access security (joiners, movers,

leavers(JML), passwords, privileged access and user access reviews), and change management (change

process and segregation of duties)

Management continues to remediate control deficiencies identified; as a result of this we continue to take a

fully substantive approach to the audit.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 120

Independent Auditor’s Report continued

to the members of Marshalls plc

Report on the audit of the Financial Statements continued

7. An overview of the scope of our audit continued

7.3. Our consideration of climate-related risks

In planning our audit, we have considered the potential impact of climate-related risks on the Group’s

business and its Financial Statements.

The Group is focused on responding to the threats and opportunities presented by climate change with

a developed strategy outlining how this is to be achieved. The Directors have considered transition and

physical risks when considering climate as part of their risk assessment process when considering the

principal risks and uncertainties facing the Group, as disclosed in the Strategic Report on pages 1 to 61.

The Directors have concluded that the key risk of climate change for the business is the security of raw

material supply.

Furthermore, the Directors acknowledged the increasing risk of climate change and as such have put more

focus into climate risk assessment and developing appropriate strategies to respond to those risks, both on

a short-term basis and on consideration of the longer-term outlook. The impact of climate-related risks on

the Financial Statements is disclosed in Note 1.

We performed our own qualitative risk assessment of the potential impact of climate change on the Group’s

account balances and classes of transaction and did not identify any reasonably possible risks of material

misstatement. Our procedures were performed with the involvement of our Environmental, Social and

Governance (ESG) specialists and included:

• Evaluating management’s assessment of the key financial statement line items and estimates which are

more likely to be materially impacted by climate change risks given the more notable impacts of climate

change on the business are expected to arise in the medium to long term

• Challenging how the Directors considered climate change in their assessment of going concern and

viability based on our understanding of the business environment and by benchmarking relevant

assumptions with market data

• Assessing the Group’s ESG and climate-related financial disclosures on pages 31 to 47 against the

recommendations of the TCFD framework and considered if any of the information disclosed was

inconsistent with the information we obtained through our audit

• Assessing whether climate risk assumptions underpinning specific account balances were

appropriatelydisclosed, and

• Reading the climate risk disclosures included in the Strategic Report section on pages 44 to 47 of

the Annual Report for consistency with the Financial Statements and our knowledge of the business

environment

8. Other information

The other information comprises the information included in the Annual Report, other than the Financial

Statements and our Auditor’s Report thereon. The Directors are responsible for the other information

contained within the Annual Report.

Our opinion on the Financial Statements does not cover the other information and, except to the extent

otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is

materially inconsistent with the Financial Statements or our knowledge obtained in the course of the audit,

or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent

material misstatements, we are required to determine whether this gives rise to a material misstatement in

the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

9. Responsibilities of Directors

As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for

the preparation of the Financial Statements and for being satisfied that they give a true and fair view, and

for such internal control as the Directors determine is necessary to enable the preparation of Financial

Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Directors are responsible for assessing the Group’s and Parent

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or

the Parent Company or to cease operations, or have no realistic alternative but to do so.

10. Auditor’s responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these

Financial Statements.

A further description of our responsibilities for the audit of the Financial Statements is located on the FRC’s

website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 121

Independent Auditor’s Report continued

to the members of Marshalls plc

Report on the audit of the Financial Statements continued

11. Extent to which the audit was considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect

ofirregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud, is detailed below.

11.1. Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud

andnon-compliance with laws and regulations, we considered the following:

• The nature of the industry and sector, control environment and business performance including the

design of the Group’s remuneration policies, key drivers for Directors’ remuneration, bonus levels and

performance targets

• Results of our enquiries of management, internal audit, the Directors and the Audit Committee about their

own identification and assessment of the risks of irregularities, including those that are specific to the

Group’s sector

• Any matters we identified having obtained and reviewed the Group’s documentation of its policies and

procedures relating to:

• Identifying, evaluating and complying with laws and regulations and whether it was aware of any

instances of non-compliance

• Detecting and responding to the risks of fraud and whether it has knowledge of any actual, suspected

or alleged fraud

• The internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations, and

• The matters discussed among the audit engagement team, including tax, valuations, pensions, and IT and

data analytics specialists regarding how and where fraud might occur in the Financial Statements and any

potential indicators offraud

As a result of these procedures, we considered the opportunities and incentives that may exist within the

organisation for fraud.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond

to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the Group operates in,

focusing on provisions of those laws and regulations that had a direct effect on the determination of

material amounts and disclosures in the Financial Statements. The key laws and regulations we considered

in this context included the UK Companies Act, UK Listing Rules, pensions legislation and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on

the Financial Statements but compliance with which may be fundamental to the Group’s ability to operate

or to avoid a material penalty. These included the Group’s environmental regulations and health and

safetyregulations.

11.2. Audit response to risks identified

As a result of performing the above, we did not identify any key audit matters related to the potential risk

offraud or non-compliance with laws and regulations.

Our procedures to respond to risks identified included the following:

• Reviewing the Financial Statement disclosures and testing the supporting documentation to assess

compliance with provisions of relevant laws and regulations described as having a direct effect on the

Financial Statements

• Enquiring of management, the Audit Committee and in-house legal counsel concerning actual and

potential litigation and claims

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate

risks of material misstatement due to fraud

• Reading minutes of meetings of those charged with governance and reviewing internal audit reports

• In addressing the risk of fraud through management override of controls, testing the appropriateness of

journal entries and other adjustments; assessing whether the judgements made in making accounting

estimates are indicative of a potential bias; and evaluating the business rationale of any significant

transactions that are unusual or outside the normal course of business

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement

team members including internal specialists and remained alert to any indications of fraud or non-

compliance with laws and regulations throughout the audit.

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared

inaccordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• The information given in the Strategic Report and the Directors’ Report for the financial year for which

theFinancial Statements are prepared is consistent with the Financial Statements

• The Strategic Report and the Directors’ Report have been prepared in accordance with applicable

legalrequirements

In the light of the knowledge and understanding of the Group and of the Parent Company and their

environment obtained in the course of the audit, we have not identified any material misstatements in

theStrategic Report or the Directors’ Report.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 122

Independent Auditor’s Report continued

to the members of Marshalls plc

Report on other legal and regulatory requirements continued

13. Corporate Governance Statement

The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term

viability and that part of the Corporate Governance Statement relating to the Group’s compliance with the

provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements

of the Corporate Governance Statement is materially consistent with the Financial Statements and our

knowledge obtained during the audit:

• The Directors’ statement with regards to the appropriateness of adopting the going concern basis of

accounting and any material uncertainties identified set out on page 115

• The Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment

covers and why the period is appropriate set out on page 51

• The Directors’ statement on fair, balanced and understandable set out on page 115

• The Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks

set out on page 5

• The section of the Annual Report that describes the review of effectiveness of risk management and

internal control systems set out on page 67, and

• The section describing the work of the Audit Committee set out on pages 84 to 89

14. Matters on which we are required to report by exception

14.1. Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• We have not received all the information and explanations we require for our audit

• Adequate accounting records have not been kept by the Parent Company, or returns adequate for our

audit have not been received from branches not visited by us

• The Parent Company Financial Statements are not in agreement with the accounting records and returns

We have nothing to report in respect of these matters.

14.2. Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of

Directors’ remuneration have not been made or the part of the Directors’ remuneration report to be audited

isnot in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

15. Other matters which we are required to address

15.1. Auditor tenure

Following the recommendation of the Audit Committee, we were appointed by shareholders on 20 May 2015

to audit the Financial Statements for the year ended 31 December 2015 and subsequent financial periods.

Following a competitive tender process, we were reappointed as auditors of the Financial Statements

for the year ended 31December 2025 and subsequent financial periods. The period of total uninterrupted

engagement including previous renewals and reappointments of the firm is eleven years, covering the years

ended 31December 2015 to 31 December 2025.

15.2. Consistency of the audit report with the additional report to the Audit Committee

Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide

in accordance with ISAs (UK).

16. Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16

of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s

members those matters we are required to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the

Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we

have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR)

4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial

Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R.

This auditor’s report provides no assurance over whether the Electronic Format Annual Financial Report has

been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.

Bashir Bahaj BSc FCA (Senior Statutory Auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

16 March 2026

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 123

Consolidated Income Statement

for the year ended 31 December 2025

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2025

		2025	2024
	Notes	£’m	£’m
Revenue	2	632.1	619.2
Net operating costs	3	(600.1)	(565.3)
Operating profit	2	32.0	53.9
Net financial expenses	6	(14.3)	(14.5)
Profit before tax	2	17.7	39.4
Income tax expense	7	(3.3)	(8.4)
Profit for the financial year		14.4	31.0
Earnings per share
Basic	8	5.7p	12.3p
Diluted	8	5.6p	12.2p
Dividend
Pence per share	9	6.7p	8.0p

All results relate to continuing operations.

		2025	2024
	Notes	£’m	£’m
Adjusted profit measures
Operating profit		32.0	53.9
Adjusting items	4	24.4	12.8
Adjusted operating profit		56.4	66.7
Profit before tax		17.7	39.4
Adjusting items	4	26.0	12.8
Adjusted profit before tax		43.7	52.2
Profit for the financial year		14.4	31.0
Adjusting items (net of tax)	4	19.6	9.5
Adjusted profit after tax		34.0	40.5
Adjusted earnings per share
Basic	8	13.4p	16.0p
Diluted	8	13.3p	16.0p

		2025	2024
	Notes	£’m	£’m
Profit for the financial year		14.4	31.0
Other comprehensive income/(expense)
Items that will not be reclassified to the Income Statement:
Remeasurements of the net defined benefit surplus	21	0.2	13.4
Deferred tax arising	23	(0.1)	(3.4)
Total items that will not be reclassified to the IncomeStatement		0.1	10.0
Items that are or may in the future be reclassified to the Income Statement:
Effective portion of changes in fair value of cash
flowhedges		0.1	1.6
Fair value of cash flow hedges transferred to the Income Statement		(1.1)	(2.4)
Deferred tax arising	23	0.2	0.2
Exchange difference on retranslation of foreign
currency net investment		(0.2)	0.2
Total items that are or may be reclassified to the Income Statement		(1.0)	(0.4)
Other comprehensive (expense)/income for the year, net of income tax		(0.9)	9.6
Total comprehensive income for the year		13.5	40.6

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 124

2025 2024

	Notes	£’m	£’m
Assets
Non-current assets
Goodwill	10	324.4	324.4
Intangible assets	11	206.0	217.8
Property, plant and equipment	12	223.9	234.8
Right-of-use assets	13	38.7	32.4
Employee benefits	21	24.9	24.1
Deferred taxation assets	23	0.7	2.1
		818.6	835.6
Current assets
Inventories	14	137.2	138.2
Trade and other receivables	15	79.6	80.8
Cash and cash equivalents	16	4.9	18.9
Assets classified as held for sale	12	0.9	1.5
Derivative financial instruments	20	0.2	1.1
		222.8	240.5
Total assets		1,041.4	1,076.1
Liabilities
Current liabilities
Trade and other payables	17	117.3	132.1
Corporation tax		2.2	4.2
Lease liabilities	19	5.6	5.7
Provisions	22	—	6.6
		125.1	148.6
Non-current liabilities
Lease liabilities	19	33.5	29.7
Interest-bearing loans and borrowings	18	142.8	152.8
Provisions	22	5.2	—
Deferred taxation liabilities	23	79.1	83.7
		260.6	266.2
Total liabilities		385.7	414.8
Net assets		655.7	661.3

		2025	2024
	Notes	£’m	£’m
Equity
Capital and reserves attributable to equity
shareholders of the Parent
Called-up share capital	24	63.2	63.2
Share premium account	24	200.0	200.0
Merger reserve	24	141.6	141.6
Own shares		(1.6)	(1.7)
Capital redemption reserve		75.4	75.4
Consolidation reserve	24	(213.1)	(213.1)
Hedging reserve	24	0.7	1.5
Foreign exchange reserve	24	0.5	0.7
Retained earnings		389.0	393.7
Total equity		655.7	661.3

Approved at a Directors’ meeting on 16 March 2026.

On behalf of the Board:

Simon Bourne Justin Lockwood

Chief Executive Officer Chief Financial Officer

The Notes on pages 129 to 153 form part of these Consolidated Financial Statements.

Consolidated Balance Sheet

at 31 December 2025

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 125

			2025 2024
	Notes	£’m	£’m
Profit for the financial year		14.4	31.0
Income tax expense	7	3.3	8.4
Profit before tax		17.7	39.4
Adjustments for:
Depreciation of property, plant and equipment	12	19.8	22.1
Asset impairments		4.5	—
Depreciation of right-of-use assets	13	6.8	7.3
Amortisation	11	12.3	12.1
Loss/(gain) on sale of property, plant and equipment		0.1	(1.9)
Equity settled share-based payments		1.0	1.1
Net financial expenses	6	14.3	14.5
Operating cash flow before changes in working capital		76.5	94.6
Decrease in trade and other receivables		2.2	13.8
Decrease/(increase) in inventories		1.0	(13.1)
(Decrease)/increase in trade and other payables		(15.7)	2.0
Cash generated from operations		64.0	97.3
Financial expenses paid		(16.1)	(11.7)
Income tax paid		(9.0)	(8.8)
Net cash flow from operating activities		38.9	76.8
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		0.8	4.4
Acquisition of property through corporate structure		(2.9)	—
Acquisition of subsidiary undertaking		—	(2.6)
Acquisition of property, plant and equipment		(13.1)	(9.2)
Acquisition of intangible assets		(0.5)	(2.4)
Net cash flow from investing activities		(15.7)	(9.8)

Consolidated Cash Flow Statement

for the year ended 31 December 2025

			2025 2024
	Notes	£’m	£’m
Cash flows from financing activities
Payments to acquire own shares		(0.9)	(1.4)
Repayment of borrowings		(42.1)	(80.0)
Drawdown of borrowings		32.1	25.0
Cash payment for the principal portion of lease liabilities		(6.9)	(5.3)
Equity dividends paid		(19.2)	(21.0)
Net cash flow from financing activities		(37.0)	(82.7)
Net decrease in cash and cash equivalents		(13.8)	(15.7)
Cash and cash equivalents at the beginning of the year		18.9	34.5
Effect of exchange rate fluctuations		(0.2)	0.1
Cash and cash equivalents at the end of the year		4.9	18.9

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 126

Consolidated Statement of Changes in Equity

for the year ended 31 December 2025

							Attributable to equity holders of the Company
		Share			Capital			Foreign
	Share	premium	Merger	Own	redemption	Consolidation	Hedging	exchange	Retained	Total
	capital	account	reserve	shares	reserve	reserve	reserve	reserve	earnings	equity
	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m
Current year
At 1 January 2025	63.2	200.0	141.6	(1.7)	75.4	(213.1)	1.5	0.7	393.7	661.3
Total comprehensive income for the year
Profit for the financial year	—	—	—	—	—	—	—	—	14.4	14.4
Other comprehensive (expense)/income
Foreign currency translation differences	—	—	—	—	—	—	—	(0.2)	—	(0.2)
Effective portion of changes in fair value of cash flow hedges	—	—	—	—	—	—	0.1	—	—	0.1
Net change in fair value of cash flow hedges transferred to the Income Statement	—	—	—	—	—	—	(1.1)	—	—	(1.1)
Deferred tax arising	—	—	—	—	—	—	0.2	—	—	0.2
Defined benefit plan actuarial gain	—	—	—	—	—	—	—	—	0.2	0.2
Deferred tax arising	—	—	—	—	—	—	—	—	(0.1)	(0.1)
Total other comprehensive (expense)/income	—	—	—	—	—	—	(0.8)	(0.2)	0.1	(0.9)
Total comprehensive (expense)/income for the year	—	—	—	—	—	—	(0.8)	(0.2)	14.5	13.5
Share-based payments	—	—	—	—	—	—	—	—	1.0	1.0
Dividends to equity shareholders	—	—	—	—	—	—	—	—	(19.2)	(19.2)
Purchase of own shares	—	—	—	(0.9)	—	—	—	—	—	(0.9)
Own shares issued under share scheme	—	—	—	1.0	—	—	—	—	(1.0)	—
Total contributions by and distributions to owners	—	—	—	0.1	—	—	—	—	(19.2)	(19.1)
At 31 December 2025	63.2	200.0	141.6	(1.6)	75.4	(213.1)	0.7	0.5	389.0	655.7

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 127

Consolidated Statement of Changes in Equity continued

for the year ended 31 December 2024

							Attributable to equity holders of the Company
		Share			Capital			Foreign
	Share	premium	Merger	Own	redemption	Consolidation	Hedging	exchange	Retained	Total
	capital	account	reserve	shares	reserve	reserve	reserve	reserve	earnings	equity
	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m
Current year
At 1 January 2024	63.2	200.0	141.6	(1.5)	75.4	(213.1)	2.1	0.5	373.1	641.3
Total comprehensive income for the year
Profit for the financial year	—	—	—	—	—	—	—	—	31.0	31.0
Other comprehensive income/(expense)
Foreign currency translation differences	—	—	—	—	—	—	—	0.2	—	0.2
Effective portion of changes in fair value of cash flow hedges	—	—	—	—	—	—	1.6	—	—	1.6
Net change in fair value of cash flow hedges transferred to the Income Statement	—	—	—	—	—	—	(2.4)	—	—	(2.4)
Deferred tax arising	—	—	—	—	—	—	0.2	—	—	0.2
Defined benefit plan actuarial gain	—	—	—	—	—	—	—	—	13.4	13.4
Deferred tax arising	—	—	—	—	—	—	—	—	(3.4)	(3.4)
Total other comprehensive (expense)/income	—	—	—	—	—	—	(0.6)	0.2	10.0	9.6
Total comprehensive (expense)/income for the year	—	—	—	—	—	—	(0.6)	0.2	41.0	40.6
Share-based payments	—	—	—	—	—	—	—	—	1.8	1.8
Dividends to equity shareholders	—	—	—	—	—	—	—	—	(21.0)	(21.0)
Purchase of own shares	—	—	—	(1.4)	—	—	—	—	—	(1.4)
Own shares issued under share scheme	—	—	—	1.2	—	—	—	—	(1.2)	—
Total contributions by and distributions to owners	—	—	—	(0.2)	—	—	—	—	(20.4)	(20.6)
At 31 December 2024	63.2	200.0	141.6	(1.7)	75.4	(213.1)	1.5	0.7	393.7	661.3

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 128

1 Accounting policies

Significant accounting policies

General information

Marshalls plc (the Company) is a public company limited by shares, incorporated in the United Kingdom

under the Companies Act 2006, and is registered in England and Wales. The Consolidated Financial

Statements of the Company for the year ended 31 December 2025 comprise the Company and its

subsidiaries (together referred to as the Group).

The Consolidated Financial Statements were authorised for issue by the Directors on 16 March 2026.

The Company’s registered address is Landscape House, Premier Way, Lowfields Business Park, Elland HX5 9HT.

The Group’s business activities, together with the factors likely to affect its future development, performance

and position, are set out in the Strategic Report on pages 1 to 61. The financial position of the Group and

its cash flows, liquidity position and borrowing facilities are also set out in the Strategic Report. In addition,

Note 20 includes the Group’s policies and procedures for managing its capital; its financial risk management

objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.

Basis of preparation

The Group Consolidated Financial Statements have been prepared and approved by the Directors in

accordance with UK-adopted International Accounting Standards and International Financial Reporting

Standards (IFRSs) as issued by the International Accounting Standards Board (IASB). The Parent Company

has elected to prepare its Financial Statements in accordance with FRS 101 “Reduced Disclosure Framework”

and these are presented on pages 154 to 161.

The Consolidated Financial Statements are prepared on the historical cost basis except that the following

assets and liabilities are stated at their fair value: employee benefits, derivative financial instruments and

liabilities for cash settled share-based payments. The Consolidated Financial Statements are presented

in Sterling, rounded to the nearest hundred thousand. Sterling is the currency of the primary economic

environment in which the Group operates. The material accounting policies, which have been applied

consistently, are set out later in the section.

Going concern

In assessing the appropriateness of adopting the going concern basis in the preparation of this Annual

Report, the Board has considered the Group’s financial forecasts and its principal risks for a period of at

least twelve months from the date of this report. The forecasts included projected profit and loss, Balance

Sheet, cash flows, headroom against debt facilities and covenant compliance. The financial forecasts have

been stress tested in downside scenarios to assess the impact on future profitability, cash flows, funding

requirements and covenant compliance. The scenarios comprise a more severe economic downturn (which

represents the Group’s most significant risk) than that included in the base case forecast, and a reverse

stress test on our financial forecasts to assess the extent to which an economic downturn would need to

impact on revenues in order to breach a covenant. This showed that revenue would need to deteriorate

significantly from the financial forecast and the Directors have a reasonable expectation that it is unlikely

to deteriorate to this extent.

Details of the Group’s funding position are set out in Note 20. The Group has a syndicated bank facility

of £270 million that matures in November 2029 and at December 2025, £125 million of the facility was

undrawn. There are two financial covenants in the bank facility that are tested on a semi-annual basis and

the Group maintains good cover against these with pre-IFRS 16 net debt to EBITDA of 1.8 times (covenant

maximum of three times) and interest cover of 5.7 times (covenant minimum of three times).

Taking these factors into account, the Board has the reasonable expectation that the Group has adequate

resources to continue in operation for the foreseeable future (a period of at least twelve months from the

date these financial statements were authorised for issue) and for this reason, the Board has adopted the

going concern basis in preparing this Annual Report.

This report has been prepared based on the accounting policies detailed in the Group’s Financial Statements

for the year ended 31 December 2025 and is consistent with the policies applied in the previous year, except

for the following new standards which were effective for an accounting period that begins on or after

1 January 2025. The new standards which are effective during the year (and have not had any material

impact on the disclosures or on the amounts reported in these Financial Statements) are:

• Amendments to IAS 21 – “Lack of exchangeability ”

At the date of authorisation of these Consolidated Financial Statements, the Group has not applied the

following new and revised IFRSs that have been issued but are not yet effective:

• Amendments to IFRS 9 and IFRS 7 – “Amendments to the classification and measurement of

financial instruments”

• Amendments to IFRS 9 and IFRS 7 – “Contracts referencing nature-dependant electricity”

• Annual improvements to IFRS Accounting Standards – Volume 11 – “Amendments to IFRS 1 First-time

adoption of international financial reporting standards, IFRS 7 Financial instruments: disclosures and its

accompanying guidance on implementing IFRS 7, IFRS 9 Financial instruments, IFRS 10 Consolidated

financial statements and IAS 7 Statement of cash flows”

• IFRS 18 – “Presentation and disclosures in financial statements”

• IFRS 19 – “Subsidiaries without public accountability: disclosures”

The Directors do not expect that the adoption of the standards listed above will have a material impact

on the Consolidated Financial Statements of the Group except as disclosed below.

IFRS 18: Presentation and Disclosure in Financial Statements

IFRS 18 will replace IAS 1 Presentation of Financial Statements and is effective for annual reporting periods

beginning on or after 1 January 2027. The standard introduces new requirements for the presentation

of income and expenses in defined categories within the Income Statement, including a newly specified

operating profit subtotal, new disclosures for management-defined performance measures, enhanced

requirements for the aggregation and disaggregation of information, and limited consequential changes to

the Statement of Cash Flows, including use of operating profit as the starting point for operating cash flows

presented under the indirect method. The Group does not intend to early adopt IFRS 18 and is continuing

to assess the impact of the new standard on the presentation and disclosure of its financial statements.

Based on the assessment performed to date, the principal areas expected to be affected are the structure

of the Consolidated Income Statement, the presentation of the Consolidated Statement of Cash Flows and

disclosure arising from the application of the enhanced aggregation and disaggregation requirements.

Alternative performance measures and adjusting items

The Group uses alternative performance measures (APMs) which are not defined or specified under IFRSs.

The Group believes that these APMs, which are not considered to be a substitute for IFRS measures, provide

additional helpful information. APMs are consistent with how business performance is planned, reported

and assessed internally by management and the Board and provide additional comparative information.

A glossary setting out the APMs that the Board uses, how they are used, an explanation of how they are

calculated, and a reconciliation of the APMs to the statutory results, where relevant, is set out in Note 29.

Notes to the Consolidated Financial Statements

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 129

Notes to the Consolidated Financial Statements continued

1 Accounting policies continued

Alternative performance measures and adjusting items continued

Adjusting items are items that are unusual because of their size, nature or incidence and which the Directors

consider should be disclosed separately to enable a full understanding of the Group’s results and to

demonstrate the Group’s capacity to deliver dividends to shareholders. Details of the adjusting items are

disclosed in Note 4 and Note 29.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of Consolidated Financial Statements requires the Group to make estimates and

judgements that affect the application of policies and reported accounts. Critical judgements represent key

decisions made by the Board in the application of the Group accounting policies. Where a significant risk of

materially different outcomes exists due to the Board’s assumptions or sources of estimation uncertainty,

this will represent a critical accounting estimate. Estimates and judgements are continually evaluated

and are based on historical experience and other factors, including expectations of future events that are

believed to be reasonable under the circumstances. Actual results may differ from these estimates. The

estimates and judgements which have a significant risk of causing a material adjustment to the carrying

amounts of assets and liabilities are discussed below.

Critical accounting judgement

The following critical accounting judgement has been made in the preparation of the Consolidated

Financial Statements:

• As noted, adjusting items have been highlighted separately due to their size, nature or incidence to provide

a full understanding of the Group’s results and to demonstrate the Group’s capacity to deliver dividends

to shareholders. The determination of whether items merit treatment as an adjusting item is a matter of

judgement. Note 4 sets out details of the adjusting items

Sources of estimation uncertainty

The Directors consider the following to be key sources of estimation uncertainty:

• In arriving at the accounting value of the Group’s defined benefit pension scheme, key assumptions have

to be made in respect of factors including discount rates and inflation rates. These are determined on

the basis of advice received from a qualified actuary. These estimates may be different to the actual

outcomes. See further information in Note 21

• The carrying value of goodwill is reviewed on an annual basis in accordance with IAS 36. This review

requires the use of cash flow projections based on a financial forecast that are discounted at an appropriate

market-based discount rate. The assumption on the market-based discount rate is determined based on

the advice of a third-party adviser. The actual cash flows generated by the business may be different to

the estimates included in the forecasts. See further information in Note 10

• The Group has assessed the impact of climate-related risks on the Financial Statements, in particular the

impact on the carrying amount of the Group’s property, plant and equipment, going concern assessment

forecasts and impairment review forecasts. The Group does not consider there to be a material impact on its

judgements and estimates from the physical and transition climate-related risks. The Directors will continue to

assess the changing nature of the of climate-related risks and impact on the financial statements in the future

Material accounting policy information

Basis of consolidation

The Consolidated Financial Statements incorporate the Financial Statements of the Company and the entities

controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved when

the Company has power over the investee; is exposed, or has rights, to variable returns from its involvement

with the investee; and has the ability to use its power to affect its returns.

All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between

Group companies are eliminated on consolidation. The accounting policies of the subsidiaries are consistent

with the accounting policies of the Group.

Revenue

Revenue from the sale of goods is recognised in the Consolidated Income Statement when the performance

obligations to customers have been satisfied. Revenue represents the invoiced value of sales to customers

less returns, allowances, rebates and value added tax.

Revenue is typically recorded on despatch of the Group’s products, when performance obligations to

customers are satisfied. Products are usually delivered on the same day. Amounts due from customers

are payable by customers on standard credit terms and there is no significant financing component or

variable consideration within amounts due from customers. There are no significant obligations arising

in relation to returns, refunds, warranties or similar obligations. Revenue earned from any contractually

distinct installation process is recognised when the Group has fulfilled all its obligations under the

installation contract.

Segmental reporting

IFRS 8 “Operating Segments” requires operating segments to be identified on the basis of discrete financial

information about components of the Group that are regularly reviewed by the Group’s Chief Operating

Decision Maker (CODM) to allocate resources to the segments and to assess their trading performance.

As far as Marshalls is concerned, the CODM is regarded as being the Board. The Group has three reporting

segments: Landscaping Products, Building Products and Roofing Products.

Share-based payments

The Group enters into equity settled share-based payment transactions with its employees. In particular,

annual awards are made to employees under the Company’s Management Incentive Plan (MIP).

The fair value of options granted is recognised as an employee expense with a corresponding increase in

equity. The fair value is measured at grant date and spread over the period during which the employees

become unconditionally entitled to the options. Where appropriate, the fair value of the options granted

is measured using the Black-Scholes option valuation model, considering the terms and conditions upon

which the options were granted. The amount recognised as an expense is adjusted to reflect the actual

number of awards for which the related service and non-market vesting conditions are expected to be met,

such that the amount ultimately recognised as an expense is based on the number of awards that do meet

the related service and non-market performance conditions at the vesting date.

Current tax relief is available as shares vest based on the value at the date of vesting. A deferred tax asset

is recognised at grant date based on the number of shares expected to be issued, at the value at which they

are expected to be issued, proportioned in line with the vesting period.

Financial expenses

Net financial expenses comprise interest on obligations under the defined benefit pension scheme,

the expected return on scheme assets under the defined benefit pension scheme, interest payable on

borrowings calculated using the effective interest rate method, interest expense arising on leases in

accordance with IFRS 16, interest receivable on funds invested, foreign exchange gains and losses and

gains and losses on hedging instruments that are recognised in the Consolidated Income Statement.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 130

Notes to the Consolidated Financial Statements continued

1 Accounting policies continued

Material accounting policy information continued

Foreign currency translation

Transactions in foreign currencies are translated to Sterling at the foreign exchange rate ruling at the date

of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet

date are translated to Sterling at the foreign exchange rate ruling at that date. Foreign exchange differences

arising on translation are recognised in the Consolidated Income Statement. Non-monetary assets and

liabilities that are measured in terms of historical cost in a foreign currency are translated using the

exchange rate at the date of the transaction and are not retranslated.

For the purposes of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s

foreign operations are translated at exchange rates prevailing on the Balance Sheet date. Income and expense

items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly

during that period, in which case the exchange rates at the dates of transactions are used. Exchange differences

arising, if any, are recognised in other comprehensive income and accumulated in a foreign exchange

translation reserve (attributed to non-controlling interests as appropriate).

Income tax

Income tax on the profit or loss for the year comprises current and deferred taxation. Income tax is

recognised in the Consolidated Income Statement except to the extent that it relates to items recognised

directly in other comprehensive income or in equity, in which case it is recognised accordingly. Current tax

is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively

enacted at the Balance Sheet date, and any adjustment to tax payable in respect of previous years.

Deferred taxation is provided using the Balance Sheet liability method, providing for temporary differences

between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts

used for taxation purposes. The following temporary differences are not provided for: the initial recognition

of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit,

other than in a business combination, and differences relating to investments in subsidiaries to the extent

that they will probably not reverse in the foreseeable future. The amount of deferred taxation provided is

based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities,

using tax rates that are expected to apply when the temporary difference reverses, based on rates that have

been enacted or substantively enacted at the Balance Sheet date. A deferred taxation asset is recognised

only to the extent that it is probable that future taxable profits will be available against which the asset can

be utilised. Deferred taxation assets are reduced to the extent that it is no longer probable that the related

tax benefit will be realised.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment

losses, if any. Cost comprises the aggregate amount paid and the fair value of any other consideration

given to acquire the asset and includes costs directly attributable to making the asset capable of operating

as intended (including appropriate elements of internal costs). Where parts of an item of property, plant

and equipment have different useful lives, they are accounted for as separate items of property, plant and

equipment. The Group recognises in the carrying amount of an item of property, plant and equipment the

cost of replacing part of such an item when that cost is incurred if it is probable that the future economic

benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably.

All other costs are recognised in the Consolidated Income Statement as an expense as incurred.

Depreciation is charged to the Consolidated Income Statement on a straight line basis over the estimated

useful life of each part of an item of property, plant and equipment as follows:

Freehold buildings 20 to 40 years

Fixed plant and equipment 4 to 30 years

Mobile plant and equipment 3 to 7 years

Quarries are based on the rate of extraction.

Freehold land is not depreciated. The residual values, useful economic lives and depreciation methods are

reassessed annually. Estimated costs associated with the restoration of quarries are charged in accordance

with IAS 37 when costs can be measured with an appropriate degree of precision.

Right-of-use assets and leases

IFRS 16 distinguishes leases and service contracts on the basis of whether an identified asset is controlled

by a customer. A right-of-use asset and a corresponding liability are recognised for all leases except for

short-term leases and leases of low-value assets. The right-of-use asset is initially measured at cost and

subsequently measured at cost less accumulated depreciation and impairment losses, adjusted for any

remeasurement of the lease liability. Right-of-use assets are depreciated on a straight line basis over the

duration of the lease, which, excluding property leases, is typically between four and eight years. The Group’s

leases principally comprise commercial vehicles, forklift trucks, motor vehicles, certain property assets and

fixed plant.

The lease liability is initially measured at the present value of the lease payments that are not paid at that

date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as for the impact

of lease modifications, amongst others. Lease liabilities are discounted at an incremental borrowing rate

calculated as the rate of interest which the Group would have been able to borrow for a similar term with

a similar security of funds necessary to obtain a similar asset in a similar market.

Short-term leases, with a duration of less than twelve months, are accounted for in accordance with the

recognition exemption in IFRS 16 and hence related payments are expensed as incurred. The Group also

utilises the option to apply the recognition exemption for low-value assets (with a value of less than the

equivalent of £5,000), which means that related payments have been expensed as incurred.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable net assets

of the acquired subsidiary at the date of acquisition. Goodwill is recognised initially as an asset at cost,

allocated to cash generating units, and is measured subsequently at cost less impairment losses.

Goodwill is not amortised but is tested for impairment at least annually and whenever there is an indication

that the asset may be impaired. Impairment is tested by comparing the recoverable amount of the cash

generating unit (CGU) with the carrying value of certain net assets of the CGUs with any impairment charge

being allocated initially to goodwill. The recoverable amount of assets of CGUs is the greater of their fair

value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market assessments

of the time value of money and the risks specific to the asset. Any impairment arising is recognised

immediately in the Income Statement and subsequent reversals of impairment losses for goodwill are

not recognised. Details of the December 2025 impairment review are set out in Note 10.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 131

Notes to the Consolidated Financial Statements continued

1 Accounting policies continued

Material accounting policy information continued

Intangible assets

Intangible assets acquired separately are initially measured at cost. Intangible assets arising on business

combinations are initially measured at fair value. Following initial recognition, intangible assets are carried at cost

or fair value less accumulated amortisation and accumulated impairment losses, if any. Internally generated

intangible assets, excluding software development and capitalised development costs, are not capitalised

and expenditure is reflected in the Income Statement in the year in which the expenditure is incurred.

All current intangible assets have finite lives and are amortised on a straight line basis over their expected

useful lives and are assessed for impairment whenever there is an indication that the intangible asset may

be impaired. Amortisation of intangible assets is provided over the following expected useful economic

lives: brand names 20 to 25 years; customer and supplier relationships 5 to 20 years; patents, trademarks

and know-how 2 to 20 years; development costs 10 to 20 years; and software 5 to 10 years.

Post-retirement benefits

Any net obligation in respect of the Group’s defined benefit pension scheme is calculated by estimating

the amount of future benefit that employees have earned in return for their service in the current and prior

periods; that benefit is discounted to determine its present value and the fair value of any scheme assets is

deducted. The discount rate is the yield at the Balance Sheet date on AA credit-rated corporate bonds that

have maturity dates approximating to the terms of the Group’s obligations. The calculation is performed by

a qualified actuary using the projected unit credit method. Net interest is calculated by applying a discount

rate to the net defined benefit liability or asset.

If the calculation results in a surplus, the resulting asset is measured at the present value of any economic

benefits available in the form of refunds from the plan, or reductions in future contributions to the plan.

The present value of these economic benefits is discounted by reference to market yields at the Balance

Sheet date on high-quality corporate bonds. When the benefits of the scheme are improved, the portion

of the increased benefit relating to past service by employees is recognised as an expense in the Income

Statement in the period of the scheme amendment. Actuarial gains and losses that arise in calculating the

Group’s obligation in respect of a plan are recognised immediately within the Consolidated Statement of

Comprehensive Income.

Obligations for contributions to defined contribution schemes are recognised as an expense in the Income

Statement as incurred.

Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling

price in the ordinary course of business, less the estimated costs to completion and selling expenses. The

cost of inventories is based on the first-in, first-out principle and includes expenditure incurred in acquiring the

inventories and bringing them to their existing location and condition. In the case of manufactured inventories

and work in progress, cost includes an appropriate share of overheads based on normal operating capacity,

which were incurred in bringing the inventories to their present location and condition.

Trade and other receivables

Trade and other receivables are stated at initial recognition, at their transaction price (as defined in IFRS 15) if

the trade receivables do not contain a significant financial component in accordance with IFRS 15 (or when

the entity applies the practical expedient in accordance with paragraph 63 of IFRS 15). Subsequent to initial

recognition they are accounted for at amortised cost. Trade receivables are stated gross of a provision for

expected credit losses. This provision has been determined using a lifetime expected credit loss calculation.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable

on demand and form an integral part of the Group’s cash management are included as a component of cash and

cash equivalents for the purpose of the Consolidated Cash Flow Statement. For the purposes of the statement of

cash flows, cash and cash equivalents as defined above, net of outstanding bank overdrafts which are repayable

and form an integral part of the Group’s cash management. Such overdrafts are presented as short-term

borrowings in the Balance Sheet to the extent the Group does not have the right and intention to settle net.

Assets classified as held for sale

Assets classified as held for sale are measured at the lower of carrying amount and fair value less costs

to sell. Assets are classified as held for sale if their carrying amount will be recovered through a sale

transaction rather than through continuing use. This condition is regarded as met only when the sale

is highly probable and expected to be completed within one year from the date of classification, and the

asset is available for immediate sale in its present condition.

Trade and other payables

Trade and other payables are stated at initial recognition, at their fair value and subsequently at amortised cost.

Interest-bearing loans and borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to

initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest rate method.

Provisions

The Group recognises provisions for dilapidations and restoration where it has a present legal or

constructive obligation arising from a past event, it is probable that an outflow of resources will be required

to settle the obligation and a reliable estimate can be made. The provisions are measured at the best

estimate of the expenditure required to settle the obligation at the reporting date.

Dilapidations provisions are recognised for the expected cost of restoring leased properties to the condition

required under lease agreements. Estimates are prepared using condition assessments and schedules of

works, supported where appropriate by external surveyors, and reflect the expected scope of reinstatement

at lease end (or earlier surrender/break where applicable). Expenditure incurred is charged against the

provision when the works are undertaken.

Restoration provisions are recognised for obligations to reinstate quarry and mineral sites in accordance

with planning permissions and other statutory requirements. Estimates are based on approved restoration

plans (including the expected scope and phasing of works) and current unit rates, with input from operational

teams and specialist advisers where relevant. Progressive restoration is expensed as incurred; obligations

relating to final reinstatement are provided for when a present obligation exists, the outflow is considered

probable and a reliable estimate can be made.

Where the effect of the time value of money is material, provisions are discounted using a current pre-tax

risk-free discount rate (for example, a Government bond yield of appropriate duration). The Group applies

a risk-free rate because the principal risks specific to the liabilities are reflected in the estimated cash flows

used to measure the provisions. Estimates incorporate assumptions about timing, inflation and cost

escalation where material.

Provisions are reviewed at each reporting date and adjusted to reflect management’s current best estimate

of expenditures that will be required to settle the obligations. Changes in the estimated amount or timing of

outflows are recognised in profit or loss, except where the obligation is associated with an asset for which

the related cost is capitalised (for example, restoration obligations recognised at commencement of a lease),

in which case the corresponding adjustment is made to the carrying amount of the related asset to the

extent that asset continues to be recognised.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 132

Notes to the Consolidated Financial Statements continued

1 Accounting policies continued

Material accounting policy information continued

Derivative financial instruments

The Group uses derivative financial instruments to hedge its exposure to interest rate, foreign exchange

and fuel pricing risks arising from operational, financing and investment activities. In accordance with its

treasury policy, the Group does not hold or issue derivative financial instruments for speculative purposes.

Derivative financial instruments are recognised at fair value and transaction costs are recognised in

the Income Statement when incurred. The gain or loss on remeasurement to fair value is recognised

immediately in the Consolidated Income Statement. However, where derivatives qualify for hedge

accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged

(see below).

Classification and measurement

The classification of financial assets is based both on the business model within which the asset is held

and the contractual cash flow characteristics of the asset. There are three principal classification categories

for financial assets that are debt instruments: (i) amortised cost; (ii) fair value through other comprehensive

income (FVTOCI); and (iii) fair value through profit or loss (FVTPL). Under IFRS 9, derivatives embedded in

financial assets are not bifurcated but instead the whole hybrid contract is assessed for classification.

Impairment

Credit losses and expected credit losses are recognised in accordance with IFRS 9. The amount of expected

credit losses is updated at each reporting date. The IFRS 9 impairment model has been applied to the

Group’s financial assets that are debt instruments measured at amortised cost or FVTOCI. The Group has

applied the simplified approach to recognise lifetime expected credit losses for its trade receivables, as

required or permitted by IFRS 9.

Hedging

The Group has elected to apply the IFRS 9 hedge accounting requirements because they align more

closely with the Group’s risk management policies. Where a derivative financial instrument is designated

as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast

transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly

in the Consolidated Statement of Comprehensive Income. When the forecast transaction subsequently

results in the recognition of a non-financial asset or non-financial liability, the associated cumulative gain

or loss is removed from equity and included in the initial cost or other carrying amount of the non-financial

asset. For cash flow hedges, other than those covered by the preceding policy statement, the associated

cumulative gain or loss is removed from equity and recognised in the Consolidated Income Statement in the

same period or periods during which the hedged forecast transaction affects the income or expense. The

ineffective part of any gain or loss is recognised immediately in the Consolidated Income Statement.

When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of

the hedge relationship, but the hedged forecast transaction is still expected to occur, it no longer meets the

criteria for hedge accounting. The cumulative gain or loss at that point remains in equity and is recognised in

accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected

to take place, the cumulative unrealised gain or loss recognised in equity is recognised immediately in the

Consolidated Income Statement and cash flow hedge accounting is discontinued prospectively.

Share capital

Marshalls plc has only Ordinary Share capital. These shares, with a nominal value of 25 pence per share, are

classified as equity. Transactions of the Group-sponsored Employee Benefit Trust are included in the Group

Financial Statements. The Trust’s purchases of shares in the Company are debited directly to equity and

disclosed separately in the Balance Sheet as “own shares”.

The following paragraphs summarise the significant accounting policies of the Group, which have

been applied in dealing with items which are considered material in relation to the Group’s Consolidated

Financial Statements.

The Group has applied all accounting standards and interpretations issued by the IASB and International

Financial Reporting Committee relevant to its operations and which are effective in respect of these

Financial Statements.

Impairment

The carrying amounts of the Group’s assets, other than inventories and goodwill, are reviewed at each

Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists,

the asset’s recoverable amount is estimated. An impairment loss is reversed if there has been a change in

the estimates used to determine the recoverable amount. Any impairment loss is reversed only to the extent

that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net

of depreciation or amortisation, if no impairment loss had been recognised.

2 Segmental analysis

Segment revenues and operating profit

	2025	2024
	£’m	£’m
Revenue
Landscaping Products	265.8	268.3
Building Products	172.0	164.6
Roofing Products	194.3	186.3
Revenue	632.1	619.2
Operating profit
Landscaping Products	0.6	10.7
Building Products	13.0	14.1
Roofing Products	50.2	49.4
Central costs	(7.4)	(7.5)
Adjusted operating profit	56.4	66.7
Adjusting items (see Note 4)	(24.4)	(12.8)
Reported operating profit	32.0	53.9
Net finance charges (Note 6)	(14.3)	(14.5)
Profit before tax	17.7	39.4
Taxation (Note 7)	(3.3)	(8.4)
Profit after tax	14.4	31.0

The Group has two customers which each contributed more than 10% of total revenue in the current and

prior year.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 133

Notes to the Consolidated Financial Statements continued

2 Segmental analysis continued

Segment revenues and operating profit continued

The accounting policies of the three operating segments are the same as the Group’s accounting policies.

Segment profit represents the profit earned without allocation of certain central administration costs that

are not capable of allocation. Centrally administered overhead costs that relate directly to the reportable

segment are included within the segment’s results.

Geographical destinations of revenue

The geographical destinations of revenue are the United Kingdom £631.1 million (2024: £617.8 million)

and Rest of the World £1.0 million (2024: £1.4 million).

Segment assets

	2025	2024
	£’m	£’m
Property, plant and equipment, right-of-use assets, intangible assets
and inventory:
Landscaping Products	212.9	222.6
Building Products	139.4	142.2
Roofing Products	578.8	584.3
Total segment property, plant and equipment, right-of-use assets, intangible assets and inventory	931.1	949.1
Unallocated assets	110.3	127.0
Consolidated total assets	1,041.4	1,076.1

For the purpose of monitoring segment performance and allocating resources between segments, the

Group’s CODM monitors the property, plant and equipment, right-of-use assets, intangible assets and

inventory. Assets used jointly by reportable segments are not allocated to individual reportable segments.

Other segment information

	Depreciation			Property, plant and equipment, right-of-use
	and amortisation			asset and intangible asset additions
	2025	2024	2025	2024
	£’m	£’m	£’m	£’m
Landscaping Products	14.9	17.8	10.6	21.2
Building Products	8.0	8.0	6.5	8.2
Roofing Products	5.7	5.3	8.4	3.8
Included in adjusting items	28.6	31.1	25.5	33.2
(Note4)	10.3	10.4	—	—
	38.9	41.5	25.5	33.2

Depreciation and amortisation includes £10.3 million (2024: £10.4 million) of amortisation of intangible assets

arising from the purchase price allocation exercises comprising £nil (2024: £0.1 million) in Landscaping

Products, £1.1 million (2024: £1.1 million) in Building Products and £9.2 million (2024: £9.2 million) in Roofing

Products. The amortisation has been treated as an adjusting item (Note 4).

Impairments of £4.5 million (2024: £nil) within property, plant and equipment all relate to the Landscape

Products operating segment.

3 Net operating costs

	2025	2024
	£’m	£’m
Raw materials and consumables	238.8	237.5
Changes in inventories of finished goods and work in progress	0.9	(14.4)
Personnel costs (Note 5)	133.7	132.8
Depreciation of property, plant and equipment	19.8	22.1
Depreciation of right-of-use assets	6.8	7.3
Amortisation of intangible assets	12.3	12.1
Asset impairments (Note 4)	4.5	—
Own work capitalised	(0.2)	(1.3)
Other operating costs	175.4	174.0
Redundancy and other similar costs (Note 4)	9.6	—
Operating costs	601.6	570.1
Other operating income	(1.6)	(2.9)
Net gain on asset and property disposals	0.1	(1.9)
Net operating costs	600.1	565.3
Adjusting items (Note 4)	(24.4)	(12.8)
Adjusted net operating costs	575.7	552.5

	2025	2024
	£’m	£’m
Net operating costs include:
Auditor’s remuneration (see below)	0.8	0.8
Short-term and low-value lease costs	5.1	2.7
Research and development costs	1.3	1.8

In respect of the year under review, Deloitte LLP carried out work in relation to:

	2025	2024
	£’m	£’m
Audit of Financial Statements of Marshalls plc	0.1	0.1
Audit of Financial Statements of subsidiaries of the Company	0.7	0.7
	0.8	0.8

These fees include a cost of £42,000 associated with Deloitte LLP’s review of the Group’s Half Year

Report (2024: £40,000).

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 134

Notes to the Consolidated Financial Statements continued

4 Adjusting items

	2025	2024
	£’m	£’m
Amortisation of intangible assets arising on acquisition (i)	10.3	10.4
Redundancy and similar costs (ii)	9.6	—
Impairment of property, plant and equipment (iii)	4.5	—
Transformation costs (iv)	—	2.5
Contingent consideration (v)	—	1.6
Significant property disposal (vi)	—	(1.7)
Adjusting items within operating profit (Note 3)	24.4	12.8
Adjusting items within financial expenses (vii) (Note 6)	1.6	—
Adjusting items before taxation	26.0	12.8
Current tax on adjusting items (Note 7)	(2.7)	(0.7)
Deferred tax on adjusting items (Note 7)	(3.7)	(2.6)
Adjusting items after taxation	19.6	9.5

Notes:

(i) Amortisation of intangible assets arising on acquisitions is principally in respect of values recognised for the Marley brand

and its customer relationships.

(ii) Restructuring and similar costs arose during major restructuring exercises conducted when the Group took steps to

reduce the cost base as part of the Landscaping Products improvement plan.

(iii) The impairment of property, plant and equipment arose in connection with the major restructuring exercise noted above.

(iv) Transformation costs represent costs incurred in respect of the ‘Transform & Grow’ strategy.

(v) The additional contingent consideration relates to the reassessment of the amounts that will become payable to vendors

arising in relation to Marley’s acquisition of Viridian Solar Limited in 2021.

(vi) The significant property disposal gain arose on the disposal of the Group’s former manufacturing site in Carluke.

(vii) Loan refinancing costs connected with renewal of banking facilities.

5 Personnel costs

	2025	2024
	£’m	£’m
Personnel costs (including amounts charged in the year in relation
to Directors):
Wages and salaries	108.2	108.2
Social security costs	13.4	11.7
Share-based payments	1.0	1.8
Contributions to defined contribution pension scheme	11.1	11.1
Included in net operating costs (Note 3)	133.7	132.8
Personnel costs relating to redundancy and other costs	6.1	—
Total personnel costs	139.8	132.8

	2025	2024
	£’m	£’m
Remuneration of Directors:
Salary	1.4	1.5
Other benefits	0.1	0.1
MIP Element A bonus	0.2	0.7
MIP Element B bonus	0.1	0.4
Amounts receivable under the MIP at the end of cycle 3	0.3	0.5
Salary supplement in lieu of pension	0.1	0.1
Non-Executive Directors’ fees and fixed allowances	0.6	0.5
	2.8	3.8

The aggregate of emoluments and amounts receivable under the Management Incentive Plan (MIP) of the

highest-paid Director was £0.8 million (2024: £1.0 million), including a salary supplement in lieu of pension

of £nil (2024: £nil).

There are no Directors to whom retirement benefits are accruing in respect of qualifying services. As set out

in the Annual Remuneration Report on page 97, the Executive Directors receive a salary supplement in lieu

of pension equal to their contractual entitlements.

Further details of Directors’ remuneration, share options, Long-term Incentive Plans (LTIPs) and pension

entitlements are disclosed in the Remuneration Committee Report on pages 96 to 103.

The average monthly number of persons employed by the Group during the year was:

	2025	2024
	Number	Number
Continuing operations
Landscaping Products	1,113	1,213
Building Products	652	621
Roofing Products	539	526
Plc	120	121
	2,424	2,481

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 135

Notes to the Consolidated Financial Statements continued

6 Financial expenses and income

	2025	2024
	£’m	£’m
(a) Financial expenses
Interest expense on bank loans	11.3	12.5
Interest expense on lease liabilities	2.0	1.7
Net interest expense on defined benefit pension scheme	—	0.3
(b) Adjusting items
Adjusting interest expense on refinancing of bank loans (Note 4)	1.6	—
(c) Financial income
Net interest income on defined benefit pension scheme	(0.6)	—
Interest receivable and similar income	—	—
Net financial expenses	14.3	14.5

Net interest expense on the defined benefit pension scheme is disclosed net of Company recharges for

scheme administration (Note 21).

7 Income tax expense

	2025	2024
	£’m	£’m
Current tax expense
Current year	7.8	13.7
Adjustments for prior years	(1.2)	—
Deferred tax expense	6.6	13.7
Origination and reversal of temporary differences:
Current year	(3.5)	(4.0)
Adjustments for prior years	0.2	(1.3)
Total tax expense	3.3	8.4
Current tax on adjusting items (Note 4)	2.7	0.7
Deferred tax on adjusting items (Note 4)	3.7	2.6
Total adjusted tax expense	9.7	11.7

	2025	2025	2024	2024
	%	£’m	%	£’m
Reconciliation of effective tax rate
Profit before tax	100.0	17.7	100.0	39.4
Tax using domestic corporation
tax rate	24.9	4.4	25.0	9.9
Impact of capital allowances in excess of depreciation	8.5	1.5	1.5	0.6
Non-taxable income	(15.3)	(2.7)	(1.2)	(0.5)
Short-term timing differences	1.7	0.3	2.1	0.8
Adjustment to tax charge in prior year	(6.8)	(1.2)	—	—
Expenses not deductible for tax purposes	24.3	4.3	7.4	2.9
Corporation tax charge for the year	37.3	6.6	34.8	13.7
Impact of capital allowances in excess of depreciation	(8.5)	(1.5)	(1.5)	(0.6)
Impact of intangible amortisation	(15.8)	(2.8)	(7.2)	(2.8)
Short-term timing differences	3.4	0.6	(1.2)	(0.5)
Pension scheme movements	1.1	0.2	(0.2)	(0.1)
Adjustment to tax charge in prior year	1.1	0.2	(3.4)	(1.3)
Total tax charge for the year	18.6	3.3	21.3	8.4

The net amount of deferred taxation debited to the Consolidated Statement of Comprehensive Income in

the year was £0.1 million (2024: credited £3.2 million).

The majority of the Group’s profits are earned in the UK, which has a corporation tax of 25% for the year

to 31 December 2025.

The adjustment for prior years relating to the deferred tax expense arises from a cautious view of capital

allowances claimable. The corresponding amount in the corporation tax charge is offset by patent box and

R&D claims made.

The Group operates in the United Kingdom and the Netherlands which have enacted new legislation to

implement the global minimum top-up tax. The Group does not expect to be subject to the top-up tax in

relation to its operations in these jurisdictions as both the statutory tax rates and adjusted effective tax rates

are expected to continue to be above 15%. The newly enacted legislation was effective from 1 January 2024

but there is no current tax impact for the year ended 31 December 2025.

The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the

top-up tax and will account for it as current tax when it is incurred. If top-up tax had applied in 2025 the

Group would not expect that any top-up tax would have arisen.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 136

Notes to the Consolidated Financial Statements continued

8 Earnings per share

Basic earnings per share from total operations of 5.7 pence (2024: 12.3 pence) per share is calculated by

dividing the profit attributable to Ordinary Shareholders for the financial year, after adjusting for non-controlling

interests, of £14.4 million (2024: £31.0 million) by the weighted average number of shares in issue during

the period of 252,868,921 (2024: 252,807,833).

Basic earnings per share after adding back adjusting items of 13.4 pence (2024: 16.0 pence) per share

is calculated by dividing the adjusted profit attributable to Ordinary Shareholders for the financial year,

after adjusting for non-controlling interests, of £34.0 million (2024: £40.5 million) by the weighted average

number of shares in issue during the period of 252,868,921 (2024: 252,807,833).

Profit attributable to Ordinary Shareholders

	2025	2024
	£’m	£’m
Profit before adding back adjusting items	34.0	40.5
Adjusting items	(19.6)	(9.5)
Profit for the financial year	14.4	31.0

Weighted average number of Ordinary Shares

	2025	2024
	Number	Number
Number of issued Ordinary Shares	252,968,728	252,968,728
Effect of shares transferred into Employee Benefit Trust	(99,807)	(160,895)
Weighted average number of Ordinary Shares at the end of the year	252,868,921	252,807,833

Diluted earnings per share from total operations of 5.6 pence (2024: 12.2 pence) per share is calculated by dividing

the profit for the financial year, after adjusting for non-controlling interests, of £14.4 million (2024: £31.0 million)

by the weighted average number of shares in issue during the period of 252,868,921 (2024: 252,807,833)

plus potentially dilutive shares of 1,636,634 (2024: 999,738), which totals 254,505,555 (2024: 253,807,571).

Diluted earnings per share after adding back adjusting items of 13.3 pence (2024: 16.0 pence) per share

is calculated by dividing the adjusted profit for the financial year, after adjusting for non-controlling interests,

of £34.0 million (2024: £40.5 million) by the weighted average number of shares in issue during the period

of 252,868,921 (2024: 252,807,833) plus potentially dilutive shares of 1,636,634 (2024: 999,738), which

totals 254,505,555 (2024: 253,807,571).

Weighted average number of Ordinary Shares (diluted)

	2025	2024
	Number	Number
Weighted average number of Ordinary Shares	252,868,921	252,807,833
Potentially dilutive shares	1,636,634	999,738
Weighted average number of Ordinary Shares (diluted)	254,505,555	253,807,571

9 Dividends

After the Balance Sheet date, a final dividend of 4.5 pence was proposed by the Directors. This dividend has

not been provided for and there are no income tax consequences.

	Pence per	2025	2024
	qualifying share	£’m	£’m
2025 final	4.5	11.4
2025 interim	2.2	5.5
	6.7	16.9
2024 final	5.4		13.7
2024 interim	2.6		6.6
	8.0		20.3

The following dividends were approved by the shareholders and recognised in the Financial Statements:

	Pence per	2025	2024
	qualifying share	£’m	£’m
2025 interim	2.2	5.5
2024 final	5.4	13.7
	7.6	19.2
2024 interim	2.6		6.6
2023 final	5.7		14.4
	8.3		21.0

The Board recommends a final dividend for 2025 of 4.5 pence per qualifying Ordinary Share amounting to

£11.4 million, to be paid on 1 July 2026 to shareholders registered at the close of business on 5 June 2026.

The shares will be marked ex-dividend on 4 June 2026.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 137

Notes to the Consolidated Financial Statements continued

10 Goodwill

	Goodwill
	£’m
Cost
At 1 January 2024	333.3
Recognised on acquisition of subsidiary	—
At 31 December 2024	333.3
At 1 January 2025	333.3
Recognised on acquisition of subsidiary	—
At 31 December 2025	333.3
Amortisation and impairment losses
At 1 January and 31 December 2024	8.9
At 1 January and 31 December 2025	8.9
Carrying amounts
At 1 January 2024	324.4
At 31 December 2024	324.4
At 31 December 2025	324.4

All goodwill has arisen from business combinations. The carrying amount of goodwill is allocated across

cash generating units (CGUs) which represent the lowest level within the Group at which the associated

goodwill is monitored for management purposes and is consistent with the operating segments set out

in Note 2. The Group has three material CGUs: Landscaping Products, Building Products and Roofing

Products. The carrying amount of goodwill has been allocated to CGUs as follows:

	2025	2024
	£’m	£’m
Landscaping Products	34.8	34.8
Building Products	43.7	43.7
Roofing Products	245.9	245.9
	324.4	324.4

The Group conducted a full impairment review in the year to determine the recoverable amount based on a

value in use calculation for each CGU compared to the carrying amounts to which goodwill is allocated. This

assessment concluded that the recoverable amount exceeded the carrying amount for each CGU and no

impairment was required. The value-in-use calculation uses cash flow projections based on management’s

latest forecasts covering a five-year period and a post-tax discount rate of 9.9% (2024: 10.0%). Cash flows

beyond that five-year period have been extrapolated using a 2.4% (2024: 2.4%) growth rate. This growth rate

reflects the long-term structural growth in demand for our products.

At the end of the financial year, the recoverable amount of the Landscaping Products CGU exceeded the carrying

amount by £60 million. During 2025, the performance of the Marshalls Landscaping CGU was impacted by

subdued market conditions leading to profits being below expectation. Within the five-year forecast period,

cash flows are dependent on the successful execution of the Landscaping Products improvement plan and

the ‘Transform & Grow’ strategy. This plan includes operational efficiency improvements, delivering commercial

excellence, a normalisation of competitive dynamics, and growth in volumes aligned with industry consensus

for the market. The combination of these assumptions is included within the value-in-use of the Landscaping

Products CGU, which forecasts a revenue CAGR of 6%, and given the subjective nature of these assumptions

it is reasonably possible that they will not occur as the directors forecast. The Group has performed

a sensitivity analysis on the reasonably possible changes in key assumptions which illustrates that a

reduction in forecast revenue CAGR of around 2ppts would be required before the carrying amounts

exceeded the value in use. The impairment review is also sensitive to changes in the discount rate with

an increase of 140 basis points in the post-tax discount rate to reduce the headroom to £nil.

At the end of 2025, the recoverable amount of the Roofing Products CGU was £80 million higher than the

carrying amount and assumed a revenue CAGR of 8%. The CAGR in the Roofing Products CGU is sensitive to

future political and regulatory decisions and the industry’s interpretation of the most effective solution to building

regulations requirements regarding the use of roof-integrated solar in new homes. These factors could affect

growth rates within the residential solar PV market and may have a corresponding impact on profit margins.

Changes in regulations regarding both the UK’s ambitions for energy efficiency of residential properties and

specificity on how they should be achieved represent reasonably possible downside risks that could give rise to

a future impairment charge. The Group has performed a sensitivity analysis on the reasonably possible changes

in key assumptions which illustrates that a reduction in revenue CAGR of around 3ppts would be required to

before the carrying amounts exceeded the value in use. The impairment review is also sensitive to changes in the

discount rate with an increase of 110 basis points in the post-rate discount rate to reduce the headroom to £nil.

The Directors believe that any reasonably possible change in the key assumptions on which the recoverable

amounts of Building Products CGU are based on would not cause the aggregate carrying amounts to

exceed the aggregate recoverable amounts.

11 Intangible assets

				Patents,
		Customer	Supplier	trademarks	Development
	Brand	relationships	relationships	and know-how	costs	Software	Total
	£’m	£’m	£’m	£’m	£’m	£’m	£’m
Cost
At 1 January 2024	82.8	158.2	1.6	1.7	0.7	28.4	273.4
Additions	—	—	—	—	—	2.4	2.4
At 31 December 2024	82.8	158.2	1.6	1.7	0.7	30.8	275.8
At 1 January 2025	82.8	158.2	1.6	1.7	0.7	30.8	275.8
Additions	—	—	—	—	—	0.5	0.5
At 31 December 2025	82.8	158.2	1.6	1.7	0.7	31.3	276.3
Amortisation and impairment losses
At 1 January 2024	4.8	18.9	1.5	1.6	0.6	18.5	45.9
Amortisation for the year	2.4	7.9	0.1	—	0.1	1.6	12.1
At 31 December 2024	7.2	26.8	1.6	1.6	0.7	20.1	58.0
At 1 January 2025	7.2	26.8	1.6	1.6	0.7	20.1	58.0
Amortisation for the year	2.4	7.9	—	0.1	—	1.9	12.3
At 31 December 2025	9.6	34.7	1.6	1.7	0.7	22.0	70.3
Net book value
At 31 December 2024	75.6	131.4	—	0.1	—	10.7	217.8
At 31 December 2025	73.2	123.5	—	—	—	9.3	206.0

Included in software additions is £0.2 million (2024: £1.0 million) of own work capitalised.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 138

Notes to the Consolidated Financial Statements continued

11 Intangible assets continued

Group cost of software includes £0.2 million (2024: £1.9 million) in respect of assets in the course

of construction.

There is no capital expenditure that has been contracted for, but for which no provision has been made

in the Consolidated Financial Statements.

Amortisation charge

The amortisation charge is recognised in the following line item in the Consolidated Income Statement:

	2025	2024
	£’m	£’m
Net operating costs (Note 3)	12.3	12.1

12 Property, plant and equipment

	Land and		Plant, machinery
	buildings	Quarries	and vehicles	Total
	£’m	£’m	£’m	£’m
Cost
At 1 January 2024	153.4	24.8	440.9	619.1
Additions	0.6	—	8.6	9.2
Reclassifications	1.6	(1.5)	(0.1)	—
Reclassified as held for sale	(0.7)	(0.1)	—	(0.8)
Disposals	(0.9)	(3.9)	(7.2)	(12.0)
At 31 December 2024	154.0	19.3	442.2	615.5
At 1 January 2025	154.0	19.3	442.2	615.5
Additions	2.5	—	10.8	13.3
Reclassifications from right-of-use-assets	—	0.4	—	0.4
Reclassified as held for sale	(0.2)	—	—	(0.2)
Disposals	—	—	(0.8)	(0.8)
At 31 December 2025	156.3	19.7	452.2	628.2
Depreciation and impairment losses
At 1 January 2024	47.3	12.8	309.6	369.7
Depreciation charge for the year	2.8	0.5	18.8	22.1
Reclassified as held for sale	(0.1)	—	—	(0.1)
Reclassifications	1.4	(1.4)	—	—
Disposals	(1.0)	(3.5)	(6.5)	(11.0)
At 31 December 2024	50.4	8.4	321.9	380.7
At 1 January 2025	50.4	8.4	321.9	380.7
Depreciation charge for the year	2.5	0.1	17.2	19.8
Reclassified as held for sale	—	—	—	—
Impairments	—	—	4.5	4.5
Disposals	—	—	(0.7)	(0.7)
At 31 December 2025	52.9	8.5	342.9	404.3
Net book value
At 31 December 2024	103.6	10.9	120.3	234.8
At 31 December 2025	103.4	11.2	109.3	223.9

The impairments in 2025, totalling £4.5 million, represent the assets being written down to recoverable value

in relation to major restructuring exercises when the Group took steps to reduce manufacturing capacity

and the cost base in response to a reduction in market demand.

During the year ended 31 December 2025, property, plant and equipment with a book value of £0.2 million

(2024: £0.7 million) has been reclassified as held for sale in accordance with IFRS 5 “Non-current Assets

Held for Sale and Discontinued Operations”. Total assets classified as held for sale at 31 December 2025

amounted to £0.9 million (2024: £1.5 million).

Group cost of land and buildings and plant and machinery includes £0.5 million (2024: £nil) and £5.2 million

(2024: £2.0 million) respectively for assets in the course of construction.

Capital commitments

	2025	2024
	£’m	£’m
Capital expenditure that has been contracted for but for which no provision has been made in the Consolidated Financial Statements	3.1	2.2

Depreciation charge

The depreciation charge is recognised in the following line item in the Consolidated Income Statement:

	2025	2024
	£’m	£’m
Net operating costs (Note 3)	19.8	22.1

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 139

Notes to the Consolidated Financial Statements continued

13 Right-of-use assets

	Land and	Plant and
	buildings	equipment	Total
	£’m	£’m	£’m
Cost
At 1 January 2024	19.2	52.4	71.6
Additions	2.9	18.7	21.6
Disposals	(0.7)	(34.7)	(35.4)
Modifications	0.4	(0.6)	(0.2)
At 31 December 2024	21.8	35.8	57.6
At 1 January 2025	21.8	35.8	57.6
Additions	3.2	8.5	11.7
Reclassified to property, plant and equipment	(0.4)	—	(0.4)
Disposals	(5.2)	(11.7)	(16.9)
Modifications	5.0	(1.9)	3.1
At 31 December 2025	24.4	30.7	55.1
Depreciation and impairment losses
At 1 January 2024	3.2	26.7	29.9
Depreciation charge for the year	1.8	5.5	7.3
Disposals	(0.6)	(11.4)	(12.0)
At 31 December 2024	4.4	20.8	25.2
At 1 January 2025	4.4	20.8	25.2
Depreciation charge for the year	1.7	5.1	6.8
Disposals	(4.7)	(10.9)	(15.6)
At 31 December 2025	1.4	15.0	16.4
Net book value
At 31 December 2024	17.4	15.0	32.4
At 31 December 2025	23.0	15.7	38.7

Depreciation charge

The depreciation charge is recognised in the following line item in the Consolidated Income Statement:

	2025	2024
	£’m	£’m
Net operating costs (Note 3)	6.8	7.3

Lease commitments

	2025	2024
	£’m	£’m
Lease commitments that have been contracted for but have not yet
commenced	0.6	2.6

In the year ended 31 December 2024, disposal of right-of-use assets principally arose in connection with

the outsourcing of the Group’s logistics function.

14 Inventories

	2025	2024
	£’m	£’m
Raw materials and consumables	28.0	28.2
Finished goods and goods for resale	109.2	110.0
	137.2	138.2

Inventories stated at a net realisable value less than cost at 31 December 2025 amounted to £12.2 million

(2024: £11.7 million). The write down of inventories made during the year amounted to £5.5 million (2024:

£3.8 million), including £2.4 million in relation to an impairment relating to the closure of the Natural Stone

processing site and partial closure of a Landscaping Products site (Note 4). There were £2.5 million of

reversals of inventory write downs made in previous years in 2025 (2024: £1.7 million).

15 Trade and other receivables

	2025	2024
	£’m	£’m
Trade receivables	72.3	72.7
Other receivables	2.9	3.4
Prepayments and accrued income	4.4	4.7
	79.6	80.8

Ageing of trade receivables

	2025	2024
	£’m	£’m
Not past due	58.0	57.3
Overdue by less than 30 days	14.2	13.3
Overdue by between 30 and 60 days	0.7	1.0
Overdue by more than 60 days	0.4	2.2
	73.3	73.8

There were no net receivables due after more than one year (2024: £nil). All amounts above are disclosed

gross of a provision for expected credit losses of £1.0 million (2024: £1.1 million). This provision has been

determined using a lifetime expected credit loss calculation. Assumptions made regarding the recoverability

of balances have been determined with reference to past default experiences in line with our policies and

understanding. Balances are only written off if deemed irrecoverable after all credit control procedures have

been exhausted.

16 Cash and cash equivalents

	2025	2024
	£’m	£’m
Cash and cash equivalents	4.9	18.9

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 140

Notes to the Consolidated Financial Statements continued

17 Trade and other payables

	2025	2024
	£’m	£’m
Current liabilities
Trade payables	66.2	72.5
Taxation and social security	10.0	9.5
Other payables	9.3	9.9
Accruals	31.8	40.2
	117.3	132.1

All trade payables are due in six months or less.

Included within accruals is £0.9 million (2024: £1.1 million) in relation to outstanding insurance claim

liabilities and £3.3 million (2024: £0.2 million) in relation to an accrual for redundancy costs.

During the year, following a review of the underlying obligations, £3.9 million of liabilities relating to

restoration & dilapidation obligations were re-presented as provisions (previously accruals) to better reflect

the uncertainties associated with these balances (see Note 22).

18 Interest-bearing loans and borrowings

	2025	2024
	£’m	£’m
Analysed as:
Non-current liabilities	142.8	152.8
	142.8	152.8

Bank loans

The bank loans are subject to intra-Group guarantees by certain subsidiary undertakings.

19 Lease liabilities

	2025	2024
	£’m	£’m
Analysed as:
Amounts due for settlement within twelve months (shown under current liabilities)	5.6	5.7
Amounts due for settlement after twelve months	33.5	29.7
	39.1	35.4

		2025			2024
	Minimum			Minimum
	lease			lease
	payments	Interest	Principal	payments	Interest	Principal
	£’m	£’m	£’m	£’m	£’m	£’m
Less than 1 year	7.5	1.9	5.6	7.2	1.5	5.7
1 to 2 years	6.7	1.7	5.0	6.0	1.4	4.6
2 to 5 years	14.3	3.2	11.1	13.6	2.9	10.7
In more than 5 years	26.5	9.1	17.4	19.9	5.5	14.4
	55.0	15.9	39.1	46.7	11.3	35.4

As at 31 December 2025, the total minimum lease payments (above) comprised property of £37.0 million

(2024: £28.7 million) and plant, machinery and vehicles of £18.0 million (2024: £18.0 million).

Certain leased properties have been sublet by the Group. Sublease payments of £0.1 million (2024: £0.2 million)

are expected to be received during the following financial year. An amount of £0.1 million (2024: £0.2 million)

was recognised as income in the Consolidated Income Statement within net operating costs in respect

of subleases.

The Group does not face a significant liquidity risk with regard to its lease liabilities. For the year ended

31 December 2025, the interest expense on lease liabilities amounted to £2.0 million (2024: £1.7 million).

Lease liabilities are calculated at the present value of the lease payments that are not paid at the

commencement date.

For the year ended 31 December 2025, the average effective borrowing rate was 4.9% (2024: 5.0%). Interest

rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have

been entered into for contingent rental payments.

The vast majority of lease obligations are denominated in Sterling.

For the year ended 31 December 2025, the total cash outflow in relation to leases amounts to £9.1 million

(2024: £7.0 million). The total cash outflow in relation to short-term and low-value leases was £5.1 million

(2024: £2.7 million).

For the year ended 31 December 2024, lease liabilities totalling £24.4 million were derecognised as a result

of the outsourcing of the Group’s logistics function.

20 Financial instruments

The Group holds and uses financial instruments to finance its operations and to manage its interest rate, liquidity

and currency risks. The Group primarily finances its operations using share capital, retained profits and borrowings.

The Group’s bank loans are non-equity funding instruments, further details of which are set out on page 144.

As directed by the Board, the Group does not engage in speculative activities using derivative financial

instruments. Group cash reserves are held centrally to take advantage of the most rewarding short-term

investment opportunities. Forward foreign currency contracts are used in the management of currency risk.

The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign

currency risk and pricing risk. The Board reviews and agrees the policies for managing each of these risks

and they have remained unchanged since 2024.

Capital management

The Group defines the capital that it manages as its total equity and net debt balances. The Group manages

its capital structure in light of current economic conditions and its strategic objectives to ensure that it is

able to continue as a going concern whilst maximising the return to stakeholders through the optimisation

of debt and equity balances.

The Group manages its medium-term bank debt to ensure continuity of funding and the policy is to arrange

funding ahead of requirements and to maintain sufficient undrawn committed facilities. A key objective is to

ensure compliance with the covenants set out in the Group’s bank facility agreements.

From time to time the Group purchases its own shares on the market; the timing of these purchases

depends on market prices. Primarily the shares are intended to be used for issuing shares under the Group’s

incentive schemes. Buy and sell decisions are made on a specific transaction basis by the Board.

There has been no change in the objectives, policies or processes with regard to capital management

during the years ended 31 December 2025 and 31 December 2024.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 141

Notes to the Consolidated Financial Statements continued

20 Financial instruments continued

Financial risks

The Group has exposure to a number of financial risks through the conduct of its operations. Risk

management is governed by the Group’s operational policies, guidelines and authorisation procedures,

which are outlined in the Strategic Report on pages 52 to 60. The key financial risks resulting from financial

instruments are liquidity risk, interest rate risk, credit risk, foreign currency risk and pricing risk.

In managing interest rate and currency risks the Group aims to reduce the impact of short-term fluctuations

on the Group’s earnings. Over the longer term, however, permanent changes in foreign exchange and interest

rates would have an impact on consolidated earnings. For instance, a weakening of Pound Sterling on the

foreign currency market would increase the cost of certain raw materials, whereas a strengthening would

have the opposite effect.

(a) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Board is responsible for ensuring that the Group has sufficient liquidity to meet its financial liabilities

as they fall due and does so by monitoring cash flow forecasts and budgets. Cash resources are largely and

normally generated through operations and short-term flexibility is achieved by bank facilities. Bank debt

is raised centrally and the Group aims to maintain a balance between flexibility and continuity of funding

by having a range of maturities on its borrowings. Details of the Group borrowing facility are provided on

pages 144 and 145.

(b) Interest rate risk

The Group has a single syndicated debt facility comprising a term loan of £120 million and revolving credit

facility of £150 million. The Group borrows at floating rates of interest and, where appropriate, uses interest

rate swaps and interest rate caps to generate the desired interest rate profile, thereby managing the Group’s

exposure to interest rate fluctuations.

80% of the £120 million term loan is covered by interest rate swaps and caps of varying maturities up until

2027, which reflects the maturity date of the related loans and medium-term requirements, in accordance

with Group policy. The Group classifies its interest rate swaps as cash flow hedges and states them at fair

value. The fair value of interest rate swaps is £0.3 million asset (2024: £1.0 million asset) and is recognised

within the hedge reserve where effective on an ongoing basis. The period that the swaps cover is matched

against the debt maturity in order to fix the impact on the Income Statement. During the year £0.3 million

(2024: £1.4 million) has been recognised in other comprehensive income for the year with £1.1 million

(2024: £2.2 million) being reclassified from equity to the Income Statement. The interest rate swaps have

been fully effective in the period.

Sensitivity analysis

A change of 100 basis points in interest rates at the Balance Sheet date would have decreased equity and

profit by the amounts shown below. The sensitivity analysis has been undertaken before the effect of tax.

The sensitivity analysis of the Group’s exposure to interest rate risk has been determined based on the

change taking place at the beginning of the financial year and held constant throughout the reporting period.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant and

considers the effect of financial instruments with variable interest rates, financial instruments at fair value

through profit or loss or available for sale with fixed interest rates and the fixed rate element of interest rate

swaps. The analysis was performed on the same basis for 2024.

	2025	2024
	£’m	£’m
Increase of 100 basis points	(0.7)	(0.7)
Decrease of 100 basis points	0.7	0.7

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

Credit evaluations are performed on all customers requiring credit over a certain amount and, where appropriate,

credit insurance cover is obtained. This provides excellent intelligence to minimise the number and value of

bad debts and ultimately provides compensation if bad debts are incurred. An ageing of trade receivables

is shown in Note 15 on page 140.

Cash and cash equivalents of £4.9 million (2024: £18.9 million) are held with financial institutions that have

an A+ credit rating.

Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal

to or better than the Group. Transactions involving derivative financial instruments are with counterparties

with which the Group has a signed netting agreement as well as sound credit ratings. Derivative financial

instruments of £0.3 million (2024: £1.1 million) are all held with financial institutions that have an A+ credit

rating. Given their high credit ratings, management does not expect any counterparty to fail to meet

its obligations.

At the Balance Sheet date there were no significant concentrations of credit risk. The maximum exposure

to credit risk is represented by the carrying amount of each financial asset, including derivative financial

instruments, in the Balance Sheet.

(d) Foreign currency risk

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency

other than Sterling. The currencies giving rise to this risk are primarily Euros and US Dollars.

The Group’s policy is to cover all significant foreign currency commitments in respect of trade receivables

and trade payables by using forward foreign currency contracts. All the forward exchange contracts have

maturities of less than one year after the Balance Sheet date. Where necessary, the forward exchange

contracts are rolled over at maturity.

The Group classifies its forward exchange contracts as cash flow hedges and states them at fair value.

The fair value of forward exchange contracts is a £0.1 million liability (2024: £0.2 million) and is adjusted

against the hedging reserve on an ongoing basis. During the year £0.2 million (2024: £0.2 million) has been

recognised in other comprehensive income for the year, with £nil (2024: £0.1 million) being reclassified from

equity to the Income Statement. At 31 December 2025 all outstanding forward exchange contracts had a

maturity date within twelve months.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 142

Notes to the Consolidated Financial Statements continued

20 Financial instruments continued

Financial risks continued

(d) Foreign currency risk continued

The foreign currency profile of monetary items was:

		2025				2024
	Sterling	Euro	US Dollar	Total	Sterling	Euro	US Dollar	Total
	£’m	£’m	£’m	£’m	£’m	£’m	£’m	£’m
Cash and cash equivalents	1.8	0.5	2.6	4.9	14.1	1.1	3.7	18.9
Trade receivables	71.6	0.1	0.6	72.3	72.8	—	—	72.8
Secured bank loans	(142.8)	—	—	(142.8)	(152.8)	—	—	(152.8)
Trade payables	(64.8)	(1.0)	(0.4)	(66.2)	(70.7)	(1.6)	(0.2)	(72.5)
Lease liabilities	(39.1)	—	—	(39.1)	(35.4)	—	—	(35.4)
Derivative financial instruments	0.3	—	(0.1)	0.2	1.1	—	—	1.1
Balance Sheet exposure	(173.0)	(0.4)	2.7	(170.7)	(170.9)	(0.5)	3.5	(167.9)

A 10% strengthening and weakening of the following currencies against the Pound Sterling at 31 December 2025 would have increased/(decreased) equity and profit or loss by the amounts shown below. This calculation assumes that

the change occurred at the Balance Sheet date and had been applied to risk exposures existing at that date.

This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain constant. The analysis was performed on the same basis for 2024:

	2025	2024
	£’m	£’m
10% strengthening of £ against €	—	0.1
10% weakening of £ against €	—	(0.1)
10% strengthening of £ against $	(0.2)	(0.3)
10% weakening of £ against $	0.2	0.3

(e) Pricing risks

Where appropriate the Group used hedging instruments to mitigate the risks of significant forward price rises of fuel in relation to expected consumption. Fuel hedges were in place until August 2024. There are no fuel

hedges in place at 31 December 2025. During the year £nil (2024: £0.1 million) has been recognised in other comprehensive income, with £nil (2024: £0.2 million) being reclassified from equity to the Income Statement.

The fuel hedges were fully effective in the period to 31 December 2024.

When combining interest rate swaps, fuel hedges and forward contracts, this gives a total of £0.1 million credit (2024: £1.6 million credit) recognised in other comprehensive income for the year, with £1.1 million credit

(2024: £2.4 million credit) being reclassified from equity to the Income Statement.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 143

Notes to the Consolidated Financial Statements continued

20 Financial instruments continued

Financial risks continued

(f) Other risks

Further information about the Group’s strategic and financial risks is contained in the Strategic Report on pages 52 to 60.

Effective interest rates and maturity of liabilities

At 31 December 2025 there was £39.1 million (2024: £35.4 million) of Group borrowings on a fixed rate. The interest rate profile of the financial liabilities is set out below. The tables also disclose cash and cash equivalents

in order to reconcile to net debt (Note 25).

	Fixed or	Effective		6 months	6–12	1–2	2–5	More than
	variable	interest rate	Total	or less	months	years	years	5 years
	rate	%	£’m	£’m	£’m	£’m	£’m	£’m
31 December 2025
Cash and cash equivalents (Note 16)	Variable	6.3	(4.9)	(4.9)	—	—	—	—
Interest-bearing loans and borrowings (Note 18)	Variable	6.3	142.8	—	—	—	142.8	—
Lease liabilities (Note 19)	Fixed	4.9	39.1	2.8	2.8	5.0	11.1	17.4
			177.0	(2.1)	2.8	5.0	153.9	17.4

	Fixed or	Effective		6 months	6–12	1–2	2–5	More than
	variable	interest rate	Total	or less	months	years	years	5 years
	rate	%	£’m	£’m	£’m	£’m	£’m	£’m
31 December 2024
Cash and cash equivalents (Note 16)	Variable	5.8	(18.9)	(18.9)	—	—	—	—
Interest-bearing loans and borrowings (Note 18)	Variable	5.8	152.8	—	—	8.4	144.4	—
Lease liabilities (Note 19)	Fixed	5.0	35.4	2.9	2.8	4.6	10.7	14.4
			169.3	(16.0)	2.8	13.0	155.1	14.4

At 31 December the undiscounted outstanding contractual payments (including interest) of financial liabilities were as follows:

	Fixed or	Carrying		6 months	6–12	1–2	2–5	More than
	variable	value	Total	or less	months	years	years	5 years
	rate	£’m	£’m	£’m	£’m	£’m	£’m	£’m
31 December 2025
Interest-bearing loans and borrowings	Variable	142.8	173.5	4.0	3.9	7.9	157.7	—
Trade and other payables	Variable	112.7	112.7	112.7	—	—	—	—
Lease liabilities	Fixed	39.1	55.0	3.7	3.8	6.7	14.3	26.5
Derivative financial assets	Fixed	(0.2)	(0.2)	—	(0.1)	(0.1)	—	—
		294.4	341.0	120.4	7.6	14.5	172.0	26.5

	Fixed or	Carrying		6 months	6–12	1–2	2–5	More than
	variable	value	Total	or less	months	years	years	5 years
	rate	£’m	£’m	£’m	£’m	£’m	£’m	£’m
31 December 2024
Interest-bearing loans and borrowings	Variable	152.8	174.7	4.8	4.8	17.7	147.4	—
Trade and other payables	Variable	122.8	122.8	122.8	—	—	—	—
Lease liabilities	Fixed	35.4	46.7	3.6	3.6	6.0	13.6	19.9
Derivative financial assets	Fixed	(1.1)	(1.1)	(0.3)	—	(0.8)	—	—
		309.9	343.1	130.9	8.4	22.9	161.0	19.9

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 144

Notes to the Consolidated Financial Statements continued

Estimation of fair values

The following summarises the major methods and assumptions used in estimating the fair values of

financial instruments reflected in the table. Other than contingent consideration, which uses a level 3 basis,

all use level 2 valuation techniques.

(a) Derivatives

Derivative contracts are either marked to market using listed market prices or by discounting the contractual

forward price at the relevant rate and deducting the current spot rate. For interest rate swaps, broker

quotes are used.

(b) Interest-bearing loans and borrowings

Fair value is calculated based on the expected future principal and interest cash flows discounted at the

market rate of interest at the Balance Sheet date.

For receivables/payables with a remaining life of less than one year, the notional amount is deemed to

reflect the fair value. All other receivables/payables are discounted to determine the fair value.

(d) Contingent consideration

The basis of calculating contingent consideration is set out in Note 22 on pages 148 and 149.

(e) Fair value hierarchy

The table below analyses financial instruments, measured at fair value, into a fair value hierarchy based on

the valuation techniques used to determine fair value.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices)

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

	Level 1	Level 2	Level 3	Total
	£’m	£’m	£’m	£’m
31 December 2025
Derivative financial assets	—	0.2	—	0.2
Contingent consideration (Note 22)	—	—	—	—
	—	0.2	—	0.2
31 December 2024
Derivative financial assets	—	1.1	—	1.1
Contingent consideration (Note 22)	—	—	(6.6)	(6.6)
	—	1.1	(6.6)	(5.5)

20 Financial instruments continued

Borrowing facilities

The total bank borrowing facility at 31 December 2025 amounted to £270.0 million (2024: £315.0 million),

of which £125.0 million (2024: £160.0 million) remained unutilised. The undrawn facility available at

31 December 2025, in respect of which all conditions precedent had been met, was as follows:

	2025	2024
	£’m	£’m
Committed:
Expiring in more than 5 years	—	—
Expiring in more than 2 years but not more than 5 years	125.0	160.0
Expiring in 1 year or less	—	—
Uncommitted:	—	—
Expiring in 1 year or less	—	—
	125.0	160.0

The Group’s committed bank facilities are charged at variable rates based on SONIA plus a margin. The

Group’s bank facility continues to be aligned with the current strategy to ensure that headroom against the

available facility remains at appropriate levels and is structured to provide committed medium-term debt.

Marshalls has a receivables purchase agreement with a UK bank and is party to a reverse factoring

finance arrangement between a third-party UK bank and one of the Group’s key customers (the principal

relationship is between the customer and its partner bank). Under these agreements, Marshalls has the

option of transferring the ownership of certain customer receivables to the bank or to receive advance

payment of approved invoices from the key customer, respectively. Utilising either agreement results in the

derecognition of receivables from the Group’s Balance Sheet. The Group utilises these facilities periodically

in order to help manage its short-term funding requirements and pays a finance charge on utilisation.

Fair values of financial assets and financial liabilities

A comparison by category of the book values and fair values of the financial assets and liabilities of the

Group at 31 December 2025 is shown below:

	2025		2024
	Book amount	Fair value	Book amount	Fair value
	£’m	£’m	£’m	£’m
Trade and other receivables	75.2	75.2	76.1	76.1
Cash and cash equivalents	4.9	4.9	18.9	18.9
Bank loans	(142.8)	(142.0)	(152.8)	(146.1)
Trade payables, other payables and provisions	(112.7)	(112.7)	(122.8)	(122.8)
Interest rate swaps, forward contracts
and fuel hedges	0.2	0.2	1.1	1.1
Contingent consideration	—	—	(6.6)	(6.6)
Financial instrument assets
and liabilities – net	(175.2)		(186.1)
Non-financial instrument assets
and liabilities – net	830.9		847.4
	655.7		661.3

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 145

Notes to the Consolidated Financial Statements continued

21 Employee benefits

Marshalls Group Limited sponsors a funded defined benefit pension scheme in the UK (the Scheme). The

Scheme is administered within a trust which is legally separate from the Company. The Trustee Board is

appointed by both the Company and the Scheme’s membership and acts in the interest of the Scheme and

all relevant stakeholders, including the members and the Company. The Trustee is also responsible for the

investment of the Scheme’s assets.

The defined benefit section of the Scheme provides pension and lump sums to members on retirement and

to dependants on death. The defined benefit section closed to future accrual of benefits on 30 June 2006

with the active members becoming entitled to a deferred pension. Members no longer pay contributions to

the defined benefit section. Company contributions to the defined benefit section after this date are used to

fund any deficit in the Scheme and the expenses associated with administering the Scheme, as determined

by regular actuarial valuations.

The Trustee is required to use prudent assumptions to value the liabilities and costs of the Scheme whereas

the accounting assumptions must be best estimates.

The defined benefit section of the Scheme poses a number of risks to the Company, for example, longevity

risk, investment risk, interest rate risk, inflation risk and salary risk. The Trustee is aware of these risks and

uses various techniques to control them. The Trustee has a number of internal control policies, including a

Risk Register, which are in place to manage and monitor the various risks it faces. The Trustee’s investment

strategy incorporates the use of liability-driven investments (LDIs) to minimise the sensitivity of the actuarial

funding position to movements in interest rates and inflation rates.

The defined benefit section of the Scheme is subject to regular actuarial valuations, which are usually

carried out every three years. These actuarial valuations are carried out in accordance with the requirements

of the Pensions Act 2004 and so include deliberate margins for prudence. This contrasts with these accounting

disclosures which are determined using best estimate assumptions. A formal actuarial valuation was

carried out as at 5 April 2024. The results of that valuation have been projected to 31 December 2025 by

a qualified independent actuary. The Scheme is in a surplus position and the Company does not expect

cash contributions to be payable during the year to 31 December 2026.

The figures in the following disclosure were measured using the projected unit method.

The amounts recognised in the Consolidated Balance Sheet were as follows:

	2025	2024
	£’m	£’m
Present value of Scheme liabilities	(200.9)	(204.2)
Fair value of Scheme assets	225.8	228.3
Net amount recognised at the year end (before any adjustments for deferred tax)	24.9	24.1

The current and past service costs, settlements and curtailments, together with the net interest expense for

the year, are included in the employee benefits expense in the Consolidated Statement of Comprehensive

Income. Remeasurements of the net defined benefit surplus are included in other comprehensive income.

	2025	2024
	£’m	£’m
Net interest (income)/expense recognised in the Consolidated
Income Statement	(0.6)	0.3
Remeasurements of the net liability:
Return on Scheme assets (excluding amount included in interest expense)	0.6	18.9
Gain arising from changes in financial assumptions	(4.0)	(22.3)
Loss/(gain) arising from changes in demographic assumptions	1.9	(3.1)
Experience loss/(gain)	1.3	(6.9)
Debit recorded in other comprehensive income	(0.2)	(13.4)
Total defined benefit credit	(0.8)	(13.1)

The principal actuarial assumptions used were:

	2025	2024
Liability discount rate	5.5%	5.4%
Inflation assumption – RPI	2.9%	3.2%
Inflation assumption – CPI	2.5%	2.8%
Rate of increase in salaries	n/a	n/a
Revaluation of deferred pensions	2.5%	2.8%
Increases for pensions in payment:
CPI pension increases (maximum 5% p.a.)	2.5%	2.7%
CPI pension increases (maximum 5% p.a., minimum 3% p.a.)	3.4%	3.5%
CPI pension increases (maximum 3% p.a.)	2.0%	2.1%
Proportion of employees opting for early retirement	0%	0%
Proportion of employees commuting pension for cash	80%	80%
Mortality assumption – before retirement	Same as post-	Same as post-
	retirement	retirement
Mortality assumption – after retirement (males)	S4PXA tables	S4PXA tables
Loading	116%	116%
Projection basis	Year of birth	Year of birth
	CMI_2024	CMI_2023
	1.0%	1.0%
Mortality assumption – after retirement (females)	S4PXA tables	S4PXA tables
Loading	116%	116%
Projection basis	Year of birth	Year of birth
	CMI_2024	CMI_2023
Future expected lifetime of current pensioner at age 65:	1.0%	1.0%
Male aged 65 at year end	85.2	84.8
Female aged 65 at year end	87.5	87.3
Future expected lifetime of future pensioner at age 65:
Male aged 45 at year end	86.1	85.7
Female aged 45 at year end	88.6	88.4

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 146

Notes to the Consolidated Financial Statements continued

21 Employee benefits continued

Changes in the present value of assets over the year

	2025	2024
	£’m	£’m
Fair value of assets at the start of the year	228.3	250.4
Interest income	12.1	11.2
Return on assets (excluding amount included in net interest expense)	(0.6)	(18.9)
Benefits paid	(13.2)	(13.6)
Administration expenses	(0.8)	(0.8)
Fair value of assets at the end of the year	225.8	228.3

Changes in the present value of liabilities over the year

	2025	2024
	£’m	£’m
Liabilities at the start of the year	204.2	239.4
Past service cost	—	—
Interest cost	10.8	10.7
Remeasurement:
Actuarial gain arising from changes in financial assumptions	(4.0)	(22.3)
Actuarial loss/(gain) arising from changes in demographic assumptions	1.9	(3.1)
Experience loss/(gain)	1.3	(6.9)
Benefits paid	(13.3)	(13.6)
Liabilities at the end of the year	200.9	204.2

The split of the Scheme’s liabilities by category of membership is as follows:

	2025	2024
	£’m	£’m
Deferred pensioners	88.3	79.9
Pensioners in payment	112.6	124.3
	200.9	204.2
Average duration of the Scheme’s liabilities at the end of the year (in years)	12	12

The major categories of Scheme assets are as follows:

	2025	2024
	£’m	£’m
Return-seeking assets
UK equities	—	0.8
Overseas equities	—	24.3
Asset backed securities	35.6	17.1
Other equity type investments	26.9	26.9
Total return-seeking assets	62.5	69.1
Other Insured pensioners	0.3	0.3
Cash	5.2	4.1
Property	—	28.9
Liability-driven investments and bonds	157.8	125.9
Total matching assets	163.3	159.2
Total market value of assets	225.8	228.3

The return-seeking assets and LDI assets have quoted prices in active markets. The valuation of the insured

pensions has been taken as the value of the corresponding liabilities assessed using the assumptions set

out above.

The Scheme has no investments in the Company or in property occupied by the Company.

The Company expects to pay no contributions to the defined benefit section of the Scheme during the year

ended 31 December 2026.

Sensitivity of the liability value to changes in the principal assumptions

If the discount rate were 0.5% higher/(lower), the defined benefit section Scheme liabilities would decrease

by approximately £11.0 million (increase by £11.0 million) if all the other assumptions remained unchanged.

If the inflation assumption were 0.5% higher/(lower), the Scheme liabilities would increase by £4.8 million

(decrease by £4.8 million). In this calculation all assumptions related to the inflation assumption have been

appropriately adjusted: that is salary, the deferred pension and pension in payment increases. The other

assumptions remain unchanged.

If life expectancies were to increase/(decrease) by one year, the Scheme liabilities would increase by

£5.0 million/(decrease by £5.0 million) if all the other assumptions remained unchanged.

Virgin Media vs NTL Pension Trustees II Limited

In June 2023, the High Court judged that amendments made to the Virgin Media pension scheme were

invalid because the necessary S37 certification associated to these historic amendments was not prepared

or documented appropriately. The case was subsequently reviewed by the Court of Appeal in July 2024

which upheld the High Court’s decision.

The High Court’s decision has wide ranging implications, affecting other schemes that were contracted

out on a salary-related basis and made amendments between April 1997 and April 2016. Historic scheme

amendments without the appropriate certification might now be considered invalid, leading to additional,

unforeseen liabilities. The Marshalls plc Pension Scheme was not contracted out on a salary-related basis

over the relevant period. As such, the ruling has no implications for the Scheme.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 147

Notes to the Consolidated Financial Statements continued

21 Employee benefits continued

Share based payments

Management Incentive Plan (MIP)

Share-based payment awards have been made during the year in accordance with the rules of the MIP.

Full details of the performance criteria and the basis of operation of the MIP are set out in the Remuneration

Committee Report on pages 96 to 103.

Equity settled awards are settled by physical delivery of shares. The following equity settled awards have

been granted:

	Number of
	instruments	£’m	Plan year
Equity settled awards granted to other employees	6,046	—	2019
Equity settled awards granted to other employees	25,138	0.1	2021
Equity settled awards granted to Directors of Marshalls plc	88,679	0.3	2022
Equity settled awards granted to other employees	97,317	0.3	2022
Equity settled awards granted to Directors of Marshalls plc	85,714	0.3	2023
Equity settled awards granted to other employees	67,951	0.2	2023
Equity settled awards granted to Directors of Marshalls plc	179,690	0.5	2024
Equity settled awards granted to other employees	147,689	0.5	2024
Equity settled awards granted to Directors of Marshalls plc	299,377	0.5	2025
Equity settled awards granted to other employees	277,303	0.5	2025
	1,274,904	3.2

Plan years 2019 to 2022 vested at the end of cycle 3 which was March 2024. Plan years 2023 to 2026 vest

at the end of cycle 4 which is in March 2027.

Analysis of closing balance (deferred into shares):

	2025		2024
	£’m	Shares	£’m	Shares
Equity settled awards granted to Directors of Marshalls plc	1.6	653,460	2.2	694,900
Equity settled awards granted to other employees	1.6	621,444	3.1	787,462
	3.2	1,274,904	5.3	1,482,362

	2025		2024
	Value	Number of	Value	Number of
	£’m	options	£’m	options
Outstanding at 1 January	5.3	1,482,362	3.8	966,157
Granted	1.0	576,680	2.4	777,636
Change in value of notional shares	(0.4)	(212,611)	0.3	122,752
Lapsed	—	—	—	—
Element released	(2.7)	(571,527)	(1.2)	(384,183)
Outstanding at 31 December	3.2	1,274,904	5.3	1,482,362

The total expenses recognised for the period arising from share-based payments were as follows:

	2025	2024
	£’m	£’m
Awards granted and total expense recognised as employee costs	1.6	4.0

Further details in relation to the Directors are set out in the Remuneration Committee Report on pages 96

to 103. Included in the total expense of £1.6 million (2024: £4.0 million) is an amount of £0.8 million (2024:

£2.4 million) settled as interim cash payments under the terms of the Scheme and which has been included

within wages and salaries in Note 5.

Employee Bonus Share Plan

A Bonus Share Plan was approved by shareholders in May 2015 under which a number of senior management

employees were granted performance related bonuses with an element of this bonus being in the form of

shares. The bonus performance criteria are the same as those applicable to the MIP awards. The bonus

shares take the form of nil-cost options to acquire shares at the end of a three-year vesting period from the

date of grant, and vesting is conditional on continued employment at the end of the vesting period. Awards

are made to participants following publication of the Group’s year-end results. In addition, certain discretionary

share awards have been granted to certain employees in the form of nil-cost options to acquire Ordinary Shares

in Marshalls plc at the end of a three-year period. The total awards outstanding at 31 December 2025 were

over 159,374 shares (31 December 2024: 146,611). The total expenses recognised for the year arising from

share-based payments were £0.6 million (2024: £1.0 million).

Employee profit sharing scheme

At 31 December 2025 the scheme held 42,245 (2024: 42,245) Ordinary Shares in the Company.

22 Provisions

		Other leasehold
	Contingent	dilapidations and
	consideration	quarry restoration	Total
	£’m	£’m	£’m
At 1 January 2024	8.0	—	8.0
Payments made	(3.0)	—	(3.0)
Increase in the provision in the period (Note 4)	1.6	—	1.6
At 31 December 2024	6.6	—	6.6
At 1 January 2025	6.6	—	6.6
Reclassification	—	3.9	3.9
Payments made	(6.6)	(0.1)	(6.7)
Increase in the provision in the period	—	1.4	1.4
At 31 December 2025	—	5.2	5.2

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 148

Notes to the Consolidated Financial Statements continued

22 Provisions continued

	2025	2024
	£’m	£’m
Analysed as:
Current liabilities	—	6.6
Non-current liabilities	5.2	—
	5.2	6.6

The Group recognises provisions for leasehold dilapidations and quarry restoration obligations, representing

the estimated expenditure required to settle the present obligations arising from past events associated with

our sites. Dilapidations provisions reflect the expected cost of reinstating leased properties to the condition

required under lease agreements at the end of the lease term. Restoration provisions reflect the expected cost

of reinstating quarry and mineral sites in accordance with planning consents and other statutory requirements.

Both sets of provisions are measured at management’s best estimate of the expenditure required to settle the

obligation at the reporting date, based on internal and external professional assessments, and are discounted

using UK Government bond rates with similar maturities. The timing and amount of outflows depend on the

lease expiry profile and quarry restoration plans and are subject to uncertainty, principally relating to the scope

of works, future contractor pricing, inflation and any changes in regulatory requirements; actual outcomes may

differ from estimates.

As part of the acquisition of Marley, there was an obligation to pay the vendors of Viridian Solar Limited

deferred consideration which was contingent on the achievement of certain performance targets in the period

post-acquisition. As at 31 December 2024 the Group included £6.6 million as contingent consideration.

The relevant targets were met and £6.6 million was paid in cash to the vendors during 2025.

A charge of £nil (2024: £1.6 million) has been included in adjusting items (Note 4).

23 Deferred taxation

Recognised deferred taxation assets and liabilities

	Assets		Liabilities
	2025	2024	2025	2024
	£’m	£’m	£’m	£’m
Property, plant and equipment	—	—	(20.1)	(21.6)
Intangible assets	—	—	(50.5)	(53.3)
Inventories	—	—	(0.5)	(0.3)
Employee benefits	—	—	(6.2)	(6.0)
Equity settled share-based
payments	0.2	0.8	—	—
Other items	0.5	1.3	(1.8)	(2.5)
Tax assets/(liabilities)	0.7	2.1	(79.1)	(83.7)

The deferred taxation liability at 31 December 2025 has been calculated at 25.0% based on the rate at which

the deferred tax is expected to unwind in the future using rates enacted at the Balance Sheet date.

The deferred taxation liability of £6.2 million (2024: £6.0 million) in relation to employee benefits is in

respect of the net surplus for the defined benefit obligations of £24.9 million (2024: £24.1 million) (Note 21)

calculated at 25.0% (2024: 25.0%).

Deferred taxation liabilities represent sums that might become payable as tax in future years as a result of

transactions that have occurred in the current year. The explanation as to why such liabilities may arise is

included in the notes to the tax reconciliation (Note 7).

The deferred tax liabilities disclosed in the year ended 31 December 2025 include the deferred tax relating to

the Group’s pension scheme assets. Deferred tax assets on capital losses and overseas trading losses have

not been recognised due to uncertainty around the future use of the losses.

Movement in temporary differences

Year ended 31 December 2025

				Recognised	Recognised
				in other	in Statement
	1 January	Recognised	Prior year	comprehensive	of Changes		31 December
	2025	in income	adjustment	income	in Equity 2025
	£’m	£’m	£’m	£’m	£’m	£’m
Property, plant and equipment	(21.6)	1.4	0.1	—	—	(20.1)
Intangible assets	(53.3)	2.8	—	—	—	(50.5)
Inventories	(0.3)	—	(0.2)	—	—	(0.5)
Employee benefits	(6.0)	(0.1)	—	(0.1)	—	(6.2)
Equity settled share-based
payments	0.8	(0.6)	—	—	—	0.2
Other items	(1.2)	—	(0.2)	0.2	(0.1)	(1.3)
	(81.6)	3.5	(0.3)	0.1	(0.1)	(78.4)

Year ended 31 December 2024

				Recognised	Recognised
				in other	in Statement
	1 January	Recognised	Prior year	comprehensive	of Changes		31 December
	2024	in income	adjustment	income	in Equity 2024
	£’m	£’m	£’m	£’m	£’m	£’m
Property, plant and equipment	(23.3)	0.6	1.1	—	—	(21.6)
Intangible assets	(56.1)	2.8	—	—	—	(53.3)
Inventories	(0.5)	0.2	—	—	—	(0.3)
Employee benefits	(2.7)	0.1	—	(3.4)	—	(6.0)
Equity settled share-based
payments	0.5	0.3	—	—	—	0.8
Other items	(2.0)	—	0.2	0.2	0.4	(1.2)
	(84.1)	4.0	1.3	(3.2)	0.4	(81.6)

The deferred tax balances on short-term timing differences are expected to reverse within one to

three years.

Based on the current investment programme of the Group and assuming that current rates of capital

allowances on fixed asset expenditure continue into the future, there is little prospect of any significant

part of the deferred taxation liability of the Company becoming payable over the next three years. It is not

realistic to make any projection after a three-year period.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 149

Notes to the Consolidated Financial Statements continued

24 Called-up share capital

The authorised, issued and fully paid up Ordinary Share capital was as follows:

	Authorised		Issued and paid up
		Value		Value
Ordinary Shares (25 pence nominal)	Number	£’m	Number	£’m
At 1 January and 31 December 2025	300,000,000	75.0	252,968,728	63.2

Share premium account and merger reserve

	Share premium account		Merger reserve
	2025	2024	2025	2024
	£’m	£’m	£’m	£’m
At 1 January and 31 December	200.0	200.0	141.6	141.6

Merger reserve

The merger reserve relates to the issue of new Ordinary Shares as consideration for the acquisition of

Marley Group Limited in 2022. An amount of £141.6 million was credited to the merger reserve in relation

to the issue of these shares and reflects the fair value of the shares at the date of acquisition.

Own shares reserve

Transactions of the Group-sponsored Employee Benefit Trust are included in the Group Financial

Statements. The Trust’s purchases of shares in the Company are debited directly to equity and disclosed

separately in the Balance Sheet as “own shares”. Further details are included on pages 113 and 114.

Capital redemption reserve

The capital redemption reserve records the nominal value of shares repurchased by the Company.

Consolidation reserve

On 8 July 2004 Marshalls plc was introduced as the new holding company of the Group by way of a court-

approved Scheme of Arrangement under Section 425 of the Companies Act 1985. The restructuring was

accounted for as a capital reorganisation and accounting principles were applied as if the Company had

always been the holding company of the Group. The difference between the aggregate nominal value of

the new shares issued by the Company and the called-up share capital, capital redemption reserve and

share premium account of Marshalls Group plc (the previous holding company) was transferred to a

consolidation reserve.

Hedging reserve

This represents the gains and losses arising on derivatives used for cash flow hedging, principally from the

Group’s interest rate swaps, energy price contracts and forward exchange contracts.

Dividends

After the Balance Sheet date, the following dividends were proposed by the Directors. The dividends have

not been provided for and there were no income tax consequences.

	2025	2024
	£’m	£’m
4.5 pence final dividend (2024: 5.4 pence) per Ordinary Share	11.4	13.7

25 Analysis of net debt

	1 January		Movement	Other	31 December
	2025	Cash flow	in leases	changes*	2025
	£’m	£’m	£’m	£’m	£’m
Cash at bank and in hand	18.9	(13.8)	—	(0.2)	4.9
Debt due after 1 year	(152.8)	10.0	—	—	(142.8)
Lease liabilities	(35.4)	6.9	(10.6)	—	(39.1)
	(169.3)	3.1	(10.6)	(0.2)	(177.0)

* Other changes include foreign currency movements on cash and loan balances.

Movement in the net debt is shown net of bank arrangement fees. The amounts above exclude an impact

of derivative instruments.

Reconciliation of net cash flow to movement in net debt

	2025	2024
	£’m	£’m
Net decrease in cash equivalents	(13.8)	(15.7)
Cash outflow from decrease in bank borrowings	10.0	55.0
Cash outflow from principal lease repayments	6.9	5.3
New leases entered into	(10.6)	(20.4)
Lease liability derecognised (Note 19)	—	24.4
Effect of exchange rate fluctuations	(0.2)	(0.3)
Movement in net debt in the year	(7.7)	48.3
Net debt at 1 January	(169.3)	(217.6)
Net debt at 31 December	(177.0)	(169.3)

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 150

Notes to the Consolidated Financial Statements continued

26 Changes in liabilities arising from financing activities

The table below details changes in the Group’s liabilities arising from financing activities, including both cash

and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or

future cash flows will be, classified in the Group’s Consolidated Cash Flow Statement as cash flows from

financing activities.

			Non-cash changes
			Derecognition
	1 January	Financing	of liabilities	Other	31 December
	2025	cash flows *	(Note 19)	changes **	2025
	£’m	£’m	£’m	£’m	£’m
Interest-bearing loans and borrowings (Note 18)	(152.8)	10.0	—	—	(142.8)
Lease liabilities (Note 19)	(35.4)	6.9	—	(10.6)	(39.1)
Total liabilities from financing activities	(188.2)	16.9	—	(10.6)	(181.9)

			Non-cash changes
			Derecognition
	1 January	Financing	of liabilities	Other	31 December
	2024	cash flows *	(Note 19)	changes **	2024
	£’m	£’m	£’m	£’m	£’m
Interest-bearing loans and borrowings (Note 18)	(207.4)	55.0	—	(0.4)	(152.8)
Lease liabilities (Note 19)	(44.7)	5.3	24.4	(20.4)	(35.4)
Total liabilities from financing activities	(252.1)	60.3	24.4	(20.8)	(188.2)

* The cash flows from bank loans, overdrafts and other borrowings make up the net amount of proceeds from borrowings

and repayments of borrowings in the Consolidated Cash Flow Statement.

** New leases and foreign currency movements.

27 Contingent liabilities

National Westminster Bank plc has issued, on behalf of Marshalls plc, the following irrevocable letters of

credit relating to the Group’s cap on self-insurance for employer’s liability and vehicle insurance:

Beneficiary	Amount	Period	Purpose
HDI Global SE – UK	£0.5 million	14 Dec 2020 to 30 Oct 2026	Employer’s liability
AIOI Nissay Dowa Insurance UK Limited	£0.6 million	22 Dec 2020 to 30 Oct 2026	Vehicle insurance
M S Amlin Limited	£0.8 million	10 Feb 2020 to 9 Feb 2027	Employer’s liability

Marshalls plc has provided a statutory Parent Company guarantee to those subsidiaries listed below in order

that they are exempt from the requirements of the Companies Act 2006 relating to the audit of individual

accounts by virtue of Section 479A of the Act.

	Registered
	number
Marshalls Building Products Limited	00113882
Marshalls Properties Limited	04349470
Marshalls EBT Limited	05472428
CPM Group Limited	01005164

28 Related parties

Identity of related parties

The Group has a related party relationship with its Directors.

Transactions with key management personnel

Other than the Directors, there are no senior managers in the Group who are relevant for establishing that

Marshalls plc has the appropriate expertise and experience for the management of its business.

The Directors of the Company as at 31 December 2025 and their immediate relatives control 0.1186%

(2024: 0.1096%) of the voting shares of the Company.

In addition to their salaries and pension allowances, the Group also provides non-cash benefits to Directors.

Further details in relation to Directors are disclosed in the Remuneration Committee Report on pages 96 to 103.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 151

Notes to the Consolidated Financial Statements continued

29 Alternative performance measures

The APMs set out by the Group are made up of earnings-based measures and ratio measures with

a selection of these measures being stated after adjusting items.

APM	Definition and/or purpose
Adjusted operating profit, adjusted	The Directors assess the performance of the Group using these
profit before tax, adjusted profit after tax, adjusted earnings per share, adjusted EBITA, adjusted EBITDA and adjusted operating cash flow	measures including when considering dividend payments.
Adjusted return on capital employed	Adjusted return on capital employed is calculated as adjusted
	EBITA (on an annualised basis) divided by shareholders’ funds plus
	net debt at the period end. It is designed to give further information
	about the returns being generated by the Group as a proportion
	of capital employed.
Adjusted operating cash flow	Operating cash flow conversion is calculated by dividing adjusted
conversion	operating cash flow by adjusted EBITDA (both on an annualised
	basis). Adjusted operating cash flow is calculated by adding back
	adjusting items paid, net financial expenses paid and taxation paid.
	It illustrates the rate of conversion of profitability into cash flow.

Pre-IFRS 16 measures

The Group’s banking covenants are assessed on a pre-IFRS 16 basis. In order to provide transparency and

clarity regarding the Group’s compliance with banking covenants, the following performance measures and

their calculations have been presented:

APM	Definition and purpose
Pre-IFRS 16 adjusted EBITDA	Pre-IFRS 16 adjusted EBITDA is adjusted EBITDA excluding
	right-of-use asset depreciation and profit or loss on the sale of
	property, plant and equipment.
Pre-IFRS 16 net debt	Pre-IFRS 16 net debt comprises cash at bank and in hand and bank
	loans but excludes lease liabilities. It shows the overall net
	indebtedness of the Group on a pre-IFRS 16 basis.
Pre-IFRS 16 net debt leverage	This is calculated by dividing pre-IFRS 16 net debt by adjusted
	pre-IFRS 16 EBITDA (on an annualised basis) to provide a measure
	of leverage.

Other definitions

APM	Definition and purpose
EBITDA	EBITDA is earnings before interest, taxation, depreciation and
	amortisation and provides users with further information about the
	profitability of the business before financing costs, taxation and
	non-cash charges.
EBITA	EBITA is earnings before interest, taxation and amortisation and
	provides users with further information about the profitability of the
	business before financing costs, taxation and amortisation.

Reconciliations of IFRS reported Income Statement measures to Income Statement APMs are set out in the

following three tables. A reconciliation of operating profit to pre-IFRS 16 adjusted EBITDA is set out below:

	2025	2024
	£’m	£’m
Operating profit	32.0	53.9
Adjusting items (Note 4)	24.4	12.8
Adjusted operating profit	56.4	66.7
Amortisation (excluding amortisation of intangible assets arising
on acquisitions)	2.0	1.7
Adjusted EBITA	58.4	68.4
Depreciation	26.6	29.4
Adjusted EBITDA	85.0	97.8
Loss/(profit) on sale of property, plant and equipment	0.1	(0.2)
Right-of-use asset principal payments	(6.9)	(5.3)
Pre-IFRS 16 adjusted EBITDA	78.2	92.3

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 152

Notes to the Consolidated Financial Statements continued

29 Alternative performance measures continued

Other definitions continued

Disclosures required under IFRS are referred to as on a reported basis. Disclosures referred to after adding

back adjusting items are restated and are used to provide additional information and a more detailed

understanding of the Group’s results. Certain measures are reported on an annualised basis to show

the preceding twelve-month period where seasonality can impact on the measure.

Pre-IFRS 16 net debt and pre-IFRS 16 net debt leverage

Net debt comprises cash at bank and in hand, bank loans and leasing liabilities. An analysis of net debt is

provided in Note 25. Net debt on a pre-IFRS 16 basis has been disclosed to provide additional information

and to align with reporting required for the Group’s banking covenants. Pre-IFRS 16 net debt leverage is

defined as pre-IFRS 16 net debt divided by adjusted pre-IFRS 16 EBITDA. Net debt as reported in Note 25

is reconciled to pre-IFRS 16 net debt and pre-IFRS 16 net debt leverage below:

	2025	2024
	£’m	£’m
Net debt	177.0	169.3
IFRS 16 leases	(39.1)	(35.4)
Net debt on a pre-IFRS 16 basis	137.9	133.9
Adjusted pre-IFRS 16 EBITDA	78.2	92.3
Pre-IFRS 16 net debt leverage	1.8	1.5

Return on capital employed (ROCE)

ROCE is defined as adjusted EBITA divided by shareholders’ funds plus net debt.

	2025	2024
	£’m	£’m
Adjusted EBITA	58.4	68.4
Shareholders’ funds	655.7	661.3
Net debt	177.0	169.3
Capital employed	832.7	830.6
ROCE	7.0%	8.2%

Adjusted operating cash flow conversion

Adjusted operating cash flow conversion is the ratio of adjusted operating cash flow to adjusted EBITDA

(on an annualised basis) and is calculated as set out below:

	2025	2024
	£’m	£’m
Net cash flow from operating activities	38.9	76.8
Adjusting items paid	10.9	6.4
Net financial expenses paid	16.1	11.7
Taxation paid	9.0	8.8
Adjusted operating cash flow	74.9	103.7
Adjusted EBITDA	85.0	97.8
Operating cash flow conversion	88%	106%

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 153

2025 2024

Notes £’m £’m

Non-current assets

Investments 33 356.2 355.7

Deferred taxation assets 34 0.1 0.4

Loans to Group undertakings 35 383.6 390.5

739.9 746.6

Net current assets — —

Total assets 739.9 746.6

Current liabilities

Corporation tax payable 36 (4.7) (5.3)

Net current liabilities (4.7) (5.3)

Net assets 735.2 741.3

Capital and reserves

Called-up share capital 37 63.2 63.2

Share premium account 37 200.0 200.0

Merger reserve 37 141.6 141.6

Own shares (1.6) (1.7)

Capital redemption reserve 75.4 75.4

Equity reserve 17.8 17.3

Retained earnings 238.8 245.5

Equity shareholders’ funds 735.2 741.3

The Company reported a profit for the financial year ended 31 December 2025 of £13.0 million (2024: profit of £15.8 million).

The Financial Statements of Marshalls plc (registered number 05100353) were approved by the Board of Directors and authorised for issue on 16 March 2026. They were signed on its behalf by:

Simon Bourne Justin Lockwood

Chief Executive Officer Chief Financial Officer

The Notes on pages 156 to 161 form part of these Company Financial Statements.

Company Balance Sheet

at 31 December 2025

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 154

Share Share premium Merger Own Capital redemption Equity Retained Total

capital account reserve shares reserve reserve earnings equity

£’m £’m £’m £’m £’m £’m £’m £’m

Current year

At 1 January 2025 63.2 200.0 141.6 (1.7) 75.4 17.3 245.5 741.3

Total comprehensive income for the year

Profit for the financial year — — — — — — 13.0 13.0

Total comprehensive income for the year — — — — — — 13.0 13.0

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Share-based payments — — — — — 0.5 0.5 1.0

Dividends to equity shareholders — — — — — — (19.2) (19.2)

Purchase of own shares — — — (0.9) — — — (0.9)

Own shares issued under share schemes — — — 1.0 — — (1.0) —

Total contributions by and distributions to owners — — — 0.1 — 0.5 (19.7) (19.1)

At 31 December 2025 63.2 200.0 141.6 (1.6) 75.4 17.8 238.8 735.2

There were no items of other comprehensive income in the year other than the profit for the financial year recorded above.

Share Share premium Merger Own Capital redemption Equity Retained Total

capital account reserve shares reserve reserve earnings equity

£’m £’m £’m £’m £’m £’m £’m £’m

Prior year

At 1 January 2024 63.2 200.0 141.6 (1.5) 75.4 16.4 251.0 746.1

Total comprehensive income for the year

Profit for the financial year — — — — — — 15.8 15.8

Total comprehensive income for the year — — — — — — 15.8 15.8

Transactions with owners, recorded directly in equity

Contributions by and distributions to owners

Share-based payments — — — — — 0.9 0.9 1.8

Dividends to equity shareholders — — — — — — (21.0) (21.0)

Purchase of own shares — — — (1.4) — — — (1.4)

Own shares issued under share schemes — — — 1.2 — — (1.2) —

Total contributions by and distributions to owners — — — (0.2) — 0.9 (21.3) (20.6)

At 31 December 2024 63.2 200.0 141.6 (1.7) 75.4 17.3 245.5 741.3

There were no items of other comprehensive income in the year other than the profit for the financial year recorded above.

Company Statement of Changes in Equity

for the year ended 31 December 2025

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 155

30 Accounting policies

The following paragraphs summarise the main accounting policies of the Company, which have been

applied consistently in dealing with items which are considered material in relation to the Company’s

Financial Statements.

Authorisation of Financial Statements and Statement of Compliance with FRS 101

The Parent Company Financial Statements of Marshalls plc for the year ended 31 December 2025 were

authorised for issue by the Board of Directors on 16 March 2026. Marshalls plc is a public limited company

that is incorporated and domiciled and has its registered office in England and Wales. The Company’s

Ordinary Shares are publicly traded on the London Stock Exchange and the Company is not under the

control of any single shareholder.

These Financial Statements were prepared in accordance with the historical cost basis of accounting

andFinancial Reporting Standard 101 “Reduced Disclosure Framework” (FRS 101).

No profit and loss account is presented by the Company as permitted by Section 408 of the

Companies Act 2006.

Basis of preparation

The Company has adopted FRS 101 from the UK Generally Accepted Accounting Practice for all

periodspresented.

The accounting policies which follow set out those policies which apply in preparing the Financial

Statements for the year ended 31 December 2025.

The Company meets the definition of a qualifying entity under FRS 100 “Application of Financial

ReportingRequirements”.

In these Financial Statements, the Company has applied the exemptions available under FRS 101 in respect

of the following disclosures:

• The requirements of paragraphs 45(b) and 46–52 of IFRS 2 “Share-based Payments”

• The requirements of IFRS 7 “Financial Instruments: Disclosures”

• The requirements of paragraphs 91–99 of IFRS 13 “Fair Value Measurement”

• The requirement in paragraph 38 of IAS 1 “Presentation of Financial Statements” to present comparative

information in respect of paragraph 79(a)(iv) of IAS 1

• The requirements of paragraphs 10(d), 10(f), 16, 39(c), 40A, 40B, 40C, 40D, 111 and 134–136 of

IAS1“Presentation of Financial Statements”

• The requirements of IAS 7 “Statement of Cash Flows”

• The requirements of paragraphs 30 and 31 of IAS 8 “Accounting Policies, Changes in Accounting Estimates

and Errors”

• The requirements of paragraph 17 of IAS 24 “Related Party Disclosures”

• The requirements in IAS 24 “Related Party Disclosures” to disclose related party transactions entered

into between two or more members of a group, provided that any subsidiary which is a party to the

transaction is wholly owned by such a member

• The requirements of paragraphs 134(d)–134(f) and 135(c)–135(e) of IAS 36 “Impairment of Assets”

The Company also intends to take advantage of these exemptions in the Financial Statements to be issued

in the following year. Objections may be served on the Company by shareholders holding in aggregate 5%

or more of the total allocated shares in the Company. Where required, additional disclosures are given in the

Consolidated Financial Statements.

Investments

Fixed asset investments in subsidiaries and associates are shown at cost less provision for impairment.

TheDirectors consider annually whether a provision against the value of investments on an individual basis

is required.

Share capital

(i) Share capital

Share capital is classified as equity if it is non-redeemable and any dividends are discretionary, or if it is

redeemable but only at the Company’s option. Dividends on share capital classified as equity are recognised

as distributions within equity. Non-equity share capital is classified as a liability if it is redeemable on a

specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends

thereon are recognised in the profit and loss account as a financial expense.

(ii) Dividends

Dividends on non-equity shares are recognised as a liability and accounted for on an accruals basis. Equity

dividends are recognised as a liability in the period in which they are declared (appropriately authorised and

no longer at the discretion of the Company).

Pension schemes

(i) Defined benefit scheme

The Company participates in a Group-wide pension scheme providing benefits based on final pensionable

pay. The defined benefit section of the Scheme was closed to future service accrual in July 2006.

The assets of the Scheme are held separately from those of the Company. The defined benefit cost and

contributions payable are borne by Marshalls Group Limited and, therefore, the defined benefit surplus

ordeficit is recorded in Marshalls Group Limited. Full details are provided in Note 21 on pages 145 to 148.

(ii) Defined contribution scheme

Obligations for contributions to defined contribution schemes are recognised as an expense as incurred.

Share-based payment transactions

The Company enters into equity settled share-based payment transactions with its employees. In particular,

annual awards are made to employees under the Company’s MIP and the Employee Bonus Share Plan (BSP).

Recognition/policy is in line with the Group policy which is set out on page 130 of the consolidated accounts.

Notes to the Company Financial Statements

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 156

30 Accounting policies continued

Own shares held by the Employee Benefit Trust

Transactions of the Company-sponsored Employee Benefit Trust are included in the Group Financial

Statements. In particular, the Trust’s purchases of shares in the Company are debited directly to equity

anddisclosed separately in the Balance Sheet as “own shares”.

Trade and other payables

Trade and other payables are stated at nominal amount (discounted if material).

Income tax

Income tax on the profit or loss for the year, current tax, deferred taxation, deferred taxation assets and

additional income taxes are recognised in line with the Group policy which is set out on page 131 of the

consolidated accounts.

Accounting estimates and judgements

In applying the Company’s accounting policies, the Directors have considered the need for disclosure of

critical judgements and key sources of estimation uncertainty. The Directors have concluded that there

are no critical judgements made in applying the Company’s accounting policies and no key sources of

estimation uncertainty that give rise to a significant risk of material adjustment to the carrying amounts

ofassets and liabilities in the next financial year.

31 Operating costs

The audit fee for the Company was £0.1 million (2024: £0.1 million). This is in respect of the audit of the

Financial Statements. Fees paid to the Company’s auditor for services other than the statutory audit of

the Company are not disclosed in the Notes to the Company Financial Statements since the consolidated

accounts of the Group are required to disclose non-audit fees on a consolidated basis.

Details of Directors’ remuneration, share options, LTIPs and Directors’ pension entitlements are disclosed

onpages 96 to 103 of the Remuneration Committee Report.

The average monthly number of employees of Marshalls plc (including Executive Directors) in the year

ended 31 December 2025 was 120 (2024: 125). The personnel costs for the majority of these employees

are borne by Marshalls Group Limited. The personnel costs charged to Marshalls plc in the year were

£3.9million (2024: £4.6 million) in relation to 23 employees (2024: 21), including the Directors.

Notes to the Company Financial Statements continued

32 Ordinary dividends: equity shares

2025 2024

Pence

per share £’m

Pence

per share £’m

2025 interim: paid 1 December 2025 2.2 5.5 2.6 6.6

2024 final: paid 1 July 2025 5.4 13.7 5.7 14.4

7.6 19.2 8.3 21.0

After the Balance Sheet date the following dividends were proposed by the Directors. The dividends have not

been provided and there were no income tax consequences.

2025 2024

£’m £’m

2025 final: 4.5 pence (2024: 5.4 pence) per Ordinary Share 11.4 13.7

33 Investments

£’m

At 1 January 2025 355.7

Additions 0.5

At 31 December 2025 356.2

Investments comprise shares in the subsidiary undertaking Marshalls Group Limited. The Directors have

considered the carrying value of the Company’s investments and are satisfied that no provision is required.

The increase in the year of £0.5 million represents adjustments to the number of shares expected to vest

inrespect of share-based payment awards granted to employees of the Marshalls Group.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 157

33 Investments continued

Pursuant to Sections 409 and 410(2) of the Companies Act 2006, the subsidiary undertakings of Marshalls plc at 31 December 2025 are set out below:

Subsidiaries Principal activities Class of share % ownership

Acraman (418) Limited Non-trading Ordinary/preference 100

Alton Glasshouses Limited Non-trading Ordinary 100

Bollards Direct Limited Non-trading Ordinary 100

Capability Brown Garden Centres Limited Non-trading Ordinary 100

Capability Brown Landscaping Limited Non-trading Ordinary 100

Classical Flagstones Limited Non-trading Ordinary 100

CPM Group Limited** (01005164) Non-trading Ordinary 100

Dalestone Concrete Products Limited Non-trading Ordinary 100

Edenhall Limited Non-trading Ordinary 100

Edenhall Building Products Limited Non-trading Ordinary 100

Edenhall Concrete Limited Non-trading Ordinary 100

Edenhall Concrete Products Limited Non-trading Ordinary 100

Edenhall Holdings Limited Non-trading Ordinary/preference 100

Edenhall Technologies Limited Non-trading Ordinary 100

Locharbriggs Sandstone Limited Non-trading Ordinary 100

Lloyds Quarries Limited Non-trading Ordinary 100

Marley Limited Manufacturer of roofing products and solutions Ordinary 100

Marley Group Limited Non-trading Ordinary 100

Marshalls Building Materials Limited Non-trading Ordinary 100

Marshalls Building Products Limited** (00113882) Property management Ordinary 100

Marshalls Concrete Products Limited Non-trading Ordinary 100

Marshalls Directors Limited Non-trading Ordinary 100

Marshalls Dormant No. 30 Limited Non-trading Ordinary 100

Marshalls Dormant No. 31 Limited Non-trading Ordinary 100

Marshalls Dormant No. 32 Limited Non-trading Ordinary 100

Marshalls EBT Limited*/** (05472428) Non-trading Ordinary 100

Marshalls Estates Limited Non-trading Ordinary 100

Marshalls Group Limited* Intermediate holding company Ordinary 100

Marshalls Landscape Products Limited Non-trading Ordinary 100

Marshalls Landscape Products (North America) Inc. Landscape Products supplier Ordinary 100

Marshalls Mono Limited Landscape Products manufacturer and supplier and quarry owner supplying a wide variety of paving,

streetfurniture and natural stone products

Ordinary 100

Marshalls Natural Stone Limited Non-trading Ordinary 100

Notes to the Company Financial Statements continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 158

Subsidiaries Principal activities Class of share % ownership

Marshalls Profit Sharing Scheme Limited Non-trading Ordinary 100

Marshalls Properties Limited** (04349470) Property management Ordinary 100

Marshalls Register Limited Non-trading Ordinary 100

Marshalls Stone Products Limited Non-trading Ordinary 100

Marshalls Street Furniture Limited Non-trading Ordinary 100

Monty Bidco Limited Non-trading Ordinary 100

Monty Midco 1 Limited Non-trading Ordinary 100

Monty Midco 2 Limited Non-trading Ordinary 100

Monty Topco Limited Non-trading Ordinary 100

Ollerton Limited Non-trading Ordinary 100

Panablok (UK) Limited Non-trading Ordinary 100

Paver Systems (Carluke) Limited Non-trading Ordinary 100

Paver Systems Limited Non-trading Ordinary 100

PD Edenhall Limited Non-trading Ordinary 100

PD Edenhall Holdings Limited Non-trading Ordinary 100

Premier Mortars Limited Non-trading Ordinary 100

Quarryfill Limited Non-trading Ordinary 100

Rhino Protect Limited Non-trading Ordinary 100

Robinson Associates Stone Consultants Limited Non-trading Ordinary 100

Robinsons Greenhouses Limited Non-trading Ordinary 100

Rockrite Limited Non-trading Ordinary 100

S Marshall & Sons Limited Non-trading Ordinary 100

Scenic Blue Limited Non-trading Ordinary 100

Scenic Blue Landscape Franchise Limited Non-trading Ordinary 100

Scenic Blue (UK) Limited Non-trading Ordinary 100

Stancliffe Stone Company Limited Non-trading Ordinary 100

Stone Shippers Limited Non-trading Ordinary 100

Stonemarket (Concrete) Limited Non-trading Ordinary 100

Stonemarket Limited Non-trading Ordinary 100

Tayvin 410 Limited Non-trading Ordinary 100

The Great British Bollard Company Limited Non-trading Ordinary 100

The Stancliffe Group Limited Non-trading Ordinary 100

The Yorkshire Brick Co. Limited Non-trading Ordinary 100

Town & Country Paving Limited Non-trading Ordinary 100

Urban Engineering Limited Non-trading Ordinary 100

Viridian Solar Limited Supplier of roof-integrated solar products Ordinary 100

Viridian Solar BV Supplier of roof-integrated solar products Ordinary 100

Woodhouse Group Limited Non-trading Ordinary 100

Woodhouse UK Limited Non-trading Ordinary 100

* Held by Marshalls plc. All others held by subsidiary undertakings.

** These subsidiaries are exempt from the requirement of the Companies Act 2006 relating to the audit of individual accounts by virtue of Section 479A of the Act. Marshalls plc has provided a statutory Parent Company guarantee in relation to these

subsidiaries. In each case the registered number is disclosed.

Notes to the Company Financial Statements continued

33 Investments continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 159

33 Investments continued

All the other companies excluding the ones below operate within the United Kingdom and are registered

in England and Wales at the following address: Landscape House, Premier Way, Lowfields Business Park,

Elland HX5 9HT. Viridian Solar BV is registered in the Netherlands and Marshalls Landscape Products

(North America) Inc. is registered in the USA. Paver Systems Limited, Paver Systems (Carluke) Limited

andLocharbriggs Sandstone Limited are registered in Scotland. The respective registered offices are:

Paver Systems Limited, Paver Systems (Carluke) Limited and Locharbriggs Sandstone Limited

Falkirk Works, Dollar Industrial Estate, Falkirk FK2 7YS, Scotland

Marshalls Landscape Products (North America) Inc.

1209 Orange Street, Wilmington, County of New Castle, Delaware 19801, USA

Viridian Solar BV

Van Bylandtachterstraat 24, unit 6 5046 MB Tilburg, The Netherlands

Marley Limited and Viridian Solar Limited operate within the United Kingdom and are registered in England

and Wales at the following addresses respectively:

Marley Limited Lichfield Road, Branston, Burton-On-Trent, England, DE14 3HD

68 Stirling Way, Papworth Everard, Cambridge, England, CB23 3GY

34 Deferred taxation

Recognised deferred taxation assets and liabilities

Assets

Liabilities

2025 2024 2025 2024

£’m £’m £’m £’m

Equity settled share-based payments 0.1 0.4 — —

Movement in temporary differences

Recognised

in Statement

1 January Recognised of Changes in 31 December

2025 in income Equity 2025

£’m £’m £’m £’m

Equity settled share-based payments 0.4 (0.3) — 0.1

Recognised

in Statement

1 January Recognised of Changes in 31 December

2024 in income Equity 2024

£’m £’m £’m £’m

Equity settled share-based payments 0.2 0.2 — 0.4

Notes to the Company Financial Statements continued

35 Loans to Group undertakings

2025 2024

£’m £’m

Amounts owed from subsidiary undertakings 383.6 390.5

An on-demand facility is in place between Marshalls plc and Marshalls Group Limited. The loan is unsecured

and, together with accrued interest and any other amounts accrued, is repayable in full on demand. Interest

is accrued on a daily basis on the outstanding balance at a rate equivalent to SONIA plus 1.8%. The loan,

however, is expected to be recovered after more than one year and has been reported as a non-current

asset. There are no expected credit losses associated with these amounts.

36 Corporation tax payable

2025 2024

£’m £’m

Corporation tax 4.7 5.3

No creditors were due after more than one year.

37 Capital and reserves

Called-up share capital

The authorised, issued and fully paid up Ordinary Share capital was as follows:

Authorised Issued and paid up

Value Value

Ordinary Shares (25 pence nominal) Number £’m Number £’m

At 1 January and 31 December 2025 300,000,000 75.0 252,968,728 63.2

Share premium account and merger reserve

Share premium account Merger reserve

2025 2024 2025 2024

£’m £’m £’m £’m

At 1 January and 31 December 200.0 200.0 141.6 141.6

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 160

37 Capital and reserves continued

Merger reserve

The merger reserve relates to the issue of new Ordinary Shares as consideration for the acquisition of

Marley Group Limited in 2022. An amount of £141.6 million was credited to the merger reserve in relation

tothe issue of these shares and reflects the fair value of the shares at the date of acquisition.

Own shares reserve

Transactions of the Group-sponsored Employee Benefit Trust are included in the Group Financial

Statements. The Trust’s purchases of shares in the Company are debited directly to equity and disclosed

separately in the Balance Sheet as “own shares”. Further details are included on pages 113 and 114.

Capital redemption reserve

The capital redemption reserve records the nominal value of shares repurchased by the Company.

Distributable reserves

The Company’s distributable reserves amount to £238.8 million (2024: £245.5 million) at the end of

the period.

Equity reserve

The equity reserve represents the number of shares expected to vest in respect of share-based payment

awards granted to employees of the Company.

Retained earnings

The retained earnings were £238.8 million at the end of the period.

38 Capital and leasing commitments

The Company had no capital or leasing commitments at 31 December 2025 or 31 December 2024.

39 Bank facilities

The Group’s banking arrangements are in respect of Marshalls plc, Marshalls Group Limited, Marshalls

Mono Limited, Marley Limited and Viridian Solar Limited with each company being a nominated borrower.

The operational banking activities of the Group are undertaken by Marshalls Group Limited, Marley Limited and

Viridian Solar Limited. The Group’s bank debt is largely included in Marshalls Group Limited’s Balance Sheet.

40 Contingent liabilities

National Westminster Bank plc has issued, on behalf of Marshalls plc, the following irrevocable letters of

credit relating to the Group’s cap on self-insurance for employer’s liability and vehicle insurance:

Beneficiary Amount Period Purpose

HDI Global SE – UK £0.5 million 14 Dec 2020 to 30 Oct 2026 Employer’s liability

AIOI Nissay Dowa Insurance

UKLimited £0.6 million 22 Dec 2020 to 30 Oct 2026 Vehicle insurance

M S Amlin Limited £0.8 million 10 Feb 2020 to 9 Feb 2027 Employer’s liability

41 Pension scheme

Marshalls Group Limited is the sponsoring employer of the Marshalls plc pension scheme (the Scheme)

which is primarily a closed defined benefit scheme with a small defined contribution element (mainlyAVCs).

Theassets of the Scheme are held in separately managed funds which are independent of the Group’sfinances.

Full details of the Scheme are provided in Note 21. The Company is unable to identify its share of the

Scheme assets and liabilities on a consistent and reasonable basis.

The latest funding valuation of the defined benefit section of the Scheme was carried out as at 5 April 2024

and was updated for the purposes of the 31 December 2025 Financial Statements by a qualified

independent actuary.

42 Related parties

Related party relationships exist with other members of the Group. All operating costs are borne by

Marshalls Group Limited and are recharged to Marshalls plc in respect of specifically attributable costs. All

related party transactions were made on terms equivalent to those that prevail in arm’s length transactions.

Notes to the Company Financial Statements continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 161

Year ended

31 December 2021

Year ended

31 December 2022

Year ended

31 December 2023

Year ended

31 December 2024

Year ended

31 December 2025

£’m £’m £’m £’m £’m

Consolidated Income Statement

Revenue 589.3 719.4 671.2 619.2 632.1

Net operating costs (after adding back adjusting items) (511.9) (618.3) (600.5) (552.5) (575.7)

Adjusted operating profit 77.4 101.1 70.7 66.7 56.4

Adjusting items (1.2) (53.2) (29.7) (12.8) (24.4)

Operating profit 76.2 47.9 41.0 53.9 32.0

Financial income and expenses (net) (6.9) (10.7) (18.8) (14.5) (14.3)

Adjusted profit before tax 73.3 90.4 53.3 52.2 43.7

Profit before tax 69.3 37.2 22.2 39.4 17.7

Income tax expense (14.4) (10.7) (3.8) (8.4) (3.3)

Profit for the financial year 54.9 26.5 18.4 31.0 14.4

Profit for the year attributable to:

Equity shareholders of the Parent 54.8 26.8 18.6 31.0 14.4

Non-controlling interests 0.1 (0.3) (0.2) — —

54.9 26.5 18.4 31.0 14.4

EBITA* 79.4 57.1 53.1 66.0 44.3

Adjusted EBITA** 79.3 102.9 72.4 68.4 58.4

EBITDA* 107.1 90.2 84.3 95.4 70.9

Adjusted EBITDA** 107.1 136.0 103.6 97.8 85.0

Basic earnings per share (pence) 27.5 11.4 7.4 12.3 5.7

Adjusted basic earnings per share** 29.2 31.3 16.7 16.0 13.4

Dividends per share (pence) 14.3 15.6 8.3 8.0 6.7

Year-end share price (pence) 699.5 273.2 279.4 294.5 180.6

Tax rate (%) 20.8 28.7 17.1 21.3 18.6

* EBITA is defined as earnings before interest, tax and amortisation of intangibles. EBITDA is defined as earnings before interest, tax, amortisation of intangibles and depreciation.

** After adding back adjusting items.

Financial History – Consolidated Group

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 162

2021 2022 2023 2024 2025

£’m £’m £’m £’m £’m

Consolidated Balance Sheet

Non-current assets 332.7 886.9 855.1 835.6 818.6

Current assets 263.2 322.0 259.0 240.5 222.8

Total assets 595.9 1,208.9 1,114.1 1,076.1 1,041.4

Current liabilities (150.6) (167.3) (138.5) (148.6) (125.1)

Non-current liabilities (101.0) (380.5) (334.3) (266.2) (260.6)

Total liabilities (251.6) (547.8) (472.8) (414.8) (385.7)

Net assets 344.3 661.1 641.3 661.3 655.7

Net borrowings (41.1) (236.6) (217.6) (169.3) (177.0)

Net borrowings (pre-IFRS 16) — (190.7) (172.9) (133.9) (137.9)

Gearing ratio 11.9% 35.8% 33.9% 25.6% 27.0%

Financial History – Consolidated Group continued

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 163

ABI

Barbour ABI – a provider of construction

intelligence data

AMP8

Asset Management Period 8

APM

Alternative performance measure

Capex

Capital expenditure

CDP

Carbon Disclosure Project

CDWG

Climate Disclosures Working Group

CFD

Climate-related Financial Disclosures

Circular economy

Production model recycling and reusing as much

as possible

, CO

e and greenhouse gas emissions

Carbon dioxide emissions. Carbon dioxide (CO

)

is the primary greenhouse gas emitted through

human activities.

While CO

emissions come from a variety of

natural sources, human related emissions are

responsible for the increase that has occurred in the

atmosphere since the Industrial Revolution.

“Carbon dioxide equivalent” or “CO

e” is a term for

describing different greenhouse gases in a common

unit. For any quantity and type of greenhouse gas,

e signifies the amount of CO

which would have

the equivalent global warming impact.

CPA

Construction Products Association

D365

Microsoft cloud ERP software system

DERI

Diversity, equity, respect and inclusion

EPDs

Environmental Product Declarations

ESOS

Energy Savings Opportunity Scheme

EVG

Employee Voice Group

GDPR

General Data Protection Regulation

GHG

Greenhouse gases

ILO

International Labour Organization

IOSH

Institution of Occupational Safety and Health

ISO

International Organization for Standardization

LTIFR

Lost time injury frequency rate

MIP

Management Incentive Plan

Mitigation vs adaptation

The difference between climate change mitigation

strategies and climate change adaptation is that

mitigation is aimed at tackling the causes and

minimising the possible impacts of climate change.

Adaptation looks at how to reduce the negative

effects it has and how to take advantage of any

opportunities that arise.

MPA

Mineral Productions Association

Net-zero

A net-zero company will set and pursue a 1.5°C

aligned science-based target for its full value chain

emissions. Any remaining hard-to-decarbonise

emissions must be compensated using certified

greenhouse gas removal.

NGO

Non-Governmental Organisation

NHBC

National House Building Council

RACM

Risk and Control Matrix

Risk Register

A document used to table risks and responses to

those risks

RMI

Repair, Maintenance & Improvement

SASB

Sustainability Accounting Standards Board

Science-based targets

Science-based targets are a set of goals developed

by a business to provide it with a clear route to

reduce greenhouse gas emissions. An emissions

reduction target is defined as “science based” if it is

developed in line with the scale of reductions that

are required to keep global warming below 1.5°C

from pre-industrial levels.

Science Based Targets initiative (SBTi)

The SBTi defines and promotes best practice

in emissions reductions and net-zero targets in

line with climate science. It provides technical

assistance and expert resources to companies

which set science-based targets in line with the

latest climate science. The SBTi is a partnership

between CDP, the United Nations Global Compact,

the World Resources Institute (WRI) and the

World Wide Fund for Nature (WWF). The SBTi is

considered the gold standard in carbon reduction

commitment setting.

Scope 1, 2 and 3 emissions

Scope 1 – all direct emissions

Emissions derived from the activities of an

organisation or from sources under its control.

This includes fuel combustion on site, from owned

vehicles and fugitive emissions. Examples include

fleet vehicles, gas emissions from boilers and air-

conditioning refrigerant leaks.

Scope 2 – indirect emissions

Emissions derived from electricity purchased and

used by the organisation. Emissions will be created

during the production of the energy and eventually

used by the organisation. This includes electricity

from energy suppliers to power computers, heating

and cooling.

Scope 3 – all other indirect emissions

Emissions derived from activities of the

organisation but occurring from sources that it

does not own or control. This is usually the largest

share of the carbon footprint, especially for office-

based companies, covering emissions associated

with business travel, procurement, waste and water.

Examples include plane travel, shipping of goods

and waste disposal.

SDGs

Sustainable Development Goals

SECR

Streamlined Energy and Carbon Reporting

SKU

Stock-keeping unit

SSI

Solar Stewardship Initiative

SuDS

Sustainable Drainage Systems

TCFD

Task Force on Climate-related Financial Disclosures

TNFD

Taskforce on Nature-related Financial Disclosures

The Group

All of Marshalls’ UK and overseas operations

Glossary

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 164

Shareholder analysis at 31 December 2025

Number of Number of

Size of shareholding shareholders % Ordinary Shares %

1 to 500 1,879 54.80 243,354 0.10

501 to 1,000 362 10.56 270,118 0.11

1,001 to 2,500 396 11.55 678,628 0.27

2,501 to 5,000 228 6.65 804,472 0.32

5,001 to 10,000 163 4.76 1,120,734 0.44

10,001 to 25,000 127 3.70 2,081,431 0.82

25,001 to 100,000 108 3.15 5,479,656 2.17

100,001 to 250,000 55 1.60 9,108,892 3.60

250,001 to 500,000 31 0.90 10,965,111 4.33

500,001 and above 80 2.33 222,216,332 87.84

3,429 100.00 252,968,728 100.00

Financial calendar

Preliminary announcement of results for the year ended

31December 2025

Announcement 16 March 2026

Annual General Meeting Meeting 13 May 2026

Final dividend for the year ended 31December2025 Payable 1 July 2026

Half yearly results for the year ending 31December 2026 Announcement Early August 2026

Half yearly dividend for the year ending 31December 2026 Payable 1 December 2026

Results for the year ending 31 December 2026 Announcement Early March 2027

Advisers

Stockbrokers

Deutsche Numis | Deutsche Bank AG

Peel Hunt

Auditor

Deloitte LLP

Legal advisers

Slaughter and May

Walker Morris LLP

Financial adviser

Rothschild & Co

Bankers

Barclays Bank plc

Credit Industriel et Commercial

HSBC Bank plc

Lloyds Bank plc

National Bank of Kuwait

National Westminster Bank plc

Virgin Money UK plc

Registrars

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Shareholders’ enquiries should be addressed to

the Registrars at the above address (tel: 0870

707 1134).

Registered office

Landscape House

Premier Way

Lowfields Business Park, Elland

Halifax HX5 9HT

West Yorkshire

Telephone: 01422 312000

Website: www.marshalls.co.uk

Registered in England and Wales: No. 5100353

Shareholder Information

Produced by Design Portfolio

www.design-portfolio.co.uk

Marshalls’ commitment to environmental issues is reflected in this Annual Report, which

has been printed on Revive 100 Silk, which is 100% post-consumer recycled, FSC

certified

and totally chlorine free (TCF) paper.

This document was printed by Park Communications using its environmental print

technology, which minimises the impact of printing on the environment, with 99% of dry

waste diverted from landfill. Both the printer and the paper mill are registered to ISO 14001.

Marshalls plc Annual Report & Accounts 2025Strategic Report Financial StatementsGovernance 165

Marshalls plc, Landscape House,

Premier Way, Lowfields Business Park,

Elland HX5 9HT

www.marshalls.co.uk

Annual Report & Accounts 2025