HELPING CREATE

LASTING LEGACIES

FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 01

AS ONE OF THE UK’S LEADING

MANUFACTURERS OF BRICKS, BLOCKS

AND PRECAST FLOORING, AT FORTERRA

WE HELP CREATE LASTING LEGACIES;

GOING BEYOND CONSTRUCTION

TO GENERATE GROWTH AND FOSTER

A LEGACY OF BUILDING TODAY,

TOMORROW AND INTO THE FUTURE.

STRATEGIC REPORT

2025 Highlights

Who we are

What we do

Strategic Progress

Investment Case

Chair’s Statement

Chief Executive’s Statement

Business Review

Business Model

Market Overview

Section 172 Statement

Key Performance Indicators

Chief Financial Officer’s Review

Sustainability Report

Risk Management and Key Risks

Viability Statement

GOVERNANCE

Board of Directors

Executive Committee

Corporate Governance Statement

Nomination Committee Report

Audit and Risk Committee Report

Sustainability Committee Report

Remuneration Committee Report

Directors’ Report

124

Statement of Directors’ Responsibilities

127

FINANCIAL STATEMENTS

128

Independent Auditor’s Report

129

Consolidated Statement of Total Comprehensive Income

136

Consolidated Balance Sheet

137

Consolidated Statement of Cash Flows

138

Consolidated Statement of Changes in Equity

139

Notes to the Financial Statements

140

Company Balance Sheet

173

Company Statement of Changes in Equity

174

Notes to the Company Financial Statements

175

Group Five-Year Summary

178

1,500

£386m

Manufacturing

facilities

Employees Revenue

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 02

2025 Highlights

STRONG RESULTS UNDER CHALLENGING MARKET CONDITIONS

ADJUSTED

STATUTORY

REVENUE (£m)

EBITDA (£m)

REVENUE (£m)

+12.1%

+18.5%

+12.1%

2025

2024

2023

2025

2024

2023

2025

2024

2023

PROFIT BEFORE TAX (£m)

NET DEBT BEFORE LEASES (£m)

PROFIT BEFORE TAX (£m)

+62.9%

-34.4%

-6.0%

2025

2024

2023

2025

2024

2023

2025

2024

2023

EPS (PENCE)

+65.8%

-2.4%

2025

2024

2023

2025

2024

2023

386.0

344.3

346.4

36.0

22.1

31.1

12.6

7.6

11.4

61.6

52.0

58.1

55.7

84.9

93.2

386.0

344.3

346.4

23.3

24.8

17.1

8.1

8.3

6.2

Note: A full reconciliation for each non-GAAP measure from adjusted through to statutory results is shown in note 31 to the Consolidated Financial Statements.

INSPIRED BY OUR PURPOSE

Helping Create Lasting Legacies

“We produce materials that bring lasting beauty and strength, helping create sustainable communities with homes and spaces that endure for generations.”

DRIVEN BY OUR VISION

GUIDED BY OUR VALUES

→ See Our People & Culture on pages 54 to 58

ALIGNED WITH OUR STRATEGY

→ See update on our Strategic Progress on pages 6 to 8

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 03

Who we are

Brilliant Today

We aspire to be leaders in operational excellence and customer service,

working to continually maximise efficiency and create

lasting value for our stakeholders.

Ahead of Tomorrow

By understanding and anticipating our customers’

evolving needs, we drive innovation and sustainable solutions

that prepare them for the future.

Innovate to Lead

Empowered to continuously improve

Pride in Excellence

We relish achievement and success

Collaborate & Care

We work in partnership and look out for one another

Strengthen the Core

By continuing to invest in our assetbase and byfocusing

on both operational andcommercial excellence,

we will become aneven stronger business inthe future.

Beyond the Core

By investing in brick slip solutions we aim to secure a leading position

in the growing lightweight façades market andextend our presence

in the mid-high rise buildings segment.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 04

What we do

CONCRETE PRODUCTS

Aircrete Blocks

Aircrete blocks are used to build the inner leaf

ofcavity walls, the most common method of

housebuilding in the UK. As its name suggests,

aircrete is an extremely lightweight building

material which is easy to handle and cut compared

with traditional blocks. We manufacture aircrete

under the renowned Thermalite brand supplied

toboth housebuilders and builders’ merchants.

Aggregate Blocks

Traditional aggregate blocks are used wherea

higher strength product is required, for example

in multi-storey buildings. Due to high transport

costs associated with heavy goods, these

products are usually supplied regionally in

proximity to the factory.

FOCUSED ON THE MANUFACTURE AND SUPPLY

OF BRICKS, BLOCKS AND PRECAST CONCRETE

BRICKS AND CLAY

Extruded Brick

Also known as wire-cut bricks, sharp angled

bricksused primarily in new construction by

majorhousebuilders, extruded bricks are the

mostcommonly used type of brickin the UK.

Operating five factories across the UK, our footprint is

weighted towards the production of extruded bricks.

Soft Mud Brick

Also known as stock bricks, they are thrown

andhave softer edges giving a more aged

andtraditional appearance. Particularly popular

inLondon and the South East, they are used in

bothnew housing and improvement. We operate

asingle, highly efficient soft mud factory.

21 43 65 7

Fletton Brick

The Fletton is a type of brick which is unique

toForterra and produced under the iconic

London Brick brand. It was widely used in the

20th century for new housing. Today its main

use is for housing renovation to match with

existing brickwork.

Brick Slips

A brick slip is a thin brick tile used as a cladding

material to replicate traditional brickwork without

the weight or structural role; they are commonly

used in mid-rise and high-rise buildings. In 2025

weopened our new brick slip line alongside our

traditional brick factory in Accrington.

Precast Concrete Flooring

Our Bison brand is a leading player in the

precast concrete market. Bison specialises

inthe manufacture of pre-fabricated flooring

elements and beams predominantly for the

newhousing market. Our in-house design and

technical support teams work directly with

housebuilders to ensure each floor is designed

and manufactured to meet the full suite of

customers’ technical requirements.

PERCENTAGE OF REVENUE

BRICKS

PERCENTAGE OF REVENUE

BLOCKS PRECAST

52% 27% 21%

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 05

What we do the Markets we serve

RESIDENTIAL NEW BUILD

Our products are at the heart of the UK’s

newhousing sector. For centuries, bricks

have been, and remain, the most common

choice of material for façades, defining the

look and feel of our urban environment.

There remains along-term shortage of

housing in the UK. The Government have

established ambitious targets to boost

thecurrent levels of UK housebuilding

andunblock current bottlenecks in the

UKplanning system.

We work closely with major housebuilders

and distributors to ensure we have the right

product to meet our customers’ needs,

backed-up with our high levels of technical

and design expertise and an in-house

fleetofspecialist delivery vehicles to get

products to site in atimely manner.

HOUSING REPAIR MAINTENANCE

ANDIMPROVEMENT

Our bricks and blocks are an important

inputto the housing repair, maintenance

andimprovement sector. Demand is driven

primarily by the number of homes being

upgraded or extended which in turn is

influenced by the costs of borrowing

andmore widely the levels of housing

marketactivity.

Our iconic London Brick product range is

aleading brand in this segment where it

ischosen for its excellent colour and texture

match with older brickwork.

We work hand in hand with our builders’

merchant partners across the UK to provide

the right range of products to meet the needs

of both the local builder and homeowner.

COMMERCIAL BUILDINGS

ANDINFRASTRUCTURE

The commercial building sector focuses

onarchitecturally driven projects such as

schools, hospitals, universities and other

public buildings.

We actively engage with architects and

designers to provide the façade and flooring

solutions to meet both their aesthetic and

technical requirements.

Our new Omnia range of brick slips and

façade systems are designed to maximise

visual appeal whilst delivering the highest

levels of technical performance and

on-siteproductivity.

SUPPLYING

HOUSEBUILDERS

SUPPLYING

RENOVATION

SUPPLYING

COMMERCIAL

67% 8%

25%

In 2023, we set out a clear strategy to focus Forterra’s efforts on

delivering both sustainable long-term growth and higher returns.

Our strategy is built on two key pillars:

• Strengthen the Core – investing in our plants and driving continuous

improvement across our operational and commercial processes.

• Beyond the Core – expanding our offering into higher-growth

lightweight façade systems and increasing our presence in construction

sectors beyond single-family housing.

STRENGTHEN THE CORE

Increasing output in line with demand

Increased housebuilding activity led to some improvement in demand

for extruded bricks and precast flooring. In a major milestone for our

flagship brick factory at Desford this improvement in demand allowed

us to run both kilns simultaneously for the first time.

Improving operational efficiency

2025 marked a key step in our journey toward operational excellence;

we launched the Sustainable Operational Excellence (SOE) programme,

a structured approach tobuilding habits that connect daily routines

with long-term success.

Over 14 weeks, participants received real-time feedback and one-to-

one coaching to build steady progress. Leaders learned to listen more,

ask better questions and empower their teams, supported by coaches

who reinforced that operational excellence is about people as much as

process. The SOE programme was initially piloted in two of our factories

and will continue to be implemented across our facilities in 2026.

Increasing our customer focus

During the year we launched a Net Promotor Score (NPS) study to

obtain feedback from our customers and better understand both our

strengths and areas for improvement. Looking ahead, we will continue

to develop plans oriented around these results and track our progress

through an annualised survey and tracking of key performance indicators.

Our ongoing Commercial Excellence initiatives continue to deliver

results with aclear focus on sales force efficiency and effectiveness.

Throughout the year our sales organisation focused on improving

results through active customer and product mix management.

The second half of the year saw both the appointment of our new Group

Commercial Director, James Cornish, along with the implementation

ofanew commercial structure which aims to align our organisation

with our key segments and routes to market with the goal of increased

customer focus andan improved customer experience.

Investing in our core products

Reconstruction of our Wilnecote brick is virtually complete, with the kiln

lit and the commissioning of a new specification focused product range

is underway.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 06

Strategic Progress

AWARD-WINNING PROJECTS

We were proud to be recognised at the 2025 Brick

Development Association Brick Awards for our work on the

W House project in Fulham. Theextension features bespoke

brickwork, created using sixspecially crafted brick types that

form a folded, textured volume inspired by historic Victorian

joinery. The intricate patterns, achieved through rotation and

mirroring of the bricks, create movement and visual interest

from every angle, demonstrating the creative potential of our

bricks in high-end residential design.

gilbertmccarragher.com

ESTABLISHING

SECURE FOUNDATIONS

AND INVESTING

FOR GROWTH

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 07

Strategic Progress continued

LONDON BRICK – AN ICONIC BRAND

In 2025, we completed a strategic refresh of the London

Brick brand, reinforcing its position as one of the UK’s

mostrecognised construction brands and a core asset

withinthe Group’s portfolio. The investment strengthens

thebrand’s competitive positioning by clearly articulating

itsdifferentiation and combining a long heritage in British

housebuilding with the product’s ability to fit seamlessly

alongside existing brickwork.

A new dedicated website forms a central element of the

refresh, enhancing digital engagement through improved

user experience and high-quality visual content. The platform

showcases the aesthetic appeal of London Brick products

while providing streamlined access to key services, including

brick matching, sample ordering and the full product portfolio.

Overall, the refresh reflects our continued commitment

toinvesting in and protecting the long-term value of the

LondonBrick brand. By reinforcing its distinct heritage and

market proposition, we are supporting its enduring relevance,

market leadership and value contribution to the Group.

WILNECOTE REDEVELOPMENT

The c.£30m redevelopment of our Wilnecote factory is almost

complete with the kiln lit and commissioning underway.

The new factory, capable of producing 35 million bricks per

annum, is designed to manufacture a premium range of bricks

primarily aimed toward commercial and specification projects;

complementing the existing range of bricks manufactured

atour other factories.

The launch of the Wilnecote offer will begin with the introduction

of the original brick range previously manufactured at the

factory, including the sought after Staffordshire Blue. This

willbefollowed by further extensions to the offer reflecting

thelatest trends in building design.

The new range of products will be further enhanced with

thecapability of the factory to manufacture a range of bricks

inboth non-standard sizes and special shapes, providing

thearchitect with an extensive range of design options for

theirprojects.

BEYOND THE CORE

Launch of our extruded brick slips range

Following a £12 million investment in a dedicated extruded brick slips

line at our Accrington factory, we launched Omnia, our new range

ofextruded brick slips. Omnia consists of a broad range of different

colours, offering architects and specifiers a variety ofaesthetic options.

In 2026 we will continue to strengthen our brick slips capabilities with

an investment of around £1.5m in a dedicated brick slip cutting facility.

This will further enhance our brick slips offer, allowing building designers

to choose from almost any traditional brick.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 08

Strategic Progress continued

BUILDING A LEADERSHIP POSITION IN BRICK SLIPS

2025 marked the launch of our new Omnia branded extruded

brick slips range, marking a significant milestone for the

business. We are now the first UK volume manufacturer

ofextruded brick slips, with an annual production capacity

ofapproximately 50 million slips per annum. Our purpose-

made extruded slips avoid the waste generated by cutting

traditional bricks into slips and reduce the transport related

environmental impacts associated with importing products

from overseas. Our Omnia range represents a more

sustainable, UK manufactured solution.

The initial range includes 15 colours, providing specifiers with

abroad selection of aesthetic options and greater flexibility

indesign. By bringing the product to market under the

Omnia brand, we are specifically targeting architects and

designers seeking a modern brick slip solution. This includes

our fully certified brick slip ventilated façade system, offering

a quick-to-install, fully certified system alongside style

andsustainability.

The launch of Omnia, strengthens our specification offer

andsupports our ambition to become a leading provider

ofbrick slip solutions. It also aligns with our strategic goal

ofdeveloping thebusiness ‘Beyond the Core’, expanding

ourcapabilities beyond traditional bricks and blocks into

high-value, innovative building solutions.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 09

Investment Case

Strong profitable growth, cash generation and disciplined

capital allocation

• Strong cash generation creates optionality in our capital allocation

priorities

• Leverage to be maintained below 1.5x adjusted EBITDA

• Modest future organic investment projects with capital outlay mitigated

by maximising the value derived from property assets

• Attractive dividend policy covered 2x byearnings

• £20m share buyback programme underway in 2026 which is expected

to continue in future years with the Board keeping this under review

• Scope for selective bolt-on acquisitions focused Beyond the Core

Established leading market positions in core products

• Complementary product range comprising clay bricks, blocks,

andflooringproducts with strong cross product synergy

• Trusted and respected leading brands including London Brick

andThermalite

• High barriers to entry supported by secure long-term mineral reserves

• Well-invested, efficient and profitable asset base

• Strong customer relationships

Commitment to sustainability and innovation leadership

• Inherently sustainable and durable products

• Ambitious ESG targets to 2030 and beyond under the ‘Planet Product

People’ framework

• Focus on innovation to deliver more sustainable products for the future

Long-term structural demand and supply factors underpin

market growth despite short-term cyclical challenges

• Market demand driven by structural, through-cycle new housing

shortage and resilient RM&I markets

• Cyclical recovery story

• Government desire to increase supply of new homes

• Structural undersupply of domestically manufactured bricks and

otherkeybuilding products provides opportunity for growth

• Diversification through exposure to RM&I market

• Consolidated brick and block market structures

Opportunity to benefit from recent investments

• £140m programme of investment virtually complete, modernising

ourasset base, increasing brick production capacity by 15%,

improvingefficiency and reducing carbon emissions, these investments

will progressively deliver significant profit and cash returns as the

marketrecovers

• Lower capital expenditure looking ahead with opportunity for selective

investments to retain both market position and competitiveness

• Proven delivery of innovation, operational excellence and productivity

improvement underpins profit growth

• Brick slip investment provides renewed exposure to the high

risemarketsegment

Key Performance Indicators Revenue EBITDA Margin

Total shareholder

return (TSR)

Strengthen the Core

ü ü ü

Beyond the Core

ü ü ü

Opportunistic bolt-on M&A beyond the core

ü ü ü

Sustained earnings growth

Short-term earnings growth supports

greater investment enabling greater

still earnings growth

Strong free cash flow conversion

Attractive dividend

Shareholder returns

LONG-TERM STAKEHOLDER VALUE

DEAR SHAREHOLDER

In this, my first statement as Chair of Forterra, I am pleased to report

arobust trading performance demonstrating the strength and resilience

of our business model and strategy. The Group delivered revenue

growth of 12.1% outperforming the wider market, leading to a 62.9%

increase in adjusted profit before tax, with solid cash generation driving

continued reduction in our borrowings.

As part of my induction as Chair, I have had the opportunity to visit the

majority of the Group’s facilities and I was impressed by the dedication

and passion of our people, driven by our vision to be both Brilliant Today

and Ahead of Tomorrow.

The Group’s unwavering focus on health, safety and wellbeing is

outstanding. It is clear that nothing is more important, and it is pleasing

to see the measurable progress being delivered in this area. Iwas also

encouraged by the strong emphasis on innovation and sustainability,

ensuring our products continue to meet the evolving needs of our

customers and a changing regulatory environment.

STRATEGY

Our strategy is to pursue long-term profitable growth in order to deliver

value for all our stakeholders. Capitalising on the UK’s long-term

shortage of housing supply, with astructural shortfall in the supply

ofthe domestically manufactured building products necessary to

meetthis demand, leveraging both our extensive mineral reserves

andstrong market positions.

Our strategy encapsulates the following strategic imperatives,

theachievement of which will deliver sustained stakeholder value:

• Strengthen the Core: Investing in new capacity to deliver revenue

growth whilst also maximising operational efficiency; and

• Beyond the Core: Expanding our product range beyond our

traditional focus of mainstream residential construction focusing

onnew and evolving solutions and end markets.

PERFORMANCE AND RESULTS

Group revenue increased by 12.1% to £386.0m (2024: £344.3m).

Adjusted EBITDA was £61.6m (2024: £52.0m) and adjusted profit

beforetax increasing 62.9% from £22.1m to £36.0m. The Group

delivered another solid adjusted operating cash flow in theyear of

£68.7m (2024: £60.1m).

Adjusted earnings per share increased by 65.8% to 12.6p (2024:

7.6p). Net debt excluding leases was £55.7m, a reduction of £29.2m

(2024: £84.9m).

CAPITAL ALLOCATION

Throughout 2025 our foremost capital allocation priority was to

continue reducing the Group’s indebtedness to more prudent and

sustainable levels, and I am pleased to report that this has been

achieved. Leverage at 31 December 2025 was c.1.0 times adjusted

EBITDA (2024: c.1.9 times), calculated on a banking covenant basis.

Built upon this solid progress, the Board has this year redefined our

forward-looking, medium-term capital allocation strategy. Recognising

the cyclicality of our core markets, we aim to maintain our leverage

below 1.5 times adjusted EBITDA.

Operating within the confines of our targeted leverage parameters,

ourcapital allocation priorities are designed tomaximise shareholder

value through:

• Selective strategic organic capital investment delivering

attractivereturns;

• Attractive ordinary dividend with a targeted coverage of c.2x

adjustedearnings;

• Supplementary shareholder returns such as share buybacks

asappropriate; and

• Bolt-on acquisitions as suitable opportunities ariseto accelerate

ourgrowth, particularly Beyond the Core.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 10

Chair’s Statement

OUR VISION IS TO

BE BOTH BRILLIANT

TODAY AND AHEAD

OF TOMORROW

“The Group’s unwavering focus

onhealth, safety and wellbeing

isoutstanding.”

Nigel Lingwood

Chair

DIVIDEND

In reaffirming our capital allocation priorities we intend to pursue an

attractive dividend policy, distributing approximately 50% of earnings.

The Board is recommending a final dividend of 4.3p per share (2024:

2.0p) which, in addition to the interim dividend of 1.9p per share paid

inOctober (2024: 1.0p), will bring the total dividend to 6.2p per share,

more than double the prior year figure (2024: 3.0p). Subject to approval

by shareholders, the final dividend will be paidon 6 July 2026 to

shareholders on the register as at 12 June 2026.

SHARE BUYBACK

As outlined above, supplementary returns are a key element of our

capital allocation priorities, and with leverage now well within targeted

levels, we are announcing the commencement of a programme

ofshare buybacks.

The Board intends to spend £20m repurchasing and subsequently

cancelling shares over the remainder of 2026. The intention is that this

programme will continue into 2027 and beyond, however the Board

shall keep this under review.

OUR PEOPLE AND CULTURE

The Board has a responsibility to foster a corporate culture grounded

in strong leadership and transparency, ensuring we do business

responsibly, adhering to the highest ethical standards, whilst minimising

the impact our business hason the environment.

Our corporate values, which guide behaviour and support the

achievement of our strategic goals, are defined below:

• Innovate to lead: We’re empowered to continuously improve;

• Pride in excellence: We relish achievement and success; and

• Collaborate and care: We work in partnership and look after

eachother.

Our purpose is to manufacture and supply the essential building

products used to build homes and other structures, helping to create

lasting legacies in the form of communities that will thrive for centuries

to come.

It is important to recognise that our success is dependent on the

passion and dedication of our employees and on behalf of the Board,

Iwould like to express my sincere appreciation to all of our colleagues

for their continued hard work and commitment.

We firmly believe that seeking and listening to feedback is fundamental

to our long-term success. We are proud of the results of our most

recent employee engagement survey, where we achieved record

response rates, with the results indicating continued improvement

inour overall engagement score.

Martin Sutherland, the designated Non-Executive Director for

employee engagement attends regular meetings of the Employee

Forum and provides feedback to the Board whilst working closely

withthe Group People Director.

BOARD CHANGES

Independent Non-Executive Director, Martin Sutherland will be retiring

from the Board at the forthcoming AGM. I wish to thank Martin for

hissignificant contribution and wise counsel during his tenure and

theBoard wish himevery success in the future.

Our Senior Independent Non-Executive Director and Chair of the

Remuneration Committee, Katherine Innes Ker will also reach the

ninthanniversary of her appointment during 2026.

We are committed to maintaining the right balance of skills, experience

and diversity while at the same time introducing fresh perspective

tothe Board. Over the coming year the Nomination Committee

willcontinue with a search process to identify new Independent

Non-Executive Directors.

HEALTH, SAFETY AND WELLBEING

Health, safety and wellbeing remains our number one priority andthe

Board remains focused on leading by example, ensuring that there can

be no doubting our commitment to zero harm. In 2025 we have reported

a significant reduction in our lost time incident frequency rate (LTIFR)

to0.92 accidents per 100,000 hours worked (2024: 2.25 accidents).

This result represents our best ever performance and is an excellent

achievement. We must not become complacent however, and will

continue to strive for further improvement in our quest for zero harm.

Each Board member has undertaken training in visible feltleadership

(VFL) and safety observations and have utilised these skills in

undertaking at least two factory health and safety walks in the year.

Inaddition, the Board completed three factory visits as a group.

CORPORATE GOVERNANCE

The Board remains committed to embedding robust governance

principles throughout the Group and keeping pace with evolving

regulatory expectations.

We strive to maintain a clear and strategic focus, ensuring we deliver

long-term, sustainable value for our shareholders through robust

oversight and responsible management. Open, rigorous and

transparent discussions on key strategic issues, potential risks and

emerging opportunities are fundamental to our Board’s decision-

making process, always considering the interests of all stakeholders.

Nigel Lingwood

Chair

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 11

Chair’s Statement continued

SIGNIFICANT PROGRESS

We are pleased with the progress we have made over the past year.

Capitalising on only a modest improvement in market conditions,

wehave outperformed the wider industry. Demand from the new

buildhousing sector improved a little during 2025, while the Repair,

Maintenance and Improvement (RM&I) market remained subdued,

withlittle sign of recovery. Against this mixed backdrop, the business

has demonstrated resilience, delivering a strong financial performance

and continued strategic progress.

2025 PERFORMANCE

Revenue for the year ended 31 December 2025 increased by 12.1%

to£386.0m (2024: £344.3m), primarily driven by higher sales volumes.

Adjusted EBITDA rose by 18.5% to £61.6m (2024: £52.0m) while

adjusted profit before tax increased by 62.9% to £36.0m (2024: £22.1m).

Adjusted earnings per share (EPS) was 12.6p (2024: 7.6p). Importantly,

net debt before leases reduced to £55.7m (2024: £84.9m) driven by

anadjusted operating cash flow of £68.7m (2024: £60.1m) reflecting

the consistent cash-generating capability of our business.

OUR STRATEGY

Our strategy remains focused on delivering long-term earnings growth.

Inspired by our purpose, to Help Create Lasting Legacies, and driven

byour vision to be both Brilliant Today andAhead of Tomorrow.

Our organisation is fully aligned around our strategic imperatives with

each individual understanding the part they playand how they contribute

to our future success.

• Strengthen the Core: Selective organic investment where appropriate

to add capacity or enhance efficiency in our core business;

• Beyond the Core: Expanding our product range beyond our

traditional focus of mainstream residential construction, focusing on

new and evolving solutions including brick slips and façade systems;

These are supported by our strategic enablers:

• Sustainability: Making our business more sustainable in everything

wedo; and

• Safety and engagement: Safety remains our number one priority

andthrough prioritising employee engagement we willmaximise the

potential of our workforce.

STRATEGIC PROGRESS

During 2025, we continued to Strengthen our Core. At our Desford

brick factory, both kilns ran simultaneously for the first time, increasing

production output and efficiency. The redevelopment of our Wilnecote

factory is virtually complete, and commissioning of a new specification

focused product range is underway. This will enable us to regain and

grow our position in the commercial and specification markets. Beyond

the Core, we successfully launched our Omnia extruded brick slip

range at Accrington. Combined with our Omnia mechanically fixed

façade system, these products position us to increase our share of

thegrowing façade market and ensure brick remains a relevant and

attractive choice for multi-family and high-rise developments.

Sustainability and innovation remain key drivers. In collaboration with

apartner, we have industrialised the production of calcined clay, a low-

carbon cement substitute derived from our London Brick production

waste. This material is already in use in our own concrete products and

will shortly be available commercially through our partner. This initiative

represents a first step leveraging this material and we are considering

opportunities to expand this by utilising virgin clay.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 12

Chief Executive’s Statement

A YEAR OF

PROGRESS

“Our Wilnecote brick factory is

nearing completion, commissioning

a new specification focused

product range.”

Neil Ash

Chief Executive Officer

CAPITAL ALLOCATION

Whilst retaining leverage of under 1.5 times adjusted EBITDA, our

capital allocation priorities are designed tomaximise stakeholder value

and facilitate the delivery of our strategy over the medium-term.

Selective strategic organic capital investment

to deliver attractive returns

Strategic investment in our manufacturing base has been central to

ourprogress. Over the past six years we have invested approximately

£140m in new brick and brick slip manufacturing capacity, modernising

our asset base, increasing our brick manufacturing capacity by 15%,

improving efficiency and reducing carbon emissions. Looking ahead,

we now expect lower levels of capital expenditure in the coming years,

whilst still progressing a potential investment in our aircrete business,

ensuring we retain both our market position and competitiveness.

Weintend to mitigate capital outlay by maximising the value we derive

from our property assets.

We are presently investing around £1.5m in a dedicated brick slip

cutting facility at our Measham site complementing our Omnia range

ofextruded brick slips with cut slips, ensuring we can meet all our

customers' needs. This new facility is expected to be operational by

the end of 2026.

Alongside modest strategic investment, we expect annual maintenance

capital spend of up to £15m in the medium-term whilst retaining

theability to flex this as appropriate. In the short-term we expect

maintenance capital spend to remain below this figure.

Attractive ordinary dividend with a coverage

of approximately 2xearnings

We will retain an attractive dividend policy, distributing approximately

50% of adjusted earnings. As our markets improve and earnings

recover, we expect our dividend to progressively increase.

The Board is recommending a final dividend of 4.3p per share (2024:

2.0p) which, in addition to the interim dividend of 1.9p per share paid

inOctober (2024: 1.0p), will bring the total dividend to 6.2p per share,

more than double the prior year figure (2024: 3.0p). Subject to approval

by shareholders, the final dividend will be paid on 6 July 2026 to

shareholders on the register as at 12 June 2026.

Supplementary shareholder returns as appropriate

With leverage now returned to normalised levels, comfortably below

our targeted maximum, and reflective of our lower capital investment

requirements in the near-term, the Board intends to commence the

return of capital to shareholders. We are announcing a programme

ofshare buybacks returning approximately £20m to shareholders

through the remainder of 2026. The intention is that this programme

will continue beyond the end of this year although the Board will keep

this under review.

Bolt-on acquisitions as suitable opportunities ariseto

accelerate our growth, particularly Beyond the Core

We will continue to explore M&A opportunities that align with our

strategy. With our core markets being highly consolidated, any M&A

ismore likely to focus upon accelerating growth Beyond the Core.

EXIT FROM NON-CORE BUSINESSES

During the year, we also took the decision to exit two non-core

businesses: the Formpave block paving business and the Bison

Bespoke Precast operation. Both faced challenging trading conditions

with limited prospects for improvement. The Formpave factory required

significant capital investment, and neither business had been profitable

in recent years despite multiple attempts to address this, leaving

uswith little choice but to exit. Closing any business is never easy and

Iextend my sincere thanks and best wishes to all those affected by

these closures. The Group retains the freehold site formerly occupied

by Bison Bespoke, which carries significant value that we intend to

monetise in support of our strategic priorities.

EXCELLENCE PROGRAMMES

Operational excellence continues to be a cornerstone of Forterra’s

performance. Our Sustainable Operational Excellence (SOE)

programme, launched in 2025, equips leaders with the skills, habits,

and behaviours needed to embed continuous improvement across

ourfactories. SOE supports annual cost reduction targets, aiming

toreduce cost of sales by 2%, and will be rolled out across all our

manufacturing facilities over the next two-to-three years.

Commercial excellence also remains central to our strategy. We have

refined our route-to-market to meet customer needs and strengthen

margin resilience. Pricing discipline, specification-led selling and

enhanced customer engagement have allowed us to deepen

relationships with housebuilders, merchants, distributors, and

contractors. The introduction of Net Promoter Score measurement

across key customer groups confirms the value we add through

consistent, reliable service and expertise.

CULTURE AND ENGAGEMENT

Culture and engagement are at the heart of our long-term success.

Weachieved a record 85% participation rate in our latest Gallup

employee engagement survey and our overall engagement score

increased to 3.83. This reflects the commitment, pride, and

professionalism of our people. During 2025, we focused on embedding

our purpose and values into everyday behaviours. A new values-led

recognition scheme encouraged colleagues to acknowledge peers

whose actions exemplify Forterra’s values, reinforcing integrity,

collaboration, and excellence.

We also launched Forterra Academy, a new learning management

system, improving access to training and development across the

Group. These initiatives empower employees to grow, innovate,

andcontribute meaningfully to the business, strengthening both

retention and capability.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 13

Chief Executive’s Statement continued

HEALTH, SAFETY AND WELLBEING

Our commitment to health, safety and wellbeing is unrelenting. I am

pleased that we have delivered a strong safety performance in 2025

with a 60% reduction in lost time accidents. Our Lost Time Incident

Frequency Rate (LTIFR) fell to its lowest ever level at 0.92 incidents

forevery million hours worked (2024: 2.25 incidents).

2025 saw the launch of our Base to Brilliant programme which is

focused on delivering best in class standards and compliance across

our manufacturing facilities, with our first sites achieving bronze status

in 2025. We have extended our Visible Felt Leadership programme

toaround 200 managers focused on creating a strong safety culture

through leaders being visible on the factory floor and having positive

safety conversations with employees.

We have also focused upon positive engagement around safety with

our employees through dedicated safety days run at each factory.

SUSTAINABILITY

Sustainability continues to guide our innovation efforts. Recognising

that our housebuilding customers increasingly focus on embodied

carbon per home, we now monitor and report carbon emissions per

square metre of product alongside our previous weight based measures.

We are developing lighter, more efficient products reducing raw

material use, energy consumption, and distribution emissions, allowing

us to demonstrate meaningful progress in lowering our carbon footprint

despite the significant operating inefficiencies that the weak demand

environment forces upon us. We will continue to collaborate with

customers to ensure our innovation and sustainability initiatives deliver

tangible value across the supply chain.

CURRENT TRADING AND OUTLOOK

2025 ended with subdued market conditions which have continued

into early 2026, with exceptionally wet weather making it difficult to

assess the strength of our underlying markets. UK domestic brick

despatches in January 2026 were 8% below the 2025 comparative.

With current activity tracking behind 2025 levels, it is expected that

demand will be weighted towards the second half.

We expect the operating leverage benefits of increasing production at

Desford and Wilnecote to be broadly offset by the impacts of production

reductions elsewhere as we continue to actively manage inventory levels.

We are currently concluding our annual pricing negotiations with our

customers and expect to recover the modest cost inflation we currently

face. Accordingly, without the further benefit of a meaningful recovery

indemand and assuming no prolonged impacts from the situation in

theMiddle East, we currently expect our 2026 adjusted EBITDA to be

slightly ahead of 2025.

Looking beyond 2026, market fundamentals remain attractive with

ashortage of housing, a strong desire within Government to address

this, and a constrained supply of essential building products. The

Board remains confident that our recent investments in new production

capacity leave the Group well placed to benefit from the market’s

structural growth drivers and a sustained recovery when it occurs.

CONCLUSION

I would like to thank all colleagues for their dedication and commitment

throughout 2025, particularly those affected by the exit from our

non-core businesses. I also extend my gratitude to shareholders

andpartners for their continued support as we execute our strategy

and deliver value responsibly and sustainably.

In summary, 2025 has been a year of progress, resilience, and

strengthened culture. Through disciplined investment, operational

andcommercial excellence, and a focus on people and sustainability,

Forterra is well-positioned to achieve long-term growth and continue

creating lasting legacies.

Neil Ash

Chief Executive Officer

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 14

Chief Executive’s Statement continued

OUR MARKETS

Overall, we saw a modest improvement in the demand for our products

during 2025, although it was a year of two halves. The first half of the

year saw strengthening demand but this slowed in the second half of

theyear, largely driven by uncertainty caused by the late Budget and

thelong-running speculation as to its contents.

UK domestic brick despatches as published by the Department for

Business and Trade (DfBT) increased by 6% relative to 2024, however

in line with our own experience, demand softened in the second half,

with despatches 4% below the first half, and 3% below the second half

of 2024.

National House-Building Council (NHBC) data suggests that new home

registrations increased by 11% in 2025 demonstrating some modest

recovery, although build levels remain well below normal levels and

demand from the Repair Maintenance and Improvement (RM&I) sector

remained muted.

Imports of bricks into the UK recorded a modest increase during the

year, remaining broadly flat as a percentage of total brick consumption

at approximately 20%.

With 2025 total UK brick consumption standing at approximately

1.8billion bricks (2024: 1.7 billion), demand remains almost 30%

belowthe2022 figure of 2.5 billion.

BRICKS AND BLOCKS SEGMENT

We possess a unique combination of strong market positions inboth

clay brick and concrete blocks.

We operate eight brick factories in seven locations across the country

with a total installed production capacity of approximately 600 million

bricks per annum. Alongside a range of products ideally suited to new

build housing, we are the only manufacturer of the iconic and original

Fletton brick sold under the London Brick brand. Fletton bricks were

used in the original construction of nearly a quarter of England’s

existing housing stock and are today used to match existing brickwork

by homeowners carrying out extension or improvement work.

Our clay reserves are the foundation that our brick business isbuilt

upon and are the primary raw material used in manufacturing our

bricks. Each of our brick factories is located adjacent to a quarry

supplying locally sourced clay directly intothe manufacturing process.

Sourcing material locally is sustainable and therefore preferable

wherever possible as it avoids the costs and carbon emissions

associated with transportation. Our mineral reserves also provide

anatural barrier, reducing the threat of new entrants entering the

market as the planning process to secure consent for a ‘green-field’

quarry and associated brick factory can take as long as 10 years.

Allofthe new brick factories built in the UK over the last two decades,

if not longer, have been redevelopments of existing locations utilising

established quarries. We have access to over 90 million tonnes of

minerals, and on average these reserves are sufficient to sustain

manufacturing operations for approximately 50 years. The majority

ofour minerals are owned, although a small amount are secured by

way of lease with a royalty payable at the point of extraction.

We are also a leader nationally in the aircrete block market. Under

theThermalite brand, we operate two block facilities in the Midlands

and South of England. In addition, our aggregate block business

hasaleading position in the important South East and East of England

markets where it has two well-located manufacturing facilities.

Trading and results

The performance of the Bricks and Blocks segment was principally

drivenby the demand dynamics outlined above. Bricks and Blocks sales

revenues were £307.7m, 11.2% ahead of the prior year (2024: £276.7m).

Segmental adjusted EBITDA was £56.9m, a 16.1% increase on the

prior year (2024: £49.0m). Adjusted EBITDA margin was 18.5% (2024:

17.7%). The improved EBITDA margin benefits from operating leverage

as volumes increased, whilst also reflecting the headwinds of being

broadly unsuccessful in our attempts to deliver brick price increases,

alongside continuing to operate significantly below full capacity utilisation.

Sales volumes

Our brick despatches showed solid growth, outperforming the wider

market. Of the different market segments that we service we carry

thegreatest exposure to new build housing. It is this segment that has

driven the wider growth in the market during the year. As a result of

ourfocus on housebuilding, we somewhat mechanically suffered a loss

ofbrick market share in 2023 as our major housebuilding customers

quickly curtailed their build programmes in response to a sudden decline

in demand. With the same major housebuilders increasing their brick

consumption in 2025 and our footprint weighted towards extruded brick,

our market share has recovered back to historical levels.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 15

Business Review

Bricks and Blocks

2025

£m

2024

£m

Revenue

307.7 276.7

Adjusted EBITDA

before overhead allocations 81.6 66.2

Overhead allocations

(24.7) (17.2)

Adjusted EBITDA

56.9 49.0

Adjusted EBITDA

margin before overhead

allocations

26.5% 23.9%

Adjusted EBITDA

margin after overhead

allocations

18.5% 17.7%

1. Revenue is stated before inter-segment eliminations.

2. Adjusted EBITDA is an APM, as explained within note 31 to the Consolidated Financial

Statements.

3. Overhead allocations are costs centrally incurred by the Group, includinggeneral

administrative expenses.

Neil Ash Ben Guyatt

Current affordability challenges place the greatest pressure on the

housing market in the South East of England where soft mud brick is

most prevalent. It is in the Midlands and Northern England where we

have seen a stronger recovery in housing starts increasing demand for

extruded bricks. Also, imported bricks are primarily soft mud products,

which therefore has a greater impact on demand for domestically

produced soft mud bricks.

Our manufacturing footprint is well suited to current demand. UK brick

manufacturing capacity is split approximately 65% extruded and 35%

soft mud, with domestic despatches in recent years being approximately

two thirds extruded, one third soft mud. Our own brick production

footprint (excluding the unique London Brick) is 80% extruded, and

20% soft mud, with only a single highly efficient soft mud factory in our

estate. Trade association data suggests that domestic extruded brick

despatches grew by 9% in 2025, whereas soft mud demand actually

fell by 1%, benefitting Forterra.

In addition, with limited house price growth and the housebuilding sector

facing pressure on their margins, housebuilders may seek to reduce

build costs by electing for cheaper extruded bricks over soft mud.

Demand for our aircrete and aggregate block products actually fell

slightly relative to 2024. The aircrete market stabilised following the

prior year competitor supply challenges from which we benefited, and

our aggregate block business continued to experience weak demand

by virtue of its exposure to the South East market and also the multi-

family residential market which was heavily impacted by delays

associated with the Building Safety Regulator.

Pricing and costs

We saw the continuation of a relatively benign cost base throughout

2025. Unit gas costs continued to moderate as a result of market

movements and our strategy of forward purchasing in order to reduce

price risk, however increased usage associated with higher production

resulted in the overall cost of gas being in line with the prioryear.

Our electricity spend in the year benefited from our solar power

purchase agreement (PPA) which was signed in 2022. With the solar

farm commencing generation in 2024, we began benefitting from the

long-term competitive rates in April 2025 resulting in a year-on-year

reduction in our electricity cost.

Brick pricing during the year was stable. With no meaningful price

increases delivered since 2022, our intention had been to increase

selling prices to offset inflation. Unfortunately, challenging market

conditions and competitor behaviours determined that these price

increases did not hold inthe market, as we needed to ensure our

pricing remained competitive. In addition, with much of our volume

growth being in extruded brick, we also experienced an adverse price

mix as cheaper bricks represented a larger proportion of our sales.

Pricing in aircrete was more positive with increases delivered to all

customers, although aggregate block remained highly competitive.

Operations

Our operational focus through 2025 was to ensure production

remained aligned with demand, something that proved challenging

with differing and shifting demand dynamics across our product range.

Strong demand for extruded bricks led to our ramping up production

at the Desford brick factory where during the autumn we commenced

running both kilns simultaneously for the first time. Adding just 25

additional roles ultimately facilitates a doubling of output, significantly

enhancing the factory's efficiency relative to a single kiln operation.

Thisrepresents a key step in Desford’s journey as we seek to increase

output towards its design capacity of 180 million bricks per annum.

During the year we also increased production of aircrete blocks in

response to growing demand in the first half. Demand increases have

not been uniform however and regrettably, atthe beginning of 2026 we

have announced reductions in production of London Brick and aircrete

blocks. In the case of aircrete, this has reversed some of the increase

implemented in 2025. These actions have regrettably led to modest

numbers of redundancies in early 2026. Looking ahead, with continued

uncertainty, weneed to retain our agility and will act to ensure that

production continues to remain aligned with sales.

Closure of non-core operations

During the year we made the decision to exit our two non-core

businesses, one of which, being the Formpave concrete block paving

business, is included within our Bricks and Blocks segment.

With 2024 full-year revenue of £5.9m, Formpave was a small non-core

part of the segment, contributing around 2% of segmental revenue. The

business broke even in 2024 and was loss-making in the current year.

With the landscaping market remaining particularly challenging and the

factory requiring significant capital investment to remain operational,

we opted to exit this sub-scale business.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 16

Business Review continued

Bespoke Products

2025

£m

2024

£m

Revenue

81.0 71.5

Adjusted EBITDA

before overhead allocations 10.9 7.3

Overhead

allocations (6.2) (4.3)

Adjusted EBITDA

4.7 3.0

Adjusted EBITDA

margin before

overheadallocations

13.5% 10.2%

Adjusted EBITDA

margin after

overheadallocations

5.8% 4.2%

1. Revenue is stated before inter-segment eliminations.

2. Both EBITDA and adjusted EBITDA are APMs, as explained within note 31 to the

Consolidated Financial Statements.

3. Overhead allocations are costs centrally incurred by the Group, includinggeneral

administrative expenses.

BESPOKE PRODUCTS SEGMENT

The Bespoke Products segment consists of our Bison Precast flooring

business. Our products comprise beam and block flooring, including

Jetfloor, which was the UK’s first suspended ground floor system to

use expanded polystyrene blocks combined with a structural concrete

topping to provide high levels of thermal insulation. As well as this,

wemanufacture and supply hollowcore floor alongside accompanying

staircases and landings for use in the upper floorsof multi-family and

commercial developments.

During the year we exited the Bison Bespoke Precast operation.

Thisbusiness manufactured a range of non-flooring structural precast

components. The Bison flooring business is unaffected by this decision

and remains an integral part of the Group’s core operations.

Trading and results

With Bison precast concrete flooring accounting for much of this

segment’s revenue during the year, the performance of this segment

remains closely correlated with Bricks and Blocks. Segmental turnover

in the year increased by 13.3% to £81.0m (2024: £71.5m) driven by

strong demand for both our beam and block and hollowcore products.

Segmental adjusted EBITDA stated before allocation of Group

overheads was £10.9m (2024: £7.3m). This segment delivered

anexcellent performance in the year, ahead of the levels delivered

in2022 when market demand was much stronger.

After an allocation of Group overheads of £6.2m (2024:£4.3m),

thesegment's adjusted EBITDA was £4.7m (2024: £3.0m).

We have retained a consistent allocation of central overhead costs

based on revenue although, in reality, the level of overhead directly

attributable to this segment is likely to be lower.

Sales volumes

Linked to an increase in housebuilding activity, we experienced

astrong growth in demand for both our Jetfloor beam and block

flooring system and our hollowcore products during the first half of

theyear, although demand softened in the second half of the year.

Pricing and costs

Both our selling prices and cost base remained relatively stable during

the year. Margins improved reflecting both increased activity levels and

the associated benefit in operating efficiency, alongside the benefits

enabled by product innovation as we developed our products to meet

customer needs in a more cost-effective manner. Our Sustainable

Operational Excellence (SOE) programme continued to yield cost savings.

Closure of non-core operations

As outlined above, we exited our non-core Bison Bespoke Precast

operation during the year.

Manufacturing a range of non-flooring structural precast components,

Bison Bespoke Precast generated revenue of £9.7m in 2024,

accounting for around 14% of segmental revenue. This business had

struggled to exceed break even performance for a number of years

and several attempts to improve upon this performance had not been

successful. The freehold factory site is owned by the Group and holds

significant land value that we intend to monetise in support of our wider

strategic and capital allocation priorities.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 17

Business Review continued

Neil Ash

Chief Executive Officer

10 March 2026

Ben Guyatt

Chief Financial Officer

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 18

Business Model

Our Purpose

HELPING CREATE

LASTING LEGACIES

A BUSINESS

BUILT ON

Long-term clay reserves

Our brick business is built

upon our clay reserves.

Engaged teams

Our people power

ourperformance.

Close to our customers

We have longstanding

relationships with our

supplychain partners

andcustomers.

Leading brands

One of our key assets

isour brands.

Operational scale

Our network of efficient,

high-capacity brick

factories ensure we have

the ability to meet the

needs of our customers.

Leading class service

anddistribution

Our distribution fleet and

customer facing teams

ensure the best customer

experience.

SOURCE

Clay reserves equivalent

to approximately 50 years

production

DISTRIBUTION

AND SERVICE

Focused on delivering the best

customer experience

COMBINED WITH

OUR ACTIVITIES

→ See our Section 172 Statement on pages 23 and 24

MANUFACTURE

A leading manufacturer of

bricks, blocks and

precast concrete flooring

CREATING VALUE

FOR OUR STAKEHOLDERS

Shareholders

An attractive dividend

policy, supported by

strongcash generation

overthe medium-term.

Suppliers

We work collaboratively

withoursupply partners

toensure valueis

deliveredthroughout

oursupply chain.

Customers

By continuously engaging

with ourlongstanding,

loyalcustomer base,

weoffer industry-leading

customer service.

Employers

We invest in our people to

build a skilled, motivated

workforce that supports

strong and sustainable

business performance.

Communities

We supply the materials

tobuild sustainable

communities, creating

localemployment and

ensuring we dobusiness

ina sustainable way.

1,094

No. of suppliers

28%

NPS score

+10%

Improvement

inemployee

engagement

£71k

Charity donations

madein the year

6.2p

Total dividend

OUR MARKETS

Our products are predominantly used in residential construction

withinthe UK. As such, demand for our products is directlylinked

tolevels ofUK residential construction activity. Levels of,and growth

in, construction activity are influenced by macroeconomic factors,

including general economic prosperity, consumer confidence,

Government policy, houseprices, interest rates and mortgage

availability.

In recent years, higher interest rates have impacted housing

affordability, in turn causing reduced demand for properties and,

asaresult, limiting the demand for our products.

The UK construction market is typically segmented into new build

andrepair, maintenance and improvement (RM&I), with each category

split between residential and non-residential sectors.

In 2025, over 90% of the Group’s revenue was derived from the

residential sector. This percentage is likely to increase in the near-term

following the decision to exit our non-core Bison Bespoke Precast

andFormpave block paving businesses.

Recent investments in our Wilnecote brick factory and the Accrington

brick slips facility will, over time, allow us to increase our exposure

tothe non-residential commercial and specification sector reducing

ourreliance on residential construction alone.

The Group’s revenue can also be split between residential new build

and RM&Iapplications with 67% attributed to new build and 25% to

RMI during2025 with the balance driven by non-residential applications.

OUR PRODUCTS

Whilst bricks is the largest part of our business representing around

50% of our revenues in 2025, it is important to recognise the importance

of our block and precast concrete products which togethercontributed

the remaining 50% of revenue.

Our block and precast products are sold into the same markets as

brickwith our aircrete blocks and the Jetfloor beam and block insulated

flooring system being almost exclusively used in single-family residential

applications.

Our aggregate blocks are used in a wide range of applications including

single-family housing but also multi-family apartment buildings, with our

hollowcore flooring products also sold into this market.

When looking at market data for each of our product groups, the brick

market has the greatest level of market data available to us, both

publicly through Government data published by the Department for

Business and Trade (DfBT), the Office for National Statistics (ONS)

andHis Majesty’s Revenue and Customs (HMRC) along with confidential

data provided by our trade associations. Accordingly, withour products

predominantly being sold into the same residential construction markets,

we often utilise the comprehensive brick market data at our disposal

asa proxy for the wider market for our products.

GEOGRAPHIC AND PRODUCT SEGMENTATION

The brick, aircrete and flooring markets are largely national in nature,

with products transported significant distances across the UK.

Incontrast, aggregate blocks have a lower value-to-weight ratio

andaretherefore more localised, with our market position primarily

concentrated in the South East.

While block and precast concrete products are generally standardised

and not factory-specific, each of our brick factories produces bricks

tailored to its local clay reserves. This makes the output from each site

distinctive and, in most cases, not directly interchangeable with bricks

from other factories.

The UK brick market comprises three main product types, each

defined by its manufacturing method:

• Extruded (wire-cut) bricks are formed by forcing clay through

adieandcutting it into uniform units, resulting in precise edges

andaconsistent appearance;

• Soft mud bricks are produced by throwing or pressing clay into

moulds, replicating traditional handmade techniques and creating

arustic, textured finish; and

• Fletton bricks, unique to Forterra and sold under the London Brick

brand, are manufactured using a pressed process with specific clay

and specialist kilns. Particularly popular in the post-World War II

period, they were used in the construction of approximately 20%

ofEngland’s housing stock. They remain a premium choice today,

especially for extensions where matching existing brickwork isimportant.

Historically, soft mud bricks were most common in the South and

South East, while extruded bricks dominated the Midlands and North.

However, as the number of factories has reduced and distribution

hasbecome national, these regional distinctions have diminished.

Softmud bricks are more expensive to manufacture and typically

command a premium over extruded bricks.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 19

Market Overview

SUPPLYING

RESIDENTIAL

CONSTRUCTION

UK HOUSING MARKET

The residential construction sector in the UK comprises private

andpublic (social) housing and includes both new build and RM&I

of existing properties. New build activity is generally measured by

thenumber of housing registrations or starts and thenumber

ofhousing completions. According to estimates provided by the

Construction Products Association (CPA), GB housing starts in

2025are expected to be approximately 135,000 homes compared

to 127,000 in 2024 and still well below the 209,000 in 2022.

The National House-Building Council (NHBC) also publish data on

housing registrations, starts and completions. Whilst they do not cover

the whole market, their data provides the most timely indication of

market development. The latest publicly released data reports that

newhome registrations increased by 11% in 2025, demonstrating

somemodest recovery, although build levels remain wellbelow

normalised levels.

The new build housing market is known for its cyclicality and as such,

we remain confident that demand for housing will recover from its

current lows with a supportive government seen as a positive.

We view the Government’s commitment tomaterially increase

housebuilding, with 1.5 million new homes promised over the course

ofthis five-year Parliament, equating to 300,000 new homes per

annum as a positive. Although, based on current run rates it is

extremely unlikely that this target will be met.

The last time the UK built close to 300,000 homes per annum was

inthe 1970s, when around half of the homes constructed were social

housing. To be successful in meeting their targets, the Government

willlikely need to deliver a significant increase inthe construction of

social housing.

BRICK IMPORTS

Under normal market conditions the UK brick market is subject to

adeficit of supply, with domestic manufacturing capacity of just over

2.0 billion bricks annually compared to consumption in 2022 of over

2.5 billionbricks.

This shortfall is met by imported bricks, most notably from continental

Europe. In 2022 around 570 million bricks, representing around 23% of

consumption, were imported into the UK. In 2025 this figure had fallen

to around 350 million bricks (c.20% of consumption).

Imports (primarily from the Netherlands and Belgium) remain persistent

for three key reasons. First, some products are architecturally

distinctive, and UK manufacturers cannot supply them. Second,

customers, mindful of past shortages that are likely to recur as the

market recovers, wish tomaintain import channels. Third, the

continental European market is equally, if not more, challenging than

the UK; European producers may export bricks to the UK to keep

factories running, even when profits after shipping are minimal.

Importsare heavily skewed toward soft mudproducts – the segment

to which Forterra has the least exposure.

Beyond brick, there is little import competition with our products,

smallamounts of aircrete are imported from continental Europe and

Northern Ireland, and some precast concrete flooring is also imported

from Northern Ireland.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 20

Market Overview continued

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 21

Market Overview by Construction Sector

IN 2025 BOTH BRICKS AND PRECAST FLOORING

EXPERIENCED DEMAND GROWTH DRIVEN BY NEW HOUSING

NEW RESIDENTIAL

• Overall there was a strong start to 2025

followed by weaker growth in the second half.

• Single family housing (+14%) was much

stronger than the apartments sector (-2%)

where high rise construction continues to be

impacted by delays linked tothe new Building

Safety Regulator.

• According to the NHBC, regions of higher

housing affordability such as the West

Midlands (+29%) and Eastern England (+24%)

experienced strong growth in registrations.

• Growth in registrations was more modest

inthe South East (+7%) where housing

affordability remains low. London was

particularly weak (-27%) given the additional

headwinds associated with the Building

SafetyRegulator.

HOUSING RENOVATION

• Inflation and interest rates continue to suppress

the Repair, Maintenance and Improvement

market particularly for larger householder

investments like extensions which drive demand

for our London Brick range.

• We track levels of approvals for large householder

extensions as a key indicator of demand

(ratherthan the broader indicators of housing

repair, maintenance and improvement).

RM&I (extensions)

+3%

NON-RESIDENTIAL

• The non-residential sector experienced solid

growth in construction new orders during 2025.

• Public sector projects including education and

health grew 17% whilst the private commercial

sector, including offices and retail, grew by 7%.

Non-residential

new orders

+7%

Total Housing Houses

+11%

+14%

Apartments

-2%

HOUSEHOLDER EXTENSIONS

NON-RESIDENTIAL NEW (£m)

HOUSING REGISTRATIONS (NHBC)

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 22

Market Overview by Product Group

BRICK DEMAND ROSE 6% IN 2025 BOOSTED

BY SINGLE-FAMILY NEW HOUSING GROWTH

BRICKS

• Domestic brick despatches increased by

6%in 2025, largely due to increased new

housebuilding.

• There were however significant variations in

growth depending on the brick types and the

market segments which they primarily serve.

• We saw strong growth for our extruded

bricks which are used primarily for new

housing.

• Demand for both Fletton and soft mud bricks

was less strong with Fletton being reliant

onhousing improvement, and, in the case

ofsoft mud, new housing in the South East,

where affordability continues to constrain

growth. With imported brick primarily

comprising soft mud product, this may have

also constrained demand.

BLOCKS

• Strong demand for aircrete during H1 was

driven by growth in new housing with supply

shortages across the industry in H1.

• Whilst the overall market for aggregate blocks

grew modestly in 2025, our geographical

focuson Southern England means our sales

were impacted by weaker market conditions,

particularly in London where commercial

projects have experienced delays linked to

theBuilding Safety Regulator.

UK Block Deliveries

-2%

PRECAST CONCRETE FLOORING

• As with extruded bricks, our Bison precast

flooring business experienced high levels of

growth in the year (particularly in the first half

of2025) driven by new housing demand.

• Unlike bricks and blocks, industry statistics

arenot available, however growth closely

tracksthatof new housing with double digit

growth insales volumes of both our floor beam

and hollowcore products in 2025.

UK BLOCK DELIVERIES (000m

)

UK BRICK DELIVERIES & IMPORTS (BILLIONS)

Forterra floor beam sales

30,000+

new homes in 2025

Domestic Brick

Despatches

+6%

We are committed to engaging with allof our stakeholders, ensuring

that strong relationships arebuilt and maintained. Theserelationships

are essential to our ongoing success.

Our key stakeholders are at the core of everything we do. The Board

remain fully appreciativeofthe impact of our strategy and business

model across our stakeholder groupandrecognise that different

stakeholders may have opposing views.

More information about our strategy can be found on pages 6 to 8,

and the business modelcan be found on page 18. The following

details engagement across our stakeholder group, both throughout

thebusiness and at Board level.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 23

Section 172 Statement Engaging with Our Stakeholders

PEOPLE

We aim to create an engaging workplace, attracting and

retainingtalented people

CUSTOMERS

Our customers are essential to our business, and evolving

tomeettheir changing needs is core to our success

Aligning with our values: Aligning with our values:

Business engagement

• Provision of regular employee updates across a number of

channels including social media, featuring regular podcasts

fromthe CEO andother members of theExecutive Committee

• CEO Neil Ash conducts regular face to face ‘town hall talks’

aswell as a roadshow visiting all sites

• Our Employee Forum gives employees the opportunity to engage

directly with senior leadership, including members oftheBoard

• Monthly management briefings equip local management to

disseminate information to the wider workforce on a face-to-

facebasis

• Over 180 managers including the Board and the Executive

Committee have completed Visible Felt Leadership training and

regularly undertake safety conversations across the business

Business engagement

• Our commercial team continually engages directly with customers,

and our sales office form the first point of customer contact

• Regular, often weekly, structured meetings with customer

procurement teams to review forward orders, availability and

anyservice issues

• Clear communication was vital in a period where we saw differing

demand dynamics for different products with limited inventories

ofcertain in demand products

Board engagement

• Board members undertake regular health and safety walks

aswellas full Board site visits, presenting the opportunity for

1-1engagement

• Supplementing the health and safety walks, each Director

engages inVisible Felt Leadership (VFL) conversations and

safetyobservations

• Martin Sutherland (Non-Executive Director) attended the

Employee Forum which met quarterly during year

• Defining culture and leading from the top is a key Board priority

• The Board meets with senior managers at Board meetings,

workshops and working dinners

Board engagement

• Executive Directors regularly meet with customers

• Annual corporate event held where the Chair and Non-Executive

Directors are able to meet withkey customers, gaining insight

intotheir perspectives

Outcomes

The Employee Forum met on a quarterly basis, discussing a range

of topics including our excellence programmes, health and wellbeing

and pay along with charitable giving

Outcomes

We continued to meet our customers’ requirements. Open and

transparent dialogue with our customers regarding their own

businesses and their demand projections for our products informed

the decisions we needed to make regarding production output

OUR VALUES

Innovate to lead Pride in excellence

Collaborate and care

DIRECTORS’ RESPONSIBILITIES IN ACCORDANCE

WITHS172(1) OF THE COMPANIES ACT 2006

The Board considers, both individually and collectively,

thatit has acted in good faith to promote the success

ofthe Company for thebenefit of the Company’s members

as a wholeinits decision-making throughout2025.

In making a declaration that it has fulfilled its responsibilities

in this matter the Board has considered the matters

detailed in s172(1) paras(a-f). The table above highlights

examples of howthe Directors have satisfied their duty

under s172 during the year.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 24

Section 172 Statement Engaging with Our Stakeholders continued

SUPPLIERS

Working collaboratively with our supply partners to ensure

valueisdelivered throughout our supply chain

COMMUNITY AND ENVIRONMENT

We believe in putting communities at the heart ofeverything

wesetout to achieve

SHAREHOLDERS

The core of our strategy is to create sustainable

shareholdervalue

Aligning with our values: Aligning with our values: Aligning with our values:

Business engagement

• Direct engagement with suppliers through the procurement team

• Increased forecasting of requirements and management of

bottlenecks

• The Executive Committee maintains relationships with directors

ofthe Group’s key suppliers with discussions covering health,

safety and wellbeing and longer-term sustainability goals alongside

day-to-day trading

Business engagement

• Supported numerous local clubs, organisations and charities

withdonations through the Forterra Community Fund

• We engaged in regular dialogue with local communities

acrossourmanufacturing locations

• Charity match funding available to employees, aiding

fundraisingefforts

Business engagement

• Results presentations were delivered on release of full-year

andinterim results

• Meetings were held between management and both current

andpotential shareholders

• The investor relations section onour website has facilitated

easyaccess to announcements, keydates and publications

• Our management regularly engaged with the analyst community

who then disseminated research to both current and potential

shareholders

• Shareholder feedback was obtained as part of our Double

Materiality Assessment laid out within our Sustainability Report

Board engagement

• Sustainability is a key priority for the Board and is governed

assuch by the Sustainability Committee

• Risks to the supply chain including energy procurement

areregularly discussed at both Board and Audit and Risk

Committeemeetings

Board engagement

• Board actively involved in sustainability strategy and regularly

updated regarding progress in thisarea

• Sustainability Committee actively engaged in consideration of both

transitional and physical climate risks

Board engagement

• Our AGM enabled shareholders direct access to the Board

• The Remuneration Committee Chair met with a number of major

shareholders to discuss the revisions to our Remuneration Policy

• We carried out independently facilitated shareholder perception

exercise canvassing the views of 15 major shareholders

withthisfeedback being key in forming our updated capital

allocation priorities

Outcomes

Managing supply chain pressures through secondary and multiple

sources of supply

Outcomes

• Donated over £70,000 to charitable causes in 2025

Outcomes

• Shareholders are kept informed of Group performance

• Shareholders fully consulted in the formation of our revised capital

allocation priorities and our new Remuneration Policy

• Sustainability metrics of decarbonisation and plastic reduction

incorporated into ourlong-term incentive Performance Share

Plan(PSP)

• Enhanced engagement with ESG ratings agencies including CDP

• Fully compliant TCFD disclosure continues to develop, ensuring

stakeholders are informed of the climate risks facing our business

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 25

Key Performance Indicators

REVENUE (£m)

OPERATING CASH CONVERSION (%)

ADJUSTED PROFIT BEFORE TAX (£m)

ADJUSTED EPS (PENCE)

Definition

Revenue represents the sale of our products,

net of rebates, discounts and value added taxes.

Performance

Revenue for 2025 represented a 12.1% increase

on the prior year, although varied ataproduct

level. Within our Bricks and Blocks segment

wesaw our brick volume growth outperforming

the wider market, although demand for both

aircrete and aggregate blocks was muted,

withdespatches falling slightly year-on-year

inline with the wider market. Within the

Bespoke Products segment we saw strong

volume growth for our precast concrete flooring

products with pricing remaining stable across

our entire product range.

Definition

Operating cash conversion is calculated as

adjusted operating cashflow/adjusted EBITDA.

Performance

The Group has a long history of strong

operating cash conversion although challenging

trading conditions impacted this in 2023.

Following management actions taken, the

Group returned apositive operating cash

conversion both in 2024 and 2025 which

isexpected to continue in2026.

Note: The calculation for this KPI has been

amended in the current year to reflect what

management feel is a morerepresentative

measure of performance. Prior years have been

restated to reflect this. The reconciliation for

operating cash conversion is shown in note 31

to the Consolidated Financial Statements.

Definition

Profit before tax adjusted for exceptional items

and other adjusting items.

Performance

Adjusted profit before tax increased by 62.9%

vs. the prior year, with a result of £36.0m

reported for 2025. This increase was driven by

an improved trading performance alongside

lower financing costs as a result of a reduction

both in the cost and level of borrowings.

Definition

Basic earnings per share (EPS) adjusted for

exceptional and adjusting items.

Performance

Adjusted EPS was 12.6p, compared with 7.6p

in2024. This was largely due to the positive

increase in operating profit, with the weighted

average of share outstanding at similar levels

forboth years.

Links:

S B

370.4

455.5

346.4 344.3

386.0

115.3

99.8

(9.1)

115.6

111.5

50.7

70.6

31.1

22.1

36.0

17.5

26.4

11.4

7.6

12.6

2021 2022 2023 2024 2025

2021 2022 2023 2024 2025 2021 2022 2023 2024 2025

2021 2022 2023 2024 2025

KEY

Link to strategy

Remuneration links

Strengthen the Core

Beyond the Core

Remuneration

FINANCIAL

Links:

S B

Links:

S B R

Links:

S B R

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 26

Key Performance Indicators continued

FINANCIAL

NON-FINANCIAL

NET (DEBT)/CASH BEFORE LEASES (£m)

LOST TIME INCIDENT FREQUENCY RATE

CLAY CARBON INTENSITY RATIO

(CO

ePER TONNE)

CONCRETE CARBON INTENSITY RATIO

(CO

e PER TONNE)

Definition

Net (debt)/cash comprises cash and cash

equivalents less thebalance of short and long-

term borrowings, excluding leaseliabilities.

Performance

Net debt before leases totalled £55.7m at

31December 2025, equating to a leverage

ofc.1.0 times on a banking covenant basis,

andan£29.2m reduction on 2024 (£84.9m),

notwithstanding capital spend of £8.3m on

ourstrategic projects during theyear.

Definition

Our lost time incident frequency rate (LTIFR)

iscalculated using contracted working hours

andisstated as the number of lost time incidents

suffered per million hours worked.

Performance

Our LTIFR was 0.92 incidents for every million

hours worked in 2025. This is the lowest LTIFR

rate the business has ever recorded and shows

our continued focus on zero harm is starting

tohave effect. 2025 saw the launch ofour Base

to Brilliant programme which is focused on

delivering best in class standards and compliance

across our manufacturing facilities with our first

sites achieving bronze status in 2025. In addition

we have now extended our Visible Felt

Leadership programme to over 180 managers.

Definition

It is important to recognise that the amount of

carbon we emit is directly related to the volume

of product we manufacture. Intensity ratio,

defined as CO

e per tonne of manufactured

product, shows this. We believe the most

transparent way of reporting our carbon

footprint is to separately report our greenhouse

gas intensity ratio (CO

e) for our clay and

concrete products and that this will provide

themost meaningful information from which

tomeasure our carbon emissions overtime.

Performance

Carbon intensity targets were first set in 2010,

andbetween 2010 and 2019 decreased by

22%. Since setting challenging targets in 2020

(against a2019 benchmark), we have reduced

carbon intensity by 9% in both the clay and

concrete businesses. Product mix and

production inefficiencies have impacted

progress overall however these reductions

areapositive illustration ofthe good work we

are doing in reducing our emissions footprint,

and reflect projects such asthe new Forterra

Solar Farm and the new more efficient factory

atDesford.

Concrete emissions intensity increased

marginally in the year reflecting the closure of

the Formpave and Bison Bespoke sites and

weexpect this to reduce in 2026 and beyond.

Whilst we hope to continue this trajectory

towards our 2030 target of 33% reduction in

clay and 80% in concrete we also acknowledge

that at the current rate of and the wider

infrastructure challenges around hydrogen

usage, this will bechallenging.

238.0

244.9

248.7

239.7

232.4

3.98

3.79

3.24

2.25

0.92

40.9

(5.9)

(93.2)

(84.9)

(55.7)

19.9

20.7

25.6

18.8 19.0

2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025

KEY

Link to strategy

Remuneration links

Strengthen the Core

Beyond the Core

Remuneration

Links:

S B

Links:

S B R

Links:

S B R

We have delivered a strong financial performance in 2025 with all of

our key financial metrics seeing improvement. Alongside a strong profit

performance in what remains a challenging market, we have again

demonstrated the strong cash generation capability of the Group as

we reduce our leverage to approximately 1 timesadjusted EBITDA.

2025 RESULTS

Alternative performance measures

In order to provide the most transparent understanding of theGroup’s

performance, we use alternative performance measures (APMs) which

are not defined or specified under IFRS. We believe that these APMs

provide additional helpful information on how our trading performance

is reported and reviewed internally by management and the Board,

allowing non-trading items which are less likely to recur to be assessed

separately.

Management and the Board use several profit-related APMs in

assessing Group performance and profitability. These are considered

before the impact of exceptional and adjusting items.

REVENUE

Total revenue of £386.0m represented a 12.1% increase upon the prior

year (2024: £344.3m). This increase was primarily driven by increased

sales volume. Within our Bricks and Blocks segment we saw our brick

volume growth outperforming the wider market, although demand for

both aircrete and aggregate blocks was muted with despatches falling

slightly year-on-year in line with the wider market.

Within the Bespoke Products segment we saw strong volume growth

for our precast concrete flooring products with pricing remaining stable

across our entire product range.

Adjusted earnings before interest, tax, depreciation

andamortisation (EBITDA)

Adjusted EBITDA was £61.6m (2024: £52.0m) with profitability

benefitting from both increased sales volumes and also the greater

operating efficiency that this enables.

Our business is managed as two segments and we allocate ourcentral

overheads to each segment based on a historical revenue-driven

allocation mechanism, with central overheads allocated to Bricks

andBlocks and Bespoke Products in the ratio 80%:20% respectively.

In practice, the allocation of overheads to Bespoke Products exceeds

the level of overheads that are directly applicable to this segment.

Accordingly, we also disclose the allocation of central overheads to

give greater visibility of the underlying profitability of our segments,

inparticular Bespoke Products.

Bricks and Blocks segmental adjusted EBITDA was £56.9m (2024:

£49.0m) and Bespoke Products contributed an adjusted EBITDA of

£4.7m (2024: £3.0m).

ADJUSTED PROFIT BEFORE TAX

Adjusted profit before tax was £36.0m representing an increase of

62.9% on the prior year (2024: £22.1m), with the increase driven by an

improved trading performance alongside lower financing costs, which

were the result of a reduction in both the cost and level of borrowings.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 27

Chief Financial Officer’s Review

“A strong financial performance

with all key financial metrics

showing improvement.”

A STRONG

FINANCIAL

PERFORMANCE

Ben Guyatt

Chief Financial Officer

STATUTORY RESULTS

On a statutory basis, EBITDA was £48.9m (2024: 54.7m), and profit

before tax (PBT) was £23.3m (2024:£24.8m). These results are

statedafter the inclusion of adjusting and exceptional items as laid

outin this review.

OPERATING EFFICIENCY

We benefitted from some improvement in operating efficiency during

the year with our output of the majority of our products increasing. In

response to improving demand for extruded bricks, we have increased

output at our Desford factory, running both kilns simultaneously for the

first time although, overall our output remains well below normalised

levels which creates some inherent operating inefficiency. During 2025

our brick production output ran at approximately 60% of our installed

production capacity.

Production planning was challenging, with the strong demand seen

inthe first half of the year softening somewhat in the second half,

necessitating that we keep output levels constantly under review.

Regrettably, we announced some modest reductions in both the

production of both London Brick and aircrete blocks in early 2026.

OPERATING COSTS

Our cost base remained broadly stable throughout the year with

normal levels of input cost inflation.

Unit gas costs continued to moderate as a result of both market

movements and our strategy of forward purchasing in order to reduce

price risk, however, increased usage associated with higher production

resulted in the overall cost of gas being in line with the prioryear.

Our electricity spend in the year benefited from our solar power

purchase agreement (PPA) which was signed in 2022. The solar farm

commenced generation in 2024, but we first benefitted from the long-

term contracted competitive rates in April 2025, resulting in a year-on-

year reduction in our electricity cost.

Looking ahead, we have around 80% of our gas usage secured for the

remainder of 2026 with the month of March 100% covered, insulating

us somewhat from the current price volatility caused by the situation

inthe Middle East. We also have a good level of layered coverage

beyond this, with around 70% of our usage secured in 2027 and with

coverage reducing through to 2030.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 28

Chief Financial Officer’s Review continued

Results for the year

Revenue EBITDA

2025

£m

Adjusted

EBITDA

2025

£m

Exceptional

items

2025

£m

Adjusting

items

2025

£m

2025

£m

Bricks and Blocks 307.7 56.9 (3.4) (6.0) 47.5

Bespoke Products 81.0 4.7 (3.3) – 1.4

Inter-segment eliminations (2.7)

Unallocated exceptional items –

Group total 386.0 61.6 (6.7) (6.0) 48.9

Results for the prior year

Revenue EBITDA

2024

£m

Adjusted

EBITDA

2024

£m

Exceptional

items

2024

£m

Adjusting

items

2024

£m

2024

£m

Bricks and Blocks 276.7 49.0 (0.1) 5.6 54.5

Bespoke Products 71.5 3.0 (0.1) – 2.9

Inter-segment eliminations (3.9)

Unallocated exceptional items (2.7) (2.7)

Group total 344.3 52.0 (2.9) 5.6 54.7

EXCEPTIONAL ITEMS

Exceptional items in the year included impairment and termination

costs associated with the exiting of the non-core businesses of

Formpave and Bison Bespoke Precast. The total combined exceptional

cost of exiting these businesses was £6.7m with termination costs

which have been, or will be cash-settled totalling £2.7m with the rest

ofcosts being non-cash impairment charges. The decision to exit

these non-core businesses is aligned to our long-term strategy,

demonstrating disciplined capital management, being both cash

flowand margin accretive, avoiding significant capital expenditure

atFormpave and releasing a valuable land asset in the case of

BisonBespoke Precast, whilst at the same time enabling greater

management focus on delivering our strategy of Strengthening the

Core and seeking growth through expansion Beyond the Core.

ADJUSTING ITEMS

In addition to exceptional items, we have also identified further

adjusting items, the separate disclosure of which allows us topresent

our results in a manner that will allow users of our financial statements

to understand the underlying trading performance of the business

applying consistent treatments as used by management to monitor

theperformance of the Group.

Adjusting items in the current and previous year relate to both realised

and open energy positions where committed energy purchased by the

Group has or are expected to exceed consumption. Where forward

energy contracts are expected to be utilised in full,we apply the own

use exception within IFRS 9 Financial Instruments and these are not

marked to market. Where we have energy in excess of our anticipated

needs secured under forward contracts, these contracts do not meet the

own use exemption and as such are treated as derivatives and marked

to market, resulting in gains and losses as market prices fluctuate.

Anyimpact on the profit and loss as a result of this marked to market

treatment, along with profits and losses on the sale of surplus energy,

are shown as adjusting items.

In the year, the Group realised a £1.2m gain in respect of surplus

energy sold back to the market, which has been removed from the

adjusted results. Alongside this, the Group has removed the marked to

market revaluation impact of energy derivatives in the period, with the

adjusted results reflecting the cost of energy consumed at the forward

purchased rate. This has resulted in a £7.2m benefit in the adjusted

versus the statutory results, with this effectively being a matter of

timing, with a near reverse adjustment in the prior year.

FINANCE COSTS

Finance costs were £6.0m (2024: £9.1m) with the decrease driven by

areduction in the level of borrowing, alongside a reduction in the interest

rate payable, with falling leverage leading to a reduction in the margin

payable on our facility, in addition to falls in the headline interest rate.

Finance costs are stated net of capitalised interest of £2.5m (2024:

£2.1m) in respect of the capital investment projects at Wilnecote

andAccrington.

Under the terms of the credit agreement, interest is payable according

to a margin grid dependent on leverage. Starting witha margin of

SONIA plus 1.65% applicable whilst leverage (net debt/adjusted

EBITDA, as measured before the impact ofIFRS 16) is less than 0.5

times, rising to a margin of 2.75% ifleverage is greater than 2.5 times.

Acommitment fee of 35% of the margin is payable on the undrawn

credit facility.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 29

Chief Financial Officer’s Review continued

Bricks and Blocks

Adjusted

2025

£m

Statutory

2025

£m

Adjusted

2024

£m

Statutory

2024

£m

Revenue

307.7 307.7 276.7 276.7

EBITDA

before

overhead allocations

81.6 72.2 66.2 71.7

Overhead

allocations (24.7) (24.7) (17.2) (17.2)

EBITDA

56.9 47.5 49.0 54.5

EBITDA

margin

before overhead

allocations

26.5% 23.5% 23.9% 25.9%

EBITDA

margin after

overhead allocations

18.5% 15.4% 17.7% 19.7%

Bespoke Products

Adjusted

2025

£m

Statutory

2025

£m

Adjusted

2024

£m

Statutory

2024

£m

Revenue

81.0 81.0 71.5 71.5

EBITDA

before

overhead allocations

10.9 7.6 7.3 7.2

Overhead

allocations (6.2) (6.2) (4.3) (4.3)

EBITDA

4.7 1.4 3.0 2.9

EBITDA

margin

before overhead

allocations

13.5% 9.4% 10.2% 10.1%

EBITDA

margin after

overhead allocations

5.8% 1.7% 4.2% 4.1%

1. Revenue is stated before inter-segment eliminations.

2. Both EBITDA and adjusted EBITDA are APMs, as explained within note 31 to the

Consolidated Financial Statements. EBITDA ispresented above under the statutory

heading, being calculated with reference to statutory results without adjustment.

3. Overhead allocations are costs centrally incurred by the Group, includinggeneral

administrative expenses.

Adjusted profit before tax reconciliation

2025

£m

2024

£m

Adjusted profit before tax 36.0 22.1

Exceptional costs

Restructuring costs (6.7) (0.2)

Aborted corporate transaction – (2.7)

Adjusting items

Realised gain/(loss) on the sale of surplus energy 1.2 (1.5)

Fair value movement on energy contract

derivatives

(7.2) 7.1

Statutory profit before tax 23.3 24.8

TAXATION

The adjusted effective tax rate (ETR) excluding the impacts of

exceptional and adjusted items was 26.2% (2024: 27.1%). The

decrease in the ETR is largely driven by the increase in adjusted profit

before tax compared to 2024, and therefore the percentage of the

permanent non-deductible items against profit is lower. The ETR is

higher than the UK main rate of corporation tax due to the permanent

impact of non-deductible items such as depreciation on non-qualifying

assets. The statutory ETR was 27.1% (2024: 29.5%), with the

decrease due to the impact of non-deductible professional fees

incurred on an aborted corporate transaction in 2024.

EARNINGS PER SHARE (EPS)

Adjusted basic EPS was 12.6p (2024: 7.6p). Statutory basic EPS

was8.1p (2024: 8.3p). EPS is calculated as the weighted average

number of shares in issue during the year (excluding those held by

theEmployee Benefit Trust (EBT)) which in 2025 was 211.0 million

(2024: 210.6 million).

CASH FLOW

The Group has a strong history of cash generation and we have

delivered another strong performance in 2025.

Adjusted operating cash flow totalled £68.7m (2024: £60.1m), a year-

on-year improvement of £8.6m. This helped drive a £29.2m reduction

in netdebt before leases to £55.7m (2024: £84.9m) after a total capital

expenditure of £14.5m including £8.3m on our three strategic projects

at Desford, Wilnecote and Accrington.

Overall, we saw a favourable £7.8m working capital movement with

inventories decreasing by £2.5m with further favourable movements

inboth receivables and payables.

Cash outflows in respect of adjusting items comprised restructuring

costs of £1.8m which were associated with exiting the non-core

businesses, offset by receipts from settling surplus gas contracts

of£1.2m.

The net tax outflow was £1.1m although within this, the Group

received a prior year tax refund of £2.3m. The corporation tax charge

in respect of 2025 was £4.9m; this liability was satisfied by payments

to HMRC of £3.4m and an estimated R&D tax credit claim for 2025 of

£1.6m with a refund of £0.1m recoverable at the year end.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 30

Chief Financial Officer’s Review continued

Cash flow – highlights

2025

£m

2024

£m

Adjusted EBITDA 61.6 52.0

Purchase and settlement of carbon credits (0.9) 6.0

Other cash flow items 0.2 (6.5)

Changes in working capital

– Inventories 2.5 13.8

– Trade and other receivables 3.5 (8.0)

– Trade and other payables 1.8 2.8

Adjusted operating cash flow 68.7 60.1

Payments made in respect of adjusted items (0.6) (8.3)

Operating cash flow after adjusted items 68.1 51.8

Interest paid (8.0) (10.0)

Tax paid (1.1) 0.4

Capital expenditure

– Maintenance (6.2) (4.0)

– Strategic (8.3) (21.6)

Dividends paid (8.2) (6.3)

Net cash flow from sale and purchase ofshares by Employee Benefit Trust (0.7) 5.1

Repayment of lease liabilities (6.0) (5.9)

Other movements (0.4) (1.2)

Decrease in net debt beforeleases 29.2 8.3

Net payments to the EBT in the year were £0.7m (2024: receipts of

£5.1m). Whilst challenging trading conditions have dictated that the

Performance Share Plan (PSP) awards due to vest in 2025 and 2026

have not done so, accordingly, the EBT’s current requirement for

shares to satisfy vesting awards was diminished. With a significant

Save As You Earn award due to vest at the end of 2026, the EBT has

recommenced a modest monthly purchase of shares which is funded

by the Group.

As at the year end, the EBT held 2.2 million shares (2024: 1.9 million

shares) with a market value of £4.0m (2024: £3.1m).

It remains our policy to provide shares for settlement of our share-

based employee reward schemes through open market purchases

asopposed to the issue of new share capital.

CAPITAL EXPENDITURE

The cash outflow in relation to capital expenditure excluding capitalised

borrowing costs totalled £14.5m (2024: £25.6m) with strategic capital

expenditure totalling £8.3m (2024: £21.6m) with maintenance capital

expenditure of £6.2m (2024: £4.0m).

Strategic capital expenditure has been focused upon completing the

projects at Wilnecote and Accrington with a small spend at Desford.

The Accrington project issubstantially complete with the new range

ofextruded brick slips successfully commissioned.

The Wilnecote project is now nearing completion after a number of

supplier driven delays with the commissioning process continuing.

Recent maintenance capital spend reflects our balance sheet

management and also the temporary reduction in our output.

Ourcapital allocation priorities anticipate up to £15m of maintenance

capital spend annually over the medium-term, with lower spend in

recent years demonstrating our ability to flex this.

Our total capex spend in 2026 is again expected to be around £15m,

with approximately £8m of this related to the completion of the

strategic projects.

BORROWINGS AND FACILITIES

At 31 December 2025 net debt before leases was £55.7m equating

toleverage of c.1.0 times on a banking covenant basis and a £29.2m

reduction on 2024 (2024: £84.9m). Net debt after adding lease

liabilities of £19.9m (2024: £20.9m) was £75.6m (2024: £105.8m).

These leases primarily relate to plant and equipment, in particular

thefleet ofheavy goods vehicles used to deliver our products to our

customers.

After exercising an extension option during 2025, the Group’s credit

facility comprises a committed revolving credit facility (RCF) of £170m

extending to June 2028. At the year-end a total of £62m was drawn

onthe facility, leaving headroom of £108m.

The facility is subject to normal covenant restrictions of net debt/

adjusted EBITDA (as measured before the impact of IFRS 16) of less

than three times and interest cover of greater than four times. The

Group has traded comfortably within these covenants throughout 2025.

On exercising the extension of our facility, we elected to remove the link

to our long-term sustainability targets, as following the sudden decline

inour markets in 2023 and the resultant impact on our efficiency, as a

result of missing our targets the sustainability link was actually increasing

borrowing and compliance costs. We remain committed to our long-

term sustainability journey and the linkage of our financing to these

targets did not influence our decision-making in this area.

With the announcement of the commencement of a programme of

share buybacks and our intention to allocate £20m to the repurchase

of shares in 2026, we expect net debt before leases to remain around

thecurrent level over the next year. Our net debt does fluctuate

seasonally and in line with historical trends our debt levels are likely

tobealittle higher at the half year.

DIVIDEND

The Board is recommending a final dividend of 4.3p per share (2024:

2.0p) which, in addition to the interim dividend of 1.9p per share paid

inOctober (2024: 1.0p), will bring the total dividend to 6.2p per share

(2024: 3.0p). Subject to approval by shareholders, the final dividend

willbe paidon 6 July 2026 to shareholders on the register as at

12June 2026.

PENSIONS

The Group has no defined benefit pension liabilities. There is adefined

contribution arrangement in place and pension costs forthe year

amounted to £6.4m (2024: £5.9m).

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report are forward-looking. Although

the Group believes that the expectations reflected inthese forward-

looking statements are reasonable, we can give no assurance that

these expectations will prove to have been correct. Because these

statements contain risks and uncertainties, actual results may differ

materially from those expressed or implied by these forward-looking

statements.

We undertake no obligation to update any forward-looking statements,

whether as a result of new information, future events or otherwise.

Ben Guyatt

Chief Financial Officer

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 31

Chief Financial Officer’s Review continued

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 32

IN THIS SECTION

33 TCFD Disclosure Navigation

34 Letter to Stakeholders

36 Double Materiality Assessment

38 Sustainability Framework

39 Planet

52 Product

54 People

59 Our Reporting Detail

SUSTAINABILITY

REPORT

GOVERNANCE

Disclose the organisation’s governance around climate-related risks and opportunities.

Recommended Disclosure Page

a) Describe the Board’s oversight of climate-related risks and opportunities. 49-51

b) Describe management’s role in assessing and managing climate-related risks and opportunities. 49-51

STRATEGY

Disclose the actual and potential impacts of climate-related risks and opportunities onthe organisation’sbusinesses, strategy, and financial planning where such information ismaterial.

Recommended Disclosure Page

Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long-term. 51

Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. 51

Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. 41-42

RISK MANAGEMENT

Disclose how the organisation identifies, assesses, and manages climate-related risks.

Recommended Disclosure Page

Describe the organisation’s processes for identifying and assessing climate-related risks. 41-42, 51

Describe the organisation’s processes for managing climate-related risks. 51

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. 51

METRICS AND TARGETS

Disclose the metrics and targets used to assess and manage relevant climate-related risks andopportunitieswhere such information is material.

Recommended Disclosure Page

Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy andrisk management process. 47, 59-60

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. 40-41, 59-60

Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. 46-47

The Group can state that in accordance with the Listing Rule 9.8.6 R, these Annual Report and Accounts include financial disclosures consistent with TCFD recommendations.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 33

Task Force on Climate-related Financial Disclosures (TCFD) Navigation

2025 presents an important milestone in our sustainability journey.

Withmany of the targets established in 2020 now at their midpoint –

and others reaching the end of their initial timeframe, this is a valuable

moment to reflect on the progress made, capture the lessons learned,

and set a clear and credible course for the years ahead.

Our long-term focus remains clear and consistent guided by the

threepillars of our sustainability framework: Planet, Product and

People underpinning our responsibility to act as a good neighbour,

aresponsible employer, and a business that creates lasting value

forfuture generations. This framework also provides the foundation

fordelivering our Climate Transition Plan set out in this Report.

We recognise that progress has not been linear and that, in some

areas, certain targets may ultimately take longer to achieve than

originally anticipated. The pace of technological advancement and the

availability of supporting infrastructure required to deliver large-scale

decarbonisation to industries like ours has developed more slowly than

we had initially anticipated. Today we are actively engaged on a number

of hydrogen and carbon capture initiatives although the levels of both

private and Government investment and national infrastructure needed

to bring these initiatives to fruition suggests that we are unlikely to

directly benefit from these game changing technologies before the

2030 target date of our current carbon reduction targets.

Just as reduced output and therefore efficiency as a result of continued

challenging market conditions acts as a headwind to our financial

performance, the same applies to sustainability with many of our

sustainability key performance indicators and targets also impacted,

something that wasn’t anticipated when we set our targets back

in2020.

Progressing sustainability initiatives is not always straightforward.

Aclear example is our ambition to reduce the amount of plastic used

inpackaging our products. While reducing plastic remains an important

objective, our unwavering commitment to health and safety means that

any change must be assessed through a rigorous safety lens first.

In particular, we have carefully evaluated the potential implications

ofalternative packaging solutions during transportation, storage

andhandling. Even where risks may appear unlikely, we will not

compromise on safety standards. Protecting employees, customers

and contractors remains our foremost priority, and sustainability

initiatives must align with and never undermine that commitment.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 34

Letter to Stakeholders

“With many of the targets established

in 2020 now at their midpoint –

andothers reaching the end of their

initial timeframe – this is a valuable

moment to reflect on the progress

made, capture the lessons learned,

and set a clear and credible course

for the years ahead.”

ENGAGING WITH

OUR STAKEHOLDERS

TO FURTHER

OUR PROGRESS

Gina Jardine

Chair of the Sustainability Committee

As expectations and priorities continue to evolve, we took the opportunity

during the year to revisit stakeholder perspectives and to undertake

ourfirst materiality assessment under double materiality principles.

Thisexercise refreshed our original 2020 assessment and provided

valuable insight that will directly inform both the replacement oftargets

concluding in 2025 and the development of those that extend further

into the decade.

The engagement and insight gained through this comprehensive

process involving customers, suppliers, shareholders along with

ourown employees has enhanced our perspectives as to how our

stakeholders are approaching decarbonisation. In particular, it has

reinforced the importance of considering emissions across the full value

chain, rather than focusing solely on our own operations. To support this

we have produced Environmental Product Declarations, which includes

information on the carbon footprint, for a range of products and this will

be extended in 2026.

While both absolute emissions and intensity per tonne of product remain

important measures, we increasingly recognise that our customers

oftenassess emissions per home or by the area of the façade or wall

constructed. Many of our initiatives are focused on reducing material

use, for example through larger brick perforations or thinner bricks,

where the level of emissions falls in line with a reduction in product

weight, recognising that our current intensity per tonne measures

ofcarbon emissions will not fully reflect the progress being made.

For this reason, we are presenting emissions per square metre for

façades for thefirst time. This metric better reflects our customers’

perspective and more accurately captures the impact of our near-term

emissions reduction initiatives.

Product innovation remains central to our sustainability strategy.

Theneed for lower-carbon, resource-efficient construction solutions

continues to shape how we prioritise research and development, from

incremental improvements to existing products to the development

ofnew, transformative systems and construction methodologies.

In 2025, this focus resulted in the launch of our Omnia extruded brick

slips and the associated mechanically fixed façade system, which

reduces material use, minimises waste and supports faster, more

efficient on-site assembly. We also maintained momentum in the

development and adoption of lower-carbon materials, continuing the

transition to CEM II cement and further advancing the use of calcined

clay derived from processed brick waste. This innovative material is

now incorporated into many of our own concrete products, and will

soon be available to external users through our partner. We are also

continuing to investigate the opportunities, in partnership with others,

to expand upon this exciting opportunity by calcining virgin clay.

The importance we place on sustainability and the expectations of our

stakeholders is reflected by the continued inclusion of a sustainability-

related target within the long-term performance conditions applied to

our Performance Share awards as part of our Long-Term Incentive Plan

(LTIP), the changes to which are laid out in our Remuneration Report.

This ensures that sustainability outcomes continue to be directly

aligned with executive remuneration and long-term value creation.

This Report provides an overview of our key sustainability initiatives

andcredentials, highlighting both the progress made during the year

and our longer-term sustainability journey. As always, we welcome

feedback on our approach, as well as on the relevance, transparency

and clarity of our disclosures.

Gina Jardine

Chair of the Sustainability Committee

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 35

Letter to Stakeholders continued

Having first conducted a materiality assessment in 2020, the midpoint

of our 2030 target period in 2025 offered an opportunity to revisit what

matters most to our stakeholders. We have chosen to do this through

an EU Corporate Sustainability Reporting Directive (CSRD) aligned

Double Materiality Assessment (DMA).

BASIS OF PREPARATION

With assistance from third-party consultants, we have performed

aDMA in alignment with the CSRD. This voluntarily applied CSRD-

aligned approach toour assessment reflects emerging best practice,

whilst recognising that certain elements of the CSRD framework and

related implementation guidance are still being finalised.

The purpose of the assessment is to identify and evaluate the

sustainability topics that are most material to the business, from both

an impact perspective and a financial perspective. This assessment

considers our impacts, risks and opportunities (IROs) in relation to

environmental, social and governance matters across our own operations,

as well as both upstream and downstream in the value chain.

DOUBLE MATERIALITY ASSESSMENT METHODOLOGY

Value chain mapping

A comprehensive exercise was undertaken to map our operations,

business model, and business relationships across the value chain.

This exercise involved categorising critical activities and gaining

adetailed understanding of key customers and suppliers, aligning

these with relevant European Sustainability Reporting Standards

(ESRS) sustainability matters to provide a structured foundation

forframing and drafting potential IROs.

Key upstream inputs to the business include the supply of materials

such as clay, aggregates and cement; whilst the downstream value

chain focuses on ensuring products reach customers efficiently,

including housebuilders, contractors and merchants. The assessment

also considers the environment and communities that are impacted

through our operations as well as the workers in our value chain.

Identifying relevant sustainability matters

CSRD identifies 10 ESRS sustainability matters, categorised across

Environmental (E1-E5), Social (S1-S4) and Governance (G1) topics.

A screening exercise was undertaken to identify the key ESRS

sustainability matters in our value chain that could give rise to material

impacts, risks and opportunities.

The screening process assessed the ESRS sustainability matters by

comparing them to relevant frameworks, peers, previous materiality

assessments and the Group’s existing risk register to help determine

whether any ESRS sustainability matters can be initially screened out

as not being relevant to Forterra in its upstream, own operations or

downstream value chain. At this point, no ESRS sustainability matters

were screened out in their entirety.

Identification and assessment of material impacts,

risksandopportunities

The identification and assessment of material IROs followed a

structured double materiality process aligned with ESRS guidance.

IROs were identified through internal engagement, expert input and

external reference sources, considering both the organisation’s own

operations and its value chain. For each IRO, the relevant location in

the value chain and the applicable time horizon (short-term: 0-1 years;

medium-term: 1-5 years; long-term: 5-25 years) were considered

aspart of the assessment.

Each IRO was then assessed and scored using the Group Risk

Framework to ensure consistent evaluation across sustainability and

Group-level risk processes. A materiality threshold, set in accordance

with ESRS requirements, was applied to determine which IROs

wereconsidered significant enough to be included in reporting.

Impact materiality

Impact materiality was assessed by evaluating the severity and

likelihood of actual and potential positive and negative impacts on

people and the environment. Severity was determined by considering

the scale, scope and irremediable character of impacts, in line with

ESRS guidance. The likelihood of potential impacts occurring was

alsoconsidered where relevant.

From an impact perspective, a sustainability topic was considered

material where it was associated with significant actual or potential

impacts arising from the organisation’s activities or its value chain.

Financial materiality

Financial materiality was assessed by identifying sustainability-related

risks and opportunities that could reasonably be expected to affect

theorganisation’s financial position, financial performance or future

cash flows. The assessment considered the magnitude and likelihood

of potential financial effects over the short-, medium- and long-term.

From a financial perspective, a sustainability topic was considered

material where related risks or opportunities could have a significant

financial effect on the organisation.

Stakeholder engagement

Stakeholder engagement formed an integral part of the DMA, validating

the list of IROs. In line with best practice, stakeholders are categorised

into two groups: affected stakeholders and users of the sustainability

statement.

Both internal representatives and external stakeholders were engaged.

Internal stakeholders included representatives from key business

functions, including Finance, Strategy, Design & Technology, People,

Health & Safety, and Sustainability. External stakeholders included

keycustomers, suppliers and investors. The engagement involved

qualitative interviews providing valuable insight and perspectives

across the topics. The output of the interviews was used to inform

andrefine the relevance of identified sustainability topics and to inform

the assessment of impact, severity, likelihood and financial relevance.

To ensure the robustness and comparability of the assessment,

atop-down review was conducted to confirm consistent scoring

across all IROs and alignment with the Group Risk Framework. This

ensured methodological consistency and reduced potential bias from

individual interviews or functional perspectives.

As a final review step, a selection of internal stakeholders were invited

to review and comment on the consolidated list of scored IROs. This

final validation ensured that the assessment reflected stakeholder

expectations and confirmed the robustness of the identified material

impacts, risks and opportunities.

RESULTS OF THE DOUBLE MATERIALITY ASSESSMENT

Out of the 96 IROs initially identified across the 10 ESRS topics,

19sub-topics included material IROs with 5 deemed to be both impact

and financially material. These areas are shown below and further

mapped at sub-topic level to our sustainability framework on page 38.

The results will be used to prioritise key focus areas for the ESG

strategy and framework, ensuring alignment with core business

elements such as the corporate strategy and business model.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 36

Double Materiality Assessment

CSRD-ALIGNED

DOUBLE MATERIALITY

ASSESSMENT

COMPLETED

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 37

Double Materiality Assessment continued

MATERIAL ESRS SUB-TOPICS

Based on the outcomes of the DMA, ESRS sustainability topics have been considered

as not material, impact material, financial material or double material.

KEY

Environmental Social Governance

IMPACT MATERIALITY

E2 Pollution

4 Pollution of air

5 Pollution of water

8 Microplastics

E3 Water

9 Water use including

withdrawal,

consumption,

discharges and

storage

E4 Biodiversity

and ecosystems

10 Drivers of biodiversity

and ecosystem

change (terrestrial and

marine habitat change,

invasive species)

12 The extent and

condition of

ecosystems

S2 Workers in the

value chain

25 Health and safety

28 Other labour-related

rights

DOUBLE MATERIALITY

E1 Climate change

2 Climate change

mitigation

3 Energy

S1 Own Workforce

Health and safety

22 Other labour-related

rights (including child

labour, forced labour,

privacy and adequate

housing)

G1 Business conduct

Corporate culture

including anti-

corruption and bribery,

the protection of

whistleblowers and

animal welfare

FINANCIAL MATERIALITY

E1 Climate change

1 Climate change

adaption

E5 Resource use and

circular economy

Resource inflows

Resource outflows

related to products

and services

S1 Own workforce

18 Social dialogue,

freedom of

association, works

councils, participation

rights of workers, and

collective bargaining

20 Training and skills

development

21 Diversity and equal

treatment (including

gender equality, equal

pay for work of equal

value, employment

and inclusion of people

with disabilities, non-

discrimination, anti-

harassment, measures

against violence)

Building on our materiality assessment, we have

translated the material areas identified across

the10ESRS topics into a more detailed set of

19material ESRS sub-topics, reflecting where

impacts, risks and opportunities are most significant

for ourbusiness.

These material sub-topics have been summarised

and mapped to our sustainability framework, shown

opposite, providing a clear line of sight between

theoutcomes of the Double Materiality Assessment

and the Planet, Product and People pillars, through

which sustainability is governed and delivered

across the Group.

Having mapped these to the sustainability

framework, the five topics highlighted as double

material are also addressed within our wider risk

management framework. Two are highlighted

explicitly within the Principle Risk disclosures later

inthis Report and the others deemed suitably

mitigated within the Group’s Risk Register.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 38

Sustainability Framework

OUR SUSTAINABILITY FRAMEWORK

Our sustainability framework guides all aspects of our approach tosustainability. Our framework

identifies thekey areas of focus toensure we operate ourbusiness with sustainability at its core.

GUIDED BY OUR

SUSTAINABILITY

FRAMEWORK

PLANET

The Planet pillar frames our wider

environmental responsibilities, with

aparticular focus upon greenhouse

gasemissions.

Double materialsub-topics:

2 Climate change mitigation

3 Energy

Materialsub-topics:

1 Climate change adaption

4/5 Pollution (air and water)

8 Microplastics

9 Water use

PRODUCT

The Product pillar focuses upon

somemore specific industry and

company level topics, including

newproduct development,

andthewider supply chain.

Double materialsub-topics:

35 Corporate culture, including

anti-corruption and bribery

Materialsub-topics:

14/15 Resource use inc.

clays,packaging and recycled

materials

PEOPLE

The People pillar highlights our social

responsibility objectives, including

ourutmost priority ofensuring health,

safety and wellbeing across our business.

Double materialsub-topics:

19 Health and safety

22 Labour-related human rights inc.

forced and child labour in our own

workforce

Materialsub-topics:

28 Labour-related rights inc. forced

and child labour in the value chain

KEY

Environmental Social Governance

Note: Material sub-topics as identified from our recent materiality assessment.

INTRODUCTION

Purpose of the report

With the ultimate ambition of reaching net zero by 2050, our medium-

term priority is to deliver a significant reduction in our emissions by

2030 and in this timeframe we have targeted to reduce our carbon

intensity per tonne by 32% relative to 2019. This target underlines

ourcommitment to both the Paris Agreement and the Race to Zero,

and was set using the Science Based Targets initiative (SBTi) well

below 2 degree pathway and requires a 27.5% reduction in absolute

carbon emissions.

First and foremost, five years into this 2030 target we acknowledge

thechallenge associated with meeting this. A key component of

ourdecarbonisation strategy is our capital investment projects at our

Desford and Wilnecote brick factories, more efficient manufacturing

capacity which alongside a number of other initiatives, including the

manufacture of brick slips at our Accrington factory, fuelswitching and

renewable energy usage, will combine to deliver ameaningful reduction

in emissions.

Whilst the emerging technologies that form part of our reduction

planhave not developed as quickly as originally anticipated, we are

continually exploring partnerships with technology providers to gain

practical experience in factory environments within both carbon

capture andstorage and hydrogen fuel, which will likely provide the

longer-term pathway to net zero.

The Commission on Climate Change (CCC) sets out a recommended

strategy for the UK to reach net zero by 2050 stating that ‘most

sectors will need to reduce emissions to closeto zero without the

useof offsetting.’ Reliance on offsetting does not reduce the burning

offossil fuelswhich is the primary contributor to climate change.

Our plan for this transition is outlined across pages 39 to 50

ofthisReport.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 39

Planet

OUR CLIMATE

TRANSITION PLAN

Principles

AMBITION ACTION ACCOUNTABILITY

Disclosure Elements

Foundations

Implementation

Strategy

Engagement

Strategy

Metrics and

Targets

Governance

Disclosure Sub-Elements

1.1

1.2

1.3

Strategic

ambition

Business model

and value chain

Key assumptions

and external

factors

2.1

2.2

2.3

2.4

Business

operations

Products and

services

Policies and

conditions

Financial

planning

3.1

3.2

3.3

Engagement

withvalue

chain

Engagement

withindustry

Engagement

with

government,

publicsector,

communities

and civil

society

4.1

4.2

4.3

4.4

Governance,

engagement,

business and

operational

metrics and

targets

Financial

metrics

andtargets

GHG metrics

andtargets

Carbon credits

5.1

5.2

5.3

5.4

5.5

Board oversight

and reporting

Management

roles,

responsibility

and

accountability

Culture

Incentives and

remuneration

Skills,

competencies

andtraining

OVERVIEW OF THE TRANSITION PLAN TASKFORCE (TPT) DISCLOSURE FRAMEWORK LINKING TO OUR OWN FRAMEWORK

PRODUCT

PEOPLE

PLANET

FOUNDATIONS

1.1

Strategic ambition

Outline the overarching aims and objectives of the Transition Plan,

including how the entity plansto contribute to a low GHG-emissions,

climate-resilient economy.

We have a clear strategy to grow our business and create stakeholder

value whilst at the same time reducing our impact on the environment.

Our strategy recognises that embracing sustainability iscritical in

ensuring our longevity as a business. Our long-held strategic priorities

sit hand-in-hand with our goal of reducing our impact on the environment.

Increased use of modern methods of manufacturing improves

efficiency, reducing both energy use and waste, reducing not only

ourcosts, but the impact we haveon the environment. We have

embedded challenging sustainability targets within our strategy

(formore information please see our targets on pages 46 and 47).

1.2

Business model and value chain

Describe the current and anticipated implications of the strategic

ambition on the business model and value chain.

Our strategy focuses on maximising the investment in our own

business to deliver a tangible and transparent reduction in carbon

emissions. We will continue to evaluate the benefits carbon offsetting

can provide and whilst it is possible that in the future there will be

aneed to use these in some form in order to reach net zero, we feel

that at present we can have the greatest impact through investing

toreduce our own emissions.

Using the latest technology as we are doing within our Desford, Wilnecote

and Accrington factories, rather than purchasing offsets and allocating

them to the emissions from aparticular factory, is the most transparent

and effective way ofmeeting ourchallenging carbon reduction targets

and in the longer-term aiming for net zero by 2050.

More information on our approach and progress in this area isavailable

in the ‘Implementation Strategy’ section of this Sustainability Report.

Our Business Model is detailed on page 18 of this Annual Report, and

how these manifest within our Climate Transition Plan is detailed here.

Greenhouse gas emissions

We manufacture two broad categories of products – those made

fromclay and those made from concrete. These products are regularly

supplied in tandem to our customers and are used together in building

high-quality homes and buildings. However, the manufacturing

processes are very different and their carbon footprints, whilst similar

overall, are built up in different ways.

Details of the manufacturing processes can be found in previous

Annual Reports, however the key point to emphasise is that both our

clay and concrete products contain similar levels of overall carbon

dioxide emissions per tonne of product. However, the way in which

these emissions are reported within the Greenhouse Gas Protocol

scopes is very different.

The majority of the emissions associated with the manufacture of

claybricks are direct emissions under our control and are therefore

disclosed in scope 1. The majority of the emissions associated with

themanufacture of our concrete products are indirect emissions under

the control of our suppliers and included in scope 3, and therefore not

disclosed in our figures. Details of our scope 3 emissions are included

later in this Report.

Scope 1

When reporting our emissions and setting targets to reduce these

emissions, it is necessary to consider our product mix. Toensure full

transparency looking forward, and when reviewing our past progress,

we provide emissions figures for both ourclay and concrete businesses.

The scope 3 emissions associated with our concrete manufacture (and

to a lesser extent clay) make the direct comparison between our total

clay and concrete reported emissions more challenging.

Any change in product mix in our output between clay brick and

concrete products could materially distort the comparability of our total

reported scope 1 emissions year-on-year. Accordingly, we disclose

thecarbon emissions for our clay and concrete businesses separately,

providing much greater transparency onour carbon reduction progress.

It is important to recognise the amount of carbon we emit is directly

related to the volume of product we manufacture.

Our key markets have historically exhibited a trend of cyclicality and

assuch it would not be meaningful to measure our performance solely

on absolute emissions. Never more relevant than the current period,

where significant absolute emission reductions have been driven by

thereduced output that market forces dictated, we have historically

believed the most transparent way of reporting our carbon footprint

isto separately report our greenhouse gas intensity ratio CO

(thecarbon emitted per tonne of production output) for our clay and

concrete products. We previously believed this would provide the most

meaningful information from which to measure the reduction in our

carbon emissions over time.

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Planet continued

AMBITION

01 02 03 04 05

PLANET

More recently however, we have also recognised the metrics that are

most important to our customers, with CO

of façade being amore

reflective measure of how our customers view the carbon footprint of a

home. With many of our initiatives focused upon reducing both the

weight and embodied carbon of our products, in order to not only best

track our own decarbonisation journey but for this to be as meaningful

as possible to all stakeholders, we have therefore for the first time in

2025 included the additional metric of CO

We recognise that carbon dioxide emissions are an inherent result

ofour manufacturing processes. The majority of our emissions are

covered by the UK Emissions Trading Scheme (UK ETS). The increasing

cost of UK ETS credits as well as a reduction in the number of freely

allocated credits will increase our operating costs and by reducing

ouremissions we can deliver a reduction in these compliance costs.

Scope 2

Having previously reported zero scope 2 emissions through the

purchase of Renewable Energy Guarantees of Origin (REGO), in2022,

having acknowledged the requirement for further new capacity within

the grid itself, working with a global leader in the management and

development of solar energy projects, we committed to purchasing

around 70% (at full production levels) of our electricity requirement

froma dedicated solar farm, exceeding 150 acres in size situated

inNottinghamshire. With this long-term agreement now in place and

the solar farm operational we are pleased to confirm that our ongoing

electricity usage is covered by either REGO’s or our own on site

generation at our Desford plant.

Scope 3

The goods and services that we purchase account for c.75% of our

scope 3 emissions and we remain committed to working with our

supply chain partners to continue minimising this where possible.

One of the interesting discussions raised during the exercise to

calculate these emissions focused on ‘end of life’ treatment of our

products. Currently ourproducts would be recycled into secondary

aggregate and whilst this is positive within the circular economy,

wehave stillaccounted for the current emissions impact of recycled

aggregate. However, due to the longevity of our products (>150years)

it is highly likely that there will be no carbon emissions associated with

their recovery when the time eventually comes.

Cement continues to be the most significant contributor to our scope 3

emissions and one we are always looking to reduce. Across 2025,

thework of our technical team has successfully allowed the utilisation

of calcined clay derived from our London Brick production waste as

alow-carbon cement substitute and we are delighted to be one of the

first in theindustry to be commercialising calcined clay in this way.

We are also working with our cement suppliers to reduce carbon in

thisrespect; our ‘Product’ section later in this Report gives further

details around our innovations in cement reduction and replacement.

1.3

Key assumptions and external factors

Highlight the keyassumptions and external factors that influence

theTransition Plan.

SCENARIO ANALYSIS

Methodology

We have undertaken a scenario analysis exercise to better understand

the external factors influencing our Transition Plan, and possible range

of risks and opportunities our business couldface under different future

climate forecasts. Theapproach consisted of two stages, the first

being a qualitative analysis to identify and assess the likely risks,

andthe second including quantitative modelling. In line with TCFD

recommendations, weexamined three scenarios (+1.5ºC, +2.0ºC,

+4.0ºC above pre-industrialised levels by 2100) inorderto capture the

widest range of plausible impacts on ourbusiness. Both qualitative

andquantitative analyses included a thorough assessment of transition

and physical risks, and were modelled around the widely recognised

Representative Concentration Pathways (RCPs) and Shared Socio-

economic Pathways (SSPs).

During the qualitative phase, granular assumptions about the policy

(Government), built environment, technological and physical changes

associated with each warming pathway wereexamined by a working

group comprised of the respective heads of relevant business

functions (Strategy, Operations, Finance, Sustainability, Marketing).

Therisks and opportunities identified in the qualitative phase were

thentransferred to the quantitative modelling in order to assess the

scale of their potential impact.

The quantitative modelling was undertaken with support from a

specialist corporate climate modelling consultancy, and interrogated

the warming pathways, modelling impacts across four categories:

Operations, Supply Chain, Demand and Physical Effects. The outputs

of this quantitative process allow us to better understand the relative

impacts and opportunities arising from climate change, and a shift to

alower-carbon macroeconomic model.

Steady path to sustainability ~ 1.5°C warming

The 1.5ºC pathway assumes significant proactive public and policy

support for climate action, and a broadly unified global response.

Itassumes a wide range of factors including stronger regulatory

interventions; enabling and disrupting technologies emerging sooner;

and demand-led effects being more material. Rather than a predictive

exercise in modelling, the scenario allows us to examine the various

impacts of a faster shift towards addressing climate change.

Fossil-fuelled global growth ~ 4°C warming

The 4ºC warming scenario assumes that the global growth continues

to be driven by fossil fuels, with limited changes to current economic

models. Regulatory interventions are delayed or absent, with a broad

range of achievement of national decarbonisation targets. Towards

2050, the effects of climate change become readily apparent to

electorates, and rapid reactive change is effected late in the period.

The pathway has limited impact on Forterra’s near- and medium-term

operations, with significant impact in the long-term.

Implications for products (under 2°C – exaggerated under1.5°C

and delayed under 4°C)

• Bricks and blocks that are manufactured at a lower-carbon intensity

are likely to gain popularity

• Environmental product declarations (EPDs) and lifecycle assessments

are likely to become the norm as product labels become mandatory

• Products that are geared toward refurbishment are likely togain

popularity

• Products with strong thermal characteristics are likely to gain popularity

as rising energy costs increase the drive for better insulation

• Production facilities that are close to carboncapture, utilisation and

storage (CCUS) cluster zones, orthat have hydrogen as part of their

decarbonisation plans, will likely benefit from lower costs as carbon

prices increase

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 41

Planet continued

Resilience of our strategy

The scenario analysis we have undertaken has assisted in better

understanding the risks and opportunities across a broad range of

climate scenarios.

We would likely be subject to transition risks in a 1.5°C and 2°C

warming scenario, which, if left unmitigated, would likely lead to

potentially higher operational costs and lower revenues. Thisis

especially true if demand for low-carbon products rises, aGovernment

penalty is implemented on high-carbon products, competitors are better

able to access low-carbon sources of energy and carbon costs rise.

These financial impacts would behigher in a 1.5°C compared to a2°C

scenario as public and policy support for climate mitigation is assumed

to be stronger. In order to avoid these risks, our strategy includes

reducing thecarbon intensity of our products, as demonstrated by

ourtargets (on pages 46 and 47), and actively pursuing the opportunities

outlined within this Report.

We would assume more physical risks in a 4°C warming scenario,

resulting in increased cost from operational disruption. However,

themajority of our factories are at low risk of extreme weather events

such as flooding and so the overall financial impact of these risks

isconsidered manageable.

We believe our strategy to be climate resilient, noting that it will continue

to respond to evolving climate risk projections, with established

procedures in place to identify and escalate climate-related risk as

described on page 51.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 42

Planet continued

MIDDLE OF THE ROAD: 2°C WARMING

The 2°C warming scenario is considered the most likely scenario, and assumes the UK remains on its current

pathtodecarbonisation,broadly meeting its stated policy goals, with a range of adherence to targets by other

nations. Inspecificterms, this means the UK achieves net zero by 2050 and meets its other environmental

industrialstrategy aims.

The scenario assumes some demand-led growth in low-carbon masonry products, driven by carbon prices

inflatingthecostofemissionsheavy products.

Policy: The UK integrates product carbon labelling across

sectors in the near-term, although these labels do not become

mandatory until the medium-term. The UK phases out coal

usage completely by the mid 2020s and it establishes its first

net zero industrial cluster by 2040. Building regulations

stipulate that public buildings and infrastructure must meet

both embodied and whole-life carbon targets.

Built environment: Building designs become more energy

efficient, helping to drive down emissions and heating costs.

Demand for high thermal mass products such as bricks

andblocks continues to grow accordingly. Renovation and

retrofitting increase in importance as growth drivers in the

medium-term, especially as a response to green building

regulations and rising electricity prices. As buildings become

more thermally efficient, the component of embodied

emissions from materials in the whole-life carbon footprint

ofbuildings increases. This helps to drive steady demand

forlow-carbon products and sustainable alternatives, with

potential pricing premiums for the lowest emissions products.

Technology: The carbon intensity of the electricity grid is

assumed to hit current targets, and is modelled on a linear

basis to 2050. Within the building products sector, landfilled

pulverised fuel ash (PFA) is being utilised as a raw material

as coal fired power plants have closed and in the long-term,

the UK’s Government directs funds towards CCUS

technology, CCUS-enabled ‘blue’ hydrogen, and electrolytic

‘green’ hydrogen. Carbon-cured concrete and lighter bricks

become increasingly common.

Physical: Physical impacts of climate change appear

gradually over the period, though effects on the UK are

relatively minor to 2050. These effects include having eight

days per month above 25°C in summer months. Damage

toUK non-residential property is expected to increase by

26% and flooding damage to facilities in UK coastal regions

is expected to increase by 48%.

IMPLEMENTATION STRATEGY

2.1 – 2.4

Transition activities

We are committed to supporting the UK’s ambition to reach net zero

by 2050 and to demonstrate this we declared a near-term carbon

reduction target of 27.5% (using the Science Based Targets initiative

(SBTi) well below 2°C scenario) running from 2019 through to 2030.

This is supported by our Carbon Management Plan which maps out

our decarbonisation pathway, including both ongoing projects aswell

asthe further technologies, infrastructure and process changes that

will be required for us to meet this target – someof them are already

commercially available such as solar panelsand electric vehicles, whereas

others, such as hydrogen and carbon capture are still, particularly from

aninfrastructure perspective, emerging within our sector.

Our vision is to take the learnings from the carbon journey ofour

existing factories and future proof any new developmentsto make

sureall of the potential carbon savingscan be incorporated, ultimately

achieving a zero carbonproduction facility.

We recognise that progress in this area has not been linear and that,

insome areas, certain targets may ultimately take longer to achieve

than originally anticipated. The pace of technological advancement and

the availability of supporting infrastructure required to deliver large-scale

decarbonisation have developed more slowly than hoped, alongside

continued market challenges across the construction sector.

We acknowledge that significant reductions in our carbon footprint

canbe made by being proactive when designing ournew factories;

ourDesford factory has reduced its energy consumption per brick by

c.30% relative to the old factory itreplaced. This is, however, only the

start of our ambitions. Applying our Carbon Management Plan to this

design process contributes to the blueprint for what could come next

for our future manufacturing capacity.

OUR CARBON MANAGEMENT PLAN

Our carbon management plan has historically focused on our scope 1

and 2 emissions, however as part of our continued stakeholder

engagement efforts, helping to understand the ambitions of our whole

value chain, discussions with our customers made it clear that scope 3

emission are of equal importance and should feature in our plan to fully

realise decarbonisation efforts at product level.

Energy efficiency

Our brick business is responsible for the majority of both our energy

use and carbon footprint, and as such our experts are working to

ensure that the kilns and dryers in our factories are working as

efficiently as possible, ensuring that when equipment is replaced,

wedo so with the most efficient alternative.

Process change and resource efficiency

We can reduce the carbon footprint of our products by either reducing

the amount of raw materials that go into their production or changing

them for lower-carbon alternatives. As outlined in previous

Sustainability Reports, this work has continued during the year and we

are working on a ‘thin’ brick which can be used in the same way as

standard brick, but its shallower profile means thatthe wall cavity can

be increased to allow for additional insulation without needing to

increase the overall thickness of the wall to meet future building

regulations. Finally, the first extruded brick slips have left our

Accrington factory, more information can be found on page 8.

In partnership we have commercialised the production of calcined clay

(a cement substitute) from the production waste from our Kings Dyke

brick factory. This waste was previously used as an aggregate in our

block business. Instead it is now being used as a higher value cement

substitute, replacing a proportion of the cement content at a number

ofour facilities.

Renewable power

As a business we continue to use 100% renewable power, from either

on-site generation or our solar farm, with the shortfall backed by REGOs.

Fuel switching

We are continuing to work on projects to enable us to move from fossil

fuels towards renewable solutions and work is progressing on the use

of biomass. During the year we carried out our most ambitious trial yet

where we fired over half a million bricks at our Kings Dyke factory using

wood pellets. The trial was successful in that we were able to replicate

most elements of firing under gas conditions, though further work is

required in 2026 to overcome some colour issues which led to the

product being downgraded.

Additionally, we are pleased to report that in 2025 for the first time,

ourcompany car fleet was 100% ULEV compliant, with 29% being

fullyelectric.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 43

Planet continued

ACTION

01 02 03 04 05

New factories

Our redeveloped Wilnecote factory is nearing completion and

undergoing commissioning and will deliver a significant reduction in gas

usage per tonne of product when compared to the factory’s previous

performance. This is the latest in series of factory improvements which

began with the development of our Desford site and we are currently

considering options beyond our clay business in continuing to upgrade

our manufacturing footprint.

Zero carbon firing and emerging technologies

Within a brick factory, the drying and firing process can be responsible for

up to 60% of its carbon emissions. This therefore forms afundamental

area of focus in our decarbonisation strategy and beyond our efforts

with biomass explained previously, we also acknowledge that reaching

our 2050 goals will require technology to evolve across many other areas.

We have continued to develop our understanding of how we can take

advantage of the opportunity presented by hydrogen and in 2025 we

have focused on supply, meeting with numerous developers of green

hydrogen generation projects, all of whom are being supported by the

Government’s Hydrogen Production Business Model. The majority of

these will supply relatively low volumes to particular factories requiring

the use of tankers for transportation. With more clarity in place

regarding supply, wewill be continuing our research and development

work into the use ofboth 50%and 100% hydrogen blends on our test

kilns during 2026.

In the longer-term we are investigating networked approaches, where

proposed infrastructure projects would deliver grid supplied hydrogen

direct to some of our factories, we have continued to support the

EastCoast Hydrogen project and inMay 2024 were part of a

delegation that met with the previous Government’s energy advisors

inDowning Street todiscuss theneed for grid supplied hydrogen

forsectors unable to electrify their processes or move closer to a

hydrogenproducer. This has led to the recent announcement

regarding the route of the first stage of their ambitious hydrogen

network project which could supply our Kirton factory with hydrogen

by mid 2030.

Carbon capture continues to be challenging for our sector, somewhat

perversely due to our relatively low volume and concentration of CO

but we continue to work with suppliers and innovators in the field so

that we are ready to take advantage when these solutions become

financially viable.

ADDITIONAL FACTORS

Distribution

Around 5% of our carbon footprint can be attributed to our distribution

fleet and we have made great strides over recent years in improving

the fuel economy of our vehicles. In order toachieve zero carbon

emissions we would need to transition toeither electric or hydrogen

powered vehicles.

Both electric and hydrogen delivery vehicles for our sector are intheir

early phase of development and as such are markedly more expensive

than a diesel equivalent, and particularly inthecase of electric vehicles,

have a significantly reduced rangeespecially when carrying heavy

loads. The weight of ourproducts generally determines that the

vehicles carrying ourproducts reach legal maximum weights for UK

roads, withelectric vehicles currently better suited to delivering lighter

products suchas consumer goods.

Air quality

Air quality is of growing concern in the UK and we understand that we

must do all we can to minimise the impact on the communities around

our sites. Our plants are subject to the Environmental Permitting

Regulations and must operate in accordance with a permit issued by

either the Environment Agency or the Local Authority. Each permit has

at least one section focusing on emissions to air, with the regulating

authority carrying out inspections to ensure compliance. Inaddition,

the majority of our brick manufacturing facilities arerequired to carry

out annual monitoring on the exhaust fromthe kiln to demonstrate

compliance with any emission limitsset out in the permit.

Our Kings Dyke brick factory is located close to an air quality

management area, and as a requirement of our permit we have installed,

and operate, two ambient air quality monitoring stations. Since their

installation in 2008 we have operated inaccordance with our permits

with no breaches of air qualitylimits.

Waste management

As a business we recognise the value of our raw material resources.

Our waste quantities are low (c.100,000 tonnes) and represent about

5% of our production output, however almost all process waste

streams are diverted and recycled foruse in other products. For

example, brick waste created atour Kings Dyke London Brick factory

is crushed on-site andbecomes a raw material for the neighbouring

aggregate block plant, and is now also being further processed and

usedmore widely as a cement substitute. All of our aircrete block

production waste is recycled into other products in thebusiness.

As a responsible operator, we comply with all waste management

legislation and apply the waste hierarchy using segregation ofwastes

to ensure that the most appropriate disposal routes areutilised.

Biodiversity

Fragile habitats and associated biodiversity are at risk from climate

change and deforestation across the globe. Within theUK, the

Government has recognised our diverse range ofnatural landscapes

and habitats, setting out a 25-year environmental plan focused on

theirprotection and enhancement.

We are responsible for almost 2,000 acres of mineral bearing land and

are therefore aware of our important role in supporting these national

ambitions through the ongoing management, treatment and final

restoration of this land after these minerals have been exhausted.

Ourquarrying operations are covered by planning consents, which

include conditions for site restoration in accordance with the local

mineral planning authority and taking into consideration local and wider

environmental needs.

Depending on future use proposals, the quarry development willoften

lead to an improvement in the biodiversity value of theland involved,

both during operation and when it moves intoits restoration phase.

The Kings Dyke nature reserve near Peterborough is an excellent

example of how exceeding the requirements of the restoration plan

hasprovided a local community asset and enabled a diverse range

ofhabitats to thrive.

Whilst we are not yet reporting in line with the Taskforce on Nature-

related Financial Disclosures (TNFD), a review group has been formed

with the remit of considering our wider biodiversity agenda and the

considerations required around future alignment in this area. We have

identified a number of indicators to provide a framework for consideration

of land use and environmental change as a result of our quarrying

activities, and we support the Council for Sustainable Business

Biodiversity commitment.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 44

Planet continued

ENGAGEMENT STRATEGY

3.1 – 3.3

Engagement strategy

Outline the approach to engaging with stakeholders,

includingemployees, customers, investors and regulators.

We are proud of our progress and are keen to place our sustainability

information in the public domain, ensuring the highest levels of

transparency as we engage with our stakeholders.

Ensuring that all of our stakeholders are aware of the business’s

ambitions and values has never been more important to us and we

communicate this through a number of different routes. Forour

employees we have regular stand down sessions and the CEO holds

‘Town Hall Talks’ at every site to inform our employees of business

initiatives, receive feedback and answer questions relating to employee

concerns. We also havequarterly employee forum meetings which are

chaired byMartin Sutherland – one of our Non-Executive Directors –

allowing nominated representatives of the workforce to discuss issues.

Andfinally, we have the ‘Hear Me’ engagement survey; akey platform

for our team members to express their thoughts, challenges, and

ideas. A number of our sites operate local liaison committees to ensure

that the voices of the local communities are heard and all of our sites

operate an open door policy for the local community.

Engagement with customers has been a key factor in a number of

decisions made during the year and sessions held with both our

commercial and sustainability teams have started to guide strategic

decisions when it comes to decarbonisation, particularly in how we

measure our efforts, now choosing per m

as a meaningful metric

totrack progress in addition to our current intensity measures.

We also further engaged with our investor base by way of an

‘InvestorAudit’, conducted by a third party and giving a group of

ourtop shareholders the opportunity to feedback across a number

ofareas, including sustainability, helping us ensure their needs are

being met and helping to guide our focus moving forwards.

We engage with regulators and government directly or in conjunction

with our trade associations where we are active members and chair

anumber of collaborative committees. Through a combination of these

routes we have responded to a number of consultations during the

year covering issues such as Landfill Tax, UK ETS Carbon Leakage

aswell as a framework intended to grow the market for low emission

industrial products. In addition, our Head of Sustainability is a member

of a technical working group comprising both regulators and operators,

which is responsible for the revision of the overarching ceramics sector

guidance document for environmental permitting.

Describe how progress and updates will be

communicatedtoshareholders

Since 2020 we have been producing a comprehensive Sustainability

Report, both in standalone form and within our Annual Reporting. This

allows the Group to showcase its sustainability efforts formally, giving

shareholders and other stakeholders access to relevant updates

regarding our progress.

As well as this formal Sustainability Report, sustainability progress

forms a core part of our regular communications with shareholders,

across investor roadshows, conferences and more ad hoc interactions

across the year.

We are committed to actively engaging with a number of sustainability

disclosure bodies and rating agencies including CDP, MSCI and

Sustainalytics.

In 2025, we are proud to have received a ‘B’ 2025 CDP Climate score,

recognising the progress we have made not just in our sustainability

efforts, but also how these are disclosed. Whilst our journey towards

best practice disclosure is always evolving, maintaining this score is

animportant result and one we strive to continue toimprove.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 45

Planet continued

ACTION

01 02 03 04 05

METRICS & TARGETS

4.1 – 4.2

Operational and financial metrics and targets

Collectively, our three pillars guide our future decision-making, ensuring

we are successful in our overall objective of being agood neighbour

and responsible employer, for generations tocome.

It is important to note that our sustainability targets cover all three of

our pillars, and whilst this Transition Plan is focused around Climate/

Planet, anumber of the targets highlighted inthis section reference our

equally important People and Product pillars, detailed later in this Report.

Our ambitions and targets

The ability to track our progress is essential to realising our sustainability

goals and we have considered the most appropriate metrics and

targets necessary for users to understand the impacts of our business.

4.3

GHG metrics and targets

In addition to disclosing our absolute greenhouse gas (GHG) emissions,

we also provide additional disclosure showing the GHG intensity ratio

(level of emissions per tonne of output) for both our clay and concrete

products, recognising that absolute emissions vary with the level of our

production according to market demand, shown clearly in the current

cycle, and as suchare not necessarily a meaningful measure of our

progress against our targets.

Five years into our 2030 decarbonisation target period, with a number

rolling off in 2025, we acknowledge that progress against this will not

always be linear. New factories at Desford and Wilnecote are positive

milestones in this journey, however risks remain around the speed of

technological and infrastructural development required for utilisation

ofhydrogen in our processes as well as carbon capture.

For the first time in 2025 we have included the additional metric of

, acknowledging the carbon footprint of a façade as a key

metric for alarge portion of our customers and as such one we should

consider actively in our decarbonisation journey.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 46

Planet continued

2024 PROGRESS

30% more efficient

Desford Brick Factory open.

Forterra Solar Farm

Generating c.80% of our electricity

demand and nowopen.

OUR SUSTAINABILITY JOURNEY

2020-25 ACHIEVEMENTS

30% more efficient

Desford brick factory open

Forterra Solar Farm

Generating c.80% of our electricity

demand

2025 AND BEYOND

Hydrogen

Whilst trials have been undertaken

at a small scale, progress in

thisarea will require enhanced

infrastructure most likely driven

bygovernment policy

Carbon capture

We continue to engage with

suppliers of carbon capture use

and storage technologies (CCUS)

monitoring systems inthis rapidly

developing area

ACCOUNTABILITY

01 02 03 04 05

2025 PROGRESS

Calcined clay

Utilised as a cement substitute,

starting within our own

aggregateblocks

Fuel switching trials

Working to better understand

theuse of hydrogen, synthetic

gas and biomass within our

production processes

2030 TARGETS

→ Read more at forterra.co.uk/sustainability

People

Zero harm

Climate

27.5%

Waste

Zero

Innovation

10%

Absolute reduction

inCO

Waste to landfill of revenue from

newproducts

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 47

Planet continued

OUR TARGETS

Pillar Topic Target

Target

type

Target

year Metric 2019 2024 2025 Target

Progress

vs.2019 Comment

PLANET

Group CO

emissions 27.5% reduction vs.

2019 baseline

2030 tonnes 319,296 177,246 195,376 231,489 -39% Performance against benchmark year reflects market driven

reduction in production levels

Group CO

emissions/tonne 32% reduction vs.

2019 baseline

2030 kg CO

tonne

123.4 110.4 109.6 83.9 -11% 2030 target remains reliant onhydrogen/carboncapture

developments which are currently constrained by delays in

Government strategy and infrastructure

Clay products CO

emissions/ sq metre

n/a n/a kg CO

30.9 29.9 28.8 -7% New metric introduced reflecting wider value chain view

ofour decarbonisation efforts. This measure reflects how

customers view our products and reflects the benefits of

reducing material content

Clay products CO

emissions/tonne

33% reduction vs.

2019 baseline

PSP 2030 kg CO

tonne

255.6 239.7 232.4 171.3 -9% 2030 target remains reliant onhydrogen/carboncapture

developments which are currently impacted by delays in

Government strategy and infrastructure

Concrete products CO

emissions/tonne

80% reduction vs.

2019 baseline

2030 kg CO

tonne

21.0 18.8 19 4.2 -9% Impacted by plant closures at Formpave and Bison Bespoke.

Progress reliant on factory upgrades at aircretefacilities

Power sourced from

on-site renewables

10% Group power

usage

2025 % 0 3.7% 4.08% 10% Strategy dictated by solar farm usage which is currently the

majority of our power use. Future aspirations in this area to

be reviewed in 2026

Waste to landfill Zero process waste n/a kg/tonne 0.16 0.01 0.01 0.00 -94% Negligible in 2025 andtherefore seen ason track

PRODUCT

New product index 10% Group revenue 2025 % 0.6% 2.5% 3.0% 10% New robust calculation established aligned tostrategy,

updated further in 2025 to include Block and Bison

Plastic packaging consumed 50% reduction vs.

2019 baseline

PSP 2025 tonnes 1,802 963 1,178 901 -35% Not met despite market driven reduction in absolute usage.

Rollout in reduction initiatives currently paused, ensuring fit

for purpose across all areas included Health and Safety

Plastic packaging 50% reduction vs.

2019 baseline

2025 kg/tonne 0.82 0.66 0.74 0.41 -10% Not met despite market driven reduction in absolute usage.

Rollout in reduction initiatives currently paused, ensuring fit

for purpose across all areas included Health and Safety

PEOPLE

Health and safety –

LostTime Incident

Frequency Rate (LTIFR)

Zero harm ambition n/a no. 7.35 2.25 0.92 0 -87% Whilst zero harm isalways our goal, 2025 was a pleasing

performance

Membership of 5%Club 5% of employees in

earn & learn positions

2025 % 3.2% 3.7% 3.8% 5% 18%

Market downturn hasimpacted ability to hire into E&L

positions whilst also making redundancies

KEY

Ahead of target/target currently met Behind target on pro-rated basis On track

4.4

Carbon credits

The majority of our emissions are covered under UK ETS and as

suchour efforts in emissions reduction are aligned with the financial

incentives of reducing our compliance obligations under the scheme.

Streamlined energy and carbon reporting (SECR)

We have used the operational control approach to determine our

organisational boundary for emissions purposes and calculated these

emissions based on the UK Government’s Environmental Reporting

Guidelines (2019) and emission factors from the DEFRA 2025

Greenhouse Gas (GHG) Conversion Factors for Company Reporting.

Scope 2 emissions have been reported using both the location-based

method of calculation and, to account for our use of renewable

electricity through the purchase of REGOs in prior years, the market-

based method forcalculation. Our underlying energy use figure has

been reportedin GWh and includes fuel used in mobile plant, on-site

generators and company vehicles. All our facilities are covered by the

scope of our ISO 50001 certification which we have held since 2015.

This is a third-party audited and certified scheme and has continual

improvement at its core. We adopt a number of approaches to

maximise energy efficiency; from LED lighting and the installation of

variable speed drives on motors, through to the recycling of waste

process heat from our kilns to power other areas of the plant.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 48

Planet continued

Streamlined energy and carbon reporting 2025 2024 2023 2019

Scope 1 emissions (location-based) (tCO

e) 195,376 177,246 241,598 299,679

Scope 2 emissions (location-based) (tCO

e) 9,957 10,812 14,142 19,617

Scope 1&2 emissions (location-based) (tCO

e) 205,332 188,059 255,740 319,296

e intensity kg per tonne 115.2 117.1 131.2 123.4

Total energy used GWh 635.8 572.9 791.6 956.3

Scope 1 emissions (market-based) (tCO

e) 195,376 177,246 241,598 299,679

Scope 2 emissions (market-based) (tCO

e) – – 14,142 19,617

Scope 1&2 emissions (market-based) (tCO

e) 195,376 177,246 255,740 319,296

e intensity kg per tonne 109.6 110.4 131.2 123.4

Scope 3 emissions (tCO

e) 204,358 196,806 247,348 n/a

GOVERNANCE

5.1 Board oversight and reporting

Sustainability sits at the heart of everything we do as a business, and

as such is at the core of our strategy. Delivery on this strategy, as well

as governance and oversight responsibility around climate-related risks

and opportunities, ultimately sitswith the Board. The Board’s Sustainability

Committee discharges this responsibility onbehalf of the Board.

The Sustainability Committee receives progress updates as to the

execution of the Group’s sustainability strategy at each of the four

committee meetings per year, reviewing ongoing compliance with

TCFD requirements and progress against targets. As well as receiving

feedback from the Executive Directors, and members of the Executive

Committee, the Head of Sustainability and the Head of Health and

Safety regularly attend Committee meetings.

The Board’s Sustainability Committee includes the following within

itsterms of reference:

i. Defining the level of the Group’s ambitions with regard toreducing

its environmental impact and addressing climaterisk;

ii. Overseeing the development of the Group’s sustainability policies,

covering both environmental and wider social (people) matters;

iii. Setting challenging environmental targets in order to meet

theGroup’s goals and monitoring progress against these;

iv. Monitor the Group’s reporting under TCFD, Sustainable Accounting

Standards Board (SASB) and other protocols asappropriate;

v. Overseeing the Group’s health and safety performance and

progress against its strategy; and

vi. Ensuring that sustainability policy still satisfies its desired outcomes

and evaluating management’s performance in implementing policy

and achievement against the targets set.

5.2

Management roles, responsibility and accountability

The Group’s Head of Sustainability leads the day-to-day sustainability

activity and reports to the Chief Financial Officer. The Chief Operations

Officer, reporting to the Chief Executive Officer, holds accountability for

delivery of the key investments that will facilitate theachievement of our

sustainability targets, including reduction of greenhouse gas emissions

and reducing our use of plastic packaging. The Group also utilises

a bi-monthly sustainability review, with a group comprising the Group’s

Executive Committee and other members of the senior management

team as required. This group is tasked with ensuring that the

Company’s sustainability ambitions and targets are on track, and

thatclimate-related risks are reported upwards to the Sustainability

Committee.

5.3 Culture

We have been reporting sustainability-related metrics and progress

forover 20 years (including previous corporate structures and

ownership) and therefore at site level it is business as usual that

westrive to produce the best quality products with the minimum

useofresources. However, to achieve the step change required to

meet net zero, we also havea strong leadership team starting at the

top ofthe business with the Board providing oversight and ensuring

accountability against our corporate targets.

This approach is underpinned by our corporate values which embrace

innovation, collaboration and excellence, to enable us to produce the

most sustainable products in the most efficient manner whilst being an

important part of the communities we operate in.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 49

Planet continued

ACCOUNTABILITY

01 02 03 04 05

5.4

Incentives and remuneration

The importance attached to sustainability both within our own

businessand by our stakeholders is evidenced by the inclusion of

sustainability-related targets within the Group’s remuneration structure.

Sustainability and innovation driven targets may be included as

personal objectives inthe Annual Bonus Plan in addition to the

inclusion of a sustainability target within the performance targets

applied to the long-term incentives granted under the Performance

Share Plan.

5.5 Skills, competencies and training

Our sustainability team has a vast experience of sustainability within the

manufacturing sector and is a central resource which provides support

to all aspects of our business from operations through to technical sales.

Our business recognises that our people require the necessary knowledge

and skills to carry out their tasks in a competent, responsible and safe

manner. This isachieved by providing training to key personnel and

then disseminating this information to site teams via toolbox talks.

Allofour sites have at least one person who has attended our three-

day sustainability training course, which is accredited bythe Institute of

Sustainability and Environmental Professionals (ISEP) but tailored to the

challenges facing our business. Wewillcontinue to roll this training out

to ensure that sustainability isfirmly embedded within our business.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 50

Planet continued

SUSTAINABILITY GOVERNANCE STRUCTURE

Robust and transparent governance is essential

to delivering our sustainability ambitions

BOARD OF DIRECTORS

Ultimate responsibility for sustainability-related matters

through the Sustainability Committee

EXECUTIVE COMMITTEE

Review and approve climate strategy, scrutinise performance,

review progress on climate strategy and targets

SUSTAINABILITY

REVIEW

Tasked with ensuring that the Company’s

sustainability ambitions and targets are

on track, and that all climate-related risks

arereported to the Sustainability Committee

CROSS-FUNCTIONAL

WORKINGGROUPS

Task-specific working groups focusing

onspecific climate-related challenges

e.g.PlasticReduction Steering Group

Risk management

Risk identification: Identify the key risks associated with

theTransition Plan.

Our wider risk management protocols are explained in detail within the

Risk Management and Key Risks section of this Annual Report which

can be found starting on page 62.

Climate-related risks are captured within our existing risk management

process. And we use an expanded risk scanning horizon to allow the

capture of longer-term climate-related risks which may not have an

immediately measurable financial impact. In identifying climate-related

risks, in accordance with the recommendations of TCFD, we have

identified both the transitional risks associated with adapting our

business to a lower-carbon economy, along with both the longer-term

acute risks associated with increasing severe weather events and the

physical risks of long-term climate change such as rising sea levels.

Our scenario-based analysis, as previously shown, considers both

risks and opportunities as well as the different time horizons over

whichthey may impact.

A full list of the risks and opportunities identified as part of this work

isavailable on our website and in previous reports, and opposite

summarised are what we deem the most material risks, and the

timeframe within which they are deemed to relate under each climate

scenario. The impact of these risks within our financial reporting has

been additionally considered, and given the mid-long-term nature of

the majority of our material risks below, we anticipate climate-related

risks will not materially impact the Group in the short-term. Therefore,

whilst considered, we do not believe there to be any impact within our

modelling for viability purposes.

Topic

Scenarios

1.5°C 2.0°C 4.0°C

Transitional risk

Policy and legal

The most material risks relating to our business as a result of changes in policy or legislation relate to the potential

forsetting mandatory embodied carbon limits for construction products and an increase in financial liability as a result

of increasing cost of carbon credits or reductions in free allowances.

Metric link: relevant metrics around carbon intensity found on page 59.

Short Mid Long

Market

As consumers become increasingly aware of the impacts of climate change and their ability to be a positive

influencethere is an expectation of a trend towards greener processes and products. This may however be offset

bythe opportunity that presents around thermal mass and the desire to make homes more energy efficient.

Metric link: relevant metrics around carbon intensity and new products index found on pages 59 and 60.

Short Short Mid

Technology

Potential demand impact as we await low-carbon technologies becoming available for our sector. This may then

leadto reduced access to capital to implement the necessary changes in our production methods.

Metric link: relevant metrics around carbon intensity, renewables and low emissions vehicles found on page 59.

Mid Mid Long

Reputational

The Forterra brand could be materially impacted as a result of negative perceptions around our products should

lower-carbon alternatives become available with similar performance characteristics. This could lead toa shift in

consumer preferences to these competing materials.

Metric link: relevant metrics around carbon intensity found on page 59.

Mid Mid Long

Topic

Scenarios

1.5°C 2.0°C 4.0°C

Physical risk

Acute

There has been an increase in extreme weather events such as flooding over the last few years. While this poses

arisk to our sites in terms of flash flooding in the longer-term, there is also a future opportunity where construction

methods favour durable materials such as clay brick and concrete products.

n/a n/a Long

Chronic

We recognise that the risk of rising sea levels triggered by increase in temperature will potentially lead to

someareaofthe country becoming unsuitable for housing, leading to a requirement for increased housing

elsewhereto compensate.

n/a n/a Long

1. Noting their long-term horizon, we do not currently report any relevant metrics in relation to our physical risks.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 51

Risk and Opportunities

KEY

Short: 0-3 years

Mid: 3-10 years Long: 10-25 years

PRODUCT

PRODUCT INNOVATION

Sustainability-driven innovation

Sustainability underpins our innovation strategy and is the primary

driver of our product development pipeline. The need for lower-carbon,

resource-efficient construction solutions shapes how we prioritise

research and development, from incremental improvements to existing

products through to new, transformative systems and construction

methodologies. We focus on solutions that reduceenvironmental

impact while meeting customer requirements forperformance, quality,

and build efficiency.

Key aspects:

• Carbon reduction underpins our ambition to reach net zero by 2050.

• Innovation targets material efficiency, waste reduction, and improved

job site productivity.

• We are increasing our product offer to support off-site and

prefabricated construction, enabling faster, lower-carbon builds.

These priorities guide our innovation funnel, ensuring new solutions

deliver both environmental and practical benefits.

Housebuilding solutions

Housebuilding is a critical sector for our business, facing an increasingly

stringent regulatory environment, particularly with enhanced Part L

standards and the Future Homes Standard. Meetingthese requirements

alongside ongoing challenges, maintaining build efficiency, managing

costs, and addressing skilledlabour shortages requires close

collaboration.

We are working with housebuilders to deliver:

• Incremental product improvements: e.g., increasing brick

perforationsby approximately 10% reduces embodied carbon

without compromising performance.

• Material-efficient systems: e.g., reduced-section T-Beams for the

Jetfloor insulated floor system, using less concrete while enhancing

insulation performance.

•

• Collaborative development of low-carbon solutions: co-creating

products to help customers meet regulatory requirements while

maintaining build efficiency.

Trials with housebuilders are also underway, representing a longer-

term opportunity to test applications, gather insights, and co-create

solutions that could reduce carbon and improve build efficiency

whileremaining compatible with traditional construction practices.

Omnia brick slips

During the year, Forterra launched its Omnia brick slip system,

designed for non-residential and high-rise projects. Key features:

• Purpose-made, extruded brick slips rather than cutting traditional

bricks and discarding the remainder.

• Reduces material waste during manufacturing and reduces

embodied carbon, whilst preserving the aesthetic qualities of

traditional brickwork.

• KIWA certified, providing assurance of high performance for

high-riseapplications.

• Supports faster assembly and reduces reliance on skilled

labouron-site.

Reducing cement use

Cement is a major contributor to global carbon emissions. Forterra

istaking steps to reduce its impact:

• Several factories have transitioned to lower-carbon cement (CEM II),

blending cement with limestone to cut embodied CO₂ by up to 16%.

• Development of calcined clay from processed brick waste provides

an alternative to cement, rolled out across Forterra’s concrete

business and externally.

Forterra’s partnership-led, sustainability-driven approach ensures

innovation delivers measurable environmental benefits while meeting

practical customer needs. By combining incremental improvements,

co-created solutions, and breakthrough products such as Omnia,

Forterra continues to respond to regulatory challenges, improve jobsite

productivity, and maintain the aesthetic and performance qualities that

define its brick and other masonry products.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 52

Product

PACKAGING

One of our mid-term targets has been to reduce the amount of

packaging we use as a business. This has proved challenging and we

have currently achieved a 10% reduction versus our 50% target. The

purpose of our packaging is to ensure that the product arrives at the

customer’s point of use safely, in good condition and ready to be used;

it is pivotal that any future packaging solution provides all these

elements. Whilst making slower progress than previously hoped,

arobust approach to testing and trials and our unwavering

commitment to health and safety has ultimately guided our progress.

We have spent the last three years identifying and installing solutions

atsome of our facilities which have reduced the amount of packaging

by up to 55%, however these solutions do require a step change in

how the product is handled and stored throughout its journey from

factory to point of use. As a result the final deployments have been

delayed while we determine how these packaging reductions impact

ourstakeholders.

PRICING INTEGRITY AND TRANSPARENCY

We recognise that in many of our product categories our markets

arecharacterised by a small number of large businesses, operating

nationally, and enjoying large market share positions. In order to

ensurethe highest standards of integrity, we enforce a zero-tolerance

approach to any anti-competitive activity.

All relevant managers and commercial employees are required

toundertake annual online compliance training on both competition

law and anti-bribery, with controls in place to recordcorrespondence

and communications with competitors.

The fines that can be levied on companies which are found tohave

breached competition law can reach 10% of annual turnover and

companies can face damages claims from those wronged by anti-

competitive actions. The risk of such fines, even if senior management

were unaware of such behaviours, means that compliance and

monitoring obligations are taken extremely seriously.

ETHICAL AND SUSTAINABLE PROCUREMENT

The procurement of third-party materials and services are critical

toourvalue chain. In 2025 this expenditure totalled over £265m,

including materials such as steel, insulation, cement, aggregates,

pulverised fuel ash (PFA) and products used in ourflooring solutions.

Our environmental footprint is minimised through afocus on local

sourcing with the majority of our materials procurement (excluding

capital items) being UK-sourced, minimising environmental impacts

ofcross-border transport logistics.

Our procurement management system is audited as part of our ISO

14001 and ISO 9001 accreditations. Compliance plays a key role

within the system, covering over 1,400 suppliers’ strict adherence

witha range of governance topics including anti-slavery, bribery,

competition law, data protection and equal opportunities. We adopt

the Ethical Trading Initiative code of practice to ensure that worker

rights are protected as part of the supplier onboarding process, and

this is continuously reviewed.

Larger suppliers are required to meet relevant ISO standards including

ISO 9001, ISO 14001 and IS0 45001, or equivalent, for example, all

timber procured is FSC accredited. Our health and safety team assists

and develops suppliers’ standards to help them improve their own

safety procedures where necessary.

SUSTAINABLE SOURCING

Operating responsibly, both environmentally and ethically, extends

wellbeyond our site boundaries. For some of our products, the most

significant risks and impacts arise within the supply chain, particularly

inrelation to the sourcing of raw materials. To provide assurance

toourcustomers, we were an early adopter of the BRE BES 6001

Responsible Sourcing Framework Standard, which has been applied

toour products for over 15 years. The standard is independently

audited annually, and assesses our performance across supply

chainmanagement, organisational governance, and sustainable

development. Certification to BES 6001 gives our customers

confidence that the materials we procure and the products we

manufacture are sourced and produced responsibly. It also enables

customers to claim credits within the BREEAM suite of construction

standards, supporting their own responsible procurement and

sustainability objectives.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 53

Product continued

Our people are at the heart of everything we do. With a workforce of

c.1,500 employees across the UK, we are proud to foster aworkplace

that prioritises engagement, growth, and inclusivity. Over the last year

we made significant strides in reinforcing aculture where every

individual can thrive and contribute to oursuccess.

HEALTH, SAFETY AND WELLBEING

The continuous improvement of our health and safety performance

remains our number one priority, working towards our goal of zero

harm and an ‘interdependent’ safety culture where all colleagues

actively look after not only their own safety and wellbeing but also that

of others. We recognise that our workforce is our greatest asset and

strive to provide a working environment that is free of accidents and

has a proactive awareness and support for positive physical and

mental health.

2025 was the first year of our new health, safety and wellbeing strategy

Base to Brilliant. The strategy is intended to move the business beyond

legal compliance and defines expectations to achieve our interdependent

safety culture goal. It is set in three parts (bronze, silver, gold), so the

steps of the journey are structured, clear and follow a pathway of

continuous improvement. All the sites were assessed against bronze

requirements to establish the initial baseline and then worked to

achieve the criteria. All sites showed progress as the year progressed

and two achieved bronze status by year-end. All sites will use the Base

to Brilliant strategy when setting out future objectives and targets in the

coming years.

SAFETY

In 2025, we maintained our certification to the ISO 45001 occupational

health and safety management system standard with a programme

ofrobust internal and external audits to ensure continued adherence.

This was the end of the three-year certification cycle and had a

significant focus on senior management commitment alongside

theusual adherence to company policies and legal requirements.

Our Lost Time Incident Frequency Rate (LTIFR) in 2025 showed

significant improvement running at 0.92 incidents for every million

hours worked, compared to 2.25 in 2024 and 3.24 in 2023. This is the

lowest LTIFR rate the business has recorded since inception and shows

our continued focus on zero harm and positive wellbeing is really starting

to take effect. Of the 26 separate business areas monitored, 23 were

Lost Time Incident (LTI) free during 2025, six have been LTI free for over

three years, seven for over five years and three for over 10years.

TRAINING

We continued to provide a range of health and safety-related training,

with key highlights within the year being:

• Our visible felt leadership and safety observations training programme;

• For the 8th successive year, running an in-house National Examining

Board for Occupational Safety and Health (NEBOSH) Certificate

course with 7 delegates attaining the qualification within the year;

• 2 Institute of Occupational Safety and Health Managing Safely

courses run; and

• Our colleagues continued to be provided with training, specifically the

Institute of Occupational Safety and Health (IOSH) one-day working

safely course alongside the traditional risk assessment and standard

operating procedure training.

HEALTH AND WELLBEING

We continued our journey to promote positive mental health and

wellbeing throughout 2025. We again targeted three nationally

recognised campaigns where the business brought colleagues

together to discuss mental wellbeing and encourage healthy

conversations. These were:

• ‘Time to Talk Day’, an event run by Mind and Rethink Mental Illness

toencourage open conversations about mental health, break stigma,

and show people they aren't alone, by starting simple chats with

friends, family, or colleagues to listen and offer support.

• Mental Health Awareness Week, with the theme of ‘community’.

Thisraised awareness on the positive impact being part of a safe,

positive community can have, how we thrive when we have strong

connections with other people and supportive communities that

remind us, we are not alone.

• World Mental Health Day, with the theme being access to services –

mental health in catastrophes and emergencies. and workplace

mental health. The theme highlights the importance of people being

able toprotect their mental health in times of global instability.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 54

People

VISIBLE FELT LEADERSHIP (VFL) CASE STUDY

After our Executive Committee and Board members

participated in our VFL training programme during 2024,

wemoved the focus to our operational management teams

in 2025. We trained over 180 front line leaders through

theyear on how to conduct a safety observation and set

them atarget ofcompleting at least two formal written

conversations a month. By the end of the year we had

recorded almost 2,500 individual conversations where HS&W

was the core focus ofthe interaction. This focus drives the

health and safety message across the business and helps

encourage apsychologically safe work environment where

open conversations about safety are a normal part of work.

Mostconversations are positive and a chance to say thanks

to colleagues for working safely and recognise the good

work being completed.

PEOPLE

SITE SAFETY DAYS CASE STUDY –

A NEW APPROACH

In 2025 we took a new approach to colleague awareness

and engagement, by holding health, safety and wellbeing

awareness days at each factory. These replaced the single

national event held previously, meaning a greater number

ofoperational colleagues attended an event rather than

aselected few.

The days were structured around common themes including

incident performance, common incident injuries and

colleagues’ opinions on HS&W, with each factory also able

to focus on site specific subject matter with key messages to

be linked to the Base to Brilliant strategy. External presenters

delivered sessions on themes including the wider impacts of

an accident, personal health and wellbeing and dependent

safety culture, where colleagues were provided with tools

and knowledge on how to protect their own safety, the pre-

cursor to interdependent culture.

The Group continued to offer pro-active support for physical health

andwellbeing with its external partners including occupational therapy,

health checks and physiotherapy to keep our colleagues physically

fitand well. This is all part of our messaging focused on looking after

ourselves, so we turn up to work right and are prepared to speak up and

offer support to each other in times of need. This was in addition to the

statutory medicals received by all operational colleagues at our sites.

HEALTH AND SAFETY AWARDS

As in previous years, we submitted best practice entries into the

Ceramics UK Pledge awards. In 2025 we received 11 individual

recognition awards, eight open category awards and two awards

inconjunction with our contractors.

EQUALITY, DIVERSITY AND INCLUSION

Creating a workplace where people from different backgrounds,

experiences and perspectives can succeed continues to be an

important priority for the Group. We recognise that improving diversity

and strengthening inclusion supports better decision-making, performance

and culture. Further information on diversity at Board level is included

inthe Corporate Governance Statement on page 84.

The construction materials sector remains heavily male dominated,

andwidening participation in operational and technical roles continues

to require focused effort. During 2025 we saw positive movement in

female representation at management level. Women now hold 26% of

management roles (defined as direct reports to Executive Committee

members), compared with 18% in the prior year, while overall female

representation across the workforce remains at 12%. Gender Pay

reporting is included within the Annual Report on Remuneration on

pages 120 and 121.

A key area of focus during the year was reinforcing standards of

behaviour and awareness across the business. We rolled out Equality,

Diversity and Inclusion and Sexual Harassment training to colleagues

across the Group, aimed at increasing understanding, supporting

inclusive behaviours, and ensuring a clear and consistent approach

tomaintaining a respectful working environment. This programme will

continue into 2026 as we extend coverage further across the workforce.

We also reached an important milestone within our early careers

programme with the appointment of our first female mechatronics

apprentice. Increasing representation in engineering and operational

roles is a long-term focus, and visible role models play an important

part in encouraging more women to consider careers in these areas.

We will continue to build on this progress as part of our broader

inclusion priorities.

We remain committed to ensuring that colleagues of all abilities can

contribute and succeed. Our approach includes providing appropriate

workplace adjustments and maintaining a working environment free

from discrimination, harassment or bias. All colleagues are expected

totreat one another with dignity, fairness and respect.

EMPLOYEE EXPERIENCE

The Employee Forum continued to run throughout the year, with

representation from across the Group. Meetings provide an opportunity

for open dialogue between colleagues and senior leadership, with

CEONeil Ash and Non-Executive Director Martin Sutherland attending

sessions and feedback shared with the Board.

Employee engagement remains a key focus and forms part of a

structured, multi-year approach to listening and action planning that

began when we introduced our Group-wide survey in partnership

withGallup, a global employee engagement and analytics organisation,

in 2021. During 2025 we continued to build on this foundation, using

feedback to inform both Group and local initiatives.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 55

People continued

“Don’t give up if it feels intimidating

because you’re a woman – you’re just as

capable as anyone else if you work hard

and keep asking questions. Forterra felt

welcoming and like a place where there

was space for me to fit in and excel.”

Milie Gibbons

Mechatronics Apprentice

Our most recent employee survey saw participation increase to 85%,

reflecting strong levels of involvement across the business. The overall

engagement index improved to 3.83, indicating positive movement in

how colleagues experience working at Forterra.

Improvements were particularly evident in areas linked to recognition

and development. Scores increased for questions relating to receiving

recognition and having conversations about individual progress.

Theseresults align with actions taken during the year, including the

introduction of a new Group-wide employee recognition scheme

designed to make it easier for colleagues to acknowledge one

another’s contribution.

Feedback from the survey also informed broader improvements to how

we support learning and communication. During the year we began

work on a new Learning Management System, Forterra Academy,

which went live in early 2026 and provides a more accessible and

structured platform for development. In response to colleague

feedback regarding communication and understanding of business

priorities, we are also exploring more collaborative communication

channels to strengthen connection across the Group.

Alongside Group-wide initiatives, managers across the business are

encouraged to develop local engagement action plans tailored to the

needs of their teams and sites. This approach ensures that feedback is

addressed both at Group level and within individual areas of the business.

Our next employee survey will be conducted in late 2026, maintaining

the 18-month cycle to allow sufficient time for actions to be embedded

and their impact assessed.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 56

People continued

GENDER DIVERSITY

DIRECTORS OF THE COMPANY

62% MALE

38% FEMALE

DIRECT REPORTS OF THE EXECUTIVE COMMITTEE

76% MALE

24% FEMALE

TOTAL EMPLOYEES OF THE GROUP

88% MALE

12% FEMALE

EXECUTIVE COMMITTEE

57% MALE

43% FEMALE

COMBINED EXECUTIVE COMMITTEE AND

DIRECTREPORTS

73% MALE

27% FEMALE

1. Company Secretary has been included under Executive Committee.

PEOPLE DEVELOPMENT

Developing the skills and capabilities of our workforce remains central

to building a resilient and high-performing organisation. During 2025

we continued to strengthen our approach to leadership, capability

development and early careers pathways across the Group.

We built further on the competency frameworks introduced for our

manufacturing leadership teams, supporting clearer expectations and

more structured development planning. Insights Discovery and 360°

feedback also continued to form part of our leadership development

approach, with a further 50 colleagues across graduate, commercial,

operational and finance roles completing Insights Discovery during the

year. These tools help individuals better understand their working styles

and support more effective collaboration across teams.

Talent and succession planning remained a focus throughout the year.

Ongoing career conversations and talent reviews support visibility of

future capability needs and help ensure that we are developing colleagues

for critical and business-essential roles across the organisation.

A key area of progress during 2025 was the continued development

ofour early careers and apprenticeship pathways. We welcomed six

graduates into the 2025 cohort, our largest graduate intake to date,

alongside 11 mechatronic apprentices, two machining apprentices and

one quantity surveyor apprentice. In addition, 19 existing colleagues

were progressing through apprenticeship programmes inearn and

learn positions, bringing the total number of colleagues undertaking

formal development programmes during the year to 40. 12 colleagues

successfully completed apprenticeship programmes during 2025,

further strengthening capability across the business.

Graduates from previous cohorts continue to progress into roles

across commercial, operational, engineering, finance and logistics

functions, demonstrating the long-term value of investing in early

careers development and structured career pathways.

Our broader learning and development offer continued to evolve,

supported by the introduction of Forterra Academy, our new Learning

Management System, which provides improved access to learning

resources and a more consistent approach to development across

theGroup.

HUMAN AND LABOUR RIGHTS

We recognise our responsibility to help prevent modern slavery and

human trafficking within both our own operations and our wider supply

chain. The Group meets its obligations under relevant Modern Slavery

and Human Rights legislation through established Company policies,

governance processes and formal declarations. Our Anti-Slavery Policy

sets clear expectations for suppliers, requiring them to meet the same

standards we apply within our own business.

The Board values and appreciates the contribution made by

allemployees at every level and is committed to protecting and

respecting human rights. Each employee is treated fairly and equally,

and the Group has measures in place to ensure that theGroup is free

from discrimination. Throughout the Group there is a zero-tolerance

approach to any form of harassment orbullying, forced or involuntary

labour, and child labour in any form. TheBoard is invested in the

development of employees and hasputin place measures to protect

both their physical and mentalwellbeing. The Group embeds its

commitments to the protection of human rights through its Anti-Slavery

and Human Trafficking Policy.

We continue to be an accredited member of the Living Wage

Foundation. Paying the real Living Wage reflects our belief that a fair

day’s work should receive fair pay and supports our ability to attract

and retain colleagues across the business.

LOOKING AHEAD

As we move into 2026, our focus will continue to centre on

strengthening capability, engagement and inclusion across the Group.

Our priorities are to:

• Continue to develop early careers and apprenticeship pathways,

strengthening our pipeline of future talent and creating clearer entry

routes into operational, technical and commercial roles;

• Expand access to learning and development through the further

embedding of Forterra Academy, supporting role-relevant learning,

clearer career pathways and increased visibility of development

opportunities;

• Strengthen talent and succession planning processes to ensure we

are developing colleagues for critical and business-essential roles

across the organisation;

• Enhance communication and engagement by modernising channels

and encouraging more two-way dialogue, helping colleagues feel

informed, connected and able to contribute;

•

• Continue to evolve our approach to reward and recognition, ensuring

it is transparent, consistent and aligned to performance;

• Build a more inclusive working environment by maintaining focus on

equality, diversity and inclusion, and ensuring colleagues feel valued,

supported and able to succeed at every stage of their career; and

• Improve the use of people data and insight to support informed

decision-making and provide leaders with greater visibility of

workforce trends and priorities.

We recognise that the long-term success of the business is closely

linked to the capability, engagement and wellbeing of our people, and

these priorities will guide our continued progress.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 57

People continued

Local community and charity engagement

While our products help shape the built environment, we are also

mindful of our impact on the communities near our sites – the

townsand villages where many of our colleagues live. During 2025,

wecontinued to support local and national causes through

targetedcommunity initiatives, product donations and Group-wide

fundraising activity.

Local community initiatives

During the year, we launched a Local Charity Initiatives Scheme,

enabling individual factory locations to support causes that matter

most within their local communities. This approach allowed managers

to access dedicated funding for grassroots organisations, including

youth groups, food banks, sports clubs and environmental projects.

Support included donations to the Chilterns Neuro Centre, helping to

fund physiotherapy, occupational therapy and wellbeing support for

people living with neurological conditions, and to The Spring Charity in

Northamptonshire, supporting vulnerable families with young children

through early intervention, practical support and community programmes.

We also contributed to the remediation of Kings Dyke nature reserve,

working with local stakeholders to stabilise the hillside following

geotechnical challenges and help restore a valued public space for

community use.

Grassroots sport and youth initiatives

We continued to support grassroots sports organisations, providing

financial assistance for clubhouse refurbishments, pitch maintenance

and equipment. Funding also helped Whittlesey Manor Bowls Club

relaunch its under-25s team, encouraging younger people into the

sport, and supported new safety equipment for a local trampoline

gymnastics academy near our Northampton headquarters.

Product donations

During 2025, product donations continued to support major

community construction projects. Through our partnership with Band

of Builders, Forterra materials were used in a home extension project

for a former construction worker who had been left paralysed, helping

volunteers deliver a life-changing adaptation. We also supported BBC

DIY SOS projects, supplying beam and block flooring and additional

bricks to help create safer, more accessible homes for families with

complex needs.

Corporate charity and fundraising

We continued to support Cancer Research UK as our corporate charity

partner, with colleagues across the business taking part in a wide

range of fundraising activities. In total, we raised over £44,000 for

Cancer Research UK during the year, supported by our Charity Match

scheme which doubles funds raised by employees. A standout

contribution came from the 524-mile Beaune Cycle Challenge, where

ateam of colleagues undertook an endurance ride to raise funds for

Cancer Research UK.

Beyond our corporate charity partnership, employees raised funds

fora range of other causes through individual and site-led initiatives.

Participation in events such as the Great North Run supported

colleagues’ chosen charities, while teams across the business also

supported national campaigns including Macmillan Coffee Mornings,

Children in Need, Red Nose Day and the RBL Poppy Appeal.

Colleagues also took part in the Jewson Dragon Boat Race alongside

industry partners, contributing to funds raised for Band of Builders

andWhiteley’s Retreat Children’s Hospice.

Employee wellbeing

Supporting the health, safety and wellbeing of our workforce remains

an important priority. During 2025, we delivered monthly internal

awareness campaigns focused on topics such as early cancer

detection, mental health, healthy living and general wellbeing. These

initiatives provide colleagues with practical information to help them

maintain healthy lifestyles and recognise key warning signs.

Wellbeing continued to be integrated into plant Safety Days across the

Group, with sessions highlighting the importance of physical health,

mental resilience and staying alert to potential health risks, reinforcing

the link between safety and overall wellbeing.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 58

People continued

Group sustainability reporting

The following table covers our wider sustainability metrics, which are aligned where possible to the SASB disclosure for construction materials.

We will continue to review this data suite on an ongoing basis for future reporting periods.

Additional disclosure

Pillar Topic Metric 2025 2024 2019

Planet Carbon emissions (scope 1, 2 and 3) tonnes 399,734 374,052

Planet Group CO

emissions (scope 1 and 2) tonnes 195,376 177,246 319,296

Planet Carbon emissions (scope 1) tonnes 195,376 177,246 299,679

Planet Carbon emissions (scope 2) tonnes – – 19,617

Planet Carbon emissions (scope 3) tonnes 204,358 196,806

Planet Group CO

emissions (scope 1 and 2) kg CO

/tonne 109.56 110.37 123.40

Planet Clay products CO

emissions (scope 1 and 2) kg CO

/tonne 232.41 239.72 256.00

Planet Concrete products CO

emissions (scope 1 and 2) kg CO

/tonne 19.02 18.80 20.90

Planet Clay products CO

emissions (scope 1 and 2) kg CO

28.75 29.94 30.9

Planet Scope 1 emissions covered under emissions-limiting regulations % 86 86 88

Planet Energy consumption MWh 635,803 572,931 956,266

Planet Energy consumption GJ 2,288,892 2,062,552 3,442,558

Planet Energy consumption kWh/tonne 357 357 369

Planet Energy sourced from alternative sources % – –

Planet Electricity sourced from on-site renewables % 4.1 3.7

Planet Electricity from renewable sources % 100.0 100.0

Planet Percentage energy from grid electricity % 8.5 8.8 8.0

Planet Percentage of power from grid electricity % 95.9 96.3 100.0

Planet Ultra low emission vehicles (cars) % of fleet 100.0 95.4

Planet Delivery fleet efficiency mpg 8.4 8.4 7.5

Planet Air quality – NOx emissions tonnes 201 152

Planet Air quality – SO

emissions tonnes 3,213 3,267 5,783

Planet Air quality – particulate matter (PM10) tonnes 131

Planet Air quality – dioxins/furans tonnes n/a

Planet Air quality – volatile organic compounds (VOCs) tonnes n/a

Planet Air quality – polycyclic aromatic hydrocarbons (PAHs) tonnes n/a

Planet Air quality – heavy metals tonnes n/a

Planet Total water withdrawn m

412,701 400,803

Planet Total water consumed m

412,701 400,803

Planet Water withdrawn in areas with high or extremely high baselinewater stress % 40 48

Planet Water consumed in areas with high or extremely high baselinewater stress % 40 48

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 59

Our Reporting Detail

Additional disclosure

Pillar Topic Metric 2025 2024 2019

Planet Mains water m

278,338 249,795 287,101

Planet Mains water litres/tonne 156.09 155.54 111.00

Planet Waste generated tonnes 71,985 112,637 107,609

Planet Waste to landfill kg/tonne 0.01 0.01 0.16

Planet Waste recycled % 99.1 99.4 99.0

Planet Hazardous waste generated tonnes 163 116 88

Planet Hazardous waste generated % 0.2 0.1

Planet Terrestrial land area disturbed hectares (ha) 540 527

Planet Impacted area restored % – –

Product New product index (revenue from new products) % revenue 3.5 2.5

Product Percentage of products that qualify for credits in sustainable building design and construction certifications % 100 100

Product Total addressable market and share of market for products thatreduce energy, water or material impacts during usage orproduction % n/a n/a

Product Total amount of monetary losses as a result of legal proceedings associated with cartel activities, price fixing, and antitrust activities £ – –

Product Plastic packaging consumed tonnes 1,178 963 1,802

Product Plastic packaging consumed kg/tonne 0.74 0.66 0.82

People Health and safety – lost time incident frequency rate (LTIFR) no. of accidents per million hours worked 0.92 2.25 7.35

People Total recordable incident rate (TRIR) (direct employees) rate per 200,000hoursworked 1.10 1.28

People Near miss frequency rate (NMFR) (direct employees) rate per 200,000 hoursworked 7.70 9.70

People Total recordable incident rate (TRIR) (contract employees) rate per 200,000 hoursworked included within direct employees

People Near miss frequency rate (NMFR) (contract employees) rate per 200,000 hoursworked included within direct employees

People Number of reported cases of silicosis no. – –

People % employees in ‘earn and learn’ positions % 3.79 3.71 3.20

People Apprentices no. 30 22 31

People Graduates no. 6 1 7

People Charitable contributions £ 70,761 34,194 41,370

Output data

Pillar Topic Metric 2025 2024 2019

Product Output clay products tonnes 756,604 665,659 1,129,173

Product Output concrete products tonnes 1,026,617 940,315 1,459,242

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 60

Our Reporting Detail continued

This section of the strategic report constitutes Forterra plc’s Non-Financial and Sustainability Information Statement, produced tocomply with

Section 414CB of the Companies Act 2006. The requirements are addressed in this section by means of cross-referencing to indicate which

sections of the narrative they are embedded. Our policies can also be found at www.forterraplc.co.uk.

Non-Financial Information Section Pages

Description of our Business Model Our Business Model 18

Principal Risks and Uncertainties Risk Management and Key Risks 62-68

Non-Financial KPIs Key Performance Indicators/Sustainability Report 26, 47, 59-60

Climate Related Financial Disclosures Sustainability Report 32-60

Area Key policies

Further information

regarding related risks

andperformance

Employees Health and Safety Policy, Health and Wellbeing Policy, Flexible Working Policy,

Maternity Leave Policy, Paternity Leave Policy, Adoption Leave Policy, Bereavement Policy,

Diversity, Inclusion and Respect at Work Policy

54-58

Climate Related Matters including TCFD disclosures Sustainability Policy 33, 39-51, 59-60

Human Rights Anti-Slavery and Human Trafficking Policy 57

Social Matters Code of Business Conduct Policy 54-60

Anti-bribery and Corruption

Bribery Act Policy, Conflicts of Interest Policy, Whistle Blowing Policy, Competition Law Policy,

Gifts and Hospitality Policy

53, 93

Business Model — 18

Principal Risks — 62-68

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 61

Our Reporting Detail continued

NON-FINANCIAL AND SUSTAINABILITY

INFORMATION STATEMENT

OVERVIEW

Effective risk management is critical to successfully meeting our

strategic objectives and delivering long-term value to our shareholders.

Instilling a risk management culture at the core of everything we do

isakey priority. Our risk management policy, strategy, processes,

reporting measures, internal reporting lines and responsibilities are

wellestablished.

We continue to monitor this alongside numerous other rapidly

evolvingbusiness risks; implementing mitigating controls and actions

as appropriate. Details of our principal key risks are shown further

inthetable starting on page 64.

Our risk management objectives remain to:

• Embed risk management into our management culture andcascade

this down through the business;

• Develop plans and make decisions that are supported

byanunderstanding of risk and opportunity; and

• Anticipate change and respond appropriately.

SUSTAINABILITY

Sustainability continues to be a key focus within our business with the

increasing need to make Forterra more resilient againstthe potential

effects of climate change, and evolving sustainability driven risks are

highlighted within extensive disclosure in this Annual Report. These

reflect not just the impact ofour operations on the environment but

alsothe challenging targets we have set to reduce this, targeting

netzero by 2050.

The Board is committed to compliance with the requirements of

theTask Force on Climate-related Financial Disclosure (TCFD) and

comprehensive disclosure on both short and long-term climate risks

(for the first time on a double materiality basis) is included in our

Sustainability Report.

The Board’s Sustainability Committee has provided oversight and

governance over all matters sustainability and climate, including

therisks and opportunities this presents over the short, medium and

long-term.

KEY RISKS

Key risks are determined by applying a standard methodology to all

risks, considering the potential impact and likelihood of arisk event

occurring, before then considering the mitigating actions in place,

theireffectiveness, their potential to be breached and the severity

andlikelihood of the risk that remains. This is a robust but

straightforward system for identifying, assessing and managing

keyrisks in a consistent and appropriate manner.

Management of key risks is an ongoing process thathas had

additional focus in 2025 as the Group prepares for the incoming

requirements of Provision 29 of the Corporate Governance Code

2024. Under the oversight of the Audit and Risk Committee, aworking

group of senior management has considered key risks and associated

material controls. Looking beyond the risks presented asprincipal

risks, we have taken guidance from various advisors including the

Internal Audit function and the External Auditor, as to how best to

achieve this. Further detail around this preparedness exercise can be

found in the Audit and Risk Committee Report on pages 88 to 93.

Many of the key risks that are identified and monitored evolve and new

risks regularly emerge. Emerging risks are reviewed regularly by senior

management as part of the Risk Steering Group with a consolidated

list of current emerging risks presented and discussed at each Audit

and Risk Committee.

The foundations of the internal control system are the first line controls

in place across all our operations and activities. This first line of control

is evidenced through monthly responsible manager self-assessments

and review controls are scheduled torecur frequently and regularly.

Policies, procedures and frameworks in areas such ashealth and

safety, compliance, quality, IT risk management and cyber security

represent the second line of controls, and internal audit activities

represent the third line.

Management continue to monitor risk closely and put in place

procedures to mitigate risks promptly wherever possible. Where the

risks cannot be mitigated, management focus on monitoring the risks

and ensuring the Group maximises its resilience to the risks, should

they fully emerge.

RISK APPETITE

The Group’s risk appetite reflects the fact that effective risk

management requires risk and reward to be suitably balanced.

Exposure to health and safety, financial and compliance risks are

mitigated as far as is reasonably practicable.

The Group is however prepared to take certain strategic, commercial

and operational risks in pursuit of its objectives; where these risks and

the potential benefits have been fully understood and reasonable

mitigating actions have been taken.

This approach was evaluated and re-approved by the Board in

January 2026.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 62

Risk Management and Key Risks

BOARD OF DIRECTORS

The Board (through the Audit and Risk Committee and

Sustainability Committee) have:

• Received updates from management on specific key risks;

• Continued to review progress against risk management actions

and internal controlpriorities;

• Considered the effectiveness of the risk management

andinternal control environment;

• Regularly reviewed all principal risks, heat maps andemerging

risks; and

• Engaged with management on internal project risksregularly.

EXECUTIVE COMMITTEE

The Executive Committee and the Risk Steering Group have:

• Met frequently to discuss the risk environment and Group risk

management activity, identify risks and gaps, and appraise

likelihood, impact and risk mitigation;

• Identified risk priority areas and focused on the key risks inthese

areas; and

• Accepted risk exposure in other areas to ensure appropriate

prioritisation of key risks.

RISK AND INTERNAL AUDIT

Risk and Internal Audit have:

• Followed a risk-based internal audit plan;

• Supported appointed risk owners throughout theyear; and

• Continued to track responses of monthly control self-

assessments from operational control owners and closure

ofinternal control improvement actions.

OPERATIONAL MANAGEMENT

Operational managers have:

• Taken ownership of key local risks;

• Completed internal control self-assessments monthly toevidence

operational controls are inplace; and

• Escalated risks as appropriate.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 63

Risk Management and Key Risks continued

RISK HEAT MAP

Risk heat map reflecting evolving

natureofcertain risks

Recognising that impact and likelihood are

equally important when assessing risk, the

chart below demonstrates bothof these

characteristics. Netimpact is afinancial

measure of severity and netlikelihood

reflectsthe chance of therisk occurring

within the next three years. Given the risk

environment that weare currently operating

in, wehave additionally highlighted those

risks deemed to beevolving.

KEY RISKS

Health and safety

Sustainability/climate change

Economic conditions

Government action and policy

Residential sector activity levels

Inventory management

Customer relationships and reputation

Attracting, retaining and developing

employees

Innovation

IT infrastructure and systems

Business continuity

Project delivery

Evolving risk

1 – HEALTH, SAFETY AND WELLBEING

Links:

Principal risk and whyit is relevant

We continue to work toensure the safety

ofemployees exposed torisks such as

theoperation of heavy machinery, moving

parts, noise, dusts and chemicals.

Key mitigation, update and sponsor

Safety remains our number one priority. We target an accident-free environment and have robust policies in place covering expected levels

ofperformance, responsibilities, communications, controls, reporting, monitoring and review.

2025 was the first year of our new health, safety and wellbeing strategy, Base to Brilliant. The strategy is intended to move the business

beyond legal compliance and defines expectations to achieve our interdependent safety culture goal. It is set in three parts (bronze, silver,

gold), so the steps of the journey are structured, clear and follow a pathway of continuous improvement.

2025 also saw the Group maintain our certification to the ISO 45001 occupational health and safety management system standard with a

programme of robust internal and external audits to ensure continued adherence. This was the end of the three-year certification cycle and

had a significant focus on senior management commitment alongside the usual adherence to Company policies and legal requirements.

Executive sponsor: Neil Ash

Rationale for appetite

Safety first is embedded in all decision-

making andis never compromised.

Reducing accidents and ill-health is critical

to strategic success.

2 – SUSTAINABILITY/CLIMATE CHANGE

Links:

Principal risk and whyit is relevant

We recognise the importance of

sustainability and climate change and

boththe positive and negative impacts

ofour products and processes on the

environment.

Key mitigation, update and sponsor

We recognise the positive impact that our products have on the built environment across their lifespan and are keen for the durability,

longevity andlower lifecycle carbon footprint of our products to be championed and better understood. Short-term transitional sustainability

risks include increasingregulatory burden or cost, aninability to adapt our business modelto keep pace with new regulation, customer

preferences changing more quickly thananticipated or too quickly for ourinnovation to keep pace. Severallonger-term physical risks could

have a material impact on the business. These risks include more severe weather impacts, such asflooding, and potentially changes to

thedesign of buildings in order to adapt todifferentclimatic conditions.

A comprehensive Sustainability Report is included within this Annual Report and isalso available as a separate document, providing detailed

disclosure ofthe sustainability-related risks faced by our business, considered for the first time this year on a double materiality basis.

Our desire to reduce our impact upon the environment sits hand-in-hand with maximising the financial performance of our business; by

investing inmodernising our production facilities not only do we reduce energy consumption and our CO

emissions, but we also benefit

financially from reducing the amount of energy and carbon credits we need to purchase.

Five years into our 2030 decarbonisation targets we acknowledge that progress against this will not always be linear. New factories at

Desford and Wilnecote are positive milestones in this journey, however risks around the speed of technological and infrastructural

development required for utilisation of hydrogen in our processes as well as carbon capture, remain. We continue to take this challenge

seriously and acknowledging the continued importance of the subject matter, allsustainability risks are governed by the standalone

Sustainability Committee.

Executive sponsor: Ben Guyatt

Rationale for appetite

Focus from all stakeholders has been

maintained in2025 and sustainability

remains a high priority for management

intheshort-, medium- andlong-term.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 64

Risk Management and Key Risks continued

KEY

Link to strategy

Risk appetite

Change

Strengthen the Core Beyond the Core

Low appetite

Balanced appetite

High appetite Increased Decreased No change

Changes noted are since December 2024.

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

3 – ECONOMIC CONDITIONS

Links:

Principal risk and whyit is relevant

Demand for our products is closely

correlated with residential and commercial

construction activity.

Changes in thewider macroeconomic

environment can have a significant impact

in this respect and we monitor these closely

as a result.

Key mitigation, update and sponsor

Understanding business performance in real-time, through our customer order book, strong relationships across the building sector,

anda range of internal and external leading indicators, help to inform management and ensure that the business has time to respond

tochanging market conditions.

Despite a modest improvement in demand for our products in 2025, the Group remains impacted by the cyclical downturn in the UK

housing market, driven primarily by global economic uncertainty, Government policy and low consumer confidence impacting demand

forhousing in the short-term. We recognise that ultimately there remains a shortage ofhousing in the UK, financing is accessible and the

population continues to grow, and as such we remain confident in market recovery in the medium-term. The trajectory of the recovery,

however, remains uncertain and is dependent on the macroeconomic conditions outlined above, as well as broader geopolitical developments.

Throughout this period of weaker demand we have continued to display our ability to flex production output both up and down, ensuring

production remains closely matched to sales. This has been effective in the past and we believe the changes made to our operational footprint

in recent periods, alongside the new flexibility and capacity provided by the Desford factory, leave us well positioned totake advantage of

attractive market fundamentals in the medium to long-term.

Executive sponsor: Neil Ash

Rationale for appetite

Generally weaker macroeconomic

conditions inrecent years have caused

demand for our products to fall. However,

with modest improvements in demand

seenduring 2025, we do believe the

bottom of the cycle to have passed. Having

already adapted our business to align

production to sales, until more consistent

demand signals are seen, this risk remains

unchanged at December 2025.

4 – GOVERNMENT ACTION AND POLICY

Links:

Principal risk and whyit is relevant

The general level and type of residential and

other construction activity is partly

dependent on the UK Government’s

housebuilding policy, investment in public

housing and availability of finance. Changes

inGovernment policy and support towards

housebuilding could either positively or

negatively impact demand for our products.

Key mitigation, update and sponsor

We participate in trade associations, attend industry events and track policy changes which could potentially impact housebuilding and the

construction sector. Such policy changes can be very broad, covering macroeconomic policy and including taxation, interest rates, mortgage

availability and incentives aimed atstimulating the housing market. Through our participation in these trade and industry associations we

ensure our views are communicated to Government andour Executive team on occasion meet with bothministers and MPs.

Where identified, we factor any emerging issues into models of anticipated future demand to guide strategic decision-making. The need

for more quality housing has featured significantly within the political narrative since the Labour Government and it is clear that the aim is

to incentivise construction ofnew homes, even if different political ideologies may demand different models of home ownership.

Changes in monetary policy and previous associated increases to interest rates had a significant impact on mortgage affordability. After

many years of demand focused policy, current Government policy has been centred on the supply-side and particularly around planning

reform. Arguably, planning issues are not at the centre of the current weak demand and it is worth highlighting that for the first time in

along-while there is no Government support to stimulate demand for new housing such as the previous Help to Buy scheme.

Executive sponsor: Neil Ash

Rationale for appetite

Recent investment incapacity and

rangehas been madedespite the

uncertainty presented by changes in

Government policy.

Whilst the UK Government have given

renewed focus and prioritisation to

housebuilding, we remain watchful in the

short- tomedium-term as to date these

policies do not appear to have been

successful in driving the increases in

housebuilding the Government might

haveexpected.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 65

Risk Management and Key Risks continued

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

5 – RESIDENTIAL SECTOR ACTIVITY LEVELS

Links:

Principal risk and whyit is relevant

Residential development (both new build

and repair, maintenance and improvement)

contributes the majority of Group revenue.

The dependence of Group revenues on

thissector means that any change in

activity levels inthis sector will affect

profitability and in the longer-term, strategic

growth plans.

Key mitigation, update and sponsor

Government action and policy as laid out above continues to be a key determinant of demand for new build housing. We closely follow the

demand we are seeing from our key markets, along with market forecasts, end-user sentiment, mortgage affordability and credit availability

in order to identify and respond to opportunities and risk. Group strategy focuses upon our strength in this sector whilst also continuing to

strengthen our commercial and specification offer.

The impact of higher interest rates and wider macroeconomic circumstances on this sector has had a notable impact on demand levels in

recent years, though 2025 has seen a modest improvement in this respect, with borrowing costs slowly falling and housebuilding forecasts

projecting growth in the coming years.

During 2025 we have benefited from the weighting of our manufacturing capacity toward extruded brick over soft mud, with demand for

extruded brick showing an increase where soft mud demand has been more muted.

The investment in the redevelopment of the Wilnecote brick factory, which will supply the commercial and specification market, will in due

course provide a degree of diversification away from residential construction, offering some insulation from the impact of future residential

demand cycles.

Executive sponsor: Neil Ash

Rationale for appetite

Serving the residential construction market

lies at the heart of our strategy. Whilst we

will seek opportunities to broaden our

offering, we continue to see residential

markets ascore.

Whilst modest improvement in 2025

suggests recent cyclical lows in the

housebuilding sector have started to ease,

at December 2025 this risk remains

unchanged.

6 – INVENTORY MANAGEMENT

Links:

Principal risk and whyit is relevant

Ensuring sufficient inventories of our

products is critical tomeeting our

customers’ needs, though this should not

be at the expense of excessive cash

tiedup in workingcapital.

Whilst the ability to serve our customers is

key, where excessive inventory starts to

be built, management mustensure that

production is aligned to forecast demand.

Cash tied to surplus working capital

increases financing costs and could

ultimately impact theGroup’s liquidity,

restricting the amount of cash available for

other purposes.

Key mitigation, update and sponsor

After a long period of historically low stock levels, a softening in demand in recent years has allowed stocks to be replenished. Strong

customer relationships and some degree of product range substitution have historically mitigated the risk of inventory levels being too low,

and now that levels have grown these relationships remain key, ensuring that visibility of ourcustomers' needs and demand levels can

accurately be matched to our production levels.

2025 saw a previously unseen dynamic in this respect, whereby growth in the demand for extruded bricks was much stronger than the

demand for our soft mud and London bricks, creating some conflicting challenges, with some factories facing low inventory levels whilst

others faced higher inventory levels necessitating cuts to production.

Executive sponsor: James Cornish and Mark Davies

Rationale for appetite

Managing capacity sufficiently to prevent

tying up excessive amounts of working

capital in stock, butensuring that customer

demand can continue to be met is crucial

tooursuccess. It is important that whilst

ensuring we do not build excess inventory,

we are also able to continually meet

demand where it occurs. At December

2025 this risk remains unchanged.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 66

Risk Management and Key Risks continued

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

7 – CUSTOMER RELATIONSHIPS AND REPUTATION

Links:

Principal risk and whyit is relevant

Significant revenues aregenerated from

sales to a number ofkey customers. Where

a customer relationship deteriorates, there

isarisk to revenue and cash flow.

Key mitigation, update and sponsor

One of our strategic priorities is to be the supply chain partner of choice for our customers. By delivering excellent customer service,

enhancing our brands and offering the right products, we seek to develop our longstanding relationships withour customers. Regular and

frequent review meetings focus on our effectiveness in this area.

Failure to maintain these relationships could manifest itself in loss of market share, and if not managed correctly, be detrimental in the

longer-term in periods of stronger demand. To mitigate these risks we remain in constant communication with our customers, ensuring

they are well informed of the challenges faced by our business. We remain particularly conscious of potential impacts on our customer

service and selling prices as we aim to retain our margins in a time where our customers are also facing challenging conditions.

Executive sponsor: James Cornish

Rationale for appetite

Customer focus is akey priority for all

employees. This risk remains equally

heightened across periods of both stronger

and weaker demand and as such remains

unchanged at December 2025.

8 – ATTRACTING, RETAINING AND DEVELOPING EMPLOYEES

Links:

Principal risk and whyit is relevant

We recognise that our greatest asset

isour workforce and a failure to attract,

retain and develop talent will be

detrimental to Groupperformance.

Key mitigation, update and sponsor

We understand where key person dependencies and skills gaps exist and continue to develop succession, talent acquisition and retention

plans. Wecontinue to focus on safe working practices, employee support and strong communication and employee engagement.

Notwithstanding a softer demand environment, challenges associated with labour availability remain across the business in key skilled areas,

and it is crucial that this continues to be addressed to ensure the ongoing success of the Group, which remains dependent on our people.

Executive sponsor: Sarah Renton

Rationale for appetite

Our people have always been pivotal toour

business and we must remain cautious of

the previously increased risk associated

with ensuring we attract, retain and develop

ouremployees.

9 – INNOVATION

Links:

Principal risk and whyit is relevant

Failure to respond tomarket

developments couldlead to a fall

indemand for the products that we

manufacture. This inturn could cause

revenue and margins tosuffer.

Key mitigation, update and sponsor

Strong relationships with customers as well as independently administered customer surveys ensure that we understand current and

futuredemand. Closetiesbetween the Strategy, Operations and Commercial functions ensure that the Group focuses on the right areas

ofresearch and development (R&D).

Providing innovative products for both our core markets to ‘Strengthen the Core’ and the wider construction market, ‘Beyond the Core’,

isof increased importance following a period of weaker demand, and we strive to ensure that we are ina position to do so.

New product development and related initiatives are therefore ongoing and we continue to commit to further investment in R&D

withclearlinks between investment in R&D and the work undertaken in relation tosustainability.

Executive sponsor: Nicola Chapman

Rationale for appetite

The Group is willing toinvest in order to

grow where the right opportunities present

themselves. We have invested in the

appropriate skills sothat opportunities can

be identified andprogressed, and we are

committed todeploying R&D toreduce the

environmental footprint of our operations.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 67

Risk Management and Key Risks continued

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

10 – IT INFRASTRUCTURE AND SYSTEMS

Links:

Principal risk and whyit is relevant

Disruption or interruption to ITsystems

could have amaterial adverse impact

onperformance andposition.

Key mitigation, update and sponsor

We have continued to invest in, consolidate andmodernise our IT systems, maintaining ISO 27001 Information Security accreditation and

strengthening our ability to both resist the threat of a cyber attack and also restore our systems should the need arise. This investment

supports our ability to maintain the levels of service that our customers expect.

We continue to increase our resilience in this area, ensuring that our people understand their role in any attempt to compromise our cyber

security, and regulartraining and tests are carried out as such.

Executive sponsor: Ben Guyatt

Rationale for appetite

The downsides to ITrisks significantly

outweigh any upside and our risk appetite

reflects this.

Our assessment of therisk in this area

remains unchanged.

11 – BUSINESS CONTINUITY

Links:

Principal risk and whyit is relevant

Group performance is dependent on key

centralised functions operating continuously

and manufacturing functions operating

uninterrupted. Should we experience

significant disruption, there is a risk that

products cannot bedelivered to customers

to meet demand and allfinancial KPIs

maysuffer.

Key mitigation, update and sponsor

Plans are in place to allow key centralised functions to continue to operate in theevent of business interruption and remote working

capabilities have been maintained and continually strengthened in recent years, ensuring the business isable to continue operating with

minimal disruption. During 2025 we have focused on increasing our resilience and flexibility, strengthening our ability to continue operating

in periods of system interruption. Given the number of news reports highlighting the disruption faced by well known businesses in the

aftermath of cyber attacks, this will continue to be a focus in 2026.

We consider climate-related risks when developing business continuity plans and have learnt lessons from weather-related events in recent

years which inform these plans. Loss of one of our operating facilities through fire or other catastrophe would impact upon production and

our ability to meet customer demand. Working with our insurers and risk advisors, we undertake regular factory risk assessments, addressing

recommendations as appropriate. We accept it is not possible to mitigate all the risks we face in this area and as such we have a

comprehensive package of insurance cover including both property damage and business interruption policies.

Executive sponsor: Neil Ash and Ben Guyatt

Rationale for appetite

The potential for significant disruption

dictates the low appetite for risk in

thisarea,a risk that atDecember 2025

remains unchanged.

12 – PROJECT DELIVERY

Links:

Principal risk and whyit is relevant

We are coming tothe end of anextensive

programme of capital investment within our

business which sees anumber of large

projects add production capacity.

Ensuring these projects are delivered and

commissioned as intended is essential

tothe future success ofthe business.

Key mitigation, update and sponsor

Despite the virtually complete Desford project, our vigilance in managing project delivery across the business has not diminished and the

focus of this risk has in turnshifted to ongoing projects at both Wilnecote and Accrington.

Management closely monitor all current strategic projects for potential challenges, cost over-runs and delays, and act promptly to ensure

that risks are mitigated. Redevelopment of the new Wilnecote factory is nearing completion with the commissioning of a new specification

focused product range underway. Challenges faced by the Group's suppliers and connected to wider global economic and supply chain

challenges impacted the project timetable, though despite this, Wilnecote (aswithDesford previously) has been procured under a fixed

price supply contract ensuring that the price we paid was certain at the outset. Given the unusually highlevels of inflation and supply chain

challenges in recent years, theGroup has benefited significantly from these contract terms.

Management recognise the additional risks posed by running concurrent major projects, and to mitigate, separate project management

structures arein place foreach respective project and where common suppliers are involved, procedures are in place to ensure they retain

sufficient capacity to deliver on both projects without significant risk.

Executive sponsor: Mark Davies

Rationale for appetite

Management and theBoard are closely

monitoring the ongoing expansion projects

atWilnecote and Accrington.

We acknowledge that progress made at

both Wilnecote and Accrington across

2025 has reduced the inherent risk in this

area and the rating at December 2025 has

been reduced to reflect this. We do

however continue to recognise the strategic

imperative ofboth projects to thefuture

success ofthe Group.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 68

Risk Management and Key Risks continued

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

Strategy: Appetite:

Gross Change: Net Change:

In accordance with the provisions of the UK Corporate Governance

Code 2018, the Board has assessed the prospects of the Company

and has a reasonable expectation that the Group will continue to

operate and meet its liabilities as they fall due. The Board has reviewed

the Group’s position and principal risks over a period of three years

from the balance sheet date, which it considers appropriate as it aligns

with the Group’s strategic and financial planning horizon. In making this

assessment, the Board considered the principal risks set out on pages

62 to 68, together with climate-related risks detailed on page 51 of the

Sustainability Report.

The Group’s credit facility comprises a committed revolving credit

facility (RCF) of £170m extending to June 2028, which was extended

following the exercise of a 17-month extension option during 2025. At

the balance sheet date, borrowings against the facility totalled £62m

with £108m of headroom remaining. The cash balance stood at £6.1m

with reported net debt before leases of £55.7m (2024: £84.9m) (net

debt is presented inclusive of capitalised arrangement fees). The Group

also benefits from an uncommitted overdraft facility of £10m which was

undrawn at the year-end.

The facility is subject to covenant restrictions of leverage (net debt/

adjusted EBITDA) (as measured before leases) of less than 3 times and

interest cover of greater than 4 times. The covenants are subject to

testing on a half yearly basis. The Group has comfortably traded within

its covenants throughout 2025 and anticipates remaining within these

throughout 2026.

The Board has reviewed the Group’s financial forecasts andany

consequential future funding requirements against committed external

borrowing facilities regularly to confirm ongoing viability. The scenarios

modelled include a base case, asevere but plausible downside

scenario and a reverse stress test scenario, which is considered

remote. These scenarios have been modelled using management’s

experience of the business, including the impact of the 2008 global

financial crisis and more recently the global pandemic and subsequent

cost of living crisis. The scenarios remain framed against the backdrop

of continuing market uncertainty. The plausible downside scenario

modelled for viability purposes isaligned to that used for going concern

modelling, from the perspective of assumed EBITDA.

Assumptions underpinning these scenarios follow. Under all scenarios

it is assumed that financing will be available to the Group throughout

the period modelled, with refinancing on similar terms to that currently

in place.

Base case

• The base case scenario is aligned to our current demand expectations,

with 2026 sales volumes expected to be similar to 2025;

• Management continues to align production to anticipated sales,

minimising inventory growth. In addition, capital expenditure

continues to reduce from prior years, with the Group’s spend on

strategic projects largely complete, increasing free cash flows;

• With leverage now returned to normalised levels, and reflective of our

lower capital expenditure requirements going forward, the Board's

intention to commence the return of surplus capital to shareholders

with a £20m share buyback programme has been included;

• Sales volumes are modelled to remain between 12% and 25%

below2022 in 2026. Volumes improve in 2027 but remain up to

22%below 2022 (product dependent). 2028 sees a recovery

involumes to nearer 2022 levels, however brick volumes remain

8%below2022; and

• Under this scenario, net debt is forecast to remain under 1.5 times

adjusted EBITDA in each year, in line with our capital allocation

policies and reflecting the announced programme of share buybacks.

Plausible downside

• The Group’s plausible downside scenario takes into account the

lowest levels of market demand seen across our products since

2022. Product dependent, this ranges up to 40% below the

levelslast seen in 2022, which is considered to be representative

ofanormalised market for the Group, and as such is seen as a

reasonable benchmark for scenario modelling. It is not considered

plausible that demand could fall further than the assumptions detailed

within the downside scenario laid out below;

• The scenario assumes that sales volumes return to their lowest level

since 2022, which, product dependent, is a reduction of between

23%and 38% relative to 2022. Volumes begin to recover in 2027

butremain up to 36% below 2022. For 2028, despite a continued

recovery, brick volumes remain 33% below 2022; and

• Under this scenario, net debt is forecast to remain stable, however

the announced programme of share buybacks is paused.

Reverse stress test

• The reverse stress test is modelled to support management and the

Board in understanding what the quantum of fall in Group trading

andfinancial performance would need to be to result ina covenant

breach. The reverse stress test indicated that should volumes fall

bya further 16% beyond those modelled in the plausible downside

scenario, the Group would be atrisk of breaching its covenants.

Thisscenario is considered remote.

The scenarios above have been modelled with consideration given

toseveral of the Group’s key risks, and the quantitative impact of

theserisks should they occur. Potential contributing factors include

Government policy, acontinuing economic downturn, consideration

ofinventory management, a prolonged reduction in residential sector

activity levels or new product development inthe sector.

Management is comfortable confirming that the Group remains

profitable under both the base and plausible downside scenarios.

Inaddition, in the event of sales volumes falling in line with those

modelled in the reverse stress test, the Group would seek to enact

further mitigating actions including additional cost savings, production

reductions, curtailment in the quantum of dividend distributions and

thesale of surplus land and buildings.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 69

Viability Statement

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 70

GOVERNANCE

IN THIS SECTION

72 Board of Directors

75 Executive Committee

76 Corporate Governance Statement

86 Nomination Committee Report

88 Audit and Risk Committee Report

94 Sustainability Committee Report

96 Remuneration Committee Report

124 Directors’ Report

127 Statement of Directors’ Responsibilities

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 71

Governance at a Glance

GOVERNANCE HIGHLIGHTS

Board changes

Nigel Lingwood and Aysegul

Sabanci join the Board in

April2025.

→ See pages 76 and 77

Succession planning

Structured search initiated

for new Independent Non-

Executive Directors.

→ See page 76

Capital investment

programme

£140m capital programme

largely complete; Desford

operating two kilns, Wilnecote

nearing completion.

→ See page 78

Remuneration Policy and

shareholder engagement

Proposed revisions to the

Remuneration Policy following

shareholder consultation.

→ See pages 101 to 109

MEETING ATTENDANCE

→ See page 80

Attendance B A S R N

Justin Atkinson

4/4 n/a 2/2 2/2 0/0

Nigel Lingwood

6/6 n/a 2/2 3/3 2/2

Neil Ash 8/8 n/a 4/4 n/a n/a

Ben Guyatt 8/8 n/a 4/4 n/a n/a

Katherine Innes Ker 8/8 4/4 4/4 5/5 2/2

Vince Niblett 7/8 4/4 4/4 5/5 2/2

Martin Sutherland 8/8 4/4 4/4 5/5 2/2

Gina Jardine 8/8 4/4 4/4 5/5 2/2

Aysegul Sabanci

6/6 2/2 2/2 3/3 2/2

1. Justin Atkinson retired from the Board on 20 May 2025.

2. Nigel Lingwood and Aysegul Sabanci joined the Board on 1 April 2025.

KEY

Board

Audit and Risk Committee

Sustainability Committee

Remuneration Committee

Nomination Committee

BOARD SKILLS MATRIX

→ See page 85

Risk Management

Strategy

M&A

Construction Sector

Manufacturing

Finance

Corporate Governance

Commercial

Health & Safety

HR and Talent Development

Sustainability

BOARD DIVERSITY

→ See page 85

GENDER DIVERSITY

62% MALE

38% FEMALE

TENURE NON-EXECUTIVE DIRECTORS

50% 0-3 YEARS

50% 6-9 YEARS

INDEPENDENCE

13% CHAIR

62% IND. NON-EXECUTIVE DIRECTORS

25% EXECUTIVE DIRECTORS

NIGEL LINGWOOD

Chair

Appointment

Nigel Lingwood joined the Boardon 1 April 2025 and was appointed

Chair in May 2025.

Skills, experience and qualifications

Nigel is an experienced FTSE 250 chair and former CFO with extensive

public company experience and wide ranging experience of industrial

businesses. Prior to joining Forterra he was Group Finance Director at

Diploma PLC, where he spent 20 years overseeing significant business

growth. He qualified with Price Waterhouse and has a BSc in

Economics from the University of Hull.

Other Directorships

• Chair of Volution Group Plc

• Senior Independent Director and Audit Chair of Dialight plc

NEIL ASH

Chief Executive Officer

Appointment

Neil Ash was appointed to the Board as Chief Executive Officer

on25April 2023.

Skills, experience and qualifications

Neil has almost three decades’ experience in the buildingmaterials

sector and an impressive track recordof improving performance

anddelivering growth. Previously at Etex, theBelgian lightweight

building materials manufacturer, he led the €2.4bn revenue Building

Performance division. During his time at Etex,Neiloversaw major

capex projects, significant acquisitions, and developed its sales

approach which delivered strong top line growth.

His experience includes 15 years at Lafarge, where heundertook

manyroles, including Vice President International Business

Development and Salesand Commercial Director UK & Ireland

ofLafarge Plasterboard.

Neil has attended executive education programmes atINSEAD

(France) and IMD (Switzerland).

BEN GUYATT

Chief Financial Officer

Appointment

Ben Guyatt was appointed to the Board on 1January 2020 and prior

to this, served as Director of Finance andCompany Secretary.

Skills, experience and qualifications

Prior to his appointment as CFO, Ben held therole of Director of

Finance and Company Secretary, playing akey role in the separation

ofthe business from HeidelbergCement and the subsequent listing on

the London Stock Exchange. Drawing upon his extensive experience

with the business and financial acumen, Benkeeps the Board updated,

enabling informed decision-making. Ben joined Hanson plc in 2006

and held a variety of senior finance and strategy roles within Hanson

andHeidelbergCement. Previously, Ben held financial management

roles at insurance broker, Heath Lambert. Ben is a Chartered

Accountant and holds a Bachelor of Arts degree with honours in

Accounting and Finance from the University of the West ofEngland.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 72

Board of Directors

S S

KEY

Committee membership

Audit and Risk Committee

Sustainability Committee

Remuneration Committee

Nomination Committee Chair

KATHERINE INNES KER

Senior Independent Non-Executive Director

Appointment

Katherine Innes Ker was appointed to the Board on 1September

2017as an Independent Non-Executive Director and wasappointed

asSenior Independent Non-Executive Director in May 2019.

Skills, experience and qualifications

Katherine has gained extensive executive and non-executive

experience across a range of sectors in a career spanning over 30

years. Katherine began her business career as a city financial analyst

and has since held many non-executive directorships with a particular

wealth of experience in the housebuilding sector. Katherine was a Non-

Executive Director of Taylor Woodrow/Taylor Wimpey for 10 years and

subsequently of St Modwen Properties and Vistry Group plc. This

experience allows Katherine to provide valuable insightinto our

markets from a customer perspective. Katherine has over 20 years’

experience as aChair ofRemuneration Committees, and asaSenior

Independent Director. Katherine isa Graduate ofOxford University,

holding a Masters degree in Chemistry and a Doctorate inMolecular

Biophysics.

Other Directorships

• Non-Executive Director at Ground Rents IncomeFund plc

• Senior Independent Director at Stelrad Group plc

VINCE NIBLETT

Independent Non-Executive Director

Appointment

Vince Niblett was appointed to the Board on8February 2019

asanIndependent Non-Executive Director.

Skills, experience and qualifications

Vince was previously a Partner at Deloitte where he held a number of

senior roles including membership of the UK Board of Directors and

Global Managing Director, Audit& Enterprise Risk Services before

retiring in 2015. During his career at Deloitte, he served some of the

firm’s most significant public company clients, working with them on

commercial and strategic issues as well asproviding audit services.

Vince uses his significant financial experience to both guide and

challenge the Board on important decisions as well as offering

adviceon governance and compliance matters. Vince is a Chartered

Accountant and holds a Bachelor of Arts degree in Economics from

Reading University.

Other Directorships

• Non-Executive Director at Big Yellow Group plc

• Non-Executive Director at Target Healthcare REIT plc

MARTIN SUTHERLAND

Independent Non-Executive Director

Appointment

Martin Sutherland was appointed to the Board on23 May 2017

asanIndependent Non-Executive Director.

Skills, experience and qualifications

Martin has over 20 years of international experience at senior

management or director level in technology and manufacturing

businesses, focused on the government and commercial sectors.

Martin was previously CEO of IT security business Reliance ACSN.

Prior to this Martin held the position of CEO at De La Rue plc and

various roles at Detica plc, Andersen Consulting and British Telecom.

Martin brings his experience as aCEO in bothpublic and private

companies to Board discussions on operational and strategic matters,

as well as providing practical advice based on his expertise in the

application of technology. As the Non-Executive Director responsible

for employee engagement, he attends and feeds back from the

Employee Forum. Martin holds a Masters degree in Physics from

Oxford University, and a Masters degree in Remote Sensing from

University College and Imperial College London.

Other Directorships

• Non-Executive Director at XPS Pensions Groupplc

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 73

Board of Directors continued

GINA JARDINE

Independent Non-Executive Director

Appointment

Gina Jardine was appointed to the Board asanIndependent Non-

Executive Director on 3April 2023.

Skills, experience and qualifications

Gina has over 25 years of experience in senior human resources roles

in Australia, Canada and the UK. She has worked in publicly listed and

private organisations across multiple sectors, from building products to

mining, logistics, automotive and telecoms. Previously Gina held the

position of Chief Human Resources Officer at global materials business

CRH plc, and before that held roles atKinross GoldCorp, Rio Tinto

Group, Linfox Logistics, Sensis Pty Ltd and Honda Motor Co Ltd. Her

global experience brings insight and helps guide the Board in the areas

of corporate culture, talent management, organisation design and

safety. Ginaholds a BA in Social Sciences from Monash University

andan MBA from Melbourne Business School.

AYSEGUL SABANCI

Independent Non-Executive Director

Appointment

Aysegul Sabanci was appointed to the Board asanIndependent Non-

Executive Directoron 1April 2025.

Skills, experience and qualifications

Aysegul has extensive international experience across commercial,

procurement and supply chain leadership roles, bringing expertise

insupply chain resilience, enterprise risk management and climate

transition and sustainability across complex industrial and construction

sectors. She most recently served as Group Head of Procurement

andSupply Chain at ISG Ltd and previously held senior commercial

and supply chain leadership roles at SPIE SA, supporting large-scale

infrastructure and engineering projects. Aysegul previously served as a

Non-Executive Director of T Clarke plc and currently serves as aNon-

Executive Director of the Code for Construction Product Information,

supporting stronger standards and transparency across construction

product information. She holds an MBA from Durham University,

anMSc in Innovation, Creativity and Enterprise Management from

Newcastle University and a BSc in Mechanical Engineering from Yildiz

Technical University.

FRANCES TOCK

Company Secretary

Appointment

Frances Tock was permanently appointed tothe position of Company

Secretary on 14December 2023, having previously held theposition

on a temporary basis.

Skills, experience and qualifications

Frances qualified as a Certified Accountant withGrant Thornton and

worked in finance positions across a number of industries including

leisure, renewable energy and ITservices before joining Forterra

in2015. Inher previous role as Group Financial Controller,

Francesplayed a key role inthe separation ofthe business from

HeidelbergCement and the subsequent listing onthe London Stock

Exchange, more recently project-managing theGroup’s IT and

business change projects before taking on the role of Company

Secretary.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 74

Board of Directors continued

NEIL ASH

Chief Executive Officer

– See Neil Ash’s biography on page 72.

BEN GUYATT

Chief Financial Officer

– See Ben Guyatt’s biography on page 72.

MARK DAVIES

Chief Operations Officer

Mark joined the Group in July 2024 and has over 30 years of

manufacturing and business experience. He hasheld senior

manufacturing roles in Tata Steeland more recently, Welsh Water.

Mark holds a Master of Business Administration degree from

WarwickBusiness School anda Bachelor of Science degree

inAppliedMathematics from the University of Reading.

JAMES CORNISH

Group Commercial Director

James joined Forterra in December 2025 and has extensive

commercial and leadership experience, having held senior roles

withTravis Perkins, Samworth Brothers, Tesco, GSK and Premier

Foods. James holds a Bachelor of Science degree in Business

andManagement Studies from The University of Bradford School

ofManagement.

SARAH RENTON

Group People Director

Sarah joined Forterra in February 2025. Prior to joining, Sarah held

senior leadership roles at SIG, LyrecoUK andTJX Europe. Sarah is

amember of the Chartered Institute of Personnel andDevelopment

and has aBachelor ofArts degree in Human Resources from

TeessideUniversity.

NICOLA CHAPMAN

Strategy & Marketing Director

Nicola joined Forterra in May 2024. Prior to joining Forterra, Nicola held

Marketing Director, Head of Market Intelligence andHeadof Products

roles for theEtex Group. Nicola has aBachelors degree in Business

Administration and Management from the University ofBradford.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 75

Executive Committee

1 2

3 4

Dear Shareholder

As Chair of the Company, I am pleased to present the Governance

Report for the year ended 31 December 2025. The Report provides

aninsight into the work and activities of the Board and its Committees

during the year.

Code compliance

The Board operates in accordance with the UK Corporate Governance

Code 2024 (the Code) which was issued by the Financial Reporting

Council and which is available on their website: www.frc.org.uk

We are preparing for the introduction of Provision 29 of the 2024

Corporate Governance Code, which will be applicable for us from

1January 2026. Over the year, we have reviewed our governance

framework and have begun making any adjustments needed to remain

compliant with the requirements of Provision 29. Further detail can be

found in the Audit and Risk Committee Report on pages 88 to 93.

The Board remains committed to the highest standards of corporate

governance, recognising that strong governance is fundamental to the

long-term sustainable success of Forterra.

This Corporate Governance Statement, together with the reports of

theNomination, Audit and Risk, Sustainability and Remuneration

Committees on pages 86 to 123, sets out in detail how the principles

and provisions of the Code have been fulfilled and how the Board and

its Committees have discharged their responsibilities for ensuring

robust governance practices operate across the Group.

2025 Board highlights

During 2025, the Board has continued to demonstrate effective

leadership, accountability and oversight in a year characterised by both

external market uncertainty and meaningful strategic progress across

the Group. The following summarises the areas of specific Board focus

during the year and is not intended to reflect the wide-ranging recurring

responsibilities of the Board.

Board succession planning and recruitment

As part of our ongoing commitment to strong governance and effective

succession planning, the Board oversaw a structured recruitment

process during the year. Following the planned retirement of Justin

Atkinson who served as a Board member for nine years, including six

years as Chair, I was appointed as Chair. I also Chair the Nomination

Committee. The Board extends their thanks to Justin for his long and

valued contribution to the Board and the wider organisation.

To further strengthen the Board’s composition and complement the

skills of existing members, we also appointed Aysegul Sabanci as

anew Independent Non-Executive Director. Aysegul brings valuable

additional expertise and will serve on all Board committees, supporting

robust governance and oversight across the Group.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 76

“The Board continues to place strong

governance at the heart of its long-

term success, and I am pleased to

present this year’s statement, which

outlines Forterra’s adherence to the

Code together with the key activities

undertaken by the Board and its

Committees during the year ended

31December 2025.”

Nigel Lingwood

Chair of the Board and the Nomination Committee

CORPORATE

GOVERNANCE

STATEMENT

After serving for nine years as an Independent Non-Executive Director,

Martin Sutherland will not seek re-election at the forthcoming AGM.

The Board would like to thank Martin for his important contribution

during his tenure and wishes him every success in the future.

Looking ahead, our Senior Independent Non-Executive Director and

Chair of the Remuneration Committee, Katherine Innes Ker, will reach

the ninth anniversary of her appointment during 2026.

To ensure a smooth and well-planned transition of responsibilities,

theNomination Committee has initiated a search process to identify

new Independent Non-Executive Directors, ensuring the Board

continues to retain the right balance of skills, experience,

independence and diversity.

Strategic investment

The Board has continued to oversee and support the Group’s strategic

progress, both in strengthening our core operations and advancing

opportunities beyond our core. During the year, the Board monitored

the successful milestone at Desford, where both kilns are now

operating simultaneously for the first time, and supported the

recommissioning of the Wilnecote factory following its redevelopment

enabling the expansion of our product range and our re-established

presence in the commercial and specification markets. The Board has

also overseen the launch of the innovative Omnia extruded brick-slip

range at our Accrington facility.

Health and safety culture

The Board remains fully committed to fostering a strong and proactive

health and safety culture across the business. Throughout the year,

theBoard continued to engage closely with management on health

and safety performance and initiatives, and demonstrated its support

for the Company’s behavioural safety programme by completing the

Visible Felt Leadership (VFL) training. All Board members have now

undertaken the training and have utilised these skills in undertaking

twofactory health and safety walks in the year. Inaddition, the Board

completed three factory visits as a group during theyear, reinforcing

theBoard’s collective leadership role in promoting safe behaviours

andembedding safety as a core value throughout the organisation.

Vision, values and culture

The Board received regular updates of the Group’s progress towards

achieving its goals and the embedding of its vision, mission, purpose

and values.

To monitor the success of our culture within the business andensure

compliance with the Code, Martin Sutherland hascontinued as the

Non-Executive Director responsible for employee engagement,

attending meetings of the Employee Forum and reporting back to the

Board following each meeting. The Forum meets quarterly at different

locations to discuss subject matters raised by our colleagues to their

Forum constituency representative including culture, operational and

commercial performance, customer feedback, health and safety and

mental health awareness.

In addition, Board members undertake regular health and safety walks,

as well as Board site visits across thebusiness. Each of these occasions

provides Board members with opportunity for one-to-one engagement

with the workforce.

Board members also take the opportunity to attend and participate in

health and safety related events including Building Safety Together (BST)

meetings at factories.

The Board further strengthened its engagement with the wider

leadership team, enabling meaningful relationship building and early

involvement in the development of key initiatives.

Corporate governance

The Board has ensured that, through the work of the Audit and Risk

Committee, it has continued to be fully appraised of the Group’s

response to the new requirements of the UK Corporate Governance

Code 2024.

During the year the Remuneration Committee liaised closely with major

shareholders in proposing a new remuneration policy to be adopted at

the forthcoming Annual General Meeting in May 2026. Further details

of the new Remuneration Policy can be found in the Remuneration

Committee report on pages 96 to 123.

The Board commissioned a Failure to Prevent Fraud review, initiating a

programme of workshops to assess the business’s risk under the new

regulations and ensure appropriate processes are in place to mitigate

those risks where possible.

Sustainability

Sustainability progress during the year is laid out in our comprehensive

Sustainability Report included on pages 32 to61. This Report includes

the conclusions from the Corporate Sustainability Reporting Directive

aligned Double Materiality Assessment and details of the Company’s

new health, safety and wellbeing strategy ‘Base to Brilliant’.

Board effectiveness

We monitor Board effectiveness in accordance with the requirements

ofthe Code and conducted an internally facilitated review during the

year. More information about this process islaid out on page 84.

Diversity

The Board remains committed to furthering all aspects of diversity

throughout the organisation and additional information is included

within this Corporate Governance Statement on page 85.

Board priorities for 2026

In 2026 the Board expects to focus upon the following

non-recurring priorities.

Response to market conditions

The Board will continue to closely monitor the Group’s key markets

and maintain oversight of management’s actions in response to

evolving conditions. Given the ongoing uncertainty in the external

environment, the Board remains focused on ensuring that appropriate

measures are taken so the Group is well positioned to respond swiftly

and effectively to changes in demand.

Induction

Following the ongoing recruitment process, the Board and the

Company Secretary will work closely with management to ensure that

all newly appointed Non-Executive Directors receive a personalised

and comprehensive induction programme. This will be tailored to their

individual experience and background, and will include visits to key

sites, meetings with members of the Executive Committee and senior

management, as well as a full briefing on the Group’s governance

framework and policies, enabling them to contribute effectively from

the outset.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 77

Corporate Governance Statement continued

Corporate Governance Code 2024

Following adoption of the Corporate Governance Code 2024, the

Board will continue to work closely with management, via the Audit and

Risk Committee, to progress the Group’s strategy to formally document

and test key controls ahead of changes to Provision 29 of the

Corporate Governance Code which takes effect from 1 January 2026.

Capitalinvestment programme

Having overseen the completion of c.£140m of capital investment

overa six-year period, capital expenditure is likely to be lower over the

coming years. The Board will continue to support selective strategic

investments, including completion of a £1.5m brick cutting facility at our

Measham site, as well as overseeing important maintenance capital

expenditure to ensure the most efficient running of our existing facilities.

Nigel Lingwood

Chair of the Board and the Nomination Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 78

Corporate Governance Statement continued

The Code focuses on the application of principles and

supporting provisions that emphasise the value of good

corporate governance to long-termsustainable success.

Therelationship between companies, shareholders and

stakeholders is critical to this, asisa focus on culture through

alignment of purpose, strategy, integrity and diversity.

Certain provisions of the Code do not apply to smaller

companies defined as those, like Forterra plc, outside of the

FTSE 250. The Board is, however, committed to sustaining

the higher standards of corporate governance and the

application of these principles, provisions and outcomes

achieved are disclosed in the Annual Report as required for

companies in the equity shares (commercial companies)

category. The Board confirms that throughout the year ended

31December 2025, and as at the date of this report, the

Company has complied with all relevant provisions set out

inthe Code.

THE KEY COMPONENTS OF THE CODE ARE:

1. Board leadership and purpose

Led by an experienced Chair (succeeding the outgoing Chair),

supported bya decisive and diverse Board with a broad

range ofexperience setting the values, culture and purpose

which are embedded across thebusiness.

Engagement with shareholders and stakeholders enables the

Board to understand their views and promote the long-term

sustainable success of the Company, generating value for

shareholders and contributing to wider society, particularly

regarding sustainability and our roadmap to netzero.

2. Division of responsibilities

The Board has an appropriate mix of Executive andNon-

Executive Directors for balanced decision-making, with

clearlines of communication to receive accurate and timely

information to make informed decisions.

There is a clear division of responsibilities between the

leadership of the Board and the executive leadership of the

business, and the Non-Executive Directors have sufficient

time to meet their Board responsibilities.

3. Composition, succession and evaluation

The Board and its Committees have a combination of skills,

experience and knowledge to discharge their duties, and

undergo an annual evaluation as to their effectiveness.

Succession planning remains high on the agenda forthe

Nomination Committee whilst acknowledging the increased

need to promote diversity of gender, social and ethnic

backgrounds and how effectively members worktogether

toachieve objectives.

4. Audit, risk and internal controls

The Board has a structured oversight of the internal and

external audit function through the establishment of the Audit

and Risk Committee. Inaddition, the Committee monitors

theCompany’s risk register with a focus on emerging risks.

Thework of the Audit andRisk Committees iscovered in

more detail from page 88.

5. Remuneration

The Remuneration Committee aligns executive remuneration

to the Company’s purpose and values by setting clear

objectives, which are linkedwith thesuccessful delivery of

thelong-term strategy, including environmental, social and

governance (ESG) factors. This is covered in more detailon

pages 96 to 123. TheCommittee also has thediscretion to

override formulaic outcomes to remuneration calculations.

The Remuneration Committee has retained remuneration

advisors, Willis Tower Watson, who areindependent of both

the Company and theindividual Directors, to assist the

Committee inmaking informed remuneration decisions.

COMPLIANCE WITH THE UK GOVERNANCE CODE 2024

Board Committees

The Board operates four Committees towhich it delegates

responsibility: theAudit and Risk Committee, Nomination Committee,

Remuneration Committee and Sustainability Committee. Each of these

Committees provides a report within the Governance section of this

Annual Report, detailing information asto their responsibilities, activities

inthe past year and future priorities. The terms of reference of each

ofthese Committees are each reviewed on an annual basis. TheBoard

believes each of the Committees has the necessary skills and

resources to fulfil its brief and each of the Committees has access to

appropriate legal and professional advice where necessary.

Chair

The Chair, Nigel Lingwood, leads the Board and is responsible for its

overall effectiveness. The Chair sets theBoard’s agenda, encourages

theDirectors to contribute openly todebate and ensures the Directors

receive accurate, timely andclear information via the Company

Secretary to stimulate this debate.

CEO

The CEO, Neil Ash, isresponsible fortheday-to-day management

ofthe Group, including embedding the purpose, values and strategic

objectives established by theBoard.

CFO

The CFO, Ben Guyatt is responsible for theGroup’s financial matters,

supports the CEO in the achievement ofthe Group’s strategic

objectives and manages the relationships with investors, lenders

andresearch analysts.

Executive Committee

The Executive Committee, which currently comprises six senior

managers including the two Executive Directors, has been established

to support the CEO inhismanagement of the business and

inexercising the authorities delegated tohim by the Board.

Membership of the Executive Committee along with biographies

isdetailed on page 75.

Senior Independent Non-Executive Director

In the Senior Independent Non-Executive Director role, Katherine Innes

Ker provides a sounding board for the Chair, serves asan intermediary

for the other Directors and meets the other Independent Non-Executive

Directors without the Chairpresent to appraise theChair’s performance.

The Senior Independent Director is available to shareholders

iftheywish to meet to discuss any matters related to theGroup.

Company Secretary

Frances Tock, in her role as Company Secretary, works closely with

and supports the Chair, and the Chairs ofthe Board Committees

insetting agendas and planning meetings, ensuring efficient distribution

of thecomplete, accurate and timely information necessary tofacilitate

Board and Committee discussion. Shealso advises the Boardand

management on all matters relating tocorporate governance and is

responsible for the management oftheAGM.

Independent Non-Executive Directors

Independent Non-Executive Directors arenot involved in the day-to-

day running of the business and as such are able to provide an

external perspective alongside sound judgement and objectivity.

Non-Executive Directors receive a fixed level ofremuneration for their

services and donot benefit from variable remuneration based on

Group performance. Given thesize of the Group and its Board, it is

thought appropriate and beneficial that each Non-Executive Director

sits on each Committee. This better allows the Non-Executive Directors

to effectively fulfil their responsibilities in providing constructive

challenge, strategic guidance, specialist advice and holding Executive

Directors toaccount for both the Group’s and theirown personal

performance. All Non-Executive Directors have the required time to

devote to Forterra with the Chairregularly keeping this under review.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 79

Division of Responsibilities

THE BOARD

Provides high level oversight and supports strategy setting

NOMINATION COMMITTEE

Oversees the composition of the Board

andCommittees, considering succession planning,

balance of skills and experience anddiversity in

making recommendations to the Board.

→ See page 86

AUDIT AND RISK COMMITTEE

Oversees the Group’s corporate financial reporting,

the internal control system, risk management and

the relationship with both the external auditor and

the outsourced Internal Audit function.

→ See page 88

SUSTAINABILITY COMMITTEE

Review and monitor theCompany’s attitude

andapproach to ESG matters andrisks, andensure

compliance with related reporting requirements.

→ See page 94

REMUNERATION COMMITTEE

Responsibility for recommending overall

Remuneration Policy and thesetting of executive

andsenior management remuneration.

→ See page 96

EXECUTIVE COMMITTEE

Responsible for day-to-day management of the business

INDEPENDENCE OF THE BOARD

The Company recognises the importance of its Non-Executive

Directors remaining independent throughout their appointment,

asitenables them to provide objective advice and guidance to

theExecutive Directors and senior management.

In considering the independence of each Non-Executive Director,

theBoard has taken into consideration the guidance provided

bytheCode, and as such, considers all Non-Executive Directors

tobeindependent in accordance with Provision 10 ofsuch Code.

Summary of matters reserved for the Board

The Board has a formal schedule of matters reserved for its decision

which is reviewed annually to ensure it remains appropriate and which

is summarised below:

• Approval of the Group’s long-term objectives and strategy;

• Approval of the Group’s business plans, operating and

capitalbudgets;

• Approval of the Group’s sustainability targets and reporting;

• Approval of the annual and interim accounts;

• Changes in the Group’s capital or financing structure;

• Approval of significant transactions including acquisitions

anddisposals;

• Approval of the dividend policy and any changes thereto;

• Ensuring the maintenance of a sound system of internal control and

risk management;

• Carry out an assessment of the Group’s emerging and principal risks;

• Board appointments;

• Succession planning and setting terms of reference for

BoardCommittees;

• Approval of the Remuneration Policy and remuneration arrangements

for the Executive Directors and senior management; and

• Creation, ongoing assessment and monitoring of Company culture.

Time commitments

The Board acknowledges the importance of directors having enough

time to perform effectively. After reviewing their external commitments,

it concluded each Director has sufficient time for the Company. Their

contributions to Board discussions reflect the time spent on Forterra

matters outside of meetings, and they are often available for

unscheduled activities as needed.

Conflicts of interest

Directors have a statutory duty to avoid situations in which they may

have interests which conflict with those of the Company. The Board

has adopted procedures as provided for in the Company’s Articles of

Association for considering and if appropriate, authorising any potential

conflicts of interest and forthe consideration of, and if appropriate,

authorisation of newsituations which may arise.

The Company maintains a conflict register which is reviewed periodically.

Currently the only situations authorised and listed on the register are

the Directors holding directorships and other similar appointments in

companies or organisations notconnected with the Company where

no conflict of interest has been identified.

Board meetings

It is the intention of the Board to meet on at least eight occasions

ayear. In 2025 the Board met on eight scheduled occasions.

Standing items on the Board agenda include the CEO report covering

health & safety, market conditions, competitor activity and progress

onmajor projects; a CFO report covering financial performance;

areview of investor-related activity; and the Company Secretary’s

report outlining regulatory updates.

The Directors regularly communicate and exchange information

regardless of the timing of meetings and should the need arise,

ameeting of the Directors can be convened at short notice. Inaddition

to the scheduled meetings, the Board also held anumber of updates

and briefings by video conference during theyear.

There were four meetings of the Audit and Risk Committee, four of the

Sustainability Committee, five meetings oftheRemuneration Committee

and two of the Nomination Committee during the year under review.

The table below only includes attendance where each Director attended

as a member. The Chair, CEO and CFOalso attended certain Committee

meetings, or parts thereof, as invitees.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 80

Division of Responsibilities continued

Attendance B A S R N

Justin Atkinson

4/4 n/a 2/2 2/2 0/0

Nigel Lingwood

6/6 n/a 2/2 3/3 2/2

Neil Ash 8/8 n/a 4/4 n/a n/a

Ben Guyatt 8/8 n/a 4/4 n/a n/a

Katherine Innes Ker 8/8 4/4 4/4 5/5 2/2

Vince Niblett 7/8 4/4 4/4 5/5 2/2

Martin Sutherland 8/8 4/4 4/4 5/5 2/2

Gina Jardine 8/8 4/4 4/4 5/5 2/2

Aysegul Sabanci

6/6 2/2 2/2 3/3 2/2

1. Justin Atkinson retired from the Board on 20 May 2025.

2. Nigel Lingwood and Aysegul Sabanci joined the Board on 1 April 2025.

KEY

Board

Audit and Risk Committee

Sustainability Committee

Remuneration Committee

Nomination Committee

Engagement: Oversaw externally facilitated

investor perception audit, ensuring shareholders

were appropriately engaged through a structured

feedback process.

Links: A, B, C, D, E, F

Review: Internal evaluation during the year to

assess Board and Committees' effectiveness

withthe findings used to support continuous

improvement in governance practices.

Links: A, B, C, D, E, F

Review: Defined and approved new capital

allocation priorities.

Links: A, B, C, D, E, F

Approval: Group’s annual operating and capital

budgets ensuring appropriate oversightof financial

planning and resourceallocation.

Links: A, B, C, D, E

Deep Dive: The newly appointed Chair and NED

received a comprehensive, tailored induction

covering regulatory obligations, the share dealing

code, site visits, management and auditor meetings

and shareholder introductions.

Links: A, B, C, D, E, F

Review: Group’s strategy, exploring future growth

options beyond the current model and agreeing

clear objectives.

Links: A, B, C, D, F

Approval: Approved PSP performance measures

and targets for the forthcoming awardcycle.

Links: A, B, C, D, E, F

Deep Dive: A Provision 29 workshop to deepen

itsunderstanding of the new internal controls

requirements and to align on the documentation

and testing approach needed for future compliance.

Links: A, B, C, D, E, F

Approval: Interim Results Announcement.

Links: A, F

Review: The Board reviewed the business’s first

Net Promoter Score survey, marking the introduction

of a new measure of customer experience and loyalty.

Links:

Engagement: Formal shareholder consultation on

the proposed revisions to the Remuneration Policy,

engaging directly with key investors togather

feedback ahead of finalising the updated policy.

Links:

A, E, F

Approval: Year-end results announcement and

theAnnual Report, ensuring that the financial and

narrative disclosures presented a fair, balanced

andunderstandable summary of the Group’s

performance for the year.

Links: A, B, C, D, E, F

Approval: Final dividend, confirming the dividend

amount and associated disclosures following its

review of the year-end financial position.

Links: A, F

Deep dive: Failure to Prevent Fraud review,

initiating a programme of workshops to assess

thebusiness’s risk under the new regulations

andensure reasonable processes are in place

tomitigate the risks where possible.

Links: A, B, C, D, E, F

Approval: Approved a £1.5m capital investment

inbrick slip cutting capability.

Links: A, B, C, D, E, F

Engagement: All Directors stood for re-election

except Justin Atkinson, who retired after nine

years; Nigel Lingwood was appointed Chair

andAysegul Sabanci joined as an NED.

Links: A, B, C, D, E, F

Review: The annual HearMe employee survey

results, noting a significant uplift in engagement and

improved scores, while recognising that recognition

and employee voice remain priority areas.

Links: B

Approval: The interim dividend, following a

reviewof interim performance and available

distribution options.

Links: A, F

Operations: Supported launch of Sustainable

Operational Excellence (SOE) programme.

Links: A, B, C, D, E, F

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 81

Board Activities and Decisions

JANUARY MARCH APRIL MAY JULY SEPTEMBER OCTOBER DECEMBER

KEY

Stakeholders

Section 172 factors

Shareholders Suppliers Customers Employees Communities

A Long-term consequences

B Employees

C Business relationships

D Community and environment

E Business conduct

F Members of the Company

Promoting long-term sustainable success

TheBoard is responsible for successfully leading the Group in

delivering long-term sustainable value to shareholders and formaking

apositive contribution to wider society. The Board establishes the

Company’s purpose, values and strategic objectives and ensures that

sufficient financial and human resources are in place for the Group to

meet its objectives. TheBoard ensures that a framework of effective

controls are inplace to enable risk to be assessed and managed.

Monitoring culture

The Board ensures that the Group’s culture aligns with the Company’s

purpose, values and strategy and that Directors lead by example in

promoting the right culture.

Our corporate values, being the principles of behaviour that will allow

us to achieve our strategic goals, are defined below and following the

refresh in 2024, the Board has continued throughout 2025 to oversee

and support management’s progress in embedding these values

across the organisation, ensuring they are reflected in day-to-day

behaviours and decision-making.

• Innovate to lead: We’re empowered to continuously improve;

• Pride in excellence: We relish achievement and success; and

• Collaborate and care: We work in partnership and look after

eachother.

The Board monitors culture through feedback from the Employee

Forum, discussions with employees during site visitsand evaluation

ofemployee survey results.

Stakeholder engagement

Board members engage with stakeholders directly to ensure that the

Group is meeting its responsibilities towards them. This engagement

with stakeholders allows any matters of concern tobe raised and

addressed by the Board. Stakeholders not only include shareholders

but our workforce (many of whom are also shareholders), lenders,

suppliers, customers and the communities in which we operate.

In performing their duties under S172(1) of the Companies Act 2006,

the Directors give careful consideration to any concerns which the

Group’s key stakeholders may have, and how these matters are

factored into decisions and proposals requiring Board approval.

Shareholder engagement

The CEO and CFO meet regularly with major shareholders and work

together with the joint corporate brokers to ensure there is effective

communication with shareholders on matters including business

performance, strategy and sustainability.

As part of the Group’s investor relations programme, meetings with

major shareholders are scheduled to discuss the Group’s interim and

full-year results. The brokers obtain feedback from these meetings

andthis is considered by the Board, allowing allBoard members to

gain a better appreciation of shareholder views and expectations.

FTI Consulting conducted an interview-based audit of its investor base,

providing the Board with independent insights to support its ongoing

oversight of shareholder engagement.

Factory tours are provided for major institutional shareholders

whoexpress an interest in visiting our facilities.

Engaging with employees

Engagement with our employees is an area which we have continued

to develop throughout the year, enabled directly viathe Employee

Forum which met four times in 2025. Martin Sutherland is the Non-

Executive Director designated with responsibility for understanding the

views of the workforce, heattends meetings of the Employee Forum

inthis capacity andhas built a rapport with the forum over his tenure.

The CEO undertook a roadshow of town hall talks at each of the

Group’s facilities and the CEO supported by other members of the

management team has continued topresent regular podcasts to

keepemployees updated on theGroup’s progress.

We completed our latest Gallup employee engagement survey in 2025,

achieving an 85% participation rate, another record high for the Group.

This strong level of engagement provides a robust and representative

view of employee sentiment and confidence in the actions taken to

date. The results demonstrated clear progress, with the engagement

mean increasing to 3.83, ahead of our anticipated trajectory.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 82

Board Leadership and Company Purpose

Details of how the Group engages with all of its stakeholders are shown on pages 23 and 24 alongside the Directors’ statement

inrelation to their statutory duty in accordance with S172(1) of the Companies Act, however engagement specifically at Board level

isdetailed in the below table:

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 83

Board Leadership and Company Purpose continued

Attendance Subject Board engagement

Employees Health, safety andwellbeing

Culture, equality anddiversity

Talentdevelopment

Board members undertake regular health and safety walks, as well as full Board site visits across thebusiness.

EachoftheseoccasionsprovidesBoardmembers with opportunity for one-to-one engagement with the workforce.

Board members also take the opportunity to attend and participate in health and safety related events including training

coursesandBuildingSafetyTogether (BST) meetings at factories.

Non-Executive Director Martin Sutherland attends the Employee Forum meeting up to four timesper year.

Defining culture and leading from the top is core to the Board’s activities.

The Board considers the results of employee engagement surveys.

The Board meets with senior managers at Board meetings and workshops and working dinners including anannual dinner

withhighpotential employees.

Customers Customer service andsatisfaction

New product development

The Executive Directors regularly meet with customers.

An annual corporate event is held where Non-Executive Directors meet with key customers.

Net Promoter Score (NPS) surveys are carried out to gauge customer satisfaction and gather actionable feedback.

Suppliers Sustainable and ethicalsourcing

Maintaining supply chainsecurity

Sustainability is a key focus for the Board and delivering against the challenging targets set in2020 remains a priority.

Scope3emissions are becominganarea of increased focus which willprompt additional supplier engagement.

The Executive Directors regularly meet with key suppliers with a focus on health, safety and wellbeing and on occasion,

itmaybeappropriate forotherBoard members to meet with keysuppliers.

Community Being a good neighbour Delivering against the sustainability targets approved by the Board will improve the environment we live in.

Shareholders

and Lenders

Group performance

ESG matters

Strategy

Executive Directors, along with the Chair and Senior Independent Director, regularly meet withlarge shareholders.

ExecutiveDirectorsregularlymeetwithlenders.

Our full Sustainability Report is included within this Annual Report on pages 32 to 61.

BOARDEVALUATION

Following the externally facilitated Board effectiveness review in 2024,

and in line with our established three-year review cycle, the Board

undertook a comprehensive internal evaluation of its own performance

and that of its Committees during 2025. This process drew on the

findings and development areas identified in the prior external review,

with progress against those recommendations monitored throughout

the year.

Their findings were summarised in a report to the Chair and then

presented at a meeting of the Board. The review confirmed the Board

continues to operate effectively with strong leadership, constructive

challenge and a positive culture.

The review identified further opportunities to improve Board

effectiveness including:

• Enhance strategic focus and sharpen agenda prioritisation to ensure

time is directed to the most material issues;

• Continue to strengthen succession planning to further diversify Board

and senior leadership competencies, ensuring the recruitment and

development of high-calibre leaders capable of supporting the

Group’s strategic ambitions; and

• Strengthen KPI reporting and expand the use of dashboards to

provide clearer, more timely and more transparent performance

tracking.

An action plan is being developed and progress will be reviewed

duringthe year.

Notwithstanding these actions, theBoard can conclude that

itscomposition and that of its Committees is appropriate, procedures

in place are effective, responsibilities are clearly divided, and that the

Directors have the skills, experience, independence and knowledge

toallow theBoard and its Committees to successfully and effectively

discharge theirduties.

During the year the Senior Independent Non-Executive Director met

the other Non-Executive Directors without the Chair being present; and

the Chair met at least once with each Director on aone-to-one basis.

These meetings allowed a full discussion ofeach Board member’s

contribution, any feedback from the Board evaluation process and

afocus on personal development.

Appointment and re-election of Directors

The Company’s Articles of Association contain certain powers of

removal, appointment, election and re-election of Directors and provide

that each Director should retire at the Annual General Meeting if they

had been a Director at each of the two preceding Annual General

Meetings and are not re-appointed bythe Company in the general

meeting or since such meeting. Aretiring Director shall be eligible for

re-appointment. In practice it is intended that all Executive and Non-

Executive Directors willretire and put themselves forward for re-

election annually ateach Annual General Meeting and as such all

Directors will stand for re-election at the 2026 Annual General Meeting

with the exception of Martin Sutherland who, after nine years as an

Independent Non-Executive Director, will not seek re-election.

On appointment, Board members disclose their other commitments

and agree to allocate sufficient time as necessary to the Company in

order to discharge their duties effectively. The current disclosable

external commitments of the Board areshown on pages 72 to 74. Any

conflicts of interest are dealt with in accordance with the Board’s

conflict procedures, however this situation has not arisen this year.

Induction

A structured induction programme is in place to ensure new Directors

are quickly integrated into the Board and given the necessary insight

and information to allow them to quickly become effective. The

induction programme includes:

• Meetings with the Directors, Company Secretary, membersofthe

Executive Committee and other members ofmanagement;

• Guided visits to the Group’s manufacturing facilities;

• Meetings with external advisors including corporate brokers, auditors

and remuneration consultants as appropriate; and

• Being given access to historic Board papers and minutes.

BOARD DIVERSITY

The Board is committed to furthering diversity at all levels. The Board

acknowledges the recommendations of the Hampton-Alexander

Review which recommends that at least 33% of the Board should be

female. In addition, the Board recognises that the Financial Conduct

Authority (FCA) Listing Rules targets for atleast 40% of the Board to be

female, at least one senior member of the Board to be a woman and at

least one member of the Board to be from a non-white ethnic minority

background.

At present 38% of the Board are female and one of the senior Board

members is a woman. Diversity covers many facets other than gender

andrace. The Board has astrong balance of diverse skills, knowledge,

experience, upbringing and education.

Forterra has made strong progress toward the Hampton-Alexander

Review target, which calls for women to make up at least 33%

ofsenior management roles (defined as the Executive Committee

andtheir direct reports). Female representation at this level has risen

to27%, up from 18% the previous year. This marks a notable

improvement and reflects Forterra’s growing commitment to diversity

across the organisation.

Gender diversity is a wider issue within our industry. Presently only

12% of our employees are female with many of our roles, especially

those which are factory based, traditionally being lesspopular with

women, and we remain committed to further improvement of our

diversity statistics.

The Company does not presently track statistics of ethnicity below

Executive Committee level.

Internalcontrols and risk management

The Board acknowledges its responsibility under Principle O ofthe

Code for establishing procedures to manage risk, oversee the internal

control framework and determine the nature and extent of the principal

risks it is willing to take to achieve its long-term strategic objectives.

In order to allow the Board to discharge its obligations, theBoard has,

either directly or through the Audit and Risk Committee, reviewed the

operation of the risk management andcontrol systems for the Group

throughout the year. Inaddition to the work undertaken to review

opportunities todevelop, strengthen and improve the effectiveness

ofthe Group’s risk management and internal control systems ahead

ofchanges to the 2024 UK Corporate Governance Code, the Audit

and Risk Committee reviewed a management prepared paper which

outlined the effectiveness of the risk management and internal control

systems within the Group, along with any areas for improvement

identified. In conducting this work, theAudit and Risk Committee

actson behalf of the Board, andits activities remain the responsibility

of the Board.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 84

Board Composition, Succession, Evaluation and Risk

The Board confirms that:

• There is an ongoing process for identifying, evaluating andmanaging

the principal risks faced by the Group;

• The systems have been in place for the year under review andup

tothe date of the approval of the Annual Report andAccounts;

• They are regularly reviewed by the Board along with the Auditand

Risk Committee where appropriate; and

• The systems accord with the Financial Reporting Council (FRC)

guidance on risk management, internal control andrelated financial

business reporting.

The key risks faced by the Group together with their potential impact

and mitigating actions are laid out in the Risk Management section of

the Strategic Report on pages62 to 68.

Directors’ and Officers’ insurance

The Company maintains Directors’ and Officers’ liability insurance

policies to cover against legal proceedings taken against its Directors

and Officers acting in their capacity as such. The Company has also

granted indemnities to its Directors to theextent permitted by the law

inrespect of liabilities incurred asa result of their office. Neither the

insurance cover or the indemnities would provide any coverage in the

event that aDirector is proven to have acted fraudulently ordishonestly.

Share dealing code

The Company has adopted a code of securities dealing in relation

tothe Ordinary Shares which is based on, and is at leastas rigorous

as, the Model Code as previously published inthe Listing Rules.

Thecode adopted applies to the Directors and other relevant

employees ofthe Group.

Approved by the Board and signed on its behalf by:

Nigel Lingwood

Chair of the Board and the Nomination Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 85

Board Composition, Succession, Evaluation and Risk continued

Board and Executive Committee reporting on ethnic background

No. of

Board members % of the Board

No. of senior

positions on

the Board

No. in the Executive

Committee (inc.

Company Secretary)

% of the Executive

Committee

Male

5 62% 3 4 57%

Female

3 38% 1 3 43%

Total

8 100% 4 7 100%

White British or other White

8 100% 4 7 100%

Asian/Asian British

– – – – –

Black/Black British

– – – – –

Other ethnic group, including Arab

– – – – –

Mixed/multiple ethnic groups

– – – – –

Not specified/prefer not to say

– – – – –

Total

8 100% 4 7 100%

Provides a practical understanding

ofrisk management in a listed

organisation.

2 Experience of developing and

implementing successful strategy

inlarge corporations.

3 Experience of mergers, acquisitions,

disposals and investing.

4 Senior Executive experience in the

construction and housebuilding

industry, with in-depth knowledge

ofmarkets, strategy, operational

issues and regulatory concerns.

5 Senior executive experience in a large

manufacturing organisation.

6 Able to support the oversight of our

financial statements and strategy

andfinancial reporting to investors

and other stakeholders.

BOARD SKILLS MATRIX

1 Risk Management

2 Strategy

3 M&A

4 Construction Sector

5 Manufacturing

6 Finance

7 Corporate Governance

8 Commercial

9 Health & Safety

10 HR and Talent Development

11 Sustainability

7 Experience on the Board of a major

listed corporation subject to vigorous

corporate governance standards.

8 Experience of developing and leading

commercial strategy in a large

corporation.

9 Experience related to workplace health

and safety at an executive level.

Experience in overseeing the

management and development

oflabour and human resource at

alargecorporation.

Experience in overseeing

environmental compliance and

overseeing responsible, long-term

value creation.

DearShareholder

I am pleased to present the report of the Nomination Committee

(theCommittee) for 2025. The content below describes the main

responsibilities of the Committee. I chair Nomination Committee

meetings but would not participate in meetings when the Committee

isdealing with my own position as Chair.

RESPONSIBILITIES

The principal responsibilities of the Committee are as follows:

• To regularly review the structure, size and composition

(includingtheskills, knowledge, experience and diversity) ofthe

Board and to make recommendations to the Board withregard

toany changes;

• To plan for succession for both Executive and Non-Executive

Boardroles along with senior management positions; to identify

andrecommend to the Board for approval candidates to fill Board

andseniormanagement vacancies asthey arise; and

• To make recommendations to the Board in respect of

theperformance of Directors standing for election or

re-election in advance of the Annual General Meeting.

The full responsibilities of the Committee are set out in its terms

ofreference which are available on the Company’s website.

The terms of reference are approved by the Board and are reviewed

annually to ensure they remain appropriate.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 86

“As the newly appointed Chair of

the Nomination Committee, I am

pleased to present my first report,

set against an important phase

ofBoard renewal as we oversee

the recruitment of new

Non-Executive Directors in line

with our succession strategy.”

NOMINATION

COMMITTEE

REPORT

MEMBERSHIP

The members of the Nomination Committee are appointed

bytheBoard. As at 31 December 2025 members ofthe

Committee were asfollows:

Nigel Lingwood (Chair) Katherine Innes Ker

Martin Sutherland Vince Niblett

Gina Jardine Aysegul Sabanci

Nigel Lingwood

Chair of the Nomination Committee

Activities during the year

The Committee has at least one standing meeting a year. There were

two scheduled meetings in 2025 and an additional meeting held during

the year to support the Non-Executive Director search process.

Board appointments

The Committee adopts a formal and transparent procedure for the

appointment of new Directors to the Board.

During the year, the Committee oversaw a number of important

succession-related developments.

As previously disclosed, the Committee undertook a selection process

to appoint executive search agencies to assist with the identifying

andsubsequent recruitment of a new Chair and Independent Non-

Executive Director.

In February 2025 we announced the appointment of Nigel Lingwood

asChair designate, with effect from 1 April 2025. He was subsequently

appointed Chair following the Annual General Meeting in May 2025.

InMarch 2025, the Company announced the appointment of Aysegul

Sabanci as Non-Executive Director, also effective from 1 April 2025.

After nine years of valued service as an Independent Non-Executive

Director, Martin Sutherland confirmed that he will not seek re-election

at the forthcoming AGM. The Board has expressed its appreciation for

his significant contribution and extends its best wishes for the future.

The Committee also considered the longer-term composition of the

Board. Our Senior Independent Director and Chair of the

Remuneration Committee, Katherine Innes Ker, will reach the ninth

anniversary of her appointment during 2026.

In preparation for these planned changes, the Committee has initiated

a structured search for new Independent Non-Executive Directors,

ensuring continuity of experience and maintaining an appropriate

balance of skills, independence and diversity across the Board.

Executive performance and succession planning

The Board undertook a structured review of Executive Team

performance during the year, evaluating leadership effectiveness,

capability and readiness to support the Group’s long-term strategy.

Supported by the newly appointed Group People Director, the

Committee also conducted a detailed assessment of high-performing

talent across the business. This formed an important part of our wider

succession-planning work, ensuring we maintain a strong, diverse and

sustainable leadership pipeline and can identify individuals with the

potential to progress into critical roles over the medium to long-term.

Priorities for 2026

Board succession planning will continue to be a significant focus area

for the Committee throughout 2026. Ensuring continuity of leadership

remains essential to maintaining the Board’s effectiveness, particularly

as we prepare for planned Non-Executive Director transitions over the

coming years. The successful completion of the current recruitment

process, together with the thorough onboarding and integration of

thetwo new Independent Non-Executive Directors, will be critical in

sustaining the right balance of skills, experience, independence and

diversity. This work forms an integral part of our broader succession

planning framework, supporting long-term Board resilience and

ensuring that governance remains robust and future-ready.

Executive skills and succession planning

A key role of the Committee is ensuring the effectiveness of theBoard

and its ability to deliver long-term success for the business. Included

inthis is the continual review of the skills, experience, independence

and knowledge required to ensure the right individuals are in place

tosupport the Company’s continued progression and effective

implementation of the Group’s strategy. See the Board Skills Matrix

onpage 71.

As described above, the executive succession plan is monitored by

theCommittee, alongside the development initiatives to identify and

nurture future leaders of the business.

Diversity and equality

The Group has an Equality and Diversity Policy and is committed to

encouraging diversity across the business at all levels and tobeing

inclusive. The percentage of females on the Board is 38% and one

ofour senior Board members isawoman.

Approved by the Board and signed on its behalf by:

Nigel Lingwood

Chair of the Nomination Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 87

Nomination Committee Report continued

Dear Shareholder

I am pleased to present the Audit and Risk Committee Report,

whichsetsout how the Audit and Risk Committee (the Committee)

hasdischarged its responsibilities during the year and provides

anunderstanding of work done to provide assurance over the

integrityof the Annual Report and Accounts for the year ended

31December 2025.

RESPONSIBILITIES

The principal responsibilities of the Committee are as follows:

Financial reporting

• Monitor the integrity of the Financial Statements, interim report,

andany other announcements relating to the Group’s financial

performance or position;

• Review significant estimates and judgements disclosed within

theFinancial Statements and how each was addressed;

• Review and challenge where necessary the consistency of,

andanychanges to, significant accounting policies; and

• Review the Annual Report and Accounts and provide assurance

tothe Board that they present a fair, balanced and understandable

assessment of the Group’s position and prospects.

External audit

• Review the effectiveness and independence of the external auditors,

negotiate and agree their remuneration and make recommendations

to the Board in respect of their appointment.

Internal audit

• Review and approve the Group’s internal audit plan and monitor

progress against it; and

• Determine the structure and operating model of the Group’s Internal

Audit function and evaluate its effectiveness.

Risk management and internal control

• Define and keep under review the Group’s appetite for risk;

• Review the effectiveness of risk management processes

indetermining whether risks are being identified, evaluated,

monitored and managed appropriately;

• Review the Group risk register and consider its appropriateness and

completeness, along with the appropriateness of the mitigating

actions being taken;

• Consider emerging risks which have the potential to impact

thebusiness;

• Keep under review the adequacy and effectiveness ofthe Group’s

internal financial control and risk management systems;

• Monitor the effectiveness of the Group’s procedures on whistleblowing,

anti-bribery, corruption and anti-money laundering; and

• Review modelling and analysis used to support the going concern

assessment and long-term viability of the Group.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 88

“Efforts in our response to

requirements under Provision 29 of

the 2024 Corporate Governance Code

have shifted towards ensuring

consistency of approach and the

development of a proportionate

andeffective testing methodology.”

AUDIT AND RISK

COMMITTEE

REPORT

MEMBERSHIP

The members of the Audit and Risk Committee are appointed

bytheBoard. As at 31 December 2025 members ofthe

Committee were asfollows:

Vince Niblett (Chair) Katherine Innes Ker

Martin Sutherland Gina Jardine

Aysegul Sabanci

Vince Niblett

Chair of the Audit and Risk Committee

The full responsibilities of the Committee are set out in its terms

ofreference which are available on the Company’s website. Theterms

of reference of the Audit and Risk Committee are approved bythe

Board and are reviewed annually to ensure they remain appropriate.

Meetings

During 2025 the Committee formally met on four occasions. Inaddition

to the members of the Committee, other members ofthe Board and

senior management, including the CEO, CFO, Group Financial Controller,

Head of Corporate Finance and Investor Relations and both the External

and Internal Auditor, were invited to, and attended, each meeting of the

Committee in2025. The Company Secretary provided secretarial services

tothe Committee and attended meetings in this capacity.

In addition to the scheduled meetings, the Committee Chair meets

regularly with the CFO, Group Financial Controller, theInternal Audit

function and External Auditor, providing additional opportunity for open

dialogue and feedback.

Key activities and highlights during the financial reportingcycle

During the year under review and to the date of this Annual Report

theagenda items and principal activities of the Committee are

outlinedbelow.

Financial reporting

• Review of the Group’s annual and interim Financial Statements and

preliminary results’ announcements, including accounting policies

and compliance with accounting standards;

• Review of significant financial reporting issues and matters of

judgement within the Financial Statements (further details can be

found on pages 90 and 91;

• Review and approval of the viability statement, including the

scenarios modelled and assumptions made within;

• Review and approval of the going concern statement for the Group,

and recommendation to the Board that the Directors can justifiably

state that they have a reasonable expectation that the Group will

beable to continue in operation and meet its liabilities in the period

toJune 2027;

• Review of the Annual Report and Accounts and advice to the

Boardon whether, taken as a whole, these are fair, balanced

andunderstandable and provide the information necessary

forshareholders to assess the Group’s financial position and

performance, business model and strategy; and

• Consideration and challenge of the Group’s use of alternative

performance measures (APMs) and their appropriateness within

theAnnual Report and Accounts.

External audit

• In accordance with regulatory requirements, the Audit and Risk

Committee oversaw and completed the mandatory external audit

tender, resulting in a recommendation to the Board that Deloitte

beappointed incoming External Auditor for the period ending

31December 2026. This recommendation was endorsed by the

Board (further detailed on page 93);

• Consideration of the 2025 external audit plan includingthe scope

ofaudit work and approval of the auditfee for both audit and non-

audit services;

• Review and approval of reports presented by the External Auditor

following the half year review and year-end audit;

• Consideration of the annual letter to those charged with governance

and other reports prepared by the External Auditor; and

• Receipt of updates from the External Auditor on published changes

to the Corporate Governance Code, in particular Provision 29,

andunderstanding of theimplications this mayhave for the Group

and Committee going forward.

Internal audit

• Monitoring of progress against the approved 2025 internal audit

programme and review of reports prepared by the Internal Audit

function;

• Setting of the 2026 internal audit programme;

• Monitoring of the Group’s fully outsourced Internal Audit function,

andreviewing the performance of PwC as outsourced provider;

• Review of the audit reports prepared by the Internal Audit function

with subsequent oversight of the implementation ofrecommended

improvements; and

• Receipt of updates from the Internal Auditor on published changes

tothe Corporate Governance Code, in particular Provision 29,

andunderstanding of theimplications this has for the Group and

Committee going forward.

Risk management and internal control

• Review and challenge of the Group Risk Register as presented

bymanagement, with developments monitored through the year;

• Review of emerging risks for the Group at each Audit andRisk

Committee, using risk heat maps to monitor risk likelihood and

impact. Challenge to management on actionsand monitoring;

• Review and approval of external disclosures in relation to

riskmanagement and internal controls, primarily principal

riskdisclosures;

• Receipt of regular updates from management on the progress ofthe

Group’s strategy to formally document and test key controls ahead

ofchanges proposed in the 2024 Corporate Governance Code,

specifically those relating to risk and internal control management,

asdue to take effect for all periods from 1 January 2026 onwards.

Further detail on thisisprovided on page 92 of this Committee

report; and

• Receipt of a report detailing the risk and internal control systems

operating in the business and their effectiveness, along with areas for

improvement to support the proposed changes outlined in the 2024

Corporate Governance code.

Other

• Receipt of compliance updates from the Company Secretary

inrelation to whistleblowing.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 89

Audit and Risk Committee Report continued

Significant financial reporting risks and judgement

areasconsidered

The Committee, in carrying out its responsibilities, is required to

assesswhether suitable accounting policies have been adopted and

consistently applied in the preparation of the Financial Statements.

The Committee considers the following to be the most significant

financial reporting matters based on their potential effect on the

Group’s Financial Statements. During the year and to the date of this

report, the Committee has reviewed and challenged papers prepared

by management, confirming these remain appropriate for the Group

and relevant in the approval of the Financial Statements for the year

ended 31 December 2025.

Revenue recognition

The Group recognises revenue on a point in time basis when

performance obligations are met, which is usually on delivery tothe

customer, but may vary by product and under different agreements.

Inaddition to this, a number of contracts contain volume driven rebate

mechanisms.

Committee action

The Committee reviewed and reaffirmed its understanding of the

Group’s policy for recognising revenue and recording rebate

obligations, noting that the underlying accounting policy remained

consistent with prior periods.

Through discussions with management, the Committee challenged the

basis for key assumptions, including the identification of performance

obligations, the evidence supporting transfer of control, and the

completeness and valuation of rebate accruals. The Committee also

reviewed the External Auditor’s findings from their substantive testing,

analytical procedures and data-driven audit work. The Committee

concluded that the Group’s assessment of the point at which control

transfers to the customer has been appropriately assessed and

applied, and was satisfied that the Group has robust systems, controls

and processes in place to support the accurate and consistent

recognition of revenue.

Restoration and decommissioning provisions

The Group recognises provisions for restoration and decommissioning

obligations based on a combination of third-party specialist assessments

and management’s judgement regarding the scope, timing and cost of

future activities.

Committee action

The Committee reviewed the work undertaken by management to

ensure the completeness and accuracy of provisions for restoration

and decommissioning. This included consideration of the use of

independent third-party experts and management’s assessment of key

assumptions such as discount rates, expected timing of restoration

activities and the useful economic lives of relevantassets.

The Committee also received and considered the External Auditor’s

report, which covered the procedures performed to assess the

appropriateness of discount rates, useful lives, management’s

underlying data, and the scope of third-party specialists engaged

bythe Group. The Committee discussed with the External Auditor

thedegree of estimation uncertainty inherent in long-term

decommissioning obligations and the sensitivity of the provision

tochanges in key assumptions.

This process enabled the Committee to challenge and understand

thebasis, methodology and judgements applied in determining the

provisions as at 31 December 2025, and to confirm that the Group’s

policy has been applied consistently. The Committee was satisfied

thatappropriate systems, internal controls and oversight mechanisms

are inplace to ensure that restoration and decommissioning

provisionsarereasonable, supportable and accurately reflected

intheFinancial Statements.

Inventory valuation and provisioning

Inventory carrying value in the Financial Statements is stated after

recognising inventory provisions, with particular reference to the

judgemental nature of the obsolescence and capping provisions.

These provisions usepast sales data, with manual adjustments as

determined necessary (an example of this being new product ranges)

to calculate a provision at the balance sheet date. These judgements

require management to evaluate the likely saleability, ageing profile

andexpected net realisable value of certain finished goods, taking

intoaccount current market conditions and commercial expectations.

Committee action

The Committee reviewed management’s assessment of the valuation

of finished goods inventory, including the methodologies and

assumptions applied in determining obsolescence and capping

provisions. Particular attention was given to the impact of current

economic conditions, changes in customer demand patterns and

thepotential effects on stock utilisation and saleability.

The Committee also considered the work performed by the External

Auditor in this area. This included attendance at stock counts,

procedures to assess the accuracy of recorded inventory quantities,

sample testing and an evaluation of the reasonableness of both the

model and the management adjustments within.

Based on the information presented, the Committee concurred

withmanagement’s assessment that there are appropriate policies,

systems and controls in place to ensure the carrying value of the

Group’s inventories is accurately stated.

Impairment

The Group holds significant assets in the form of brands, land and

buildings, and plant and machinery. At both the interim and year-end

reporting dates, these assets were assessed for indicators of

impairment. Management carried out a structured review of potential

impairment triggers and, where indicators were identified, performed

detailed assessments for the relevant cash-generating units (CGUs).

These assessments used either value-in-use calculations or estimates

of fair value less costs of disposal, as appropriate at a CGU level, and

required judgement in areas such as long-term cash flow forecasts,

discount rates and growth assumptions.

In 2025 management has proposed impairments to both the Bison

Bespoke Precast (£1.3m) and Formpave (£2.7m) factories, reflecting

the cessation of operations at these two sites. These impairments,

covering property, plant and equipment, right-of-use assets and

inventories have been recorded as exceptional items in the year.

Further details can be found within note 8 to the Consolidated

FinancialStatements.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 90

Audit and Risk Committee Report continued

Committee action

The Committee reviewed management’s impairment assessments,

including the identification of impairment indicators and the selection of

CGUs requiring detailed review. These assessments included the key

assumptions used in the value-in-use and fair value models, including

forecast cash flows, discount rates and long-term growth rates.

The Committee also evaluated the proposed impairments relating to

the Formpave and Bison Bespoke Precast factories, which reflect the

cessation of operations at these sites. This included reviewing the

basis for impairing property, plant and equipment, right-of-use assets

and inventories, and ensuring the classification of these charges as

exceptional items was appropriate.

In addition, the Committee considered the External Auditor’s findings,

including their procedures over the impairment models, assessment

ofkey assumptions and review of the evidence supporting the

impairments.

Based on the information and assurance received, the Committee

wassatisfied that the impairment reviews had been conducted

appropriately, that the judgements applied were reasonable, and

thatthe resulting impairments were correctly reflected in the

FinancialStatements.

Alternative performance measures (APM): exceptional items

Exceptional items have historically been disclosed separately inthe

Financial Statements where management believes it is necessary

toshow an APM in presenting the financial results ofthe Group.

Management assesses the nature, size and incidence of itemswhen

judging what should be disclosed separately.

In the current year, management has considered restructuring costs

associated with the exit of the two non-core businesses, Formpave

and Bison Bespoke Precast, to be exceptional in nature and has

presented these are such. Full details can be found within note 8

totheConsolidated Financial Statements.

Committee action

The Committee reviewed the rationale for classifying the restructuring

costs associated with the exit of the Formpave and Bison Bespoke

Precast businesses as exceptional items. This included assessing

thenature, size and non-recurring characteristics of the costs, and

considering whether separate disclosure would provide users of the

Financial Statements with a clearer understanding of the Group’s

underlying performance. In addition, the Committee considered the

External Auditor’s procedures in this area, including its assessment of

the appropriateness of the exceptional classification and the evidence

supporting the costs recognised.

Based on these discussions and the assurances received, the

Committee was satisfied that the items presented as exceptional

intheyear have been appropriately identified, consistently applied,

andclearly disclosed in the Financial Statements.

Alternative performance measure (APM): adjusting items

In addition to exceptional items, as in the prior year the Group is

disclosing certain adjusting items separately within the Annual Report

and Accounts. This has led to the presentation of ‘adjusted’ results,

which are presented before both exceptional and adjusting items.

Management believes the presentation ofthis APM is beneficial

andnecessary in allowing users of the accounts to understand the

performance of the Group.

In the current year, the Group has presented thebelow as adjusting items:

• The realised gain recognised within the Statement of Total

Comprehensive Income for the sale of excess energy in2025, where

committed volume exceeded actual consumption by the Group,

totalling £1.2m; and

• The impact of fair value accounting for forward energy contracts held,

whereby committed future volume is expected, as at 31 December

2025, to exceed total consumption by the Group. For these future

contracts, the Group can no longer apply the own use exemption

under IFRS 9 and instead recognise these as derivatives held at

fairvalue on the balance sheet at 31 December 2025.

Committee action

The Committee assessed the categories of items proposed for inclusion

as adjusting items and considered their appropriateness. In doing so the

Committee sought views fromthe External Auditor as to the use of

adjusted results withinthe Annual Report and Accounts. Upon conclusion

of thisreview, the Committee concurred with management’s analysis of

proposed items and their disclosure as an APM.

Alternative performance measure: accounting for carbon credits

Under the UK Emissions Trading Scheme, the Group receives an

annual allocation of free carbon credits, which are used to satisfy a

portion of the Group’s carbon emissions liability as incurred over the

compliance period, which falls in line with the accounting period of the

Group. These are recorded at nil value within the Financial Statements.

As this allocation is less than the total carbon compliance liability

incurred by the Group over the compliance period, additional carbon

credits are purchased to satisfy the shortfall.

The liability for the shortfall is measured, up to the level of credits

purchased, at the cost of the purchased credits. Where the liability to

surrender carbon credits exceeds the carbon allowances purchased,

the shortfall is measured at the prevailing market price andremeasured

at the reporting date. The Group’s free allocation ofcarbon credits is

based on expected emissions over the full compliance period, which is

in line with the Group’s financial year. Assuch, management believes

this operationally aligned method for measurement recognises these

free allowances over the full financial year using a weighted average

basis, aligned proportionately with the production which drives carbon

emissions, in line with management reporting. This weighted average

basis is presented as an APM in the interim financial statements.

The interim statutory results showed carbon credits as being utilised

ona first in, first out basis, fully utilising the Group’s freeallocation

ofcarbon credits before recognising any liability to purchase further

credits. The above differing treatments only affect the interim results for

the Group and have no impact on thefull-year Financial Statements.

Committee action

The Committee received updates from management and the External

Auditor on the appropriateness of the Group’s accounting policy for

the treatment of carbon credits, including the measurement basis

applied at both the interim and year-end reporting dates. The

Committee reviewed and discussed the relevant accounting standards

underpinning the policy and considered management’s rationale for

disclosing a weighted-average measurement basis as an APM within

the interim Financial Statements.

The Committee also sought the External Auditor’s views on the

suitability, transparency and consistency of the APM presentation

andthe supporting reconciliations provided by management.

Following its review, the Committee concluded that the disclosure

continued to offer users additional clarity over performance and that

the reconciliations and supporting explanations were sufficiently

detailed and appropriately prominent within the Financial Statements.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 91

Audit and Risk Committee Report continued

Risk management and internal controls

Throughout the year and to the date of this Annual Report, the risk

considering completeness, likelihood and impact of risks, along with

controls and actions in place to mitigate risks. Emerging and principal

risks for the Group (as described in the Strategic Report on pages 62

to 68) are reviewed regularly and the full risk register is presented to the

Board at least annually.

During 2025, the Committee received regular updates on emerging and

evolving risks, with continued focus on the risks surrounding, and

subsequent responses to, current market conditions. Risks deemed as

emerging in 2025 included an evolving market and how we as a business

respond. The Committee considered the likely implications and potential

mitigations of each risk and reviewed the Group’s overall approach to

determining risk appetite, which was formally approved in January 2026.

The Committee continues to review emerging risks alongside the

Group’s principal risks to provide assurance that all risks continue to

be afforded proper attention.

Further information regarding the risks faced by the Group is included

in the Strategic Report on pages 62 to 68.

Internal audit

The Internal Audit function exists to provide the Board and

management with independent assurance that internal controls

andrisk management processes are both appropriate and

operatingeffectively.

The Group operates an outsourced Internal Audit function which is

supported by the Company Secretary and members of the senior

finance team. The Committee believes this operating model provides

the Group with a wide pool of external experience and specialist skill

sets to deliver the most effective and responsive solution, alongside

strong internal business support provided internally.

The Internal Audit function operates to an agreed 12-month audit

programme which is set by the Committee after considering

recommendations from the outsourced Head of Internal Audit as well

as senior management. Internal audit programmes are designed

following an assessment of risk andmateriality. The Committee retains

the ability to bring in independent specialists to assist with audit work

where more specialist knowledge and understanding is required.

During 2025 and to the date of this report the Internal Audit function

performed work covering areas including: Corporate governance code

preparedness, assessment of cyber security maturity, along with the

scoping for an IT disaster recovery audit and planned reviews of the

Groups business continuity plans.

The outcomes of those that have reached completion were presented

tothe Audit and Risk Committee ahead of approval of the Financial

Statements for the yearended 31 December 2025. These set out

anycontrol weaknesses identified as well as management’s actions

toaddress control recommendations. A report on the status of open

management actions was presented by the Internal Audit function

ateach meeting of the Committee during 2025 and challenged

asnecessary.

Overall the Internal Audit function operated effectively and contributed

strongly to the Group’s overall governance framework.

The Chair of the Audit and Risk Committee regularly met with the

Internal Audit function during the year and the function had confidential

access to the Chair of the Committee as required.

Committee experience and competence

Provision 24 of the revised Code requires that the Board shouldsatisfy

itself that at least one member of the Audit and Risk Committee has

recent and relevant financial experience. The Committee asa whole

shall have competence relevant to the sector in which it operates.

The Board has concluded that Vince Niblett meets the recent and

relevant financial experience requirement. Vince Niblett waspreviously

Partner at international professional services firm,Deloitte, where he

held a number of senior roles including membership of the UK Board

ofDirectors and Global Managing Director, Audit & Enterprise Risk

Services before retiring in 2015. Vince is a Chartered Accountant

andalso a Non-Executive Director and Chair of the Audit Committee

atBigYellow Group plc and Target Healthcare REIT plc.

The Board also considers the wider Committee to have the required

competence, skills and experience, and that it is operating effectively

and is providing robust challenge to the Executive Directors and the

wider business.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 92

Audit and Risk Committee Report continued

STRATEGIC RESPONSE TO THE REVISIONS TO

THEUK CORPORATE GOVERNANCE CODE

COVERING RISK MANAGEMENT AND INTERNAL

CONTROL EFFECTIVENESS

During the year, supported by the Internal Audit function and

an established working group of senior management, the

Committee has continued to oversee the Group’s response

to the revised UK Corporate Governance Code and the

evolving expectations arising from the Government’s

programme on audit and corporate governance reform.

Inparticular, the Committee has focused on the practical

implementation of the requirements under Provision 29, and

the implications these place on the Board and the Committee.

Following the revisions to the Corporate Governance Code

published by the FRC in January 2024, the Group has made

significant progress in strengthening its approach to risk

management and internal control. The working group has

now reached a well-developed position on the identification

of material risks and the associated material controls,

informed by guidance from Internal Audit and external

advisers. The focus has therefore shifted from design to

execution, with current activity centred on ensuring robust

documentation, consistency of approach and the

development of a proportionate and effective testing

methodology.

Internal Audit has continued to provide regular input

throughout this phase of the programme, offering challenge

and insight as the control framework has been refined and as

plans for testing have been developed. A clear roadmap to

the Group’s first Provision 29 declaration is now in place,

setting out the key milestones required to support Board

assessment and disclosure. Design effectiveness testing is

scheduled across 2026 to ensure that controls are fit for

purpose, and by Q3 the Committee expects to have a clear

view of the proposed disclosure approach.

The Committee has received regular updates on progress

during the year and will continue to oversee the further

embedding, documentation and testing of the Group’s

material controls, as the Group moves towards full compliance

with the 2024 UK Corporate Governance Code in 2026,

alongside any further policy or legislative developments.

Fair, balanced and understandable

At the request of the Board, the Audit and Risk Committee has

considered whether the 2025 Annual Report and Accounts is fair,

balanced and understandable and whether it provides the necessary

information forthe Group’s shareholders to assess the Group’s

position, performance, business model and strategy.

As part of its review the Committee considered:

• The messaging and balance of key disclosures in the StrategicReport;

• Presentation of APMs, including the balance between statutory and

non-statutory measures;

• Advice from external professional advisors on complex matters

whereappropriate;

• Reviews performed by senior management over the Annual Report

and Accounts;

• Disclosures related to the Group’s sustainability objectives, aswell

asclimate risk and opportunities; and

• Consistency of reporting within the Annual Report and Accounts,

including disclosure of judgements and estimates.

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 Accounts is fair,

balanced and understandable.

Viability statement and going concern

Ahead of the publication of the full-year financial results for 2025, the

Committee undertook a detailed review of the prospects of the Group

to ensure ongoing viability. A viability statement was prepared which

carefully considered possible adverse scenarios resulting from continued

economic uncertainties, against a budgeted base case. This was used to

support a recommendation to the Board that the Directors can justifiably

state that they have a reasonable expectation that the Group willbe

able to continue in operation and meet its liabilities to theend of 2028.

The viability statement is included in the risk management and key risks

section of the Strategic Report.

The Committee also reviewed and challenged the going concern

statement included in the Directors’ Report, along with the underlying

assessment prepared to support this statement.

External audit

In accordance with the regulatory requirement to conduct an external

audit tender at least every 10 years, the Committee undertook a

competitive tender process during the year for the statutory audit for

the financial year ending 31 December 2026. The Committee approved

the tender participants, scope, timetable and evaluation criteria,

ensuring the process was consistent with the FRC’s Audit Committees

and the External Audit: Minimum Standard.

The tender was open to all eligible audit firms. Participating firms,

including the incumbent auditor (Ernst & Young), were given access

toa comprehensive data room providing detailed information on the

structure and operations of the Group. This was supplemented by a

factory site visit and meetings with senior management, the Chair of

the Board and the Chair of the Audit Committee to support the firms’

understanding of the business. In parallel, each firm completed an

independence assessment for the proposed audit period.

The second phase of the process focused on the proposed approach

of each audit firm, including the structure of the audit team, proposed

use of data analytics and digital audit tools, and how the firms intended

to address the more complex areas of the audit. The Committee

reviewed written proposals, held detailed presentation sessions, and

assessed the firms against a range of criteria, including audit quality,

sector experience, independence, robustness of challenge, and the

resourcing and depth of the engagement team.

Upon completion of this process, the Committee concluded that

Deloitte best met the Group’s requirements in delivering a high-quality,

independent and effective audit. The Committee therefore recommended

to the Board that Deloitte be appointed as External Auditor. The Board

endorsed this recommendation, and Deloitte will be proposed for

appointment by shareholders at the 2026 AGM. A transition plan has

begun in early 2026, with Deloitte attending key meetings in relation

tothe 2025 audit to ensure an effective handover from the incumbent

auditor, Ernst & Young.

Going forward, in line with regulatory expectations, the Committee

anticipates that the statutory audit will be tendered at least every

10years to support ongoing audit quality, independence and value

forshareholders.

Non-audit services policy

The Group’s non-audit services policy restricts the External Auditor

from performing certain non-audit services in accordance with the

Revised Ethical Standard 2024. It is the policy of the Company that

theonly non-audit services provided by the external auditor should

bethe review of the Group’s interim financial statements. Any further

non-audit services require the specific approval of the Committee.

The amounts paid to Ernst & Young for non-audit services during

theyear are disclosed in note 5 of the Financial Statements. Non-audit

services provided in the year were in respect of the review of the

Group’s interim financial statements and results announcement.

Ernst&Young also has its own policies and procedures in place

toensure it maintains its independence andobjectivity and regularly

reports to the Committee on its independence.

Whistleblowing, fraud and the Bribery Act

The Board has reviewed and approved the Group’s policies and

procedures covering whistleblowing, anti-bribery and corruption

including the controls in place to detect fraud and to ensure

compliance with both competition and anti-bribery legislation.

TheGroup maintains a zero-tolerance approach to breaches

ofthislegislation and certain employees incommercial roles,

selectedusingarisk-based approach, are provided with dedicated

training andguidance appropriate to their roles.

The Group operates a MySafeWorkplace anonymous incident reporting

system, allowing employees to report any wrongdoing or concerns

with confidentiality assured. There were no concerns notified to the

Group that required the attention of the Committee during the year

andup to the date of this report.

Approved by the Board and signed on its behalf by:

Vince Niblett

Chair of the Audit and Risk Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 93

Audit and Risk Committee Report continued

DearShareholder

I am pleased to present the report of the Sustainability Committee

(theCommittee) for 2025. The purpose of the Committee is to guide

the business towards successful long-term sustainability, overseeing

the effective management ofrisksand opportunities across areas

ofenvironmental, socialand governance.

RESPONSIBILITIES

The role of the Committee is to review and monitor the Company’s

attitude and approach to sustainability matters and risks and ensure

compliance with sustainability reporting requirements under relevant

frameworks. As part of this it is responsible forthe review and

monitoring of health and safety policy and performance, along with

theprocess for compliance with applicable laws, regulations and

ethical codes of practice.

The principal responsibilities of the Committee are as follows:

• Oversee the Group’s sustainability policies;

• Review of the health and safety policy, considering whether it

complies with legislation and best practice, and recommend

improvements as appropriate;

• Define the level of the Group’s ambitions with regards to reducing

environmental impact and addressing climate-related risk;

• Set challenging environmental targets and monitor progress

againstthese;

• Monitor the Group’s compliance with the requirements ofTCFD

andother reporting protocols as appropriate;

• Ensure that the Group’s sustainability policy satisfies its desired

outcomes and monitors achievement against the targets set; and

• Implement changes in the health and safety policy as necessary.

The Committee’s full terms of reference are available on the

Company’s website.

The terms of reference of the Sustainability Committee are

approvedby the Board and are reviewed annually to ensure

theyremain appropriate.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 94

“Our commitment to health and

safety is unwavering, and the

Committee takes clear

responsibility for driving this

agenda forward across the Group.”

SUSTAINABILITY

COMMITTEE

REPORT

MEMBERSHIP

The members of the Sustainability Committee are appointed

bytheBoard. As at 31 December 2025 members ofthe

Committee were asfollows:

Gina Jardine (Chair) Nigel Lingwood

Neil Ash Ben Guyatt

Katherine Innes Ker Vince Niblett

Martin Sutherland

Aysegul Sabanci

Gina Jardine

Chair of the Sustainability Committee

Meetings

During the year under review, the Committee held four meetings.

Inaddition to the Committee members, other members of the

management team with responsibilities covering health andsafety,

sustainability, commercial and operations regularly attended and

actively contributed tothe meetings.

Activities during the year

During the year under review and to the date of this Annual Report

theagenda items and principal activities of the Committee are

outlinedbelow.

Health and safety strategy

Health and safety remains our number one priority as a Group and

accordingly continued to be an area of significant focus for the

Committee during the year.

2025 was the first year of our new health, safety and wellbeing

strategy, Base to Brilliant. The strategy is intended to move the

business beyond legal compliance and defines expectations to achieve

our interdependent safety culture goal. It is set in three parts (bronze,

silver, gold), so the steps of the journey are structured, clear and follow

a pathway of continuous improvement. The Committee has been

regularly updated on progress in this area as each site has been

assessed against bronze requirements to establish an initial baseline,

working to then achieve the criteria going forwards.

The Committee has continued to demonstrate the Board’s

commitment towards Visible Felt Leadership (VFL) as all Board

members have now undertaken the training and have utilised these

skills in undertaking two factory health and safety walks in the year.

Whilst the Group’s Lost Time Incident Frequency Rate (LTIFR) in

2025showed significant improvement, the Committee has remained

involved in ensuring the recent high standards of Health and Safety

would be maintained when future capacity was increased. A number

of‘deep dive’ incident reviews were presented to the Committee

across the year, giving the Committee the opportunity to both

understand incidents that have occurred and challenge the proposed

learning and improvement actions.

Decarbonisation

Reducing our carbon emissions is a core focus for the Group, with

theultimate ambition of reaching netzero by 2050, ourmedium-term

priority is to deliver a significant reduction inour emissions by 2030.

The Committee continues to play a key role in the Group’s

decarbonisation activities, receiving regular updates as to performance

against key carbon reduction targets and helping to shape the Group’s

Climate Transition Plan.

During the year, the Group took the opportunity to seek stakeholder

views as part of a Double Materiality Assessment process, and the

Committee was kept regularly apprised of progress throughout the

exercise. In addition, a number of Committee members including the

Committee Chair and CFO participated in the stakeholder interview

process, providing direct input and oversight at a key stage of the

assessment. Having been finalised in early 2026, conclusions from the

assessment will be reviewed by the Committee and utilised in strategic

decisions and target setting going forwards.

Decarbonisation activities in the year focused at product level, as

detailed below, however the Committee was kept updated with

developments in the Group’s longer-term activities around hydrogen

usage and carbon capture. These updates looked at supply and

transport with significant progress being made with the East Coast

Hydrogen pipeline project, which could connect to one of our facilities

in the early 2030s, as well as opportunities for on-site production

underthe Government’s hydrogen production business model. The

Committee were also presented with potential longer-term options

around Carbon capture, reviewing an opportunity to install a small

scale pilot plant on one of our sites to determine if new technology

inthis field would be suitable for the relatively low carbon dioxide

concentrations found in brick factory emissions.

Product innovation

The Committee received updates regarding the Group’s ongoing

workto reduce raw material usage and support housebuilders in their

decarbonisation efforts recognising their focus on embodied carbon

per m

of façade.

On this basis, the Committee also reviewed the metrics through

whichGroup emissions are measured and agreed that intensity per m

shouldbe included within our reporting going forwards, allowing this

tobe measured on an ongoing basis and aligning how we think about

emissions to how our customers look at this.

The Committee continues to challenge and guide the Group’s innovation

strategy acknowledging that continued investment inproduct

development and innovation iscritical to our future success.

Focus for 2026

The Committee’s focus in 2026 will remain in the governance ofthe

Group’s sustainability strategy, with health and safety, decarbonisation

and the Group’s wider sustainability targets atits core.

Having taken the opportunity to seek stakeholder views through

ourdouble materiality assessment in 2025, 2026 will offer a key

opportunity tobuild on this and set targets to replace those that

haveconcluded in2025.

Approved by the Board and signed on its behalf by:

Gina Jardine

Chair of the Sustainability Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 95

Sustainability Committee Report continued

RESPONSIBILITIES

The principal responsibilities of the Committee are as follows:

• Design and implement Remuneration Policy and practices

oftheCompany to support strategy and promote long-term

sustainablesuccess;

• Ensure executive remuneration is aligned to Company purpose and

values and linked to delivery of the Company’s long-term strategy;

• Ensure the engagement and independence of external remuneration

advisors; and

• Review workforce remuneration and related policies and the

alignment of incentives and rewards with culture.

The full responsibilities of the Committee are set out inits terms of

reference which are available on the Company’s website.

The terms of reference are approved by the Board and are reviewed

annually to ensure they remain appropriate.

Dear Shareholder

I am pleased to present, on behalf of the Board, the 2025 Directors’

Remuneration Report (Report).

The Group aims to attract and retain talented people to deliver

sustainably high levels of performance, ensuring the ongoing success

ofthe Group. Our Remuneration Policy (Policy) aligns the Group’s

strategic goals with the pay and incentives of Executive Directors,

senior management, employees, and with the long-term interests

ofour shareholders. Alongside this, the Policy is designed to create

anenvironment of achievement and delivery, with appropriate reward

forgood performance and for behaviours which support the culture

promoted throughout the Group, without incentivising the taking

ofunnecessary risks, and is designed to be both transparent and

understandable.

The current Remuneration Policy was approved by shareholders at

the2023 AGM, and received 98.14% of the votes cast in favour.

The Policy has reached the end of its three-year term and a new

Policyis now being presented for approval by our shareholders at the

2026AGM. A major focus of the Committee over the course of 2025

has been to undertake a detailed review of the Policy to ensure that

itcontinues to effectively support Forterra’s strategy and culture.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 96

“On behalf of the Board, I am pleased

topresent our Directors’ Remuneration

Report for the financial year ended

31December 2025. The Report explains

how the Remuneration Committee has

applied the Directors’ Remuneration

Policy during the year and outlines

proposed changes to thePolicy

whichwill be submitted forshareholder

approval at the Company’s 2026

AnnualGeneral Meeting.”

REMUNERATION

COMMITTEE

REPORT

MEMBERSHIP

The members of the Remuneration Committee during the year

andas at 31 December 2025 were as follows:

Katherine Innes Ker (Chair) Nigel Lingwood

Martin Sutherland Vince Niblett

Gina Jardine Aysegul Sabanci

Katherine Innes Ker

Chair of the Remuneration Committee

This review was informed by principles of good governance, current

market practice, and included an investor consultation exercise.

Forterra’s business context, the cyclical nature of our industry,

opportunities for growth arising from market recovery, continued

enhanced and more efficient production capacity, and the

development of new products to broaden our market reach were

alltaken into consideration. A key objective is to ensure that the

remuneration arrangements and incentives support the Board’s

objective to motivate and retain the current leadership team. While

some aspects of the Policy continue to work well in this regard,

theCommittee has concluded that some changes to our incentive

arrangements will be important in supporting the Board’s strategy

andExecutive Management retention.

Full details of the changes proposed are set out within this Report.

Trading performance

Notwithstanding only a modest improvement in market conditions, we

have returned a strong financial performance in 2025. Group revenue

increased by 12.1% to £386.0m (2024: £344.3m) outperforming the

wider market, driven by increased sales volumes, with our brick market

share returning to historical levels. Adjusted EBITDA was £61.6m (2024:

£52.0m) with adjusted profit beforetax increasing 62.9%, from £22.1m

to £36.0m. The Group delivered another solid adjusted operating cash

flow in theyear of £68.7m (2024: £60.1m)

Adjusted earnings per share increased by 65.8% to 12.6p (2024:

7.6p). Net debt excluding leases was £55.7m, a reduction of £29.2m

(2024: £84.9m). Having reduced our net debt, with leverage now

around 1 times Adjusted EBITDA, we are now able to provide greater

clarity on our capital allocation priorities looking forward, which will

include additional returns to shareholders in the form of share buybacks.

Strategic progress

During the year we made good progress in Strengthening our Core.

Atour Desford brick factory, both kilns ran simultaneously for the first

time, increasing production output and efficiency. Redevelopment of

our Wilnecote factory is nearing completion, and commissioning of an

enhanced product range is underway. This will enable us to regain and

grow our position in the commercial and specification markets. Beyond

the Core, we successfully launched our Omnia extruded brick slip

range atAccrington. Combined with the Omnia mechanically fixed

façade system, these products position us to increase our share of

thegrowing façade market and ensure brick remains a relevant and

attractive choice for multi-family and high-rise developments.

Remuneration in context

In making decisions in relation to the Executive Directors’ remuneration

outcomes for 2025, the Committee has taken into account key measures

of the Group’s performance as well as the experience of wider

stakeholders as outlined within this Report.

Employees

We are committed to the provision of an inclusive working environment

and ensuring fair reward for all employees, regardless of seniority

across the business. In addition to the Executive Directors and senior

management, the Committee considers wider workforce remuneration

and conditions.

The Committee also continued its commitment to encouraging

employee share ownership by approving the offer and subsequent

grant of share options under the Forterra Sharesave Plan. There was

continued uptake of this offer from employees, with over half of our

workforce continuing to save in this way.

In line with established protocols, wages and salaries were reviewed

atthe beginning of 2025 with an increase of 3% awarded to salaried

and hourly paid employees from January 2025.

During the year, management met with representatives from the

Employee Forum on a quarterly basis, with discussion topics including

employee reward amongst many others.

Shareholders

We remain in close contact with major shareholders, with the Executive

Directors regularly meeting shareholders to discuss business

performance, strategy, capital allocation, sustainability and other

matters. Discussion in 2025 centred upon market conditions, our

balance sheet and capital allocation, as we successfully reduced

ourindebtedness.

The Chair of the Board is always available to discuss matters with

major shareholders and held a number of meetings during the year.

Ahead of proposing the amendments to our Remuneration Policy,

Iwrote to major shareholders seeking feedback on proposed

amendments. We have acted upon the feedback received, details

ofwhich can be found within thisReport.

2025 salary and fees

The base salaries of the Chief Executive Officer, Neil Ash; Chief

Financial Officer, Ben Guyatt; the Chair’s fee; and the Non-Executive

Directors’ base fee were all increased by 2.75% from January 2025.

2025 annual bonus

Reflecting the fulfilment of personal objectives and Company

performance, the 2025 annual bonus will be paid in March 2026.

The adjusted profit before tax (PBT) of £36.0m exceeds the maximum

threshold of £32.5m and will result in the Executive Directors receiving

100% of their maximum profit-related bonus entitlement.

The maximum and minimum thresholds were set by the Committee

inearly 2025 and reflected the Board’s expectations at the time for the

Group’s 2025 performance, recognising that market uncertainty was

likely to impact recovery, with higher inflation and interest rates.

The achievement against the personal objectives’ element has been

determined at 80% for the Chief Executive Officer (CEO), Neil Ash,

making his total bonus earnings 95% of his maximum potential

annualbonus for 2025. Ben Guyatt, Chief Financial Officer (CFO)

wasdetermined to have achieved 75% of his personal objectives,

making his 2025 bonus earnings 93.75% of his maximum potential

annual bonus.

No adjustments or discretion have been applied to the formulaic

outcome for the 2025 annual bonus.

Under the current rules of the Annual Bonus Plan, the first 10%

ofsalary is payable in cash, with half of the remainder of any bonus

beingnormally deferred into shares under the Deferred Annual Bonus

Plan (DABP).

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 97

Remuneration Committee Report continued

Performance Share Plan (PSP) awards vesting in 2025

The 2022 PSP award was due to vest on 17 March 2025. The award

was granted with half of the award subject to an earnings per share

(EPS) performance condition and half subject to a total shareholder

return (TSR) performance condition, both measured over the three

yearperiod ended 31 December 2024. Neither the EPS nor the

TSRperformance conditions were met and therefore the 2022 PSP

awardsdid not vest.

Performance Share Plan (PSP) awards vesting in 2026

The 2023 PSP award is due to vest in April 2026 although each of

theperformance conditions are assessed as at 31 December 2025.

The award was granted with 40% of the award subject to a stretching

EPS performance condition, 40% of the award subject to a TSR

performance condition, and the remaining 20% of the award

determined by sustainability-based targets. Neither the EPS, TSR

orsustainability performance conditions were met and therefore the

2023 PSP awards will not vest in April 2026.

Performance Share Plan (PSP) awards granted duringtheyear

The 2025 grant of awards under the PSP was made in accordance

with the Policy at 175% of salary for the CEO, Neil Ash, and 150% of

salary for the CFO, Ben Guyatt. This represents an increase on 2024

award levels, which were 150% and 125% respectively, to reflect the

stretch in the performance criteria.

The performance targets applicable to this award are disclosed

withinthis Report. The awards are structured with 40% of the awards

granted subject to an EPS performance condition, 40% of the awards

granted subject to a TSR performance condition and 20% of the

awards subject to sustainability targets.

2026 OVERVIEW

Review of the Directors’ Remuneration Policy

The current Remuneration Policy was approved by shareholders at

the2023 AGM and received 98.14% of the votes cast, in favour. This

Policy is now due for renewal and will be put to shareholders at the

2026 AGM in May. The Remuneration Committee has conducted a

thorough review of the current Policy to ensure it remains appropriate

to support the business and would like to take theopportunity to make

a number of changes, all of which are intended to bring the Policy

further in line with best and market practice. Details of these changes

are enclosed within this Report.

The approach to structuring pay, and the remuneration framework,

hasbeen in operation since the Initial Public Offering (IPO) in 2016.

Alongside fixed pay, it consists of a Deferred Annual Bonus Plan

(DABP), wherein bonus is delivered as a mix of cash and deferred

shares, and awards of performance shares under a Performance

SharePlan. In considering the current Policy and its application to

date, the focus has been on three issues: the level of fixed pay, the

quantum of potential reward, and the structure of the long-term

incentive arrangements.

2026 salary and fees

In line with the Policy, the Committee considered the base salaries

ofthe Executive Directors, Neil Ash (CEO) and Ben Guyatt (CFO).

TheCommittee considered benchmark data with caution, choosing to

use two bases for assessing the relative base salaries of the Executive

Directors. Benchmarking was conducted against a group of sector

peers and against the lower quartile of the FTSE 250. In both

assessments it was identified that the base salary of the CEO

wassignificantly below relevant market peers, therefore a one-off

adjustment of 10% has been proposed for 2026, taking the base

salary of the CEO to £550,777 per annum. Future adjustments are

expected to be in line with increases for the wider workforce.

The CFO’s base salary review determined that no adjustment was

required, therefore the base salary of the CFO was increased by

3.15%to £369,696, in line with that awarded to the wider workforce.

2026 annual bonus

The Committee reviewed the operation of the Annual Bonus Plan

during the year. The objective is to achieve a balance between financial

performance and, through a clear link with objectives and reward,

ensure that the right behaviours are being driven. It was agreed that

financial performance and personal business objectives continue to

form the basis of the 2026 annual bonus, however, there has been

achange to the metrics used to measure performance and to the

balance between financial and non-financial metrics. Under the existing

policy, the 2025 annual bonus was structured as follows:

• 75% of maximum opportunity: Adjusted Profit before Tax (PBT); and

• 25% of maximum opportunity: non-financial/strategic objectives.

The following metrics and weightings will apply for the 2026

annualbonus:

• 60% of maximum opportunity: Adjusted Earnings Before Interest,

Tax, Depreciation and Amortisation (EBITDA);

• 20% of maximum opportunity: Average working capital as

apercentage of sales; and

• 20% of maximum opportunity: non-financial/strategic objectives.

The market remains challenging, and industry analysts are currently

forecasting only modest growth through 2026, which is reflected in

their expectations of 2026 performance for the Group. Annual Bonus

Plan thresholds have been set accordingly with a significant stretch to

the maximum opportunity. These targets will be reported retrospectively

following the end of the performance period, as they are considered

tobe commercially sensitive.

The Committee assessed that the current Policy maximum, in place

since the IPO in 2016, should be revised, in particular with respect

tothe levels typically observed within sector peers. The Committee

proposes an increase to the maximum bonus potential from 100% to

200%. This is intended to allow the Committee flexibility to increase

themaximum potential annual bonus for Executive Directors; however

thismaximum would only be awarded in exceptional circumstances.

It is proposed that for 2026, the maximum bonus opportunity for the

CEO will be increased from 100% to 150% of base salary and from

100% to 130% of base salary for the CFO.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 98

Remuneration Committee Report continued

2026 Long-term incentive awards

As part of the proposed 2026 Remuneration Policy changes, the

Committee is proposing to introduce flexibility under the Policy to

granthybrid long-term incentive (LTI) awards to Executive Directors,

comprising a combination of performance and restricted shares.

This blended approach seeks to strike an appropriate balance between

motivating and rewarding for performance and, importantly, supporting

executive retention. It introduces a predictable reward framework in

ahighly cyclical sector, whilst preserving a strong alignment with long-

term corporate performance. The long-term incentive arrangements

forexecutive management below Board level will be aligned to this

hybrid structure, to maintain a consistent pay policy across the Group

as a whole. Executive management incentive and retention remain key

objectives of the Policy.

No change is proposed to the current Policy maximum notional

performance share award level of 200% of salary (250% in exceptional

circumstances). However, a 50% discount rate will be applied to the

restricted share portion of the award.

The notional performance share award level for the CEO (prior to any

reduction for restricted share conversion) will remain at a maximum of

175% of base salary. The award will be split 50% performance shares

(a face value of 87.5% of base salary) and 50% restricted shares (a

face value of 43.75%, after applying the discount for these awards),

reducing the award face value to 131.25% of base salary.

The notional performance share award level for the CFO will remain

ata maximum of 150% of base salary, and under the 50:50 split, the

performance share award would equate to 75% and the restricted

share award to 37.5% of salary face value, reducing the award face

value to 112.5% of base salary.

The Committee will review the appropriateness of the split between

performance and restricted shares for each LTI award in succeeding

years. Performance shares will be subject to the achievement of

stretching performance conditions. Awards granted in 2026 will

continue to be based on relative TSR compared tothe constituents

ofthe FTSE 250 excluding investment trusts, EPS growth and an

Environmental, Social, and Governance metric – with weightings

of45%, 45% and 10%, respectively.

It is also proposed that each LTI award (both performance and

restricted share elements) will be subject to an underpin of satisfactory

Return on Capital Employed (ROCE) and health and safety performance.

The Committee will retain discretion as to whether to reduce the total

award at vesting if this underpin has not been met. The Committee

also retains discretion to adjust formulaic vesting outcomes if

circumstances are considered appropriate.

This longer-term incentive award structure underscores the Company's

commitment to combining a focus on financial performance with

sustainability and broader corporate responsibility todeliver acceptable

returns on capital investment.

Once finalised, the 2026 LTI award targets will be communicated by

way of a Regulatory News Services (RNS) announcement and placed

on the Group’s website. It is intended that LTI awards will be granted

following the AGM, subject to shareholder approval of the new Policy.

Shareholder engagement

Shareholder views have been sought as part of a consultation to get

aclear understanding of their views and perspectives, given the range

and extent of the changes to the Remuneration Policy being proposed.

Engagement was constructive and positive overall, and good feedback

was received. The initial proposal put to shareholders had included

increases to three components of remuneration for the CEO (base

salary, annual bonus, and long-term incentive plan), and to both the

annual bonus opportunity and long-term incentive plan for the CFO.

Reflecting shareholders’ concerns that there were increases proposed

for all three elements of the CEO remuneration, and for two of the

CFOremuneration, the increase to the long-term incentive plan was

considered and the Committee agreed that it should be amended.

Inthe revised proposal, the current total potential award under the

long-term incentive plan would remain unchanged at 175% of base

salary for the CEO and 150% base salary for the CFO.

Shareholders were supportive of a corrective adjustment to the base

salary of the CEO, while a few shareholders requested that a phased

increase be considered. The Committee discussed this and concluded

that the proposed increase still left the CEO base salary in the lower

quartile ofthe peer group, therefore the proposed 10% increase to

thebase salary of the CEO has been retained.

The decision to make the increase in one step was accompanied by

aconfirmation of the undertaking made in the original proposal that

theannual increases would thereafter revert to the average awarded

annually to the workforce.

The current maximum annual bonus opportunity of 100% ofsalary

hasbeen in place since IPO in 2016. Shareholders were supportive

ofan increase to the maximum annual bonus opportunity ifit were

accompanied by sufficiently stretching performance metrics and

targets, to reflect the increases. The increase in the annual bonus

opportunity from 100% to 150% of base salary and from 100% to

130% of base salary for the CEO and CFO respectively were retained

by the Committee, undertaking that targets set would be sufficiently

stretching.

The change to the performance measures from 75% Adjusted Profit

before Tax and 25% personal business objectives, to 60% Adjusted

Earnings Before Interest Tax, Depreciation and Amortisation (EBITDA),

20% on average working capital as a percentage of sales, and the

remaining 20% for personal business objectives that reflected the key

strategic objectives, was welcomed, in particular the introduction of

acash-based metric.

The rationale for, and introduction of, a hybrid long-term incentive plan

was broadly understood, given the highly cyclical nature of the sector,

and the objective to retain management at both Executive Director

andsenior executive levels, alongside the ambition to deliver returns

over the cycle from the extensive capital investment programme,

whichis nearcomplete.

We take a keen interest in our shareholders’ views on executive

remuneration and welcome any feedback on the Remuneration

Committee Report.

This Remuneration Committee Report will be subject to an advisory

vote and the revised Remuneration Policy subject to a binding vote

atthe 2026 AGM. Our goal has been to be clear and transparent

inthepresentation of this Report and I look forward to your support

onthese resolutions.

Approved by the Board and signed on its behalf by:

Katherine Innes Ker

Chair of the Remuneration Committee

10 March 2026

This report has been prepared in accordance with Schedule 8 to the large and medium-sized

Companies and Groups (Accounts and Reports) Regulations 2008 as amended in 2013,

theprovisions of the UK Corporate Governance Code and the Listing Rule.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 99

Remuneration Committee Report continued

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 100

Remuneration Committee Report continued

INTRODUCTION

As described in the Chairman’s introduction, the revised Remuneration

Policy will be put forward to a binding shareholder vote at the 2026

AGM. Subject to shareholder approval, it is intended that the new

Policy will apply until the 2029 AGM. The proposed Policy as set out

overleaf describes the pay structures that the Company will operate

and summarises the approach that the Committee will adopt in certain

circumstances such as the recruitment of new Directors and/or the

making of any payments for loss of office. The Remuneration

Committee conducted a comprehensive review and has proposed

changes that bring the Policy in line with best and market practice.

Policy overview

The Committee has responsibility for determining the remuneration

ofthe Chairman, Executives and Non-Executive Directors and other

senior management. The Committee’s terms of reference are available

on the Company’s website.

The Company’s Remuneration Policy has been designed based on the

following key principles:

• to promote the long-term success of the Group, with stretching

performance targets which are rigorously applied;

• to provide appropriate alignment between the Group’s strategic

goals, shareholder returns and executive reward; and

• to have a competitive mix of base salary and short and long-term

incentives, with an appropriate proportion of the package determined

by stretching targets linked to the Group’s performance.

The remuneration arrangements have been structured with due

consideration of the UK Corporate Governance Code and both best

practice and market practice for UK listed companies.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 101

Remuneration Committee Report Summary of Remuneration Policy

Factor How our Remuneration Policy aligns

Clarity

Remuneration arrangements should

betransparent and promote effective

engagement with shareholders and

theworkforce.

Martin Sutherland remains the designated Non-Executive Director to represent the views of

employees to the Board, and when appropriate this will include decisions on remuneration across

the business. This is facilitated through the Employee Forum.

We proactively consult our shareholders on any changes to the Remuneration Policy and seek

their views.

Simplicity

Remuneration structures should avoid

complexity and their rationale and operation

should be easy to understand.

The Remuneration Policy includes a single annual bonus plan and a single long-term incentive plan

which are clearly communicated.

The rationale for each element of the Policy is clearly explained in the Remuneration Policy tables.

Risk

Remuneration arrangements should ensure

reputational and other risks from excessive

rewards, and behavioural risks that can

arisefrom target-based incentive plans,

areidentified and mitigated.

The Committee has discretion to adjust formulaic out-turn of performance incentives if it

considers it appropriate to do so.

Awards made under long-term incentive plans are subject to malus and clawback provisions.

Post-vesting holding periods and shareholding requirements align the interests of management

and shareholders and promote a long-term approach to performance and risk management.

Performance metrics are aligned with the Company’s strategy, incentivising delivery of sustained

performance over the long-term.

Defined limits are set on the maximum awards which can be earned.

Predictability

The range of possible values of rewards

toindividual Directors and any other limits

ordiscretions should be identified and

explained at the time of approving the policy.

The Remuneration Policy sets out potential levels of vesting available for varying degrees

ofperformance.

The Remuneration Report illustrates the total remuneration opportunity for Executive Directors

under various performance scenarios.

There is full and transparent retrospective disclosure of targets within the Remuneration Report

and the degree to which long-term incentive awards were achieved.

Proportionality

The link between individual awards, the

delivery of strategy and the long-term

performance ofthe Company should

beclear. Outcomes should not reward

poorperformance.

The use of long-term incentive plans and post-vesting holding periods ensure focus on

sustainedperformance over the long-term.

The Committee has discretion to adjust formulaic out-turn of performance incentives if it considers

itappropriate to do so.

Alignment to culture

Incentive schemes should drive behaviours

consistent with Company purpose, values

andstrategy.

The Remuneration Policy places a focus on share ownership through shareholding requirements

and incentive plans, incentivising delivery of sustained, long-term performance in the Company.

The Remuneration Policy for Directors

Subject to shareholder approval at the May 2026 AGM, the arrangements for the Executive and Non-Executive Directors will, in 2026, be in line with the revised Remuneration Policy.

Element Purpose and link to strategy Operation Maximum opportunity Framework used to assess performance

Salary

2026 Policy change

No change

Salary is a fixed payment

thatreflects an individual’s

experience and role and

maybeincreased to reflect

capability and performance.

To recruit and retain executives.

Salaries are paid monthly and are normally reviewed annually with changes

effective from 1 January but by exception may be reviewed more frequently

ifthe Committee determines this is appropriate.

In reviewing salaries, the Committee considers:

• remuneration practices within the Group;

• market benchmarks based on companies of broadly comparable size

and/or operating in similar sectors;

• role, competence and performance; and

• the general increase awarded to salaried employees.

Higher increases may be awarded tonew Executive Directors who were

hired at below-market rates but with theintention to move to a market

competitive rate over time, subject toindividual performance.

It is anticipated that salaries will

generally be increased in line with

increases awarded tosalaried

employees.

However, in certain situations

suchaswhere there has beenan

increase in the scope, responsibility

or complexity ofthe role or there

has been asignificant change

inthe size, value or complexity

oftheGroup, increases may be

higher to remain market competitive.

Individual and Group performance is taken into account

when determining theannual increase.

The rationale for any such increase will be disclosed

inthe Annual Report on Remuneration.

Benefits

2026 Policy change

No change

The Company’s aim is to offer

competitive and cost-effective

benefits valued by participants

and to help recruit and retain

executives.

A range of benefits are provided to Executive Directors that may include

acompany car (or car allowance), private medical and permanent

healthinsurance, business travel insurance and life assurance/death

inservice cover. Relocation (or other related expenses) and tax equalisation

arrangements may be offered as appropriate to ensure Directors

arenoworse or better off in a case ofrelocation.

Any reasonable business-related expenses (including tax thereon) may

bereimbursed if determined tobea taxable benefit.

Executive Directors are eligible for otherbenefits which are introduced

forthe wider workforce on broadly similar terms.

The cost of providing market

competitive benefits may vary from

year-to-year depending on the cost

tothe Company from third party

providers.

The Committee will continue to

monitor the cost of benefits to

ensurethat the overall benefit costs

do not increase by more than the

Committee considers appropriate

inthe circumstances.

No performance metricsapply.

Pension

2026 Policy change

No change

To provide a market-competitive

cost-effective contribution

towards post-retirement

benefits.

Executive Directors receive a contribution towards their retirement provision

which may be paid as a contribution to a personal pension scheme or a cash

allowance in lieu ofpension or a mix of both.

The Company contribution to

retirement allowances is up to

10%ofsalary, which is aligned

tothat offered to all employees.

No performance metricsapply.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 102

Remuneration Committee Report Summary of Remuneration Policy continued

The Remuneration Policy for Directors continued

Element Purpose and link to strategy Operation Maximum opportunity Framework used to assess performance

Annual bonus

2026 Policy change

Increase in maximum

bonus opportunity level

to 200% ofsalary

Simplified bonus

deferralapproach

to50% of bonus earned

paid in cash and 50%

deferred intoshares

The Annual Bonus Plan is to

incentivise Executive Directors

to achieve annual financial and/

or strategic targets. Bonus

deferral provides a retention

mechanism and provides

furtheralignment with

shareholders’ interests.

Bonus payments are determined by the Committee after the year-end,

based onperformance against the targets set around the start of the year.

The Committee aims to set out in the Annual Report on Remuneration the

nature ofthe targets and their weighting for the forthcoming financial year

anddetails oftheperformance conditions, the weightings and targets

applied and the level of achievement against these targets for the financial

year being reported on.

50% of any annual bonus earned will be payable in cash with the remaining

50%deferred into shares as either conditional awards or nominal cost

optionsunder the Deferred Annual Bonus Plan (DABP). Such awards vest

aftera periodof three years subject to continued employment. No further

performance conditions apply.

In line with good practice, recovery and withholding provisions apply

(seepage106). Anadditional payment (in the form of cash or shares) may

bemade inrespect of shares that vest to reflect the value of dividends that

would havebeen paid on those shares during the vesting period.

The maximum opportunity under

theannual bonus scheme is 200%

ofsalary.

Bonus starts to be earned at

thethreshold level (up to 25%

ofthe maximum depending on

theperformance metric).

The bonus may be based on the achievement of an

appropriate mix of challenging financial, operational

orstrategic measures.

Typically, financial measures will account for the

majority of the bonus opportunity and may include

measures such as profit or cash flow. Other financial

measures that support the key short-term priorities

ofthe business may be used.

The targets applying to financial metrics will take into

account the internal plan and external expectations

ofthe business at the time they are set. If operational,

individual or strategic measures are included, where

possible a quantitative performance range will be set

although this will depend on the measure chosen.

Themeasures, targets and weightings may be varied

by the Committee year-on-year based on the

Company’s strategic priorities at the time. The payment

of any bonus is at the absolute discretion of the

Committee which may adjust the formulaic out-turn

ofthe bonus if it considers itappropriate to do so.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 103

Remuneration Committee Report Summary of Remuneration Policy continued

The Remuneration Policy for Directors continued

Element Purpose and link to strategy Operation Maximum opportunity Framework used to assess performance

Long-term

IncentivePlan

2026 Policy change

Introduction offlexibility

to make awards

ofrestricted shares

alongside performance

The Long-Term Incentive

Plan(The Plan) incentivises

Executive Directors and

selected senior management to

deliver sustained performance

overthe long-term.

The Plan also acts as a method

of retaining key management

over the medium-term. It aligns

the interests of the Executive

Directors and shareholders

andassists Executive

Directorsin building up a

substantial shareholding.

Awards are granted annually in the form of nominal or nil cost options under

the Plan and vest after no less than three years.

The performance share element of the award will be subject to the

achievement of stretching performance conditions measured over a period

of three years to determine the extent to which awards vest.

Each award under the Plan (both performance and restricted share

elements) will be subject to satisfactory Return on Capital Employed (ROCE)

and health and safety performance. The Committee will retain discretion as

to whether to adjust the total award at vesting and reduce it if performance

does not meet the standards expected. The Committee also retains

discretion to reduce formulaic vesting outcomes if circumstances are

considered appropriate.

A holding period may apply to vested awards under which Executive

Directors will be required to retain the net of tax number of vested awards

forat least two years from the date of vesting. In exceptional circumstances,

the Committee may, at its discretion, allow participants to sell or dispose

ofsomeor all of these vested shares before the end of the holding period.

Detailsof performance conditions for grants made in the year will be set

outinthe Annual Report on Remuneration.

Award levels are reviewed annually (subject to the Plan individual limits)

takinginto account matters such as market practice, overall remuneration,

andthe performance of the Company and the Executive Director being

madethe award.

In line with good practice, recovery and withholding provisions may apply

(seepage 106). Dividends may accrue based on the value of dividends

paidduring the three-year vesting period and two-year holding period

(ifapplicable).

The maximum annual award under

the Plan that may be granted to

anindividual in any financial year

is200% of salary in normal

circumstances (250% of salary

inexceptional circumstances).

A50% discount rate will be applied

to the restricted share portion of

the award.

For the performance share

element, a maximum of 25% of

theaward will vest for threshold

performance.

Performance share vesting is based on the

achievement of one or more challenging performance

targets set by the Remuneration Committee at the

timeof grant and measured over a three-year period.

Measures may include EPS growth (or another financial

metric), TSR and an Environmental, Social and

Governance metric.

In determining the target range for any financial

measures that may apply, the Committee ensures

theyare challenging by taking into account current

andanticipated trading conditions, the long-term

business plan and external expectations.

The Committee retains the flexibility to vary the mix

ofmetrics for each year’s award in light of the business

priorities at the time, or to introduce new measures

tosupport the long-term business strategy.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 104

Remuneration Committee Report Summary of Remuneration Policy continued

The Remuneration Policy for Directors continued

Element Purpose and link to strategy Operation Maximum opportunity Framework used to assess performance

All-employee share

plans

2026 Policy change

No change

To increase alignment between

employees andshareholders

inataxefficient manner.

All-employee share schemes may beoperated. Current schemes include:

• Sharesave Plan (SAYE);

• Share Incentive Plan (SIP); and

• Other HMRC approved all-employee schemes may be introduced at the

Committee’s discretion.

Consistent with prevailing

HMRClimits.

No performance metricsapply.

Share ownership

policy

2026 Policy change

No change

To align interests of

management and shareholders

and promote a long-term

approach to performance

andrisk management.

In-post

Executive Directors are required to build up a shareholding in the Company

equal to 200% of salary. Half of the net of tax number of vested LTIP

andDABP awards are expected to be retained until the guideline is met.

Thevalue of vested but unexercised awards subject to a two-year holding

period will count towards the guideline on a net of tax basis.

Post-cessation

Leavers will be required to hold the lower of 200% of their in-post share

ownership requirement or their actual holding on departure for two years

post-cessation.

Shares acquired by or granted to an Executive Director prior to 1 January

2020 will not be counted towards the requirement. Shares purchased by

anExecutive Director, along with shares granted or acquired prior to

appointment to the Board will also not be counted towards the requirement.

Not applicable. No performance metricsapply.

Non-Executive

Directors’ fees

2026 Policy change

No change

To attract and retain high-

quality and experienced Non-

Executive Directors.

The fees of the Non-Executive Directors are set by the Board and the Chair’s

fee is setby the Committee (the Chair does not take part in any discussion

regarding his own fees). Fees are reviewed periodically. Non-Executive

Directors receive a fee forcarrying out their duties. Additional fees may

bepayable in relation to extra responsibilities undertaken such as chairing

aBoard Committee and/or a Senior Independent Director or other designated

Non-Executive Director role. The Chair andNon-Executive Directors are

entitled to reimbursement of reasonable business-related expenses

(including any tax thereon). They do not participate in any incentive

arrangements and they do not receive a pension contribution. The level of

fees reflects the time commitment and responsibility of their respective roles.

Details of current fees are set

outinthe Annual Report on

Remuneration. As set out in the

Company’s Articles of Association,

the total fees paid to Non-

Executive Directors must not

exceed £1m a year or any higher

amount agreed by ordinary

resolution at a general meeting.

No performance metricsapply.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 105

Remuneration Committee Report Summary of Remuneration Policy continued

Recovery and withholding provisions

Recovery and withholding provisions apply to the Annual Bonus Plan,

including the DABP, and the LTIP. If, within three years of the payment

of a bonus, grant of a deferred bonus award and/or vesting of an LTIP

award, it transpires that payment or vesting should not have occurred

as a result of a material misstatement, error in calculation, gross

misconduct has been discovered, corporate failure, material damage

to the Company’s reputation, failure of risk management, or any other

circumstances that the Board considers to have a similar nature or

effect, the payment or vesting can be recovered or withheld, in part

orin full, as appropriate.

Incentive plan discretions

The Committee will operate the Annual Bonus Plan, including the

DABP, and the LTIP according to their respective rules as summarised

in the policy set out on previous pages. The Committee, consistent

with market practice, retains discretion over a number of areas relating

to the operation and administration of these plans. These include,

butare not limited to, the following:

• Who participates in the plan;

• The timing of grant and/or payment;

• The size of an award and/or payment;

• The choice of performance measures and targets for each incentive

plan in accordance with the policy set out on previous pages and the

rules of each plan;

• The ability to vary any performance conditions if circumstances occur

which cause the Remuneration Committee to determine that the

original conditions have ceased to be appropriate provided that

anychange is fair and reasonable and in the Committee’s opinion,

not materially less difficult to satisfy than the original condition;

• Discretion to override formulaic outcomes and scale back outcomes

under the annual bonus and LTIP;

• Discretion relating to the measurement of performance in the event

ofachange of control or reconstruction; and

• Determination of a good leaver (in addition to any specified categories)

for incentive plan purposes based on the rules of each plan and the

appropriate treatment under the plan rules.

Any use of the above discretions would, where relevant, beexplained

in the Annual Report on Remuneration and may, as appropriate, be

thesubject of consultation with the Company’s major shareholders.

Remuneration policy for other employees

The Policy described above applies specifically to the Company’s

Executive and Non-Executive Directors and is designed with regard to

the policy for employees across the Group as a whole. The Company

aims to apply similar principles to the design of the remuneration

arrangements for all employees. Executive Directors are entitled to

receive a similar package of benefits and participate in the pension

plan at the same level as other employees. However, differences

doexist between the Company’s policy for the remuneration of the

Executive Directors and its approach to the payment of employees

generally, reflecting market practice and different levels of seniority:

• There are differences in salary levels and in the levels of potential

reward depending on seniority and responsibility, although a key

reference point for executive salary increases is the average increase

across the general workforce;

• A lower level of maximum annual bonus opportunity (or zero bonus

opportunity) may apply to employees;

• Performance metrics attached to the annual bonus may differ to

reflect the precise roles and responsibilities of the employee; and

• Participation in the LTIP is limited to the Executive Directors and

certain selected senior employees.

In general, these differences arise from the development of remuneration

arrangements that are market competitive for the various categories

ofemployee. They also reflect that, in the case of the Executive

Directors and selected senior employees, a greater emphasis is

placedon performance-related pay reflecting their influence over

theCompany’s performance.

How the views of employees and shareholders

are takeninto account

In setting the remuneration for the Executive Directors, the Committee

takes note of the overall approach to reward for employees in the

Group, and salary increases will ordinarily be (in percentage of salary

terms) in line with those of the wider workforce. The Committee does

not formally consult directly with employees on executive pay but does

receive periodic updates on employee remuneration within the Group

as necessary. In line with the UK Corporate Governance Code,

MartinSutherland remains the designated Non-Executive Director to

represent the views of employees to the Board, and when appropriate

this will include decisions on remuneration across the business.

Thisisfacilitated through the Employee Forum. During the year the

management met with representatives from the Employee Forum on

aquarterly basis. At each meeting a business performance update was

provided, together with pay included within general topics addressed

by the forum. The Committee takes keen interest in shareholders’

views on executive remuneration and welcomes any feedback on

theapproach taken.

Service contracts and letters of appointment

Service contracts and letters of appointment are available for

inspection at the Company’s registered office.

Service contracts

The service contracts for the Executive Directors are terminable

byeither the Company or the Executive on 12 months’ notice. The

Company can terminate either Executive Director’s service contract

bypayment of a cash sum in lieu of notice equivalent to the base salary

and the cost that would have been incurred in providing the Executive

Director with contractual benefits for any unexpired portion of the

notice period (or alternatively the Company can choose to continue

providing the contractual benefits). The payment in lieu may be paid as

one lump sum or in monthly equal instalments over the notice period.

Ifthe Company chooses to pay in instalments, the Executive Directors

are obliged to seek alternative income over the relevant period and

thepayment of each monthly instalment will be reduced by the

amountof such income earned. There are no enhanced provisions

ona change of control.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 106

Remuneration Committee Report Summary of Remuneration Policy continued

At the discretion of the Committee, a contribution to reasonable

outplacement costs in the event of termination of employment due to

redundancy may also be made. The Committee also retains the ability

to reimburse reasonable legal costs incurred in connection with a

termination of employment and may make a payment for any statutory

entitlements or to settle or compromise claims in connection with a

termination of employment of any existing or future Executive Director

as necessary. Relevant details will be provided in the Annual Report

onRemuneration should such circumstances apply.

The table overleaf sets out, for variable pay elements, the Company’s

policy on payment for loss of office in respect of Executive Directors.

Ingeneral, treatment will depend on the circumstances of departure

and in particular whether a leaver isa ‘good leaver’. Good leaver

reasons include:

• Death;

• Injury;

• Retirement;

• Disability;

• Redundancy;

• The employing company being sold outside the Group; or

• Other circumstances at the discretion of the Committee.

In any other circumstance, the leaver will be treated as a‘badleaver’.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 107

Remuneration Committee Report Summary of Remuneration Policy continued

ILLUSTRATIONS OF APPLICATION OF THE REMUNERATION POLICY

TOTAL REMUNERATION OPPORTUNITY

Notes:

• Minimum is equivalent to fixed pay which comprises salary levels applying for 2026, the value

of benefits in 2025 and a 10% retirement allowance. Minimum also includes restricted shares

which are 43.75% of salary for the CEO and 37.5% of salary for the CFO.

• Target comprises fixed pay plus restricted shares (as above) plus the value of the on-target

bonus at 50% of the maximum bonus opportunity (150% of salary for the CEO and 130%

ofsalary for the CFO) plus the value of the on-target level of vesting under the PSP which is

taken to be 50% of the expected 2026 grant level which is 87.5% of salary for the CEO and

75% of salary for the CFO.

• Maximum comprises fixed pay plus restricted shares plus maximum bonus plus the

maximum value of PSP (equal to 100% of the face value of the award at grant using the

2026 grant policy of 87.5% of salary for the CEO and 75% of salary for the CFO).

• Maximum +50% share price growth comprises fixed pay plus maximum bonus plus the

maximum value of the PSP at a 50% higher share price than when the PSP award was

granted plus restricted shares at a 50% higher share price than when the restricted shares

were granted.

Policyonpayment for loss of office

The following table summarises the key aspects of the Company’s Remuneration Policy for Executive and Non-Executive Directors.

Element Treatment

Annual Bonus Plan No automatic or contractual right to bonus payment.

Good leavers: a pro-rata bonus may become payable at the normal payment date for the period of employment and based on full-year performance.

With rationale set out in the Annual Report on Remuneration.

Bad leavers: no bonus is payable for the year of cessation.

Discretions: to determine whether to pro-rate the bonus for time. It is the Committee’s normal policy to pro-rate for time, however, there may be

circumstances where this is not appropriate. Where this is the case it will be fully disclosed to shareholders.

Deferred Annual Bonus Plan The use of post-vesting holding periods and long-term incentive plans ensure focus on sustained performance over the long-term.

Good leavers: all deferred shares vest at the date of cessation.

Bad leavers: awards lapse.

Discretions: to vest deferred shares at the end of the original deferral period or to defer vesting inconnection with a potential clawback event.

Long-Term Incentive Plan Good leavers: awards vest at normal vesting date pro-rated for time and tested for performance in respect of each subsisting LTIP award.

Bad leavers: awards lapse.

Discretions: to vest and measure performance over the original performance period or vest and measure performance at the date of cessation

ortodefer vesting in connection with a potential clawback event.

To determine whether to pro-rate the maximum number of shares for the time from the date of grant to the date of cessation (the Committee may

needto round up to the nearest whole year). Normal policy is to pro-rate for time, however there may be circumstances where this is not appropriate.

Where this is the case it will be fully disclosed to shareholders.

Shareholding requirements All leavers will be required to hold the lower of 200% of their in-post share ownership requirement or their actual holding on departure for two years post-

cessation. Shares acquired by or granted to an Executive Director prior to 1 January 2020 will not be counted towards the requirement. Shares purchased

byan Executive Director along with any shares granted or acquired prior to appointment to the Board will also not be counted towards the requirement.

Change of control

The Committee’s policy on the vesting of incentives on a change of control is summarised below:

Element Treatment

Annual Bonus Plan Pro-rated for time and performance to the date of the change of control.

Deferred Annual Bonus Plan Subsisting DABP awards will vest on a change of control.

Long-Term Incentive Plan The number of shares subject to existing LTIP awards will vest on a change of control pro-rated for time and performance to the date of the change of control.

Discretions: to determine whether to pro-rate the maximum number of shares from the time fromthe date of grant to the date of the change of control

(theCommitteemay round up to the nearest whole year). Normal policy is to pro-rate for time, however there may be circumstances where this is not appropriate.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 108

Remuneration Committee Report Summary of Remuneration Policy continued

Letters of appointment

The Chair and Non-Executive Directors have letters of appointment

and are subject to annual re-election at the AGM. The appointment

letters for the Non-Executive Directors provide that no compensation

ispayable on termination. The appointments are terminable by the

Company on not less than 30 days’ notice or immediately in the event

that the appointment is terminated by the shareholders (or where

shareholder approval is required but not forthcoming).

Approach to recruitment and promotions

The recruitment package for a new Executive Director would be set in

accordance with the terms of the Company’s approved Remuneration

Policy. The Committee is proposing a maximum annual bonus

payment of no more than 200% of salary and LTIP award of up to

200% of salary (other than in exceptional circumstances (including

recruitment), where up to 250% of salary may be made).

On recruitment, salary may (but need not necessarily) be set below the

normal market rate, with phased increases as the Executive Director

gains experience. The rate of salary should be set so as to reflect the

individual’s experience and skills. The pension offered to new Executive

Directors will be set in line with the current policy and in alignment with

the majority of employees in the Group.

In addition, on recruitment the Company may compensate for amounts

foregone from a previous employer (using the exemption to the

requirement for prior shareholder approval under Listing Rule LR

9.3.2R if necessary) taking into account the quantum foregone and,

asfar as reasonably practicable, the extent to which performance

conditions apply, the form of award and time to vesting date.

For an internal appointment, any variable pay element awarded in

respect of their prior role should be allowed to pay-out according to its

outstanding terms. Any other ongoing remuneration obligations existing

prior to appointment may continue, provided that, if they are outside

the approved policy, they are put to shareholders for approval at the

earliest opportunity.

For all appointments, the Committee may agree that the Company

willmeet appropriate relocation costs. For the appointment of a new

Chairor Non-Executive Director, the fee arrangement would be set

inaccordance with the approved Remuneration Policy in force at

thattime.

Policy on external appointments

Subject to Board approval, Executive Directors are permitted to take

on a single paid non-executive position with an unconnected company

and to retain their fees in respect of such position. Where appropriate,

details of outside directorships held by the Executive Directors

andanyfees that they received are provided in the Annual Report

onRemuneration.

Legacy arrangements

For the avoidance of doubt, any remuneration or loss of office

payments that are not in line with this Policy may be made if the

termswere agreed before the approval of this Policy, including those

disclosed in the prospectus. In addition, authority is given to the

Company to honour any commitments entered into at a time when

therelevant employee was not a Director of the Company.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 109

Remuneration Committee Report Summary of Remuneration Policy continued

SINGLETOTAL FIGURE OF REMUNERATION (AUDITED)

Executive Directors (audited)

Fixed Variable

Executive Directors Period

Salary and

fees

Taxable

benefits

Retirement

allowance

Annual

bonus

Long-term

incentives

Total

Total fixed

remuneration

Total variable

remuneration

Neil Ash

2025 £500,706 £5,959 £50,071 £475,671 – £1,032,407 £556,736 £475,671

2024 £487,305 £3,697 £48,731 £235,125

–

£774,858 £539,733 £235,125

Ben Guyatt

2025 £358,406 £9,495 £35,841 £336,006 – £739,748 £403,742 £336,006

2024 £348,814 £8,722 £34,881 £168,303

–

£560,720 £392,417 £168,303

1. Taxable benefits in the year comprised a company car/allowance and private medical insurance.

2. Details of the bonus targets and their level of satisfaction and resulting bonus earned are set out below.

3. The EPS and TSR conditions of the 2023 PSP were calculated overthe three-year reporting period to 31 December 2025, therefore are known at the year-end date;

however the performance conditions have vested at nil.

2025 Annual bonus (audited)

Threshold

performance

required

Maximum

performance

required

Actual

performance

achieved

Percentage of maximum value achieved Bonus achieved

Weighting Neil Ash Ben Guyatt Neil Ash Ben Guyatt

PBT (before adjusted items) 75% £22.5m £32.5m 100% 100% 100% £375,530 £268,805

Strategic objectives 25% 80% 75% £100,141 £67,201

Total (% of maximum) 100% 95% 94%

Total £475,671 £336,006

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 110

Remuneration Committee Report Annual Report on Remuneration

2025 strategic objectives

A full breakdown of the bonus payments and share award deferral is set out below. These calculations are based on the current Policy,

whereby the first 10% of salary is payable in cash and half of the remainder ofthe bonus is deferred into shares. As previously stated,

this is proposed to be changed as part of the new Policy.

Bonus total Paid in cash Paid in Shares

Neil Ash £475,671 £262,871 £212,800

Ben Guyatt £336,006 £185,923 £150,083

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 111

Remuneration Committee Report Annual Report on Remuneration continued

Participants Objectives Assessment of achievement

% of bonus

entitlement

earned

Neil Ash Objectives linked to:

Improving sustainability including the launch of a new lower-carbon

product range; completion of the redeveloped factory at Wilnecote and

progress to be made on the pipeline of organic investment opportunities,

specifically including opportunities beyond brick; driving innovation

andbusiness growth through the launch of the Omnia brick slips and

associated mechanically fixed façade system and embedding new

product development process, and preparation of an acquisition funnel of

potential bolt-on acquisition opportunities to accelerate business growth;

embedding of the Sustainable Operational Excellence initiative, delivering

savings and ensuring successful roll out and ongoing progress in

commercial excellence.

Good progress has been made on reducing embedded carbon, with the introduction of larger brick

perforations and ongoing work to introduce a lower-carbon brick.

The Wilnecote factory is almost complete and commissioning an enhanced range of specification

focused bricks. Good progress has been made on the pipeline of organic investment projects.

The brick slips facility at Accrington has been completed and a new range of slips has been brought

tomarket, supported by a commercial organisation to drive growth.

Progress has been made on developing the innovation funnel, with a roadmap now in place and strong

progress has been made in developing the calcined clay opportunity with discussions now being held

with potential partners. In addition, a full acquisition funnel has been prepared, focusing on slips, façades

and alternative methods of construction.

Savings and efficiencies continue to be delivered by the Sustainable Operational Excellence programme

and our commercial excellence initiative has continued to drive value in the year.

80%

Ben Guyatt Objectives linked to:

Improving sustainability including the launch of a new lower-carbon

product range; completion of the redeveloped factory at Wilnecote and

progress to be made on the pipeline of organic investment opportunities,

specifically including opportunities beyond brick; driving innovation and

business growth through preparation of an acquisition funnel of potential

bolt-on acquisition opportunities; progressing compliance with UK

Governance Code 2024 Provision 29 inaccordance with roadmap.

Good progress has been made on reducing embedded carbon, with the introduction of larger brick

perforations and ongoing work to introduce a lower-carbon brick.

The Wilnecote factory is almost complete and commissioning an enhanced range of specification

focused bricks. Good progress has been made on the pipeline of organic investment projects.

A full acquisition funnel has been prepared, focusing on slips, façades and alternative methods

ofconstruction.

Strong progress has been made on compliance with Provision 29 of the UK Corporate Governance

Code2024, with material controls identified and documented.

75%

Long-termincentives: 2023 Performance Share Plan (audited)

PSP awards granted in 2023 are subject to following the performance conditions:

Performance condition

% of award

subject to condition Target

% of PSP award

which will vest

Annual basic EPS growth (before exceptional items)

over a 2022 EPS of 26.4p

40%

<4%

Equal to 4%

11% or above

25%

100%

Company’s total TSR against TSR index members – measured at 31December 2025 40%

<Median

Median

Upper quartile or above

25%

100%

Reduction in Group’s clay product carbon emissions intensity versus 2019 baseline

measured at 31 December 2025

10%

<10%

10%

18% or above

25%

100%

Reduction in Group’s plastic packaging intensity versus 2019 baseline measured at

31December 2025

10%

<25%

25%

50% or above

25%

100%

Vesting is measured on a straight-line basis between the above performance points.

The Index comprises the unweighted FTSE 250 participants (excluding investment trusts).

The 2023 PSP awards have a vesting date of 3 April 2026. All four performance conditions of the 2023 PSP are calculated over thethree-year reporting period to 31 December 2025,

therefore are known at the year-enddate. The performance conditions have not been achieved and accordingly none of the awards shall vest.

Performance Share Plan awards made during the year (audited)

On 19 March 2025 the following awards were granted to Executive Directors.

Type of award

Basis of award

granted

Share price used to

determine number of

options granted

Number of

shares over

which award

was granted

Face value

of award

% of face

value that would vest

at threshold

performance

Vesting

determined by

performance

over

Neil Ash Nominal (1p)

cost option

175% of salary of

£500,706

£1.605 545,873 £876,126 25% Three years to

31December 2027

Ben Guyatt Nominal (1p)

cost option

150% of salary of

£358,406

£1.605 334,917 £537,542 25% Three years to

31December 2027

1. The number of options granted was calculated using the salary in place for each Executive Director at the date of grant on 19 March 2025.

2. The number of options was determined using a share price of £1.605 being an amount equal to the average mid-market closing price for the five days prior to grant.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 112

Remuneration Committee Report Annual Report on Remuneration continued

Performance condition % of award subject to condition Target % of PSP award which will vest

Absolute EPS (before exceptional items) reported for the

year ending 31 December 2027

40% <15p

Equal to 15p

23p or above

25%

100%

Company’s total TSR against TSR of index members

(FTSE 250 excluding investment trusts) – measured at

31December 2027

40% <Median

Median

Upper quartile or above

25%

100%

Reduction in Group’s clay product carbon

emissionsintensity versus 2019 baseline measured at

31December 2027

10% <12%

12%

18% or above

25%

100%

Reduction in Group’s plastic packaging intensity versus

2024 baseline measured at 31 December 2027

10% <15%

15%

26% or above

25%

100%

Vesting is measured on a straight-line basis between the above performance points.

The Index comprises the unweighted FTSE 250 participants (excluding investment trusts).

The EPS targets were set based on the Board’s expectations for the future performance of the business and the wider economy inMarch 2025

and were considered appropriately stretching yet achievable at the time.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 113

Remuneration Committee Report Annual Report on Remuneration continued

SINGLETOTAL FIGURE OF REMUNERATION (AUDITED)

Non-Executive Directors (audited)

The table below sets out the single total figure for remuneration and breakdown for each Non-Executive Director.

Roles Period Fees Total

Nigel Lingwood

Chair 2025 £113,303 £113,303

2024 – –

Justin Atkinson

Chair 2025 £66,172 £66,172

2024 £164,698 £164,698

Martin Sutherland Independent Non-Executive Director 2025 £61,889 £61,889

2024 £60,233 £60,233

Katherine Innes Ker Senior Independent Non-Executive Director 2025 £78,889 £78,889

2024 £77,233 £77,233

Vince Niblett Independent Non-Executive Director 2025 £68,889 £68,889

2024 £67,233 £67,233

Gina Jardine

Independent Non-Executive Director 2025 £70,639 £70,639

2024 £61,983 £61,983

Aysegul Sabanci

Independent Non-Executive Director 2025 £46,417 £46,417

2024 – –

1. Nigel Lingwood joined the Board of Forterra plc on 1 April 2025 and became Chair on 20 May 2025 following the 2025 AGM.

2. Justin Atkinson stepped down as Chair on 20 May 2025.

3. Fees of £1,750 were paid to Gina Jardine post year-end in relation to 2024.

4. Aysegul Sabanci was appointed as an Independent Non-Executive Director on 1 April 2025.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 114

Remuneration Committee Report Annual Report on Remuneration continued

DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS

Share ownership plays a key role in the alignment of our Executive Directors with the interests of shareholders. Our Executive Directors are expected to build up and maintain

a 200% of salary shareholding in Forterra. Where an Executive Director does notmeet this guideline, then they are required to retain at least 50% of the net of tax vested shares

under the Company’s share plans until the guideline is met. The number of shares held by the Directors as at 31 December 2025 are as follows.

Shareholding

requirement

(% salary)

Current

shareholding

(% salary)

Beneficially

owned

Deferred

shares not

subject to

performance

conditions

Unvested

PSP

(nominal cost

options

subject to

performance

conditions)

Unvested

DABP

(nominal cost

options not

subject to

performance

conditions)

Outstanding

Sharesave

awards

Shareholding

requirement

met

Executive Directors

Neil Ash 200% 53% 143,554 – 1,484,437 58,059 14,053 No

Ben Guyatt 200% 77% 148,029 461 819,073 106,101 14,053 No

Non-Executive Directors

Nigel Lingwood n/a – 50,000 – – – – n/a

Justin Atkinson

n/a – 35,256 – – – – n/a

Martin Sutherland n/a – 10,064 – – – – n/a

Katherine Innes Ker n/a – 6,164 – – – – n/a

Vince Niblett n/a – 24,367 – – – – n/a

Gina Jardine n/a – 7,000 – – – – n/a

1. As at 31 December 2025. This is based on a closing share price of £1.854 and the year-end salaries of the Executive Directors. Values are not calculated for Non-Executive Directors

asthey are not subject to shareholding requirements.

2. Includes shares owned by connected persons.

3. This relates to shares awarded granted under the Forterra all-employee Share Incentive Plan (SIP) and does not include dividend shares accrued on the free share awards.

The balance includes the free share awards made in May 2016 of 277 shares, and the free share award from 2021 of184 shares.

4. This relates to PSP awards granted in the form of nominal (1p) cost options and subject to performance criteria.

5. This relates to DABP awards for the partial deferral of the 2022 and 2024 annual bonus granted in the form of nominal (1p) cost options which are not subject to performance criteria.

These options were granted in 2023 and 2025.

6. During 2023 grants were made under the 2023 Sharesave Scheme with an exercise price of £1.32, resulting in a 20% discount atgrant date and a vesting date of 1 December 2026.

7. Justin Atkinson stepped down as Chair on 20 May 2025. The above shareholding is shown as at date of departure.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 115

Remuneration Committee Report Annual Report on Remuneration continued

Summary of share option awards

Type of

award

Date

granted

At 1 January

2025

Awarded

during the year

Vested

during the year

Exercised

during the year

Lapsed/cancelled

during the year

At 31 December

2025

Neil Ash PSP Mar-25 – 545,873 – – – 545,873

DABP Mar-25 – 58,059 – – – 58,059

PSP May-24 447,891 – – – – 447,891

SAYE Oct-23 14,053 – – – – 14,053

PSP Apr-23 490,673 – – – – 490,673

Total 1,556,549

Ben Guyatt PSP Mar-25 – 334,917 – – – 334,917

DABP Mar-25 – 41,559 – – – 41,559

PSP May-24 267,167 – – – – 267,167

SAYE Oct 23 14,053 – – – – 14,053

PSP Apr-23 216,989 – – – – 216,989

DABP Mar-23 64,542 – – – – 64,542

PSP Mar-22 176,239 – – – (176,239) —

DABP Mar-22 59,715 – – (59,715) – —

Total 939,227

PSP awards granted in 2024 are subject to the following performance conditions.

Performance condition

% of award

subject to condition Target

% of PSP award

which will vest

Annual basic EPS growth (before exceptional items) over a 2023 EPS of 11.4p 40% <5%

Equal to 5%

10% or above

25%

100%

Company’s total TSR against TSR of FTSE 250 members excluding investment trusts – measured at 31 December 2026 40% <Median

Median

Upper quartile or above

25%

100%

Reduction in Group’s clay product carbon emissionsintensity versus 2019 baseline measured at31December 2026 10% <8%

14% or above

25%

100%

Reduction in Group’s plastic packaging intensity versus 2019 baseline measured at 31 December 2026 10% <20%

20%

40% or above

25%

100%

Vesting is measured on a straight-line basis between the above performance points.

The Index comprises the unweighted FTSE 250 participants (excluding investment trusts).

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 116

Remuneration Committee Report Annual Report on Remuneration continued

PERFORMANCE GRAPH

Totalshareholder return

This graph shows the value, by 31 December 2025, of £100 invested

in Forterra plc on 20 April 2016, compared with the value of £100

invested in the FTSE Small Cap (excluding Investment Trusts) and

theFTSE All-Share Construction and Materials on a daily basis.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 117

Remuneration Committee Report Annual Report on Remuneration continued

TOTAL SHAREHOLDER RETURN

CHIEF EXECUTIVE OFFICER PAY RATIO

The CEO median pay ratio in 2025 was 19 times. The Remuneration

Committee is steadfastly committed to ensuring that the reward of the

CEO and other senior executives is commensurate with performance.

Accordingly, as laid out graphically in the Remuneration Policy,

asignificant element of the Chief Executive’s total pay is variable

andisdetermined based onthe performance of the Company and

isdependent on share price performance.

The Regulations require us to disclose the ratio of the Chief Executive’s

pay, using the amount set out in the single total figure table, to that

ofthe median, 25th and 75th percentile total remuneration of full-time

equivalent UK employees.

The table to the right shows the relevant data for Forterra’s employees

for 2025, calculated using Option B as set out in the legislation.

Pay details for the individuals whose 2025 remuneration is at the

median, 25th percentile and 75th percentile amongst UK-based

employees are also set out in the table to the right.

The median, 25th percentile and 75th percentile employees used to

determine these ratios were identified by using gender paygap data

and full-time equivalent annualised remuneration (comprising salary,

benefits, pension, annual bonus and long-term incentives) of allUK-

based employees of the Group as at April 2025 (i.e. Option B) under

the Regulations. The Committee selected this calculation methodology

as it was felt to produce the most consistent result.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 118

Remuneration Committee Report Annual Report on Remuneration continued

Year

Method of

calculation adopted

25th percentile pay

ratio

(Chief Executive:

UK employees)

Median pay ratio

(Chief Executive:

UK employees)

75th percentile pay

ratio

(Chief Executive:

UK employees)

2025 Option B 27:1 19:1 18:1

2024 Option B 21:1 17:1 14:1

2023 Option B 33:1 28:1 26:1

2022 Option B 32:1 23:1 19:1

2021 Option B 27:1 24:1 21:1

2020 Option B 19:1 19:1 18:1

Chief Executive 25th percentile Median 75th percentile

Salary £500,706 £34,152 £48,374 £51,172

Total pay and benefits £1,032,407 £37,567 £53,211 £56,289

CHANGE IN EXECUTIVE AND NON-EXECUTIVE DIRECTORS’ REMUNERATION COMPARED WITH EMPLOYEES

The Committee ensures that the Executive Directors’ remuneration outcomes remain appropriate and consistent with the wider workforce.

Neil Ash

(CEO)

Stephen

Harrison

(former

CEO)

Ben Guyatt

(CFO)

Nigel

Lingwood

(Chair)

Justin

Atkinson

(Chair)

Martin

Sutherland

(NED)

Katherine

Innes Ker

(NED)

Vince Niblett

(NED)

Divya

Seshamani

(NED)

Gina Jardine

(NED)

Aysegul

Sabanci

(NED)

Average for

all other

employees

Changes

2024 to 2025

Base salary change

2.8% n/a 2.8% n/a 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% n/a 3.0%

Benefits change

61.2% n/a 9.0% n/a – – – – – – n/a (4.9%)

Annual bonus

102.3% n/a 99.6% n/a – – – – – – n/a 110.1%

Changes

2023 to 2024

Base salary change

2.0% n/a 2.0% n/a 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% n/a 2.0%

Benefits change

(66.4%) n/a (6.8%) n/a – – – – – 0.0% n/a 0.5%

Annual bonus

425.0% n/a 293.7% n/a – – – – – 0.0% n/a 154.5%

Changes

2022 to 2023

Base salary change

n/a (57.7%) 5.0% n/a 5.0% 5.0% 5.0% 5.0% 5.0% n/a n/a 5.0%

Benefits change

n/a (56.6%) (22.5%) n/a – – – – – n/a n/a (1.5%)

Annual bonus

n/a (93.9%) (85.6%) n/a – – – – – n/a n/a (79.7%)

Changes

2021 to 2022

Base salary change

n/a 3.5% 3.5% n/a 3.5% 3.5% 3.5% 3.5% 3.5% n/a n/a 5.4%

Benefits change

n/a (5.8%) 1.0% n/a – – – – – n/a n/a 23.5%

Annual bonus

n/a (5.8%) (3.4%) n/a – – – – – n/a n/a (11.4%)

Changes

2020 to 2021

Base salary change

n/a 6.8% 6.8% n/a 6.8% 6.8% 6.8% 6.8% 6.8% n/a n/a 1.5%

Benefits change

n/a (9.7%) 0.1% n/a – – – – – n/a n/a 4.8%

Annual bonus

n/a 100.0% 100.0% n/a – – – – – n/a n/a 215.9%

1. The Executive and Non-Executive Directors received a 3.0% increase in 2022 but when full-year earnings are compared to 2021, where an increase was awarded mid year,

the year-on-year increase was 3.5%.

2. Neil Ash joined in April 2023. The increase in benefits is due to comparing a full 12 months in 2024 to 9 months in 2023.

3. Gina Jardine joined in April 2023 therefore no prior year comparisons for earlier years.

4. The percentage presented is calculated using base salary considering the three-month voluntary deduction in salary of 20% taken by the Executive and Non-Executive Directors

during2020 due to the Covid-19 pandemic.

5. No bonus was payable to Ben Guyatt and Stephen Harrison in 2020. The bonus for 2021 is therefore presented as a 100% increase.

6. Stephen Harrison left Forterra in May 2023.

7. Ben Guyatt was appointed as Chief Financial Officer on 1January 2020 and therefore no movement was presented in the table in relation to his remuneration for the period 2019 to 2020.

8. Nigel Lingwood joined in Forterra in April 2025, therefore there are no comparisons to prior years.

9. Aysegul Sabanci joined Forterra in April 2025, therefore there are no comparisons to prior years.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 119

Remuneration Committee Report Annual Report on Remuneration continued

Metric

1,2

2025 2024 2023

2022 2021 2020

Mean gender pay gap in hourly pay (%) 4.6% 9.1% 16.7% 15.1% 11.4% 7.8%

Median gender pay gap in hourly pay (%) 17.5% 21.2% 25.4% 25.1% 21.6% 7.6%

Mean gender bonus gap (%) 35.5% 19.6% (18.3%) 7.3% 66.2% 46.7%

Median gender bonus gap (%) 63.8% 67.4% (24.8%) 6.4% 70.0% 59.2%

Metric

2025 2024 2023 2022 2021 2020

Male employees receiving bonus (%) 50.3% 53.2% 96.7% 66.2% 48.6% 70.7%

Female employees receiving bonus (%) 86.8% 94.4% 98.0% 83.1% 32.2% 81.8%

GENDER PAY REPORTING

Forterra continues to be committed to ensuring its policies and

practices adopt fair and equal principles when it comes to all aspects

of diversity and inclusion. Our gender pay reporting statistics (adhering

to reporting guidelines) for the year ended April2025 are as follows.

2025 mandatory metrics

The mean hourly rate pay gap has decreased by 4.5% in 2025

compared to 2024 to 4.6%. This reduction is due to less females being

in lower paid roles than in 2024 as can be seen in the quartile gender

pay split on the following page. Due to the lower proportion of females

inthe workforce than males, any increase in the number of females

inhigher paid roles has a larger impact on the average pay rate for

afemale employee.

There continues to be a high percentage of females in the workplace

who receive a bonus. The majority of female employees will be subject

to the annual bonus scheme, whereas a large proportion of male

employees willbe in operational roles and will receive a monthly

bonusbased on production targets.

We continue our commitment to increase gender diversity and,

inparticular, within operational roles.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 120

Remuneration Committee Report Annual Report on Remuneration continued

1. The mean and median gender pay gap has been calculated using April 2025 pay, allowances, bonuses, share exercises, recognition awards and other

relevantmetrics.

2. Executive and Non-Executive Directors are excluded from the gender pay gap report as they are employed by Forterra plc and not Forterra Building Products Ltd.

3. Two Executive Directors of Forterra plc were incorrectly included in the Gender Pay Gap workings for 2023 and prior years. The impact on the reported figures

isnot considered material.

4. 2020 Gender Pay Gap report not representative due to employees being placed on furlough as a direct consequence of the global pandemic.

1. The mean and median gender pay gap has been calculated using April 2024 to March 2025 bonuses, share exercises, recognition awards and other

relevantmetrics.

Relative importance of total spend on pay

The following table shows the Company’s actual spend on pay for all

employees compared to distributions to shareholders in 2025.

Disbursements from profit

Metric

2025

£m

2024

£m

Total spend on pay, including Directors 105.6 90.6

Distributions to shareholders by way of dividend 8.2

6.3

1. Final 2024 dividend of £0.02 per share paid in July 2025 and interim dividend of £0.019

pershare paid in October 2025.

2. Final 2023 dividend of £0.02 per share paid in July 2024 and interim dividend of £0.01

pershare paid in October 2024.

CASCADE OF INCENTIVES

The remit of the Remuneration Committee includes not only the

remuneration of the Executive Directors but also the members ofthe

Executive Committee. In making remuneration decisions in respect

ofthe ExecutiveDirectors and senior management, the Committee

also monitors and considers the remuneration of the wider workforce

to ensure that pay is fair throughout the Group.

Level

Participation

inLTIP

Participation

inbonus

Participation

in SAYE

Executive Directors ✓ ✓ ✓

Executive Committee ✓ ✓ ✓

Senior Managers ✓ ✓ ✓

Managers ✓ ✓

Employees ✓

✓

1. All salaried staff participate in the Forterra staff bonus scheme. Arrangements for hourly

paid staff vary by location with a number of facilities offering production-related bonuses

as part of a total remuneration package. Other facilities may have a higher level of base

payand no bonus arrangements.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 121

Remuneration Committee Report Annual Report on Remuneration continued

THE GENDER PAY SPLIT WITHIN EACH QUARTILE (%)

2025

2024

LOWER

77% MALE 76% MALE

23% FEMALE 24% FEMALE

LOWER MIDDLE

93% MALE 92% MALE

7% FEMALE 8% FEMALE

UPPER MIDDLE

93% MALE 93% MALE

7% FEMALE 7% FEMALE

UPPER

90% MALE

94% MALE

10% FEMALE 6% FEMALE

IMPLEMENTATION OF THE REMUNERATION POLICY

FOR THE YEAR ENDING 31 DECEMBER 2026

A summary of how the Directors’ Remuneration Policy will be applied

during the year ending 31 December 2026 is set out below.

Base salary

The 2026 review of Executive Directors’ salaries took place in January

2026. As outlined previously, as a result of market benchmarking it

wasidentified that the base salary of the CEO was significantly below

relevant market peers, therefore a one-off adjustment of 10% is being

proposed for 2026. The CFO’s base salary review determined that

noadjustment was required, therefore the base salary of the CFO was

increased by 3.15% inline with that awarded to the wider workforce.

This increase took effect from 1 January 2026.

Participants 2026 2025 % increase

Neil Ash £550,777 £500,706 10.00%

Ben Guyatt £369,696 £358,406 3.15%

Pension and benefits

The Committee intends that the implementation of its policy in relation

to pension and benefits will be in line with the proposed Remuneration

Policy for the year ended 31 December 2026.

Annual bonus

Subject to approval of the revised policy, the maximum annual bonus

for the year ending 31 December 2026 will be 150% of salary for the

CEO and 130% of salary for the CFO. Awards will be determined

based on a combination of the Group’s financial results, being adjusted

EBITDA (60%), average working capital as a percentage of sales (20%)

and non-financial/strategic performance (20%).

The specific financial targets were confirmed in early 2026. These are

considered commercially sensitive. However, the Committee intends

todisclose these retrospectively in next year’s Annual Report on

Remuneration along with details as to their achievement to the extent

that they do not remain commercially sensitive. The strategic objectives

for 2026 are also considered commercially sensitive. Stretching targets

aligned to the Group’s strategy have been set.

In determining the level of any bonus award to be deferred into shares

under the Deferred Annual Bonus Plan, the first 50% of bonus earned

will be deferred in shares for three years, with the remaining 50% paid

in cash.

LONG-TERM INCENTIVE PLAN (LTIP)

The Committee expects to grant awards under the 2026 LTIP in May

2026, which, subject to approval of the revised policy, will be split

between performance shares and restricted shares.

Award levels

The notional performance share award level for the CEO (prior to any

reduction for restricted share conversion) will remain at the maximum

of 175% of base salary. The award will be split 50% performance

shares (a face value of 87.5% of base salary) and 50% restricted

shares (a face value of 43.75%, after applying the discount for these

awards), reducing the award face value to 131.25% of base salary.

The notional performance share award level for the CFO will remain

ata maximum of 150% of base salary, and under the 50:50 split, the

performance share award would equate to 75% and the restricted

share award to 37.5% of salary face value, reducing the award face

value to 112.5% of base salary.

Performance Shares

45% of the performance share award shall be subject to a stretching

EPS performance condition which reflects the Board’s aspirations

forgrowth, supported by the Group’s recent programme of capital

investment, whilst also recognising the challenging market conditions

which the Group continues to face, along with the significant

uncertainty as tothe timing and trajectory of the market recovery.

45% of the awards will be subject to a TSR performance condition

withthe comparator group being the unweighted FTSE 250

participants (excluding investment trusts).

The final 10% of the awards will be determined by a sustainability-

based target.

The performance targets to be applied to the 2026 Performance Share

Plan awards have yet to be finalised by the Committee. Once finalised,

the targets will be communicated by way of an RNS announcement.

Participants Type of award

Expected basis

of award

granted

Vesting

determined by

performance

over

Neil Ash Nominal (1p)

cost option

87.5% of salary

of £550,777

Three years to

December 2028

Ben Guyatt Nominal (1p)

cost option

75% of salary of

£369,696

Three years to

December 2028

Restricted Shares

The remaining 50% of the 2026 LTIP awards will be granted in the

form of restricted shares. These will be granted without performance

conditions, reflecting their distinct purpose within the overall remuneration

framework. Instead, they will be subject to a three-year retention

period, during which participants must remain in employment with

theGroup.

Participants Type of award

Expected basis

of award

granted

Vesting

determined by

performance

over

Neil Ash Nominal (1p)

cost option

43.75% of salary

of £550,777

Three years to

December 2028

Ben Guyatt Nominal (1p)

cost option

37.5% of salary

of £369,696

Three years to

December 2028

Both the Performance share awards and Restricted share awards

willbe subject to an underpin of satisfactory ROCE and Health and

Safety performance.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 122

Remuneration Committee Report Implementation of the Remuneration Policy continued

Fees for Chair and Non-Executive Directors

The Company’s approach to Non-Executive Directors’ remuneration is set by the Board with account taken of the time and responsibility

involved in each role, including where applicable the chairing of Board Committees.

2026 2025 % Increase

Chair £174,559 £169,228 3.15%

Non-Executive Director base fee £63,839 £61,889 3.15%

Additional fees:

Senior Independent Director £10,000 £10,000 –

Audit and Risk Committee Chair £7,000 £7,000 –

Remuneration Committee Chair £7,000 £7,000 –

Sustainability Committee Chair £7,000 £7,000 –

CHIEF EXECUTIVE OFFICER’S REMUNERATION HISTORY

The table below sets out the total Chief Executive Officer’s remuneration for 2025, together with the percentage of maximum annual bonus awarded in that year.

2025 2024 2023 2022 2021 2020 2019 2018 2017 2016

Single total figure £1,032,407 £774,858 £1,428,665

£930,206 £939,074 £748,689 £1,052,599 £893,054 £762,476 £985,806

Annual bonus (% of maximum) 95.0% 48.3% 12.5% 89.5% 97.8% – – 60.5% 72.0% 50.3%

PSP vesting (% of maximum) – – 54% – – 45% 72% 36.9% – –

1. Includes one-off bonus agreed prior to IPO of £400,000.

2. Includes a one-off share award for Neil Ash on joining Forterra on 3 April 2023 of £409,334 to compensate for amounts foregone from previous employer.

ADVISERS TO THE REMUNERATION COMMITTEE

The Remuneration Committee has access to independent advice where it considers it appropriate. During the year, the Committee sought advice from Willis Towers Watson (WTW). WTW also

provides other remunerationand benefits services to the Group and the Committee is satisfied no conflict of interest exists in the provision of these services. The Committee is satisfied that the

advice received by WTW in relation toexecutive remuneration matters during the year was objective and independent. WTW is a member of the Remuneration Consultants Group and abides

by the Remuneration Consultants Group Code of Conduct, whichrequires itsadvice to be objective and impartial. The fees paid to WTW during the year totalled £89,750.

STATEMENT OF SHAREHOLDER VOTING

A high level of shareholder support was received for our Remuneration Report at our 2025 AGM, as summarised below:

APPROVAL

This Remuneration Committee Report, comprising the Annual Statement, Remuneration Policy Summary, Annual Report onRemuneration

and Implementation of the Remuneration Policy has been approved by the Board of Directors.

Signed on behalf of the Board of Directors:

Katherine Innes Ker

Chair of the Remuneration Committee

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 123

Remuneration Committee Report Implementation of the Remuneration Policy continued

Level Votes for Votes against Votes withheld

An advisory vote on the approval ofthe 2025 Annual Report onRemuneration

151,793,525

99.66%

520,768

0.34%

1,007,542

TheDirectors present their report for the financial year ended

31December 2025. The information required by the Listing Rules (DTR

4.1.8R) is contained in the Strategic Report and theDirectors’ Report.

Forterra plc is incorporated in England and Wales withcompany

number 09963666.

DIVIDENDS

An interim dividend of 1.9p per Ordinary Share was paid on 10

October 2025 to shareholders on the register at 19 September 2025.

Subject tosecuring shareholder approval at the 2026 AGM, the

Directors are proposing a final dividend for the financial yearended

31December 2025 of 4.3p per Ordinary Share, whichbrings the total

dividend for the year to 6.2p. If approved attheAGM, payment of the

final dividend will be made to shareholders registered at the close of

business on 12 June 2026 and will be paid on 6 July 2026.

DIRECTORS

The Directors of the Company who served during the year and to

thedate of this report are listed on pages 72 to 74. Details of the

Directors’ interests in the share capital of the Company are set out

onpage 115 of the Remuneration Committee Report.

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 re-election by theshareholders at the

firstAnnual General Meeting following their appointment. Inpractice

however, all Directors are expected to retire and seek re-election on

anannual basis.

The Board of Directors may exercise all of 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 ability to borrow

money and to issue and repurchase shares.

The Articles of Association may be amended in accordance withthe

provisions of the Companies Act 2006 by way of a special resolution

ofthe Company’s shareholders.

SHARE CAPITAL AND CONTROL

Details of the Company’s share capital are included within note27

ofthe Consolidated Financial Statements on page 166.

As at 31 December 2025 there were 212,803,389 Ordinary Shares

of1p nominal value in issue. The Company has one class of shares,

Ordinary Shares of 1p nominal value, which carry equal rights to

dividends, voting and return of capital on winding up of the Company.

There are no restrictions on the transfer ofsecurities in the Company

and there are no restrictions on any voting rights other than those

prescribed by law, nor is theCompany aware of any arrangement

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.

The Company has established two separate employee benefit trusts

forthe purposes of satisfying awards under the Company’s share-based

incentive schemes. The Company has established a Trust in connection

with the Group’s Share Incentive Plan (SIP) which holds Ordinary

Shares in trust for the benefit of employees of the Group. TheTrustees

of the SIP Trust may vote in respect of Forterra shares held inthe Trust

but only as instructed by participants in the SIP inaccordance with the

deed and rules governing the scheme. TheTrustees will not otherwise

vote in respect of the shares held in theSIPTrust. As at 31 December

2025 the Trust held a total of 265,717 shares in the Company, with

anominal value of 2,657p and ata weighted average purchase

consideration of 231p per share.

The Company has also established The Employee Benefit Trust (EBT)

to satisfy awards vesting under the Performance Share Plan(PSP),

theDeferred Annual Bonus Plan (DABP) and the Sharesave Scheme.

As at 31 December 2025 the EBT held a total of2,167,669 shares

inthe Company, with a nominal value of 21,769p and at a weighted

average purchase consideration of 248ppershare.

POLITICAL DONATIONS

The Group made no donations during the year to any political party

orother political organisation.

POST BALANCE SHEET EVENTS

Within the year end results, the Company has announced the

commencement of a share buyback programme. The aggregate price

of all shares purchased in 2026 will be no more than £20 million

(excluding stamp duty and expenses) and any Ordinary shares

purchased under the programme will be cancelled immediately.

SIGNIFICANT AGREEMENTS (CHANGE OF CONTROL)

The Company’s committed credit facilities as described in note 20

ofthe Consolidated Financial Statements on page 158 are subject to

provisions that require the mandatory prepayment of the facilities on

achange of control. For this purpose, a change of control is defined

asany person or group of persons acting inconcert gaining direct

orindirect control of the Company. Forthe purposes of this definition,

control of the Company means the holding beneficially (directly or

indirectly) of the issued share capital of the Company having the right

to cast more than 30% of the votes capable of being cast in general

meetings of the Company.

There are no agreements between the Group and its Directors and

employees providing for compensation for loss of office oremployment

(whether through resignation, purported redundancy or otherwise)

inthe event of a takeover bid.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 124

Directors’ Report

SUBSTANTIAL SHAREHOLDINGS

At 31 December 2025 the Company, in accordance with the Disclosure

Guidance and Transparency Rules, has been notified of the following

interests of greater than 3% in its Ordinary Share capital. This information

is correct at the date of notification and it should be noted that these

holdings may have changed since they were notified to the Company.

Information provided to the Company in accordance with the

Disclosure Guidance and Transparency Rules is publicly available

viathe Regulatory News Service and on the Company’s website.

GOING CONCERN

The Group’s credit facility comprises a committed revolving credit

facility (RCF) of £170m extending to June 2028, which was extended

following the exercise of a 17-month extension option during 2025.

Atthe balance sheet date, borrowings against the facility totalled £62m

with £108m of headroom remaining. The cash balance stood at £6.1m

with reported net debt before leases of £55.7m (2024: £84.9m) (net

debt is presented inclusive of capitalised arrangement fees). The Group

also benefits from an uncommitted overdraft facility of £10m which was

undrawn at the year-end.

The Group meets its working capital requirements through these cash

reserves and facilities, and closely manages working capital to ensure

sufficient daily liquidity and prepares financial forecasts under various

scenarios to ensure sufficient liquidity over the medium-term.

Management maintains strong relationships with the Group’s lenders

and advisors, and remains confident in the Group’s ability to continue

to access the financing it requires.

The facility is subject to covenant restrictions of leverage (net debt/

adjusted EBITDA) (as measured before leases) of less than 3 times and

interest cover of greater than 4 times. The covenants are subject to

testing on a half yearly basis. The Group has comfortably traded within

its covenants throughout 2025 and anticipates remaining within these

throughout 2026.

Management have modelled two financial scenarios for the 18-month

period to 30 June 2027, comprising a base case and a plausible

downside scenario, reflecting both macroeconomic and industry-

specific projections. In addition to this, a reverse stress test has also

been modelled.

Assumptions underpinning these scenarios are outlined as follows:

• The base case scenario is aligned to our current demand expectations,

with 2026 sales volumes expected to be similar to 2025;

•

• Management continues to align production to anticipated sales,

minimising inventory growth. In addition, capital expenditure

continues to reduce from prior years, with the Group’s spend on

strategic projects largely complete, increasing free cash flows;

• With leverage now returned to normalised levels, and reflective of our

lower capital expenditure requirements going forward, the Board's

intention to commence the return of surplus capital to shareholders

with a £20m share buyback programme has been included; and

• The Group’s plausible downside scenario takes into account the

lowest levels of market demand seen across our products since

2022. Product dependent, this ranges up to 40% below the levels

last seen in 2022. 2022 is considered to be representative of a

normalised market for the Group and as such is seen as a reasonable

benchmark for scenario modelling. It is not considered plausible that

demand could fall further than the assumptions detailed within the

downside scenario laid out below.

Scenario Sales volume assumptions

Management

mitigations

Base Sales volumes remain between

12% and 25% below 2022.

Volumes improve in 2027 but

remain up to 22% below 2022

None necessary

Plausible

downside

Product dependent, volumes

return to their lowest level since

2022, which is a reduction of

between 23% and 38% relative to

2022. Volumes begin to recover

in 2027 but remain up to 36%

below 2022

Proposed share

buyback

programme is

paused

Under both of the above scenarios, there is no breach in covenants

throughout 2026 and in the period up to 30 June 2027.

In addition to the scenarios, the Group has prepared a reverse stress

test to determine the level of market decline that could potentially breach

covenants, before further mitigating actions are taken. The reverse stress

test indicated, that should volumes fall by a further 16% from the

plausible downside, the Group would be at risk of breaching its

covenants. This is viewed by the Board to be a highly unlikely scenario.

The Board remains confident in the Group's ability to benefit significantly

as markets recover and its strategic investments generate returns.

Further to this, in the event of sales volumes falling in line with those

modelled in the reverse stress test, the Group would seek to enact

further mitigating actions including additional cost savings, production

reductions, curtailment in the quantum of dividend distributions and the

sale of surplus land and buildings.

Taking the above into consideration, the Directors have a reasonable

expectation that the Group has adequate resources to continue in

operational existence for the going concern period to 30 June 2027.

The Group therefore adopts the going concern basis in preparing the

Consolidated Financial Statements.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 125

Directors’ Report continued

31 December 2025 10 March 2026

Nature

of holding

Number of

shares disclosed

% interest in

voting rights

Number of

shares disclosed

% interest in

voting rights

Lansdowne Partners Indirect 22,802,737 10.72 22,802,737 10.72

Vulcan Value Partners Indirect 20,379,023 9.58 20,379,023 9.58

Cobas Asset Management Indirect 10,731,743 5.04 14,454,764 7.14

Aberforth Partners Indirect 10,870,862 5.11 10,870,862 5.11

JO Hambro Capital Management Indirect 10,647,332 5.00 10,647,332 5.00

MFS Investment Management Indirect 10,550,158 4.96 10,550,158 4.96

Kayne Anderson Rudnick Investment Management Indirect 6,432,738 3.02 6,432,738 3.02

STATEMENT OF DISCLOSURE OF INFORMATION TO THE AUDITOR

Each Director of the Company confirms that as far as they are aware,

there is no relevant audit information of which the Company’s auditors

are unaware and that each of the Directors has taken all the steps

they ought to have taken individually as a Director in order to make

themselves aware of any relevant audit information and to establish

that the Company’s auditors are aware of that information.

ANNUAL GENERAL MEETING (AGM)

The 2025 AGM will be held on 19 May 2026. Full details are contained

in the Notice convening the AGM, which will be sent to shareholders

no later than 21 days prior to the AGM.

Approved by the Board and signed by order of the Board by:

Frances Tock

Company Secretary

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 126

Directors’ Report continued

TheDirectors are required by the Companies Act 2006 to prepare

Financial Statements for each financial year that give atrue and fair

view of the state of affairs of the Group and the Company as at the

endof the financial year, and of the profit orloss of the Group for

thefinancial year. Under that law, the Directors are required to

preparetheConsolidated Financial Statements in accordance with

therequirements of the Companies Act 2006 and UK-adopted

international accounting standards and have elected to prepare the

Company Financial Statements in accordance with United Kingdom

Generally Accepted Accounting Practice, including FRS 102, the

Financial Reporting Standard applicable in the United Kingdom

andtheRepublic of Ireland and applicable law.

In preparing these 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;

• In respect of the Consolidated Financial Statements, state whether

UK-adopted international accounting standards have been followed,

subject to any material departures disclosed and explained in the

Financial Statements;

• In respect of the Company Financial Statements, state whether

applicable UK Accounting Standards, including FRS 102, have been

followed, subject to any material departures disclosed and explained

in the Financial Statements;

• 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 IFRS (and in respect of the Company Financial

Statements, FRS 102) are insufficient to enable users to understand

the impact of particular transactions, other events and conditions

onthe entity’s financial position and financial performance; and

• Prepare the Financial Statements on the going concern basis, unless

it is inappropriate to presume that the Group and the Company will

continue in business.

The Directors are responsible for keeping adequate accounting records

that are sufficient to show and explain the Group’s transactions and

disclose with reasonable accuracy, at any time, the financial position

ofthe Group and the Company, andwhich enable them to ensure

thatthe Financial Statements and the Directors’ Remuneration Report

comply with the Companies Act 2006 and as regards the Consolidated

FinancialStatements, Article 4 of the IAS Regulation. They alsohave

general responsibility for taking such steps as arereasonably open

tothem to safeguard the assets of the Group and the Company, and

to prevent and detect fraud andother irregularities.

The Directors are responsible for the maintenance and integrity of the

Company’s website. Legislation in the UK governing thepreparation

and dissemination of Financial Statements may differ from legislation

inother jurisdictions.

The Directors consider that the Annual Report and Financial Statements,

taken as a whole, is fair, balanced and understandable and provides

the information necessary forshareholders to assess the Group’s and

the Company’s performance, business model and strategy.

Each of the Directors, whose names and functions are set out on

pages 72 to 74, confirm that, to the best of their knowledge:

• The Consolidated Financial Statements of the Group, which have

been prepared in accordance with UK-adopted international

accounting standards in conformity with the requirements of the

Companies Act 2006 give a true and fairview of the assets, liabilities,

financial position and profit ofthe Group; and

• The Strategic Report contained within this document includes a fair

review of the development and performance ofthe business and the

position of the Group together with adescription of principal risks

and uncertainties that the Groupfaces.

Approved by the Board and signed on its behalf by:

Neil Ash

Chief Executive Officer

10 March 2026

Ben Guyatt

Chief Financial Officer

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 127

Statement of Directors’ Responsibilities

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 128

FINANCIAL

STATEMENTS

IN THIS SECTION

129 Independent Auditor’s Report

136 Consolidated Statement of Total

Comprehensive Income

137

Consolidated Balance Sheet

138 Consolidated Statement of Cash Flows

139 Consolidated Statement of Changes in Equity

140 Notes to the Financial Statements

173 Company Balance Sheet

174 Company Statement of Changes in Equity

175 Notes to the Company Financial Statements

178 Group Five-Year Summary

OPINION

In our opinion:

• Forterra plc’s Group Financial Statements and Parent Company Financial statements (the “Financial

Statements”) give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as

at 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 UK-adopted

international accounting standards;

• the Parent Company Financial Statements have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice; and

• the Financial Statements have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the Financial Statements of Forterra plc (the ‘Parent Company’) and its subsidiaries

(the‘Group’) for the year ended 31December 2025 which comprise:

Group

Parent Company

Consolidated Balance Sheet as at 31 December 2025 Balance sheet as at 31 December 2025

Consolidated Statement of Comprehensive Income

forthe yearended 31 December 2025

Statement of Changes in Equity for the year ended

31December 2025

Consolidated Statement of Changes in Equity for the

year ended 31December 2025

Related notes 1 to 13 to the Company Financial

Statements includingasummary of significant

accounting policies

Consolidated Statement of Cash Flows for the year

ended 31December 2025

Related notes 1 to 32 to the Consolidated Financial

Statements, including material accounting policy

information

The financial reporting framework that has been applied in the preparation of the Group Financial Statements

is applicable law and UK-adopted international accounting standards. The financial reporting framework

thathas been applied in the preparation of the Parent Company Financial Statements is applicable law and

United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable

inthe UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

ouropinion.

INDEPENDENCE

We are independent of the Group and Parent Company in accordance with the ethical requirements that are

relevant to our audit of the Financial Statements in the UK, including 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 prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent

Company and we remain independent of the Group and the Parent Company in conducting the audit.

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 and Parent Company’s ability to continue to adopt the going concern basis of

accounting included:

• We obtained an understanding of management’s going concern assessment process by performing our

walkthrough of the Group’s Financial Statement close process.

• We obtained management’s going concern assessment, including the cash flow forecast and covenant

calculations for the going concern period which covers a period to 30 June 2027. The Group has

modelled base case and severe but plausible scenarios, derived from the board-approved budget, in its

cash flow forecasts and covenant calculations in order to test the impact of unforeseen fluctuations in the

performance and liquidity of the Group on the going concern conclusion.

• We performed an assessment of all borrowing and other financing facilities, including the compliance with

covenants computed based on the cash flow forecasts. This included obtaining evidence of the terms of

the bank loan facilities and assessing their continued availability to the Group through the going concern

period and evaluated the forecast covenants compliance.

• We tested the clerical accuracy of the model used to prepare the Group's going concern assessment.

• Using our understanding of the business, we evaluated and challenged the historical accuracy of

management’s forecast by performing the comparison with last five years actual results with the

forecasts.

• We have obtained and performed an analysis on post year end results and compared this against

management’s budget to identify unforeseen circumstances and to challenge whether the forecast cash

flows are achievable.

• We have tested the main assumptions, including trading volumes and underlying EBITDA, in each

modelled scenario by comparing them with the Group’s historical performance, economic and industry

forecasts including the potential impact of climate change on the Group’s business.

• We obtained management’s reverse stress test to assess the reduction in EBITDA required to eliminate

liquidity headroom or breach bank loan facility covenants and whether the reduction in EBITDA required

has no more than a remote possibility of occurring. We also considered the mitigating factors included in

the reverse stress test to challenge whether they are within the control of the Group. This included review

of the Group’s non-operating cash outflows and evaluating the Group’s ability to control these outflows as

mitigating actions if required.

• We reviewed the Group’s and Parent Company’s going concern disclosures included in the annual report

in order to assess their conformity with the relevant reporting standards.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 129

Independent Auditors Report to the Members of Forterra Plc

KEY OBSERVATIONS

• The Directors’ assessment forecasts that the Group will maintain sufficient liquidity and covenant

compliance through the going concern period to 30 June 2027. We observed that under both

management’s base case and severe but plausible scenarios the Group continues to demonstrate

adequate liquidity and covenant compliance.

• Management’s assessment was further supported by a reverse stress scenario to determine the level

ofrevenue volumes decline that would breach covenants, before further mitigating actions are taken.

TheDirectors considers such a scenario to be remote.

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 and Parent Company’s

ability to continue as a going concern for a period to 30 June 2027.

In relation to the Group and Parent Company’s reporting on how they have 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. However, because not all future events or conditions can be

predicted, this statement is not a guarantee as to the Group, and Parent Company’s, ability to continue

asagoing concern.

Overview of our audit approach

Audit scope

• We performed an audit of the complete financial information

oftwocomponents and audit procedures on specific balances

forafurther one component

• All work has been performed by the Group audit engagement team

Key audit matters

• Revenue recognition

Materiality

• Overall Group materiality of £1.8m which represents 5% of

adjustedprofit before tax

AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS

We have followed a risk-based approach when developing our audit approach to obtain sufficient

appropriate audit evidence on which to base our audit opinion. We performed risk assessment procedures,

to identify and assess risks of material misstatement of the Group Financial Statements and identified

significant accounts and disclosures. When identifying components at which audit work needed to be

performed to respond to the identified risks of material misstatement of the Group Financial Statements,

weconsidered our understanding of the Group and its business environment, the potential impact of

climatechange, the applicable financial framework, the Group’s system of internal control at the entity level,

the existence of centralised processes, applications and any relevant internal audit results.

In assessing the risk of material misstatement to the Group Financial Statements, and to ensure we had

adequate quantitative coverage of significant accounts in the Financial Statements, we selected all three

active components (2024: three components) covering entities within the Group either due to a significant

risk or an area of higher assessed risk of material misstatement of the Group Financial Statements being

associated with the components, or due to materiality or financial size of the component relative to the

Group.

Having identified the components for which work will be performed, we determined the scope to assign to

each component.

Of the three components selected, we designed and performed audit procedures on the entire financial

information of two components (“full scope components”). For the residual balances remaining in the other

component, we designed and performed audit procedures on specific significant financial statement

account balances or disclosures of the financial information of the component that were material to the

Group; all undertaken centrally by the Group audit team (“specific scope components”).

Our scoping to address the risk of material misstatement for each key audit matter is set out in the key audit

matters section of our Report.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 130

Independent Auditors Report to the Members of Forterra Plc continued

INVOLVEMENT WITH COMPONENT TEAMS

All audit work performed for the purposes of the audit was undertaken by the Group audit team.

CLIMATE CHANGE

Stakeholders are increasingly interested in how climate change will impact Group. The Group has determined

that the most significant future impacts from climate change on its operations will be from both the transitional

risks associated with adapting its business to a lower carbon economy, along with both the longer-term

acute risks associated with increasing severe weather events and the physical risks of long-term climate

change such as sea level rise. These are explained on page 51 in the required Task Force on Climate

Related Financial Disclosures and on pages 62 to 68 in the principal risks and uncertainties. They have also

explained their climate commitments on page 47. All of these disclosures form part of the “Other information,”

rather than the audited Financial Statements. Our procedures on these unaudited disclosures therefore

consisted solely of considering whether they are materially inconsistent with the Financial Statements or

ourknowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line

withour responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the Group’s

business and any consequential material impact on its Financial Statements.

The Group has explained in its basis of preparation note their articulation of how climate change has been

reflected in the Financial Statements including how they have reflected the impact of climate change in their

Financial Statements and how this aligns with their commitment to achieve net zero emissions by 2050.

Asexplained in the basis of preparation note, there are no significant judgements or estimates relating to

climate change.

Our audit effort in considering the impact of climate change on the Financial Statements was focused on

theadequacy of the Group’s disclosures, supported by our climate change internal specialists, and the

conclusion that there is no material impact from climate change on the carrying values of assets with

indefinite or long lives, or on the Group Financial Statements.

We also challenged the Directors’ considerations of climate change risks in their assessment of going

concern and viability and associated disclosures. Where considerations of climate change were relevant

toour assessment of going concern, these are described above.

Based on our work, we have not identified the impact of climate change on the Financial Statements

tobeakey audit matter or to impact a key audit matter.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our

audit of the Financial Statements of the current period 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 our opinion thereon, and we do not provide a separate opinion

onthese matters.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 131

Independent Auditors Report to the Members of Forterra Plc continued

Risk Our response to the risk

Revenue recognition (2025: £386.0m, 2024: £344.3m).

Refer to the Audit and Risk Committee Report (page 90); Accounting policies

(page 142); and note 2 of the Consolidated Financial Statements (page 140)

We believe that there may be an incentive for management to manipulate

revenue. There is a risk that management may override controls to overstate

revenue by recording fictitious revenue transactions through inappropriate

journals posted to revenue.

We have understood the accounting for revenue recognition which included walk through of the key controls over the process and review

ofthe revenue recognition policy. We also assessed that the policy for all revenue streams is in compliance with IFRS 15, the revenue

accounting standard.

We performed data analytic techniques over the full amount of revenue recognised in the year, testing the correlation of invoiced revenue

toreceivables and cash. We traced a sample of transactions through to cash receipts to verify the validity of the data used to perform the

analysis. Where the process did not follow our expectations, we investigated and tested a sample of transactions to ensure their validity

byagreeing back to source documentation.

We have performed cut-off testing for a sample of revenue items and credit notes booked either side of the year end date to determine

whether revenue was recognised in the period in which the performance obligation was fulfilled.

Management override

We performed specific procedures to address the risk of management override, including testing to identify unusual, neworsignificant

transactions or contractual terms and targeted testing over topside journal entries via consolidation adjustments to revenue

Key observations communicated to the Audit and Risk Committee

Based on our procedures performed, we concluded that revenue recognised in the yearwas appropriate.

How we scoped our audit to respond tothe risk

We performed full scope audit procedures overthis risk area, which covered 100% of the risk amount.

All audit work performed to address this risk was undertaken by the Group audit team.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 132

Independent Auditors Report to the Members of Forterra Plc continued

The key audit matter set out in the table above is consistent with those reported in 2024, except for the

removal of impairment of tangible and intangible assets as a key audit matter.

In the current year, we concluded that impairment of tangible and intangible assets does not represent a key

audit matter based on the Group's improved performance, and stable asset values.

OURAPPLICATIONOF MATERIALITY

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified

misstatements on theaudit and in forming our audit opinion.

MATERIALITY

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably

beexpected to influencethe economic decisions of the users of the Financial Statements. Materiality

provides abasis for determining the nature and extent of our audit procedures.

We determined materiality for the Group to be £1.8 million (2024: £1.1 million), which is 5% (2024: 5%) of

adjusted profit before tax. We believe that adjusted profit before tax provides us with the most relevant

performance measure to the main users of the Group Financial Statements and therefore have determined

materiality on that number.

We determined materiality for the Parent Company to be £3.4m (2024: £1.6m) which is 1% (2024: 0.5%) of

total assets.

Materiality

Starting basis

• Profit before tax – £23.3m

Adjustments

• Exceptional Items – £(6.7)m

• Adjusting Items – £(6.0)m

Materiality

• Adjusted profit before tax – £36.0m (materiality basis)

• Materiality of £1.8m (5% of materiality basis)

During our audit, we revised the materiality at year end to reflect the impact of one-off transactions that

occurred during the year.

PERFORMANCE MATERIALITY

The application of materiality at the individual account or balance level. It is set at an amount to

reduceto an appropriately lowlevel the probability that the aggregate of uncorrected and undetected

misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control

environment, our judgement was that performance materiality was 75% (2024: 75%) of our planning

materiality, namely £1.4m (2024: £0.8m). We have set performance materiality at this percentage due to our

understanding of the Group and Parent Company and our past experience with the audit, which indicates a

lower risk of misstatements.

REPORTING THRESHOLD

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in

excess of £0.09m (2024: £0.06m), which is set at 5% of planning materiality, as well as differences below

that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed

above and in light of other relevant qualitative considerations in forming our opinion.

OTHER INFORMATION

The other information comprises the information included in the Annual Report and Accounts set out on

pages 1 to 177, including the Strategic report and Governance 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 and Accounts.

Our opinion on the Financial Statements does not cover the other information and, except to the extent

otherwise explicitly stated in this 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 the other information, we are required to report that fact.

We have nothing to report in this regard.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 133

Independent Auditors Report to the Members of Forterra Plc continued

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; and

• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal

requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the Group and the Parent Company and its environment

obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or

the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006

requires us to report toyou if, in our opinion:

• adequate accounting records have not been kept by the Parent Company, or returns adequate for our

audit have not been received from branches not visited by us; or

• the Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be

audited are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

CORPORATE GOVERNANCE STATEMENT

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part

ofthe Corporate Governance Statement relating to the Group and Parent Company’s compliance with the

provisions of the UK Corporate Governance Code specified for our review by the UK Listing Rules.

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 or our

knowledge obtained during the audit:

• Directors’ statement with regards to the appropriateness of adopting the going concern basis of

accounting and any material uncertainties identified set out on page 125;

• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment

covers and why the period is appropriate set out on page 69;

• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in

operation and meets its liabilities set out on page 125;

• Directors’ statement on fair, balanced and understandable set out on page 93;

• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set

out on page 92;

• The section of the Annual Report and Accounts that describes the review of effectiveness of risk

management and internal control systems set out on pages 92 and 93; and

• The section describing the work of the Audit and Risk Committee set out on pages 88 and 89.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors’ Responsibilities Statement set out on page 127, 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 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.

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.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 134

Independent Auditors Report to the Members of Forterra Plc continued

EXPLANATION AS TO WHAT EXTENT 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 irregularities, including fraud. The risk of not detecting a

material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged

with governance of theCompany and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group

and determined that the most significant are directly relevant to the specific assertions in the Financial

Statements are those that relate to the reporting frameworks (UK-adopted international accounting

standards, FRS 102, the Companies Act 2006 and UK Corporate Governance Code) and the relevant tax

compliance regulations in the UK. In addition, we concluded that there are certain laws and regulations

which may have an effect in the determination of the amounts and disclosures in the Financial Statements

being the Listing Rules of the UK Listing Authority, and those laws and regulations relating to occupational

health and safety, environmental laws and data protection.

• We understood how Forterra plc is complying with those frameworks by making enquiries of management,

internal audit and those responsible for legal and compliance procedures. We corroborated our enquiries

through our review of Board minutes, papers provided to the Audit and Risk Committee and any

correspondence received from regulatory bodies where appropriate.

• We assessed the susceptibility of the Group’s Financial Statements to material misstatement, including

how fraud might occur by meeting with management from various parts of the business to understand

where it considered there was susceptibility to fraud. We also considered performance targets and the

risk of management override of controls to manage earnings or influence the perceptions of analysts.

Weconsidered the programmes and controls that the Group has established to address risks identified,

or that otherwise prevent, deter, and detect fraud; and how senior management monitors those

programmes and controls. Where the risk was considered to be higher, we performed audit procedures

to address each identified fraud risk. These procedures, as mentioned in the key audit matters section for

revenue recognition, included testing journal entries and were designed to provide reasonable assurance

that the Financial Statements were free from fraud or error.

• Based on this understanding we designed our audit procedures to identify non-compliance with such

laws and regulations. Our procedures involved understanding the process and controls to identify non-

compliance, journal entry testing, review of board minutes, enquiries of legal counsel, Group management,

internal audit, and focused testing, as referred to in the key audit matters section above.

A further description of our responsibilities for the audit of the Financial Statements is located on the

Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description

forms part of our auditor’s report.

OTHER MATTERS WE ARE REQUIRED TO ADDRESS

• Following the recommendation from the Audit and Risk Committee we were reappointed by the Company

on 5 March 2025 to audit the Financial Statements for the year ended 31 December 2025.

• The period of total uninterrupted engagement including previous renewals and reappointments is ten

years, covering the years ended 31 December 2016 to 31 December 2025.

• The audit opinion is consistent with the additional report to the Audit and Risk Committee.

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.

Anup Sodhi

Senior Statutory Auditor

for and on behalf of Ernst & Young LLP,

Statutory Auditor

Luton

10 March 2026

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 135

Independent Auditors Report to the Members of Forterra Plc continued

		2025	2024
	Note	£m	£m
Revenue	4	386.0	344.3
Cost of sales		(264.5)	(241.3)
Gross profit		121.5	103.0
Distribution costs		(52.5)	(46.1)
Administrative expenses		(34.3)	(29.4)
Other operating (expense)/income	6	(5.4)	6.4
Operating profit	5	29.3	33.9
Finance expense	9	(6.0)	(9.1)
Profit before tax		23.3	24.8
Income tax expense	10	(6.3)	(7.3)
Profit for the financial year attributable to equity shareholders		17.0	17.5
Other comprehensive income/(loss)
Effective portion of changes of cash flow hedges (net of tax impact)		0.2	(0.1)
Total comprehensive income for the year attributable to equity shareholders		17.2	17.4
Earnings per share		Pence	Pence
Basic earnings	12	8.1	8.3
Diluted earnings	12	8.0	8.3

Note

2025

£m

2024

£m

Adjusted profit measures

Adjusted EBITDA 61.6 52.0

Exceptional items 8 (6.7) (2.9)

Adjusting items

(6.0) 5.6

EBITDA 48.9 54.7

Depreciation and amortisation 13, 14, 25 (19.6) (20.8)

Operating profit 5 29.3 33.9

Adjusted profit before tax 36.0 22.1

Exceptional items 8 (6.7) (2.9)

Adjusting items 31 (6.0) 5.6

Profit before tax 23.3 24.8

Adjusted earnings per share

Pence

Basic earnings 12 12.6 7.6

Diluted earnings 12

12.5 7.6

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 136

Consolidated Statement of Total Comprehensive Income for the year ended 31 December 2025

Non-current assets
Intangible assets	13	11.5	11.6
Property, plant and equipment	14	262.8	263.8
Right-of-use assets	25	18.8	20.5
Derivative financial assets	23	–	2.8
		293.1	298.7
Current assets
Assets held for sale	15	3.0	–
Inventories	16	78.6	82.0
Trade and other receivables	17	35.4	39.0
Income tax asset		0.2	2.4
Cash and cash equivalents	18	6.1	15.2
Derivative financial assets	23	0.7	5.1
		124.0	143.7
Total assets		417.1	442.4
Current liabilities
Trade and other payables	19	(69.8)	(68.7)
Loans and borrowings	20	(0.2)	(0.7)
Lease liabilities	25	(6.7)	(5.8)
Provisions for other liabilities and charges	24	(8.4)	(6.6)
Derivative financial liabilities	23	–	(0.1)
		(85.1)	(81.9)

Note

2025

£m

2024

£m

Non-current liabilities
Loans and borrowings	20	(61.6)	(99.4)
Lease liabilities	25	(13.2)	(15.1)
Provisions for other liabilities and charges	24	(8.7)	(8.2)
Deferred tax liabilities	26	(14.0)	(12.9)
		(97.5)	(135.6)
Total liabilities		(182.6)	(217.5)
Net assets		234.5	224.9
Capital and reserves attributable to equity shareholders
Ordinary shares	27	2.1	2.1
Retained earnings		238.2	228.2
Cash flow hedge reserve	27	–	(0.2)
Reserve for own shares	27	(6.0)	(5.4)
Capital redemption reserve	27	0.2	0.2
Total equity		234.5	224.9

Note

2025

£m

2024

£m

The notes on pages 140 to 172 are an integral part of these Consolidated Financial Statements.

Approved by the Board of Directors on 10 March 2026 and signed on their behalf by:

Neil Ash

Chief Executive Officer

Ben Guyatt

Chief Financial Officer

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 137

Consolidated Balance Sheet as at 31 December 2025

		2025	2024
	Note	£m	£m
Cash generated from operations	21	68.1	51.8
Interest paid		(8.0)	(10.0)
Tax (paid)/credit		(1.1)	0.4
Net cash inflow from operating activities		59.0	42.2
Cash flows from investing activities
Purchase of property, plant and equipment		(14.5)	(25.4)
Purchase of intangible assets		–	(0.2)
Net cash used in investing activities		(14.5)	(25.6)
Cash flows from financing activities
Repayment of lease liabilities	25	(6.0)	(5.9)
Dividends paid	11	(8.2)	(6.3)
Drawdown of borrowings		47.0	93.0
Repayment of borrowings		(85.0)	(103.0)
Purchase of shares by Employee Benefit Trust		(0.7)	–
Proceeds from sales of shares by Employee Benefit Trust		–	5.1
Financing fees		(0.7)	(0.3)
Net cash used in financing activities		(53.6)	(17.4)
Net decrease in cash and cash equivalents		(9.1)	(0.8)
Cash and cash equivalents at the beginning of the year		15.2	16.0
Cash and cash equivalents at the end of the year	18	6.1	15.2

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 138

Consolidated Statement of Cash Flows for the year ended 31 December 2025

			Capital	Reserve	Cash flow
		Ordinary	redemption	for own	hedge	Retained	Total
		shares	reserve	shares	reserve	earnings	equity
	Note	£m	£m	£m	£m	£m	£m
Balance at 1 January 2024		2.1	0.2	(14.2)	(0.1)	219.8	207.8
Profit for the year		–	–	–	–	17.5	17.5
Other comprehensive loss		–	–	–	(0.1)	–	(0.1)
Total comprehensive (loss)/income for the year		–	–	–	(0.1)	17.5	17.4
Dividends paid	11	–	–	–	–	(6.3)	(6.3)
Proceeds from sale of shares by Employee Benefit Trust		–	–	5.1	–	–	5.1
Share-based payments charge		–	–	–	–	1.0	1.0
Share-based payments exercised		–	–	3.7	–	(3.7)	–
Tax on share-based payments	26	–	–	–	–	(0.1)	(0.1)
Balance at 31 December 2024		2.1	0.2	(5.4)	(0.2)	228.2	224.9
Profit for the year		–	–	–	–	17.0	17.0
Other comprehensive income		–	–	–	0.2	–	0.2
Total comprehensive income for the year		–	–	–	0.2	17.0	17.2
Dividends paid	11	–	–	–	–	(8.2)	(8.2)
Purchase of shares by Employee Benefit Trust		–	–	(0.7)	–	–	(0.7)
Share-based payments charge		–	–	–	–	1.4	1.4
Share-based payments exercised		–	–	0.1	–	(0.1)	–
Tax on share-based payments	26	–	–	–	–	(0.1)	(0.1)
Balance at 31 December 2025		2.1	0.2	(6.0)	–	238.2	234.5

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 139

Consolidated Statement of Changes in Equity for the year ended 31 December 2025

1. General information

Forterra plc (Forterra or the Company) and its subsidiaries (together referred to as the Group) are domiciled

in the United Kingdom. The address of the registered office of the Company and its subsidiaries is 5 Grange

Park Court, Roman Way, Northampton, NN4 5EA. The Company is the parent of Forterra Holdings Limited

and Forterra Building Products Limited, which together comprise the Group. The principal activity of the

Group is the manufacture and sale of bricks, dense and lightweight blocks, precast concrete, concrete

block paving and other complementary building products.

Forterra plc was incorporated on 21 January 2016 for the purpose of listing the Group on the London Stock

Exchange. Forterra plc acquired the shares of Forterra Building Products Limited on 20 April 2016, which to

that date held the Group’s trade and assets, before admission to the main market of the London Stock

Exchange.

The Consolidated Financial Statements of the Group for the year ended 31 December 2025 were approved

for issue by the Board of Directors on 10 March 2026.

2. Summary of material accounting policies

(A) BASIS OF PREPARATION

The accounting policies used in the preparation of the Consolidated Financial Statements of the Group are

set out below. These accounting policies have been used consistently in all material respects across the

periods presented. The Consolidated Financial Statements have been prepared in accordance with UK-

adopted international accounting standards. The Consolidated Financial Statements are presented in

pounds sterling and all values are rounded to the nearest hundred thousand unless otherwise indicated.

In preparing the Consolidated Financial Statements management has considered the impact of climate

change, taking into account the relevant disclosures in the Strategic Report, including those made in

accordance with the recommendations of the Task Force on Climate-related Financial Disclosure.

The Group has engaged in a detailed review of expected climate change impacts on the business and its

assets and liabilities to establish any adjustments required and what reporting is necessary in its

Consolidated Financial Statements for the year ended 31 December 2025. The explanation below of how

this has been included in the Consolidated Financial Statements should be read in conjunction with the

climate-related risk and governance section on pages 49 to 51 of the Sustainability Report within this Annual

Report and Accounts. This process has been completed to ensure material accuracy of the financial

reporting and that disclosure of relevant information complies with the requirements of IAS 1. The process

has involved a review of reporting segments and each element of the Group’s commitment to reach net zero

by 2050, to identify if any of these items are expected to be materially impacted in a negative or positive way

by weather, legislative, societal or revenue/cost changes.

The conclusion of the review was that, while there will undoubtedly be impacts on the Group, the 100% UK-

focused nature of the operations of the business significantly reduces the risk profile of the Group to impacts

from weather-related changes. The changes necessary to achieve net zero will not have a materially adverse

impact on the cash flows of the Group and indeed, warmer climates may present some opportunities as

disclosed on page 51 of the Sustainability Report within this Annual Report and Accounts. Societal and

legislative impacts are not considered to have a material impact on any one segment such that we need to

break out reporting in a different way to previous years. Judgements are not considered to be significant,

although clearly understanding of climate change is developing with time. Management review has

concluded that there is no material impact for inclusion within modelling scenarios for viability purposes and

given the profitability and short payback period of the cash generating units (CGU), no issues were identified

that would impact the carrying values of such tangible and intangible assets. Given the cash generation and

facilities available, no significant issues were identified that would impact viability over the forecast period

and therefore no further disclosure is required.

The preparation of the Consolidated Financial Statements in conformity with IFRS requires the use of certain

critical accounting estimates. It also requires management to exercise its judgement in the process of

applying the Group’s accounting policies. The areas involving a higher degree of judgement and complexity,

or areas where assumptions and estimates are significant to the Consolidated Financial Statements, are

disclosed in note 3.

(B) GOING CONCERN

The Group’s credit facility comprises a committed revolving credit facility (RCF) of £170m extending to June

2028, which was extended following the exercise of a 17-month extension option during 2025. At the

balance sheet date, borrowings against the facility totalled £62m with £108m of headroom remaining. The

cash balance stood at £6.1m with reported net debt before leases of £55.7m (2024: £84.9m) (net debt is

presented inclusive of capitalised arrangement fees). The Group also benefits from an uncommitted

overdraft facility of £10m which was undrawn at the year-end.

The Group meets its working capital requirements through these cash reserves and facilities, and closely

manages working capital to ensure sufficient daily liquidity and prepares financial forecasts under various

scenarios to ensure sufficient liquidity over the medium-term. Management maintains strong relationships

with the Group’s lenders and advisors, and remains confident in the Group’s ability to continue to access

the financing it requires.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 140

Notes to the Financial Statements

2. Summary of material accounting policies continued

The facility is subject to covenant restrictions of leverage (net debt/adjusted EBITDA) (as measured before

leases) of less than three times and interest cover of greater than four times. The covenants are subject to

testing on a half yearly basis. The Group has comfortably traded within its covenants throughout 2025 and

anticipates remaining within these throughout 2026.

Management have modelled two financial scenarios for the 18-month period to 30 June 2027, comprising a

base case and a plausible downside scenario, reflecting both macroeconomic and industry-specific

projections. In addition to this, a reverse stress test has also been modelled.

Assumptions underpinning these scenarios are outlined as follows:

• The base case scenario is aligned to our current demand expectations, with 2026 sales volumes

expected to be similar to 2025;

• Management continues to align production to anticipated sales, minimising inventory growth. In addition,

capital expenditure continues to reduce from prior years, with the Group’s spend on strategic projects

largely complete, increasing free cash flows;

• With leverage now returned to normalised levels, and reflective of our lower capital expenditure

requirements going forward, the Board's intention to commence the return of surplus capital to

shareholders with a £20m share buyback programme has been included; and

• The Group’s plausible downside scenario takes into account the lowest levels of market demand seen

across our products since 2022. Product dependent, this ranges up to 40% below the levels last seen in

2022. 2022 is considered to be representative of a normalised market for the Group and as such is seen

as a reasonable benchmark for scenario modelling. It is not considered plausible that demand could fall

further than the assumptions detailed within the downside scenario laid out below.

		Management
Scenario	Sales volume assumptions	mitigations
Base	Sales volumes remain between 12% and 25% below 2022. Volumes	None necessary
	improve in 2027 but remain up to 22% below 2022
Plausible	Product dependent, volumes return to their lowest level since 2022, which is	Proposed share
downside	a reduction of between 23% and 38% relative to 2022. Volumes begin to	buyback
	recover in 2027 but remain up to 36% below 2022	programme is
		paused

Under both of the above scenarios, there is no breach in covenants throughout 2026 and in the period up to

30 June 2027.

In addition to the scenarios, the Group has prepared a reverse stress test to determine the level of market

decline that could potentially breach covenants, before further mitigating actions are taken. The reverse

stress test indicated, that should volumes fall by a further 16% from the plausible downside, the Group

would be at risk of breaching its covenants. This is viewed by the Board to be a highly unlikely scenario. The

Board remains confident in the Group's ability to benefit significantly as markets recover and its strategic

investments generate returns.

Further to this, in the event of sales volumes falling in line with those modelled in the reverse stress test, the

Group would seek to enact further mitigating actions including additional cost savings, production

reductions, curtailment in the quantum of dividend distributions and the sale of surplus land and buildings.

Taking the above into consideration, the Directors have a reasonable expectation that the Group has

adequate resources to continue in operational existence for the going concern period to 30 June 2027. The

Group therefore adopts the going concern basis in preparing these Consolidated Financial Statements.

The accounting policies adopted in the preparation of these Consolidated Financial Statements are

consistent with those followed in the preparation of the Consolidated Financial Statements for the year

ended 31 December 2024, except for the adoption of new standards effective as at 1 January 2025.

The following new standards and amendments apply for the first time in 2025, none of which had a material

impact on the Consolidated Financial Statements:

• Amendments to IAS 21, Lack of Exchangeability, amendments to IAS 21, The Effects of Changes in

Foreign Exchange Rates.

Amendments to IFRS 9 and IFRS 7 will become mandatory from 1 January 2026. Management are currently

assessing the impact of these amendments.

Contracts referencing nature-dependent electricity – As part of this amendment the Group will present

additional disclosures in relation to its solar PPA contract, following changes to requirements for financial

contracts whose pricing or settlement terms depend on nature-dependent electricity. The PPA contract will

continue to meet the requirements for the own use exemption under IFRS 9 and be accounted for as an

executory contract, in line with treatment for the period ended 31 December 2025.

Classification and measurement of financial instruments – The impact of changes within this narrow scope

amendment in relation to the recognition and derecognition of financial assets and liabilities involving an

electronic payment system are being assessed for the Group. It is anticipated the Group will apply a

modified retrospective approach in adopting these amendments.

IFRS 18 will become mandatory from 1 January 2027. Management are currently assessing the impact

of this new standard for the Group.

Other than the amendments to IFRS 9 and IFRS 7 and the introduction of IFRS 18, at the date of approval

of these Consolidated Financial Statements there were a number of standards, amendments and

interpretations that have been published and are effective for accounting periods beginning on or after

1 January 2026. These have not been applied in these Consolidated Financial Statements and are not

expected to have a material impact when adopted. The Group has not early adopted any standard,

interpretation or amendment that has been issued but is not yet effective.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 141

Notes to the Financial Statements continued

2. Summary of material accounting policies continued

(D) BASIS OF CONSOLIDATION

The Group controls an entity when it is exposed to, or has rights to, variable returns and has the ability to

affect those returns through its power over the entity. A subsidiary is an entity over which the Group has

control. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are

deconsolidated from the date that control ceases.

Intra-Group transactions, balances and unrealised gains and losses on transactions between Group

companies are eliminated.

(E) FOREIGN CURRENCY TRANSLATION

The presentational currency of the Group is pounds sterling; the currency of the primary economic

environment in which the Group operates.

Foreign currency transactions are translated into the presentational currency using the exchange rate prevailing

at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such

transactions, or from the translation of monetary assets and liabilities denominated in foreign currencies at

period end, are recognised in the Group’s Consolidated Statement of Total Comprehensive Income.

(F) REVENUE

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts

for goods supplied, net of rebates, discounts, returns and value added taxes. The Group recognises

revenue when performance obligations are met, as follows:

• Bricks and Blocks – on delivery of goods.

• Bespoke Products – on delivery of goods, or, for supply and fit contracts, on delivery and installation.

Delivery and installation are construed as two separate performance obligations, however, the pattern of

installation is in a manner that the obligation is satisfied at the same time as the delivery of products, thus

there is no time lag between the two performance obligations and hence revenue is recognised

on installation.

• Bill and hold arrangements, for both reporting segments – when the customer obtains control of the

goods, which arises when facts and circumstances indicate that control has passed and when all of the

following criteria are met: (i) the reason for the arrangement is substantive; (ii) the product has been

identified separately as belonging to the customer; (iii) the product is ready for delivery in accordance with

the terms of the arrangement; and (iv) the Group does not have the ability to use the product or sell the

product to another customer.

The Group offers volume-based rebates to certain customers, typically on an annual basis. Revenue is

recognised net of rebates paid or accrued. In total £23.1m (2024: £22.1m) has been deducted from revenue

in relation to rebates in the year.

(G) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting to the Executive

Committee which has been identified as the chief operating decision maker.

(H) PROPERTY, PLANT AND EQUIPMENT

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment

losses. Cost includes the original purchase price of the asset, costs attributable to bringing the asset to

working condition for intended use, the initial estimate of any decommissioning obligation and associated

changes to those estimates. When components of an item of property, plant and equipment have different

useful lives, those components are accounted for as separate assets. Subsequent costs are included in the

asset’s carrying value where they meet the recognition criteria.

Assets are derecognised on disposal. Gains and losses on disposal are determined by comparing the

proceeds with the carrying amount of an asset and are recognised in the Consolidated Statement of Total

Comprehensive Income. Where estimated future economic benefit falls below the carrying value of an asset

or group of assets, the asset is impaired.

Assets under construction are not depreciated until they are ready for use. For the other categories of

property, plant and equipment, depreciation is charged to either cost of sales, distribution or administrative

expenses within the Consolidated Statement of Total Comprehensive Income on a straight-line basis over

the estimated useful life of the asset. The estimated useful lives of assets are as follows:

• Buildings: up to 50 years

• Plant and machinery: 2 to 40 years

Asset residual values are reviewed, and adjusted if appropriate, at each balance sheet date. The carrying

amount of an asset is written down if it is in excess of its recoverable amount.

Repairs and maintenance expenses do not meet the recognition criteria and are recognised as an expense

in the Consolidated Statement of Total Comprehensive Income.

(I) INTANGIBLE ASSETS

(I) Brand

Intangible assets relating to brands are not amortised as all held by the Group have an indefinite useful life,

but are tested annually for impairment or more frequently if events or changes in circumstances indicate

a potential impairment.

(II) Carbon credits

Purchased carbon credits are recorded at cost within intangible assets. The asset is surrendered at the end

of the compliance period reflecting the consumption of the economic benefit and is recorded as being

utilised. As a result, no amortisation is booked but an impairment charge may be recognised. Further details

of the Group’s policy in accounting for carbon credits are disclosed under section (U) of this note.

(III) Other intangible assets

Other intangibles consist of clay rights, acquired merchant relationships and software development costs.

These are attributable to both reportable segments. All other intangible assets have finite lives and are

carried at cost less accumulated amortisation. Amortisation for all intangible assets, including those internally

generated, is charged to administrative expenses within the Consolidated Statement of Total Comprehensive

Income on a straight-line basis over the estimated useful lives of the assets.

• Software: up to 7 years

• Clay rights: up to 12 years

• Merchant relationships: up to 8 years

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 142

Notes to the Financial Statements continued

2. Summary of material accounting policies continued

(IV) Impairment of tangible and intangible assets

The Group continues to evaluate tangible and intangible assets for indicators of impairment whenever events

or changes in circumstances indicate that the carrying value may not be recoverable. Judgements have

remained consistent with prior periods.

The recoverable amount is defined as the higher of fair value less costs to sell and value in use, which in turn

is the present value of the future cash flows expected to be derived from the asset. Management apply a

three-level hierarchy of valuation inputs, prioritising observable market evidence where available, only using

specific assumptions when higher-level inputs are unavailable.

Management sensitises value-in-use models to assess the level of sensitivity to each assumption. Within each

model, accounting for reasonably possible changes in assumptions such as a 1% increase in discount rate,

decrease in long-term growth rates, or a 10% fall in annual EBITDA does not eliminate headroom.

(V) Research and development costs

Research costs are expensed as incurred. Development expenditures on an individual project are

recognised as an intangible asset when the Group can demonstrate:

• The technical feasibility to complete the development so that the asset will be available for use or sale;

• Its intention to complete and its ability and intention to use or sell the asset;

• That the asset will generate future economic benefits;

• The availability of resources to complete the asset; and

• The ability to reliably measure development expenditure.

(J) LEASES

The Group leases various premises, land, fleet vehicles, motor vehicles and plant and equipment. Lease

terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

Lease terms are typically made for the following fixed periods:

• Land and property: up to 60 years

• Fleet vehicles, motor vehicles and plant and machinery: 2 to 7 years

Lease assets are recognised as a right-of-use asset, with a corresponding liability also recognised at the

date at which the leased asset is available for use by the Group.

(I) Lease liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities

for the Group include the net present value of fixed lease payments due over the lease term. The Group

remeasures lease liabilities if there is a change in the cash flows resulting in a change in index or rate used

to determine lease payments.

Lease payments are discounted using the interest rate implicit in the lease if readily available. If that rate

cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee

would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic

environment with similar terms and conditions.

Payments made in relation to lease interest charges are presented within interest paid within cash flows

from operating activities in the Consolidated Statement of Cash Flows. Principal lease repayments made

are recognised within cash flows from financing activities.

(II) Right-of-use assets

Right-of-use assets for the Group are measured at cost. This is determined as the initial measurement of the

lease liability and the balance of any lease payments made at or before the commencement date. Right-of-

use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated

useful life of the asset. The useful life of right-of-use assets are as follows:

• Land and buildings: 8 to 14 years

• Plant, fleet and motor vehicles: 2 to 7 years

(III) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and

equipment (leases that have a lease term of 12 months or less from the commencement date and do not

contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that

are considered to be low-value. Low-value assets comprise of tools, IT equipment and small items of office

equipment. Payments associated with short-term leases and leases of low-value assets are recognised on

a straight-line basis as an expense in the Consolidated Statement of Total Comprehensive Income and

presented within cash flows from operating activities within the Consolidated Statement of Cash Flows.

(K) FINANCIAL INSTRUMENTS

The Group determines the classification of financial assets and financial liabilities at initial recognition.

The principal financial assets and liabilities of the Group are as follows:

(I) Trade and other receivables (excluding prepayments)

Trade and other receivables are initially stated at fair value and subsequently measured at amortised cost.

Trade receivables are amounts due from customers for goods sold in the ordinary course of business.

All trade receivables are expected to be settled in one year or less.

Trade and other receivables are reported net of an allowance for expected credit losses. Losses are

calculated by reviewing lifetime expected credit losses using historic and forward-looking data on credit risk.

Expected loss allowances are recorded in a separate provision account with the loss being recognised

within administrative expenses in the Consolidated Statement of Total Comprehensive Income. On

confirmation that the receivable will not be collectable, the gross carrying value of the asset is written

off against the associated provision.

(II) Trade and other payables (excluding statutory non-financial liabilities)

Trade and other payables are initially stated at fair value and subsequently measured at amortised cost

using the effective interest method.

(III) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits. Short-term deposits are

those deposits with a maturity of three months or less, held for the purpose of meeting short-term cash

commitments, that are readily convertible to a known amount of cash and subject to an insignificant risk

of changes in value.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 143

Notes to the Financial Statements continued

2. Summary of material accounting policies continued

(IV) Loans and borrowings

Loans and borrowings are initially recognised at fair value, net of attributable transaction costs and are

subsequently measured at amortised cost using the effective interest rate method. Gains and losses arising

on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance

income and finance expense.

Borrowing costs incurred by the Group which are directly attributable to the construction of a qualifying

asset are capitalised as part of the asset, until the point at which the qualifying asset is determined

substantially complete.

Strategic projects with an expected timeline to completion of greater than one year are considered qualifying

assets by the Group.

Interest capitalised is determined either by way of interest incurred on specific borrowings entered in respect

of qualifying assets, or through the determination of a capitalisation rate which is based on the interest

on general borrowings of the Group, being the Group's Revolving Credit Facility, which is then applied to

expenditure on qualifying assets. In the current period to 31 December 2025, the Group capitalised interest

of £2.5m in respect of qualifying assets (2024: £2.1m).

(V) Derivative financial instruments (excluding those designated as cash flow hedges)

The Group uses derivative financial instruments, in particular forward foreign exchange contracts and

options, to manage the financial risks arising from the business activities and the financing of those activities.

The Group does not use derivative financial instruments for speculative purposes. Such derivative financial

instruments are initially recognised at fair value on the date on which a derivative contract is entered into

and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value

is positive and as financial liabilities when the fair value is negative.

The energy costs of the Group are closely managed to ensure the impact of fluctuating energy prices is

minimised. As such, forward contractual commitments are in place for both gas and electricity.

Under normal circumstances, the Group takes delivery of all energy purchased under each contract, meeting

the requirements under IFRS 9 Financial Instruments of the own use exemption. These are then accounted

for as executory contracts through the Consolidated Statement of Total Comprehensive Income in line with

consumption.

If, due to unforeseen circumstances, the Directors do not at the balance sheet date expect to take delivery

of all volumes committed for future periods, thus necessitating excess volumes to be sold back to the market,

any open contracts for which this applies are valued at their fair value with any gain or loss recognised in the

income statement for the period then ended.

(VI) Cash flow hedges

When a derivative financial instrument is designated as a hedge of the variability in cash flows of a

recognised asset or liability, the effective portion of the gain or loss on the hedging instrument is recognised

in Other Comprehensive Income in the cash flow hedge reserve, while any ineffective portion is recognised

immediately in profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or

loss on the hedging instrument and the cumulative change in fair value of the hedged item.

The amounts accumulated in Other Comprehensive Income are accounted for, depending on the nature

of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of

a non-financial item, the amount accumulated in equity is removed from the separate component of equity

and included in the initial cost or other carrying amount of the hedged asset or liability. For any other cash

flow hedges, the amount accumulated in Other Comprehensive Income is reclassified to profit or loss as

a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit

or loss.

(L) ASSETS HELD FOR SALE

The Group classifies non-current assets as held for sale if their carrying amounts will be recovered principally

through a sales transaction rather than continuing use. Non-current assets classified as held for sale are

measured at the lower of their carrying value and fair value less costs to sell.

In order to be classified as such, the sale of the asset must be highly probable, and available for immediate

sale in its present condition. The Group must be committed to the plan to sell the asset and the sale

expected to be completed within one year from the date of the classification.

Assets classified as held for sale are presented separately as current items in the Consolidated Balance

Sheet and are not depreciated or amortised once classified as such.

In the current year, management considers the associated assets held at its Cradley and Somercotes sites

to meet the classification of held for sale.

(M) INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Net realisable value is based on

estimated selling price less any costs expected to be incurred in sale. The Group applies an inventory

provision for damaged, obsolete, excess and slow-moving inventory.

Raw materials are measured at the weighted average cost. This method perpetually applies a cost weighting

to obtain an average cost of purchased inventory and inventory on hand in proportion to quantity.

Finished goods are measured at standard cost. Cost comprises: direct materials, direct labour and an

appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis

of a normalised operating capacity.

(N) PROVISIONS

Provisions are recognised in the Consolidated Balance Sheet when the Group has a present legal or

constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will

be required to settle that obligation and the amount can be reliably measured. If the effect is material, the

provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects

current market assessments of the time value of money and the risks specific to the liability. The change

in provisions due to passage of time is recognised as a net finance expense.

Provisions for rebates are included within accrued liabilities and other payables.

Provisions are not made for future operating losses.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 144

Notes to the Financial Statements continued

2. Summary of material accounting policies continued

Provisions for restructuring costs, product liability, legal claims and carbon emissions obligations are all

made based on the best estimate of the likely committed cash outflow, using relevant information available

at the reporting date. Management engages third-party valuation experts, as appropriate, when material and

complex estimates are required.

(O) SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are

shown in share premium as a deduction from the proceeds.

(P) NET FINANCE EXPENSE

(I) Finance expense

Finance expense comprises interest payable on borrowings from external and related parties, direct issue

costs, interest paid on lease liabilities and unwinding of discount on long-term provisions. Finance expense

is recognised in the Consolidated Statement of Total Comprehensive Income as it accrues using the

effective interest method.

(II) Finance income

Finance income comprises interest receivable on funds invested.

(Q) CURRENT AND DEFERRED INCOME TAX

Income tax for the periods presented comprises current and deferred tax. Tax is recognised in the

Consolidated Statement of Total Comprehensive Income, unless it relates to items recognised directly

in equity.

The current income tax charge 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 income tax is recognised on temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the Consolidated Financial Statements. Deferred income tax assets

are recognised only to the extent that it is probable that future taxable profit will be available against which

the temporary differences can be utilised.

(R) EMPLOYEE BENEFITS

The Group operates a defined contribution pension plan under which the Group pays fixed contributions.

The Group has no further payment obligations once the contributions have been paid. The contributions are

recognised as an employee benefit expense.

(S) SHARE-BASED PAYMENTS

The Group operates a number of equity-settled share-based compensation plans. The fair value of the

employee services received in exchange for the grant of shares or options is recognised as an expense over

the vesting period. The total amount to be expensed over the vesting period is determined by reference to

the fair value of shares or options granted. At each balance sheet date the Group revises its estimates of the

number of shares or options that are expected to vest and recognises the impact of the revision on original

estimates, if any, in the Consolidated Statement of Total Comprehensive Income, with a corresponding

adjustment to equity.

(T) OWN SHARES HELD BY EMPLOYEE BENEFIT TRUST

The Group has established two separate employee benefit trusts for the purposes of satisfying awards

under the Group’s share-based incentive schemes. Shares in the Group acquired by the Trusts are

deducted from equity until shares are cancelled, reissued or disposed.

(U) ACCOUNTING FOR CARBON CREDITS

The Group’s factories operate under the UK (Emission Trading Scheme) carbon pricing system. Purchased

carbon credits are recorded at cost within intangible assets. A liability is recognised based on the level of

emissions recorded in the relevant compliance period. Up to the level of allowances held, the liability is

measured at the cost of purchase. Where the liability to surrender carbon credits exceeds the carbon

allowances held, the provision is recognised for the shortfall measured at the prevailing market price and

remeasured at the reporting date. Subsequent movements in the provision are recognised in the Statement

of Total Comprehensive Income.

Due to the nature of carbon credits purchases being to satisfy obligations incurred through the Group’s

operations, the purchase and settlement of carbon credits are included in cash flows from operating

activities within the Consolidated Statement of Cash Flows.

(V) GOVERNMENT GRANTS

Government grants (including research and development credits) are recognised within the income

statement on a systematic basis over the periods in which the Group recognises as expenses the related

costs for which the grants are intended to compensate. Grants are presented as part of the income

statement and are deducted in reporting the related expense.

Government grants that are receivable as compensation for expenses or losses already incurred or for the

purpose of giving immediate financial support to the Group with no future related costs are recognised

within the income statement in the period in which they become receivable. Government grants are not

recognised until there is reasonable assurance that the Group will comply with the conditions attached to

them and that the grants will be received.

(W) ALTERNATIVE PERFORMANCE MEASURES

In order to provide the most transparent understanding of the Group’s performance, the Group uses

alternative performance measures (APMs) which are not defined or specified under IFRS and may not be

comparable with similarly titled measures used by other companies. The Group believes that its APMs

provide additional helpful information on how the trading performance of the business is reported and

internally assessed by management and the Board.

Management and the Board use several profit and non-profit-related APMs in assessing Group performance

and profitability.

These ‘adjusted results’ are presented before both adjusting and exceptional items as outlined below. A full

reconciliation for each APM from adjusted through to statutory results is shown in note 31.

(I) Exceptional items

The Group presents as exceptional items on the face of the Consolidated Statement of Total

Comprehensive Income, those material items of income and expense, which, because of the nature and

expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to

understand better elements of financial performance in the period.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 145

Notes to the Financial Statements continued

2. Summary of material accounting policies continued

In the current year, management considers restructuring costs incurred as a result of site closures to meet

this definition. Restructuring costs were inclusive of impairments to asset values, site clearance and

termination costs. In the prior year, restructuring costs in relation to market decline, and aborted transaction

costs were determined by management to meet this definition.

Exceptional items are further detailed in note 8.

(II) Adjusting items

Adjusting items are disclosed separately in the Annual Report and Accounts where management believes it

is necessary to show an alternative measure of performance in presenting the financial results of the Group.

The term adjusted is not defined under IFRS and may not be comparable with similarly titled measures used

by other companies. In the current year, management has presented the below as adjusting items:

• The realised gain recognised within the Statement of Total Comprehensive Income for the sale of excess

energy in 2025, where committed volume exceeded actual consumption by the Group, totalling £1.2m;

and

• The fair value of forward energy contracts held where committed future volume is expected by

management, as at 31 December 2025, to exceed total consumption by the Group. For these future

contracts, the Group can no longer apply the own use exemption under IFRS 9 and instead recognises

these as derivatives held at fair value on the balance sheet at 31 December 2025. The impact of this fair

value treatment, being a charge of £7.2m in Statement of Total Comprehensive Income for the statutory

versus adjusted results, has been presented as an adjusting item for the year ended 31 December 2025.

Further details around future forward energy contracts classified as derivative financial instruments can be

found in note 23.

The Group has historically presented APMs as a measure of before exceptional items. Due to the inclusion

of adjusting items since 2023, management has moved to present APMs which are calculated before both

exceptional and adjusting items. The Group no longer uses APMs which consider only exceptional items and

the Consolidated Financial Statements have been presented to align with this. Management believes this

presents a consistent view of performance which is in line with that reviewed internally and our banking

covenants.

3. Critical accounting judgements and key sources of estimation uncertainty

The preparation of the Consolidated Financial Statements under IFRS requires management to make

judgements, estimates and assumptions that affect the application of policies and reported amounts of

assets and liabilities, income and expenses. The estimates and associated assumptions are based on

historical experience and other factors that are believed to be reasonable under the circumstances, the

results of which form the basis of making the judgements about carrying values of assets and liabilities that

are not readily apparent from other sources. Actual results may differ from these estimates.

(A) ACCOUNTING ESTIMATES

(I) Provisions

Provisions for restoration and decommissioning obligations are made based on the best estimate of the

likely committed cash outflow. Management seeks specialist input from third-party experts to estimate the

cost to perform necessary remediation work at the reporting date. These experts undertake site visits

in years where scoping identifies there is a change in operations in the year which could suggest a change

in these estimates, or at sites that have not been visited recently. Desktop reviews are undertaken to inform

the estimates for other sites. If the cost estimates increased by 10% the value of provisions would change

by c.£1.5m (2024: c.£1.0m). The useful lives of quarrying sites are based on the estimated mineral

reserve remaining and manufacturing facilities linked to the useful life of site property, plant and equipment.

If the useful lives of quarrying sites reduced by 5 years the value of provisions would change by c.£1.0m

(2024: £0.9m).

The estimation of inflation and discount rates is also considered to be judgemental and can have a

significant impact on net present value. Management references information from the Bank of England when

making such estimates. If the inflation or discount rate were changed and the spread between them increased

by 1% the value of provisions would increase and decrease respectively by c.£1.7m (2024: c.£1.8m).

(II) Fair value of energy contracts

Where the Group holds forward energy purchases for which committed volumes are expected to exceed

total consumption for the Group, these forward contacts are held at fair value. This is further detailed within

(K) Financial instruments. In estimating fair value, management utilises future energy price forecasts from

third-party experts which are modelled against contracted volume. If the future estimated energy prices

were to vary by 10% across all periods modelled, the fair value gain would increase or decrease by £0.4m.

(B) ACCOUNTING JUDGEMENTS

(I) Inventory valuation and provisioning

Inventory carrying value is stated after recognising inventory provisions. The accounting for potential

inventory obsolescence is assessed using past sales data, with manual adjustments for new products to

calculate provisions for slow-moving inventory. This requires a degree of commercial judgement when

determining saleability and price of certain finished goods.

(II) Exceptional and adjusting items

As referenced in note 8 and 31, the Group has disclosed certain exceptional and adjusting items within the

Annual Report and Accounts. In determining whether something is classified as exceptional or adjusting,

management makes reference to nature, size and expected infrequency, with the decision to include or

exclude being a matter of judgement.

(III) Capitalisation of borrowing costs: qualifying assets

As referenced within (K) Financial instruments, borrowing costs incurred by the Group which are directly

attributable to the construction of a qualifying asset are capitalised as part of the asset. The determination of

a qualifying asset by management is considered to be a critical judgement.

Strategic projects with an expected timeline to completion of greater than one year are considered qualifying

assets. In the current year, the Wilnecote brick factory redevelopment and the Accrington brick slip factory

have been recognised as qualifying assets.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 146

Notes to the Financial Statements continued

4. Segmental reporting

Management has determined the operating segments based on the management reports reviewed by the

Executive Committee that are used to assess both performance and strategic decisions. Management has

identified that the Executive Committee is the chief operating decision maker in accordance with the

requirements of IFRS 8 ‘Operating segments’.

The Executive Committee considers the business to be split into three operating segments: Bricks, Blocks and

Bespoke Products.

The principal activity of the operating segments are:

• Bricks: Manufacture and sale of bricks to the construction sector;

• Blocks: Manufacture and sale of concrete blocks and permeable block paving to the construction sector;

and

• Bespoke Products: Manufacture and sale of bespoke products to the construction sector.

The Executive Committee considers that for reporting purposes, the operating segments above can be

aggregated into two reporting segments: Bricks and Blocks and Bespoke Products. The aggregation of

Bricks and Blocks is due to these operating segments having similar long-term average margins, production

processes, suppliers, customers and distribution methods.

The Bespoke Products range comprises precast concrete (marketed under the ‘Bison Precast’ brand), which

is typically made-to-measure or customised to meet the customer’s specific needs. The precast concrete

products are complemented by the Group’s full design and nationwide installation services.

Costs which are incurred on behalf of both segments are held at the centre and these, together with general

administrative expenses, are allocated to the segments for reporting purposes using a split of 80% Bricks

and Blocks and 20% Bespoke Products. Management considers that this is an appropriate basis for the

allocation.

The revenue recognised in the Consolidated Statement of Total Comprehensive Income is all attributable to

the principal activity of the manufacture and sale of bricks, both dense and lightweight blocks, precast

concrete, concrete paving and other complementary building products.

Substantially all revenue recognised in the Consolidated Statement of Total Comprehensive Income arose

within the UK.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 147

Notes to the Financial Statements continued

4. Segmental reporting continued

Segment revenue and results

			2025			2024
		Bricks and	Bespoke		Bricks and	Bespoke
		Blocks	Products	Total	Blocks	Products	Total
	Note	£m	£m	£m	£m	£m	£m
Segment revenue		307.7	81.0	388.7	276.7	71.5	348.2
Inter-segment eliminations				(2.7)			(3.9)
Revenue				386.0			344.3
EBITDA before adjusted items		56.9	4.7	61.6	49.0	3.0	52.0
Depreciation and amortisation	13, 14, 25	(18.1)	(1.5)	(19.6)	(19.1)	(1.7)	(20.8)
Operating profit before adjusted items		38.8	3.2	42.0	29.9	1.3	31.2
Allocated exceptional items	8	(3.4)	(3.3)	(6.7)	(0.1)	(0.1)	(0.2)
Unallocated exceptional items	8			–			(2.7)
Allocated adjusting items	31	(6.0)	–	(6.0)	5.6	–	5.6
Operating profit				29.3			33.9
Finance expense	9			(6.0)			(9.1)
Profit before tax				23.3			24.8

Segment assets

			2025			2024
		Bricks and	Bespoke		Bricks and	Bespoke
		Blocks	Products	Total	Blocks	Products	Total
	Note	£m	£m	£m	£m	£m	£m
Intangible assets	13	10.1	1.4	11.5	9.7	1.9	11.6
Property, plant and equipment	14	258.4	4.4	262.8	255.4	8.4	263.8
Assets held for sale	15	0.5	2.5	3.0	–	–	–
Inventories	16	75.6	3.0	78.6	79.0	3.0	82.0
Right-of-use assets	25	17.9	0.9	18.8	19.4	1.1	20.5
Segment assets		362.5	12.2	374.7	363.5	14.4	377.9
Unallocated assets				42.4			64.5
Total assets				417.1			442.4

Property, plant and equipment, intangible assets, right-of-use assets and inventories are allocated to segments and considered when appraising segment performance. Trade and other receivables, income tax assets,

cash and cash equivalents and derivative assets are centrally controlled and unallocated.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 148

Notes to the Financial Statements continued

4. Segmental reporting continued

Other segment information

			2025			2024
		Bricks and	Bespoke		Bricks and	Bespoke
		Blocks	Products	Total	Blocks	Products	Total
	Note	£m	£m	£m	£m	£m	£m
Intangible asset additions	13	3.6	–	3.6	0.1	–	0.1
Property, plant and equipment additions	14	16.1	0.4	16.5	27.7	0.2	27.9
Right-of-use asset additions	25	4.9	0.2	5.1	2.5	0.2	2.7

Customers representing 10% or greater of revenues

		2025			2024
	Bricks and	Bespoke		Bricks and	Bespoke
	Blocks	Products	Total	Blocks	Products	Total
	£m	£m	£m	£m	£m	£m
Customer A	–	–	–	35.6	0.4	36.0
Customer B	16.2	22.9	39.1	–	–	–

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 149

Notes to the Financial Statements continued

5. Operating profit

Profit from operations is stated after charging

		2025	2024
	Note	£m	£m
Depreciation and amortisation	13, 14, 25	19.6	20.8
Lease expense	25	2.2	3.2
Impairment of property, plant and equipment	14	2.3	–
Share-based payments	28	1.4	1.0

Depreciation and amortisation in the current year includes depreciation on right-of-use assets recognised

through IFRS 16. Lease expenses relate to short-term leases and leases of low-value assets outside of the

scope of IFRS 16, as detailed within note 25.

During the year, the Group recognised a research and development credit of £1.9m (2024: £1.4m) in

respect of qualifying spend of £8.0m (2024: £7.0m) on research and development.

Auditor’s remuneration

	2025	2024
	£m	£m
Audit services:
Fees payable for the audit of the Company and Consolidated Financial Statements	0.1	0.1
Fees payable for the audit of the subsidiary Financial Statements	0.4	0.4
	0.5	0.5

Non-audit services in the year totalled £0.1m (2024: £0.2m).

6. Other operating (expense)/income

		2025	2024
	Note	£m	£m
Other income		0.6	0.8
Realised gain/(loss) on sale of surplus energy	31	1.2	(1.5)
Movements in the fair value of energy contract derivatives	31	(7.2)	7.1
		(5.4)	6.4

The other income balance contains amounts relating to rental income, revenue from waste contracts and

foreign exchange gains/losses incurred on operating expenses.

7. Employee costs

Employment costs for the Group during the year

		2025	2024
	Note	£m	£m
Wages and salaries		86.2	76.3
Pension costs		6.4	5.9
Social security costs		9.1	7.2
Share-based payments	28	1.4	1.0
Redundancies and terminations	8	2.5	0.2
		105.6	90.6

The total share-based payments cost in the year includes a national insurance contribution of £0.1m (2024:

contribution of £0.1m).

Average number of employees

	2025	2024
	Number	Number
Administration	130	110
Production and distribution	1,331	1,364
	1,461	1,474

The prior year comparative has been restated following a review which identified an error in the original

categorisation of employees across administration and production.

Pension costs

Throughout the period under review the Group provided pension benefits to employees through defined

contribution schemes and by way of a retirement allowance to some members of senior management.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 150

Notes to the Financial Statements continued

8. Exceptional items

		2025	2024
	Note	£m	£m
Restructuring costs		(6.7)	(0.2)
Aborted corporate transaction		–	(2.7)
		(6.7)	(2.9)

2025 exceptional items

During the year, the Group exited from two non-core businesses, the Formpave block paving business and

the Bison Bespoke Precast operation. As a consequence of these operation closures, asset values at these

sites are no longer supportable by value-in-use assessments. Instead, in assessing the carrying value of

assets at these sites, management has relied on estimates of fair value less costs to sell.

Following these assessments, the Group recognised impairments of £2.3m (£1.0m at Formpave and £1.3m

at Bison Bespoke Precast) against certain items of plant and machinery, along with £0.8m against the right-

of-use land asset at Formpave. In addition, inventory at Formpave has been impaired by £0.9m to reflect

management’s assessment of realisable values. Further restructuring costs of £2.7m include redundancies

of £2.5m (£0.7m at Formpave and £1.8m at Bison Bespoke Precast) and a provision of £0.2m for site

clearance works at Bison Bespoke Precast. Further details of these impairments can be found in note 14.

2024 exceptional items

Exceptional items in 2024 relate to restructuring costs of £0.2m and professionals fees associated with an

aborted corporate transaction of £2.7m.

Presentation of exceptional items

	Cost of	Distribution	Administrative
	sales	costs	expenses	Total
	£m	£m	£m	£m
2025
Restructuring costs	(6.7)	–	–	(6.7)
	(6.7)	–	–	(6.7)
2024
Restructuring costs	(0.1)	–	(0.1)	(0.2)
Aborted corporate transaction	–	–	(2.7)	(2.7)
	(0.1)	–	(2.8)	(2.9)

Tax on exceptional items

The restructuring costs incurred in the year, including redundancies and legal costs, were tax deductible.

9. Finance expense

		2025	2024
	Note	£m	£m
Interest payable on loans and borrowings		4.2	7.4
Interest payable on lease liabilities	25	0.9	1.0
Other finance expenses		0.1	0.1
Amortisation of capitalised financing costs		0.8	0.6
		6.0	9.1

Interest payable on loans and borrowings is presented net of borrowings costs which have been capitalised

against qualifying assets. In the year to 31 December 2025, interest of £2.5m (2024: £2.1m) was capitalised

against qualifying assets, with an average capitalisation rate of 5.7%.

10. Taxation

		2025	2024
	Note	£m	£m
Current tax
UK corporation tax on profit for the year		4.9	3.2
Prior year adjustment on UK corporation tax		0.4	(2.4)
Total current tax		5.3	0.8
Deferred tax
Origination and reversal of temporary differences	26	1.3	4.1
Effect of changes in tax rates	26	–	–
Effect of prior period adjustments	26	(0.3)	2.4
Total deferred tax		1.0	6.5
Income tax expense		6.3	7.3

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 151

Notes to the Financial Statements continued

10. Taxationcontinued

	2025	2024
	£m	£m
Current tax
Profit before taxation	23.3	24.8
Expected tax charge	5.8	6.2
Expenses not deductible for tax purposes	0.4	1.1
Effect of prior period adjustments	0.1	–
Income tax expense	6.3	7.3

The effective tax rate (ETR) used for statutory measures is 27.1% (2024: 29.5%) and the adjusted ETR is

26.2% (2024: 27.1%). Deferred tax is calculated at the rate at which the provision is expected to reverse.

The UK main rate of corporation tax increased to 25% on 1 April 2023. There has been no further changes

to the rate of corporation tax since the Finance Bill 2023.

11. Dividends

	2025	2024
	£m	£m
Amounts recognised as distributions to equity holders in the year
Interim dividend of 1.9p per share (2024: 1.0p)	4.0	2.1
Final dividend of 2.0p per share in respect of prior year (2024: 2.0p)	4.2	4.2
	8.2	6.3

The Directors are proposing a final dividend for 2025 of 4.3p per share, making a total payment for the year

of 6.2p (2024: 3.0p). This is subject to approval by the shareholders at the AGM and has not been included

as a liability in the Consolidated Financial Statements.

12. Earnings per share

The calculation of earnings per Ordinary share is based on profit or loss after tax and the weighted average

number of Ordinary shares in issue during the year. Adjusted earnings per share is presented as an

alternative performance measure to provide an additional year-on-year comparison. A reconciliation between

adjusted and statutory results is presented within note 31.

For diluted earnings per share, the weighted average number of Ordinary shares in issue is adjusted to

assume conversion of all dilutive potential Ordinary shares. The Group has four types of dilutive potential

Ordinary shares: those share options granted to employees under the Sharesave scheme; unvested shares

granted under the Deferred Annual Bonus Plan; unvested shares granted under the Share Incentive Plan;

and unvested shares within the Performance Share Plan that have met the relevant performance conditions

at the end of the reporting period. If, for any of the above schemes, the average share price for the year

is lower than the option price, these shares become anti-dilutive and are excluded from the calculation.

		Adjusted		Statutory
		2025	2024	2025	2024
	Note	£m	£m	£m	£m
Operating profit for the year		42.0	31.2	29.3	33.9
Finance expense	9	(6.0)	(9.1)	(6.0)	(9.1)
Profit before tax		36.0	22.1	23.3	24.8
Income tax expense	10	(9.4)	(6.0)	(6.3)	(7.3)
Profit for the financial year		26.6	16.1	17.0	17.5
Weighted average number of shares (millions)		211.0	210.6	211.0	210.6
Effect of share incentive awards and options (millions)		1.3	0.7	1.3	0.7
Diluted weighted average number of shares (millions)		212.3	211.3	212.3	211.3
Earnings per share		Pence	Pence	Pence	Pence
Basic earnings		12.6	7.6	8.1	8.3
Diluted earnings		12.5	7.6	8.0	8.3

Adjusted earnings per share is presented as an APM and is calculated by excluding both exceptional and

adjusting items as detailed within note 31 to these Consolidated Financial Statements. The associated

adjusted tax charge is calculated using the rate excluding these exceptional and adjusting items, being

26.2% (2024: 27.1%).

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 152

Notes to the Financial Statements continued

13. Intangible assets

		Carbon	Other
	Brand	credits	intangibles	Total
	£m	£m	£m	£m
Cost
At 1 January 2025	11.1	2.9	24.7	38.7
Additions	–	3.6	–	3.6
Asset reclass	–	–	–	–
Disposals	–	(2.7)	(0.1)	(2.8)
At 31 December 2025	11.1	3.8	24.6	39.5
Accumulated amortisation and impairment
At 1 January 2025	(4.7)	–	(22.4)	(27.1)
Charge for the year	–	–	(0.9)	(0.9)
At 31 December 2025	(4.7)	–	(23.3)	(28.0)
Net book value
At 1 January 2025	6.4	2.9	2.3	11.6
At 31 December 2025	6.4	3.8	1.3	11.5

		Carbon	Other
	Brand	credits	intangibles	Total
	£m	£m	£m	£m
Cost
At 1 January 2024	11.1	8.9	24.6	44.6
Additions	–	–	0.1	0.1
Asset reclass	–	–	0.1	0.1
Disposals	–	(6.0)	(0.1)	(6.1)
At 31 December 2024	11.1	2.9	24.7	38.7
Accumulated amortisation and impairment
At 1 January 2024	(4.7)	–	(20.7)	(25.4)
Charge for the year	–	–	(1.7)	(1.7)
At 31 December 2024	(4.7)	–	(22.4)	(27.1)
Net book value
At 1 January 2024	6.4	8.9	3.9	19.2
At 31 December 2024	6.4	2.9	2.3	11.6

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 153

Notes to the Financial Statements continued

13. Intangible assets continued

The brand category comprises the acquired Thermalite and Bison Precast brands, components of the

Bricks and Blocks and Bespoke Products reportable segments respectively.

The other intangibles category consists of purchases of clay rights, merchant relationships and software

development costs. These are attributable to both reportable segments. Additions relating to the upgrading

of Group IT systems were less than £0.1m in the year (2024: £0.1m). No own work has been capitalised

within software additions during the year (2024: £nil).

Carbon credits are purchased to satisfy compliance obligations of the Group, and whilst there is no

obligation to utilise this within the next 12 months; a proportion of the year end balance is expected to be

surrendered within 2026. Due to the nature of carbon credits being part of the Group’s operating activities,

any purchases made during the year are included in cash flows from operating activities within the

Consolidated Statement of Cash Flows.

Impairment of intangible assets

Intangible assets with indefinite useful lives

Intangible assets with indefinite useful lives consist of the Thermalite brand (net book value £6.0m) which is

allocated to the Aircrete blocks CGU within the Bricks and Blocks reportable segment and the Bison Precast

brand (net book value £0.4m) which is allocated to the Bespoke Products segment. Both brands are

considered to have no foreseeable limit to the period over which the asset is expected to generate net cash

inflows for the Group. These assets are not amortised but are subject to annual impairment tests. The Group

estimates recoverable amount using a value-in-use model by projecting pre-tax cash flows over the

indefinite useful life. The key assumptions underpinning recoverable amounts are forecast revenue, EBITDA

margin, capital expenditure and the discount rate. The forecast revenues and EBITDA in the models are

based on management’s past experience and future expectations of performance. Maintenance capex

is based on planned levels in the short-term and recent trends in the longer-term. A pre-tax discount rate of

13.6% in 2025 (2024:12.9%) has been derived from a weighted average cost of capital (WACC) calculation

and benchmarked against similar organisations operating within the sector and used to discount cash flows.

EBITDA growth rates over the next five years vary by CGU between 4.2% and 7.1% and are based on

management’s past experience and expectations of future market performance. These compare to growth

rates at 31 December 2024 of between 14.2% and 19.4%.

Terminal growth rate of 2.0% for 2025 (2024: 2.0%) is consistent across CGUs and reflects management’s

past experience, expectations of future market performance, longer-term industry forecasts and inflationary

expectations.

The recoverable amounts in respect of indefinite life intangibles, as assessed by management using the

above assumptions, is greater than the carrying amount, with sufficient headroom under forecast and

sensitised scenarios, and therefore no impairment has been recognised in 2025 (2024: £nil).

The Group has considered the assumptions used within the scenario analysis exercise undertaken to better

understand the possible range of risks and opportunities our business could face under different future

climate forecasts made in accordance with the recommendations of the Task Force on Climate-related

Financial Disclosure. In doing so, the Group has concluded that there is no material impact necessary for

inclusion within modelling scenarios for impairment purposes. Given the profitability and short payback

period of the CGUs of the Group, no issues were identified that would impact the carrying values of either

tangible or intangible assets.

Should the costs associated with carbon emissions increase over time, this would be experienced across

the industry and the Group would therefore expect to be able to recover this through its pricing strategy

where possible. Primary mitigation, however, remains the focus on reducing our emissions and delivering

on the plan and targets outlined within the Sustainability Report within this Annual Report and Accounts.

Whilst recognising the risks associated with the longer-term demand for our products, our commitment to

innovation and developing to meet the evolving needs of our customer base, paired with the acknowledged

climate-related opportunities that the thermal properties of our products offer, leads the Group to the believe

that the useful lives of its brands are not currently impacted by climate-related risk.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 154

Notes to the Financial Statements continued

14. Property, plant and equipment

	Land and	Plant and
	buildings	machinery	Total
	£m	£m	£m
Cost
At 1 January 2025	185.7	315.5	501.2
Additions	3.5	13.0	16.5
Asset reclass 2	0.1	(0.1)	–
Reclassification to assets held for sale 1	(4.7)	(5.9)	(10.6)
Disposals	–	(3.4)	(3.4)
Change in the value of decommissioning assets	0.6	–	0.6
At 31 December 2025	185.2	319.1	504.3
Accumulated depreciation and impairment
At 1 January 2025	(59.1)	(178.3)	(237.4)
Charge for the year	(2.8)	(10.0)	(12.8)
Reclassification to assets held for sale 1	2.1	5.5	7.6
Asset impairments	–	(2.3)	(2.3)
Disposals	–	3.4	3.4
Change in the value of decommissioning assets	–	–	–
At 31 December 2025	(59.8)	(181.7)	(241.5)
Net book value
At 1 January 2025	126.6	137.2	263.8
At 31 December 2025	125.4	137.4	262.8

1. Assets associated with Cradley and Somercotes sites have been reclassified as held for sale, after management

assessments that the primarily economic benefit from these assets would come from a disposal. Further details of these

reclassifications can be found in note 15.

2. Asset reclasses represent transfers of assets between categories where assets under construction were previously

reported within plant and machinery.

	Land and	Plant and
	buildings	machinery	Total
	£m	£m	£m
Cost
At 1 January 2024	180.1	310.3	490.4
Additions	9.0	18.9	27.9
Asset reclass 2	0.2	(0.3)	(0.1)
Reclassification to assets held for sale	–	–	–
Disposals	(2.7)	(13.4)	(16.1)
Change in the value of decommissioning assets	(0.9)	–	(0.9)
At 31 December 2024	185.7	315.5	501.2
Accumulated depreciation and impairment
At 1 January 2024	(59.1)	(181.6)	(240.7)
Charge for the year	(2.8)	(10.1)	(12.9)
Reclassification to assets held for sale	–	–	–
Asset impairments	–	–	–
Disposals	2.7	13.4	16.1
Change in the value of decommissioning assets	0.1	–	0.1
At 31 December 2024	(59.1)	(178.3)	(237.4)
Net book value
At 1 January 2024	121.0	128.7	249.7
At 31 December 2024	126.6	137.2	263.8

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 155

Notes to the Financial Statements continued

14. Property, plant and equipment continued

Land and buildings comprise sites used for administration, distribution, manufacturing and mineral extraction.

Each asset is used to generate operating cash flows and rates of depreciation reflect this use. Quarries and

manufacturing facilities are classified under land and buildings. Quarrying enables manufacturing and is not

carried out for any other economic purpose. The two are therefore not considered to be distinct.

At 31 December 2025, capital commitments not yet incurred totalled £5.0m (2024: £9.2m).

Included within property, plant and equipment are assets under the course of construction of £41.2m (2024:

£48.8m), comprising of £11.6m (2024: £15.3m) for land and buildings and £29.6m (2024: £33.5m) for plant

and machinery.

		Land and buildings		Plant and machinery
	2025	2024	2025	2024
	£m	£m	£m	£m
Strategic:
Desford brick factory	–	4.1	–	0.1
Wilnecote brick factory redevelopment	10.6	8.5	27.7	21.8
Accrington brick slip development	–	1.4	–	10.4
Maintenance:
Other assets	1.0	1.3	1.9	1.2
	11.6	15.3	29.6	33.5

Impairment of tangible assets

Any impairment of tangible assets is determined in line with Group accounting policies.

In the current year, the Group has recognised impairments of £2.3m, against certain items of plant and

machinery. These impairments were in relation to the strategic closures of two non-core businesses, being

Formpave in Coleford, Gloucestershire (£1.0m) and the Bison Bespoke Precast business in Somercotes,

Derbyshire (£1.3m). As a consequence of the site closures, asset values at these sites are not supportable

by value-in-use assessments. Instead, in assessing the carrying values of assets at these sites, management

has relied on estimates of fair value less costs to sell. As observable transaction evidence was unavailable for

these assessments, fair values are based on unobservable inputs using the best information available and

management assumptions (level 3 hierarchy). Impairments against plant and machinery held at Formpave

and Bison Bespoke Precast businesses have been recorded as an exceptional items. For further details,

see note 8. In addition, an accelerated depreciation charge of £0.2m was recognised as an operating expense

in relation to an asset at a manufacturing site that remains in operation, where a clear indication of impairment

was identified.

The Group has considered the assumptions used within the scenario analysis exercise undertaken to better

understand the possible range of risks and opportunities our business could face under different future

climate forecasts made in accordance with the recommendations of the Task Force on Climate-related

Financial Disclosure. In doing so, the Group has concluded that there is no material impact necessary for

inclusion within modelling scenarios for impairment purposes. Given the profitability and short payback

period of the CGUs of the Group, no issues were identified that would impact the carrying values of either

tangible or intangible assets.

15. Assets held for sale

In the current year, management considers the associated assets held at its Cradley and Somercotes sites

to meet the classification of assets held for sale, being available for immediate sale in their present condition

and a sale highly probable.

In both instances the fair value of the asset less costs to sell has been assessed as exceeding the asset’s

carrying value, and there were no liabilities directly associated with the assets. No impairment charge was

associated with these assets reclassified as held for sale during the year.

		2025	2024
Site	Classification	£m	£m
Somercotes	Land and buildings	2.1	–
Somercotes	Plant and machinery	0.4	–
Cradley	Land and buildings	0.5	–
		3.0	–

16. Inventories

	2025	2024
	£m	£m
Raw materials	10.8	11.3
Work in progress	1.8	1.9
Finished goods	62.7	66.6
Other inventory	3.3	2.2
	78.6	82.0

Costs relating to raw materials and consumables included within cost of sales during the year were £81.0m

(2024: £73.4m). Employment expenses within cost of sales totalled £65.2m (2024: £59.4m).

The balance in other inventory mainly comprises packaging and consumables.

Write-downs of inventories recognised as an expense in the year were £2.7m (2024: £3.8m). Reversals of

previous inventory write-downs in the period were £1.3m (2024: £2.8m). Reversals of inventory write-downs

are primarily due to changes in provision estimates and judgements for obsolete or slow-moving inventory.

There is no significant difference between the replacement cost of inventories and their carrying amounts.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 156

Notes to the Financial Statements continued

17. Trade and other receivables

	2025	2024
	£m	£m
Trade receivables	31.7	34.4
Other receivables	1.0	1.2
Prepayments	2.7	3.4
	35.4	39.0

The ageing profile of trade receivables is:

	2025	2024
	£m	£m
Trade receivables not yet due	27.4	28.6
1 to 30 days past due	2.8	3.2
31 to 60 days past due	0.5	0.9
61 to 90 days past due	0.5	1.0
Over 90 days past due	0.5	0.7
	31.7	34.4

Included within trade receivables are balances which are past due at the balance sheet date but have not

been provided for. These balances relate to customers who have no recent history of default and whose

debts are considered to be recoverable.

Procedures are in place to ensure that customer creditworthiness is assessed and monitored sufficiently and

that appropriate credit limits are in place and enforced. Provisions for impairment are calculated by reviewing

lifetime expected credit losses as further detailed in note 23. An analysis of the provision movement in the

current year is as follows:

	2025	2024
	£m	£m
At the start of the year	0.7	0.7
Statement of Total Comprehensive Income charge	–	–
Written off	–	–
At the end of the year	0.7	0.7

18. Cash and cash equivalents

	2025	2024
	£m	£m
Cash at bank and in hand	6.1	15.2

Cash at bank and in hand is held in pounds sterling and euros. As at 31 December 2025, £0.3m was held

in euros (2024: £0.2m).

19. Trade and other payables

	2025	2024
	£m	£m
Trade payables	39.7	39.9
Payroll tax and other statutory liabilities	7.3	9.1
Accrued liabilities and other payables	22.8	19.7
	69.8	68.7

The other payables balance contains predominantly amounts owed in relation to rents, rates and

pension liabilities.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 157

Notes to the Financial Statements continued

20. Loans and borrowings

	2025	2024
	£m	£m
Current loans and borrowings:
Interest	0.2	0.7
Non-current loans and borrowings:
Capitalised financing costs	(0.4)	(0.6)
Revolving credit facility	62.0	100.0
	61.8	100.1

The Group’s credit facility comprises a committed revolving credit facility (RCF) of £170m which, following

the exercise of the extension option during 2025, extends to June 2028. The Group also benefits from an

uncommitted overdraft facility of £10.0m.

Interest is calculated using SONIA plus a margin, with the margin grid ranging from 1.65% at a leverage of

less than 0.5 times, extending to a margin of 2.75% when leverage exceeds 2.5 times.

The facility is subject to covenant restrictions of net debt/adjusted EBITDA (as measured before the impact

of IFRS 16) of less than three times and interest cover of greater than four times.

On exercising the extension of our facility, the Group elected to remove the link to long-term sustainability

targets. The Group had missed these targets following the sudden decline in its markets in 2023 and the

resultant impact on efficiency, meaning that the sustainability link was increasing borrowing and compliance

costs. The Group remains committed to its long-term sustainability journey and the linkage of financing to

these targets did not influence decision-making in this area. The removal of the sustainability link was

assessed under the relevant modification guidance and was not considered to constitute a substantial

modification.

The facility remains secured by fixed charges over the shares of Forterra Building Products Limited and

Forterra Holdings Limited.

21. Notes to the Consolidated Statement of Cash Flows

		2025	2024
	Note	£m	£m
Cash flows from operating activities
Profit before tax		23.3	24.8
Finance expense	9	6.0	9.1
Exceptional items	8	6.7	2.9
Adjusting items	31	6.0	(5.6)
Adjusted operating profit		42.0	31.2
Adjustments for:
Depreciation and amortisation	13, 14, 25	19.6	20.8
Movement in provisions		0.2	(5.6)
Purchase of carbon credits	13	(3.6)	–
Settlement of carbon credits	13	2.7	6.0
Share-based payments	28	1.4	1.0
Other non-cash items		(1.4)	(1.9)
Changes in working capital:
Inventories		2.5	13.8
Trade and other receivables		3.5	(8.0)
Trade and other payables		1.8	2.8
Adjusted cash generated from operations		68.7	60.1
Cash flows relating to operating exceptional items		(1.8)	(6.5)
Cash flows relating to operating adjusting items		1.2	(1.8)
Cash generated from operations		68.1	51.8

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 158

Notes to the Financial Statements continued

22. Net debt

		2025	2024
	Note	£m	£m
Cash and cash equivalents	18	6.1	15.2
Loans and borrowings	20	(61.8)	(100.1)
Lease liabilities	25	(19.9)	(20.9)
Net debt		(75.6)	(105.8)

Reconciliation of net debt

		2025	2024
	Note	£m	£m
Adjusted cash generated from operations		68.7	60.1
Payments made in respect of exceptional items		(1.8)	(6.5)
Receipts/(payments) arising in respect of adjusting items		1.2	(1.8)
Cash generated from operations		68.1	51.8
Interest paid		(8.0)	(10.0)
Tax (paid)/credit		(1.1)	0.4
Net cash outflow from investing activities		(14.5)	(25.6)
Dividends paid	11	(8.2)	(6.3)
Purchase of shares by Employee Benefit Trust		(0.7)	–
Proceeds from sale of shares by Employee Benefit Trust		–	5.1
New lease liabilities	25	(5.1)	(2.7)
Other financing movement		(0.3)	(1.1)
Decrease in net debt		30.2	11.6
Net debt at the start of the year		(105.8)	(117.4)
Net debt at the end of the year		(75.6)	(105.8)

23. Financial instruments

		2025	2024
	Note	£m	£m
Financial assets
Cash and cash equivalents	18	6.1	15.2
Trade and other receivables (excluding prepayments)	17	32.7	35.6
Derivative financial assets		0.7	7.9
		39.5	58.7

		2025	2024
	Note	£m	£m
Financial liabilities
Trade and other payables (excluding non-financial liabilities)	19	62.5	59.6
Loans and borrowings	20	61.8	100.1
Lease liabilities	25	19.9	20.9
Derivative financial liabilities		–	0.1
		144.2	180.7

Cash and cash equivalents, trade and other receivables, trade and other payables and derivative financial

instruments as referenced above are derived directly from operations. Loans and borrowings and lease

liabilities are arranged periodically to finance operating and investing activities.

All financial assets and liabilities are held at amortised cost, with the exception of derivatives which are held

at fair value based on future energy price forecasts from third-party experts and modelled against contracted

volume. These instruments are measured at fair value using level 2 valuation techniques subsequent to initial

recognition.

Capital management

The Group manages capital (being loans and borrowings, cash and cash equivalents and equity) to ensure

a sufficiently strong capital base to support the Group remaining a going concern, maintain investor

and creditor confidence, provide a basis for future development of the business and maximise the return

to stakeholders.

The Group manages its loans and borrowings to ensure continuity of funding. A key objective is to ensure

compliance with the covenants set out in the Group’s bank facility agreements.

In managing capital, the Group may purchase its own shares on the open market. These purchases meet

the Group’s obligation to employees under the Group’s share-based payment schemes.

There has been no change in the objectives, policies or processes with regard to capital management during

the years ended 31 December 2024 and 31 December 2025.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 159

Notes to the Financial Statements continued

23. Financial instrumentscontinued

Financial risk management

The Group’s activities expose it to a variety of financial risks including market risk, credit risk and liquidity

risk. The Group uses derivative financial instruments to periodically manage risks if it is judged to be prudent.

The risk management framework governing the management of these and all other business risks is set by

the Board of Forterra plc.

Foreign exchange risk

The functional and presentational currency of the Group is pounds sterling, although some transactions

are executed in euros. The transactional amounts realised or settled are therefore subject to the effect

of movements in these currencies against pounds sterling. Foreign currency exposure is centrally managed

by the Group’s Treasury function using forward foreign exchange contracts and currency options.

Principal rate of exchange: euro/sterling

	2025	2024
	£m	£m
Year end	1.15	1.20
Average	1.17	1.18

Cash flow hedges

The Group has previously entered into forward currency contracts which are designated as cash flow

hedges. When undertaken, these are entered into to mitigate the Group’s exposure to fluctuations in foreign

currency exchange rates in relation to committed spend on property, plant and equipment.

The Group has, during both the current and prior year held foreign forward contracts over purchases of

equipment for the redevelopment of its Wilnecote facility, the payments for which are denominated in euro.

At 31 December 2025, no balances remained undrawn under these forward contracts (2024: €4.5m).

All contracts open for Wilnecote during 2025 were fully utilised in the period to 31 December 2025.

The Group classifies its forward foreign exchange contracts as cash flow hedges and holds them at fair

value. The fair value of the cash flow hedges in place at 31 December 2025 was £nil (2024: liability of £0.1m),

which is adjusted against the cash flow hedge reserve. During the year, an income of £0.2m (2024: loss of

£0.1m) has been recognised in Other Comprehensive Income in relation to these contracts.

Interest risk

The Group has secured its borrowings from a group of leading banks under a revolving credit facility. These

facilities allow the Group to meet short, medium and long-term financing requirements at a margin over

SONIA. The Group manages interest risk on an ongoing basis and reviews options available to hedge part

of the variable rate risk.

A sensitivity analysis has been performed based on the exposure to interest rates at the balance sheet date.

Based on the average borrowings drawn down in 2025, a 1.0% increase or decrease in interest rates, with

all other variables held constant, would increase or decrease profit before taxation by £0.9m (2024: £1.2m)

for the year ended 31 December 2025.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial

loss to the Group. Credit risk arises on cash balances (including bank deposits and cash and cash equivalents)

and credit exposure to customers through trade and other receivables. A financial asset is in default when

the counterparty fails to pay its contractual obligations.

Financial assets are impaired when there is no reasonable expectation of recovery.

To dilute and mitigate the financial credit risk associated with cash balances, the Group deposits cash and

cash equivalents with multiple highly rated counterparties.

Credit risk associated with trade receivables results from normal commercial operations. Procedures are in

place to ensure that customer creditworthiness is assessed and monitored sufficiently and that appropriate

credit limits are in place and enforced.

Trade and other receivables are stated net of management estimated expected credit losses.

With respect to trade and other receivables, an impairment analysis is performed at each reporting date using

a provision matrix to measure expected credit losses. The calculation reflects the probability-weighted

outcome, the time value of money and reasonable and supportable information that is available at

the reporting date about past events, current conditions and forecasts of future economic conditions.

Impairments of trade receivables in the year were less than £0.1m (2024: less than £0.1m).

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 160

Notes to the Financial Statements continued

23. Financial instrumentscontinued

Commodity price risk

Forward purchased energy contracts

The substantial energy requirements of the Group are closely managed to ensure that the impact of

fluctuating energy costs can be removed as far as possible; allowing management to have some certainty

over likely energy costs and providing a reasonable basis on which to budget. Contracts with energy

suppliers are entered into allowing prices to be fixed, by month, for volumes the Group expects to use.

Under normal circumstances, the Group takes delivery of and consumes all of the gas and electricity under

each contract, and in doing so satisfies the requirements under IFRS 9 to follow the own use exemption in

accounting for these. As such, the costs associated with the purchase of gas and electricity are accounted

for in the Statement of Total Comprehensive Income at the point of consumption, and contracts are not held

at fair value.

The decline in the Group’s market conditions during 2023, and subsequent reductions made to production

resulted in open forward contracts for some periods where the committed volume of gas exceeded

budgeted total consumption. In these instances, the quantities which have been ‘over purchased’ are sold

back to the market, crystallising a realised gain or loss. As was the case in prior years, any open contracts

where management expects to sell surplus gas back to the market fail the own use exemption, and in

accordance with IFRS 9, are accounted for as derivatives. As at 31 December 2025 the Group has

recognised a current asset of £0.7m (2024: £5.1m) in relation to these contracts. No non-current asset has

been recognised (2024: £2.8m). The values are calculated with reference to all forward purchased contracts

within which a sale back to the market is expected to occur, and reflect not only the portion of such

contracts expected to be sold, but also the fair value of the remaining quantity which is expected to be

consumed by the Group during the normal course of business.

For the purposes of internal reporting to management and the Board, the Group continues to measure these

contracts as if the own use exemption could still be applied, recognising energy costs at the contracted rate

in the period of consumption. In order to allow users of the accounts to review this operationally aligned

reporting, the movement due to the fair value treatment of energy derivatives since 31 December 2024,

being a charge of £7.2m in the statutory versus adjusted results, has been presented as an adjusting item in

these Consolidated Financial Statements. Further details can be found in note 31.

The Group has not historically, and has no future plans to, intentionally purchase gas or electricity to sell and

these current circumstances are solely the result of market conditions.

Liquidity risk

The Group’s borrowing facilities are available to ensure that there is sufficient liquidity to exceed maximum

forecast cash flow requirements in all reasonably possible circumstances. The Group monitors cash flow on

a weekly basis to ensure that headroom exists within current agreed facilities and updates the Executive

Committee on liquidity and the sources of cash flow performance and forecasts.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 161

Notes to the Financial Statements continued

23. Financial instruments continued

The maturity profile of contractual undiscounted cash outflows, including expected interest payments, which are payable under financial liabilities at the balance sheet date is set out below:

	Less than	One to	Two to	Three to	Four to	Greater than
	one year	two years	three years	four years	five years	five years	Total
2025	£m	£m	£m	£m	£m	£m	£m
Trade and other payables (excluding non-financial liabilities)	62.5	–	–	–	–	–	62.5
Loans and borrowings	5.3	14.6	56.8	–	–	–	76.7
Lease liabilities	7.4	6.9	4.0	2.0	0.7	0.5	21.5
	75.2	21.5	60.8	2.0	0.7	0.5	160.7

	Less than	One to	Two to	Three to	Four to	Greater than
	one year	two years	three years	four years	five years	five years	Total
2024	£m	£m	£m	£m	£m	£m	£m
Trade and other payables (excluding non-financial liabilities)	59.6	–	–	–	–	–	59.6
Loans and borrowings	33.3	25.1	54.6	–	–	–	113.0
Lease liabilities	6.5	6.2	5.6	2.8	1.1	0.7	22.9
Derivative liabilities	0.1	–	–	–	–	–	0.1
	99.5	31.3	60.2	2.8	1.1	0.7	195.6

The maturity profile for loans and borrowings is structured around management’s viability modelling. There is no material difference between the carrying value and fair value of the Group’s financial assets and liabilities.

A reconciliation of liabilities arising from financing activities has been detailed below:

		At						At
		1 January		Interest		Capitalised	New	31 December
		2025	Cash flow	charge 1	Disposal	interest	leases	2025
2025	Note	£m	£m	£m	£m	£m	£m	£m
Loans and borrowings	20	100.1	(45.8)	5.0	–	2.5	–	61.8
Lease liabilities	25	20.9	(6.9)	0.9	(0.1)	–	5.1	19.9

		At						At
		1 January		Interest		Capitalised	New	31 December
		2024	Cash flow	charge 1	Disposal	interest	leases	2024
2024	Note	£m	£m	£m	£m	£m	£m	£m
Loans and borrowings	20	109.2	(19.2)	8.0	–	2.1	–	100.1
Lease liabilities	25	24.2	(6.9)	1.0	(0.1)	–	2.7	20.9

1. Interest charged is shown inclusive of the amortisation of capitalised finance costs.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 162

Notes to the Financial Statements continued

24. Provisions for other liabilities and charges

	Restoration and	Other	Carbon	Restructuring
	decommissioning	provisions	credits	costs	Total
	£m	£m	£m	£m	£m
At 1 January 2025	9.8	1.1	3.9	–	14.8
Charged/(credited) to the Consolidated Statement of Total Comprehensive Income:
– Additional provision	1.1	0.4	3.3	2.5	7.3
– Release of provision	–	(0.3)	(0.1)	–	(0.4)
– Unwind of discount	0.2	–	–	–	0.2
Utilised amounts	–	(0.3)	(2.7)	(1.8)	(4.8)
At 31 December 2025	11.1	0.9	4.4	0.7	17.1

Analysed as:

	2025	2024
	£m	£m
Current	8.4	6.6
Non-current	8.7	8.2
	17.1	14.8

The other provisions balance is made up of provisions for lease dilapidations and product liability provisions.

Non-current provisions are discounted at a rate of 4.1% (2024: 4.0%). The unwind of discount in the year is shown as a finance expense.

Restoration and decommissioning

The Group is required to restore quarrying sites to a state agreed with the planning authorities after extraction of raw materials ceases, and to decommission manufacturing facilities that have been constructed. Provisions

for restoration and decommissioning obligations are made based on the best estimate of the likely committed cash outflow. Management seeks specialist input from third-party experts to estimate the cost to perform any

necessary remediation work at the reporting date. These experts undertake site visits during the year, either where scoping identifies there is a change in operations which could change estimates, or to sites that have not

been visited recently. Desktop reviews are undertaken to inform the estimates for remaining sites.

The useful lives of quarrying sites are based on the estimated mineral reserve remaining and manufacturing facilities linked to the useful life of site property, plant and equipment. Estimates of appropriate inflation and

discount rates are judgemental and can have a significant impact on net present value. Management references information from the Bank of England when making such estimates. These provisions are discounted by

applying a discount rate that reflects the passage of time. Estimates are revised annually and, in the case of decommissioning provisions, are adjusted against the asset to which the provision relates. Assets are then

subject to impairment assessments at a CGU level. Future costs are expected to be incurred over the useful life of the sites, which is a period of up to 34 years.

The following table shows the timeline in which undiscounted costs in relation to the restoration and decommissioning provision are expected to become current:

	Current	1 to 20 years	21 to 40 years	40 years plus	Total
	£m	£m	£m	£m	£m
Restoration and decommissioning	2.4	5.2	3.5	–	11.1

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 163

Notes to the Financial Statements continued

25. Leases

The Group leases various premises, land, fleet vehicles, motor vehicles and plant and equipment. Lease

terms are negotiated on an individual basis, and terms and conditions can vary.

In addition, the Group also leases machinery on a short-term basis (less than 12 months) and office equipment

of low financial value. These leases are recognised on a straight-line basis as an expense in the Consolidated

Statement of Total Comprehensive Income.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:

		Plant,
		fleet and
	Land and	motor
	buildings	vehicles	Total
	£m	£m	£m
At 1 January 2024	2.1	22.0	24.1
Additions	0.2	2.5	2.7
Disposals	–	(0.1)	(0.1)
Depreciation expense	(0.6)	(5.6)	(6.2)
At 1 January 2025	1.7	18.8	20.5
Additions	1.2	3.9	5.1
Impairment	(0.8)	–	(0.8)
Disposals	(0.1)	–	(0.1)
Depreciation expense	(0.3)	(5.6)	(5.9)
At 31 December 2025	1.7	17.1	18.8

Set out below are the carrying amounts of lease liabilities and the movements during the year.

	2025	2024
	£m	£m
At the start of the year	(20.9)	(24.2)
New leases	(5.1)	(2.7)
Interest	(0.9)	(1.0)
Payments	6.9	6.9
Disposal of leases	0.1	0.1
At the end of the year	(19.9)	(20.9)

Payments above of £6.9m (2024: £6.9m) include £6.0m (2024: £5.9m) of capital repayment and £0.9m

(2024: £1.0m) of interest paid.

	2025	2024
	£m	£m
Current	(6.7)	(5.8)
Non-current	(13.2)	(15.1)
	(19.9)	(20.9)

The following are the amounts recognised in the Consolidated Statement of Total Comprehensive Income:

	2025	2024
	£m	£m
Depreciation of right-of-use-assets	5.9	6.2
Interest payable on lease liabilities	0.9	1.0
Expenses relating to short-term leases	2.2	3.2
	9.0	10.4

Leases of low financial value for the year ended 31 December 2025 were less than £0.1m (2024: less than

£0.1m). During the years ended 31 December 2025 and 31 December 2024, the Group did not hold any

lease contracts with variable payment terms.

The Group has several land and property lease contracts that include termination options, known as ‘break

clauses’. These options are negotiated by management to provide flexibility in managing the leased-asset

portfolio and align with the Group’s business needs. Management exercises judgement in determining

whether these clauses are reasonably certain to be exercised.

At 31 December 2025, the Group has determined it is reasonably certain that any break clause would not

be exercised, and full lease terms have been considered within the present value calculations.

At 31 December 2025, lease commitments that were contracted but had not yet commenced totalled less

than £0.1m (2024: £0.1m).

26. Deferred tax

The analysis of deferred tax liabilities is as follows:

	2025	2024
	£m	£m
Deferred tax liabilities to be incurred after more than 12 months	14.0	12.9

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 164

Notes to the Financial Statements continued

26. Deferred taxcontinued

The movement in deferred tax assets/(liabilities) is as follows:

	Fixed		Intangible	Share-based
	assets	Provisions	assets	payments	Other	Total
	£m	£m	£m	£m	£m	£m
At 1 January 2024	(9.8)	3.4	(1.0)	1.1	–	(6.3)
(Charged)/credited to Consolidated Statement of Total Comprehensive Income	(3.3)	(0.3)	–	–	(0.5)	(4.1)
Effect of changes in tax rates	–	–	–	–	–	–
Effect of prior period adjustments	(2.4)	–	–	–	–	(2.4)
Other movements	0.2	(0.2)	–	–	–	–
Tax on items taken directly to equity	–	–	–	(0.1)	–	(0.1)
At 31 December 2024	(15.3)	2.9	(1.0)	1.0	(0.5)	(12.9)
(Charged)/credited to Consolidated Statement of Total Comprehensive Income	(1.2)	0.2	–	0.3	(0.6)	(1.3)
Effect of changes in tax rates	–	–	–	–	–	–
Effect of prior period adjustments	0.3	–	–	–	–	0.3
Other movements	(0.1)	0.1	–	–	–	–
Tax on items taken directly to equity	–	–	–	(0.1)	–	(0.1)
At 31 December 2025	(16.3)	3.2	(1.0)	1.2	(1.1)	(14.0)

Deferred tax is calculated on temporary differences between the tax base of assets and liabilities and their carrying amounts, using the corporation tax rate applicable to the timing of their reversal.

Deferred tax assets and liabilities are only offset where there is a legally enforceable right to offset and there is an intention to settle the balances net.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 165

Notes to the Financial Statements continued

27. Share capital and other reserves

Share capital

Called up issued and fully paid Ordinary shares.

	2025	2025	2024	2024
	Number	£m	Number	£m
Allotted, called up and fully paid 1p Ordinary shares
At the start of the year	212,803,389	2.1	212,803,389	2.1
At the end of the year	212,803,389	2.1	212,803,389	2.1

Reserve for own shares

Own shares represent the cost of Forterra plc shares purchased in the market and held by employee benefit

trusts to satisfy the future exercise of options under the Group’s share option schemes. At 31 December

2025, two trusts were in place and consolidated within the Consolidated Financial Statements.

The first trust holds 265,717 Ordinary shares (2024: 299,106), relating to shares granted under two free

share awards. The first of these was granted on 25 May 2016, the second on 10 February 2021. Shares

granted under the 2016 award were issued by the Company. To satisfy the 2021 award, a total of 291,483

shares were purchased by the Company through the Trust. The total weighted average cost for shares held

by the Trust at 31 December 2025 was 231p per share (2024: 165p), which is reflected in the reserve for

own shares within the Consolidated Statement of Changes in Equity. The market value of shares held by the

Trust at 31 December 2025 was £0.5m (2024: £0.5m).

The second trust holds 2,167,669 (2024: 1,889,884) shares at an average cost of 248p per share (2024:

260p), reflected within the reserve for own shares within the Consolidated Statement of Changes in Equity.

The market value of these shares at 31 December 2025 was £4.0m (2024: £3.1m).

Capital redemption reserve

The capital redemption reserve records the nominal value of shares repurchased by the Company.

Cash flow hedge reserve

The cash flow hedge reserve reflects the gains and losses arising on forward foreign exchange contracts

which are designated as cash flow hedges.

28. Share-based payments

Total cost of share schemes:

	2025	2024
	£m	£m
Share Incentive Plan (SIP)	–	(0.2)
Performance Share Plan (PSP)	0.8	0.8
Sharesave Plan (SAYE)	0.6	0.4
	1.4	1.0

The total cost of share schemes in the year includes a national insurance contribution of £0.1m (2024: credit

of £0.1m). The total national insurance liability, relating to share-based payments, held within the

Consolidated Balance Sheet as at 31 December 2025 was £0.4m (2024: £0.3m).

Summary of share option and share award arrangements

The Group operates a number of share schemes for the benefit of employees, all of which are equity-settled

(although the rules of the PSP and DABP allow for cash settlement in exceptional circumstances).

Share awards

Share Incentive Plan (SIP)

On 25 May 2016, 442,068 deferred free shares were awarded to all employees in service at this date.

Shares to the value of £500 were issued which vested in May 2019, three years after the date of grant,

subject to a three-year service condition. Further to this, on 10 February 2021, an additional £500 award

was made to all serving employees, subject to the same service condition as in 2016. A total of 314,075

shares were granted under this award. Unexercised shares are held by the Employee Benefit Trust on behalf

of the Group’s employees and detailed within note 27.

Share options

Performance Share Plan (PSP)

Performance-based awards granted to the Executive Directors and designated senior management which vest

three years after the date of grant at 1p per share. The total number of shares vesting is dependent upon both

service conditions being met and the performance of the Group over the three-year period. All in-flight PSPs are

currently structured with 40% of the award subject to an EPS performance condition, 40% of the award subject

to a TSR performance condition and 20% of the award subject to sustainability targets. In addition to this, a

holding period applies to vested PSP awards for the Executive Directors of Forterra plc, under which they are

required to retain the number of vested awards, net of tax, for at least two years from the date of vesting.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 166

Notes to the Financial Statements continued

28. Share-based payments continued

Deferred Annual Bonus Plan (DABP)

A portion of the Executive Directors’ annual bonus award is deferred into shares under a DABP, with a

deferral period of three years. These awards are accrued as a bonus in the year to which they relate and

are converted into deferred share awards after the year end. A DABP award of £0.2m was granted during

2025 (2024: £nil). At 31 December 2025 an amount of £0.2m (2024: £0.2m) has been recorded in accruals

and is expected to be awarded in 2025 relating to bonuses achieved in the year.

Sharesave (SAYE)

This HM Revenue & Customs approved scheme is available to all employees, with schemes offered annually

since 2016. Employees make monthly contributions of up to £500 per month into a linked savings account

where these may be exchanged three years from each grant date for shares at an option price discounted

by 20% from the offer date.

The aggregate number of share awards outstanding for the Group is shown below:

	PSP	DABP	SAYE
	Number of	Number of	Number of
	options	options	options
At 1 January 2024	2,965,742	124,257	9,583,122
Awards granted	1,407,772	–	1,532,961
Awards exercised	(254,789)	–	(2,295,037)
Awards lapsed/forfeited	(825,667)	–	(2,376,330)
At 31 December 2024	3,293,058	124,257	6,444,716
Awards granted	1,965,064	99,618	981,153
Awards exercised	(10,940)	(59,715)	(16,610)
Awards lapsed/forfeited	(1,054,681)	–	(1,061,813)
At 31 December 2025	4,192,501	164,160	6,347,446

Options were exercised on a regular basis throughout the year. The average share price during the year

was 183p (2024: 171p).

Neither the EPS nor the TSR performance conditions for the 2022 PSP award, which was due to vest

in March 2025, were met. The shares therefore did not vest and have been shown within lapsed/forfeited

in the above table.

Share options either outstanding or not yet exercised at the end of the year have the following vesting dates:

	2025	2024
	Number of	Number of
	options	options
PSP
25 April 2020	3,874	3,874
17 September 2023	25,558	36,498
17 March 2025	–	723,540
3 April 2026	1,097,087	1,191,007
1 May 2027	1,216,225	1,338,139
18 March 2028	1,849,759	–
DABP
17 March 2025	–	59,715
16 March 2026	64,542	64,542
19 March 2028	99,618	–
SAYE
1 December 2024	–	273,823
1 December 2025	348,683	393,076
1 December 2026	3,952,861	4,327,801
1 December 2027	1,144,871	1,450,016
1 December 2028	901,029	–
	10,704,107	9,862,031

The weighted average remaining contractual life of share options outstanding at 31 December 2025 was 1 year

6 months (2024: 1 year 10 months).

The average exercise price for share options outstanding ranges from 1p to 210p (2024: 1p to 238p).

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 167

Notes to the Financial Statements continued

28. Share-based payments continued

The fair value per option granted in the year has been calculated using the following assumptions:

	2025		2024
	PSP	SAYE	PSP	SAYE
	(Performance and		(Performance and
	service condition)	(Service condition)	service condition)	(Service condition)
Date of grant	19 March 2025	2 October 2025	1 May 2024	2 October 2024
Option pricing model	Monte Carlo	Black-Scholes	Monte Carlo	Black-Scholes
Share price on grant date (pence)	160.50	184.00	163.00	170.00
Exercise price (pence)	1.00	151.00	1.00	140.00
Expected volatility (%)	28.6%	27.7%	29.0%	30.0%
Vesting period (years)	3.00	3.15	3.00	3.15
Expected option life to exercise (years)	3.00	3.40	3.00	3.40
Expected dividend yield (%)	–	4.3%	–	4.9%
Risk-free interest rate (%)	4.2%	4.0%	4.3%	3.7%
Fair value per option (pence)	128.80	45.00	133.40	41.00

Fair value per option under the PSP is calculated as the average for the TSR and non-market conditions.

Expected volatility is a measure of expected fluctuations in the share price over the expected life of an option. The measures of volatility used by the Group in its pricing models has been derived through analysis of the

Group’s historic share price in order to provide an estimate of future volatility.

29. Group subsidiaries

Forterra plc had the following subsidiaries as at 31 December 2025:

		Country of		Nature of
	Registration number	incorporation	Holding	holding	% of class held	Principal activity
Forterra Holdings Limited	09983078	England & Wales	Ordinary £0.01	Direct	100%	Holding Company
Forterra Building Products Limited	08960430	England & Wales	Ordinary £0.01	Indirect	100%	Trading
Red Bank Limited	10082033	England & Wales	Ordinary £1.00	Indirect	100%	Dormant
London Brick Company Limited	10081930	England & Wales	Ordinary £1.00	Indirect	100%	Dormant
Cradley Special Brick Company Limited	10082008	England & Wales	Ordinary £1.00	Indirect	100%	Dormant
Butterley Brick Limited	10082046	England & Wales	Ordinary £1.00	Indirect	100%	Dormant
Formpave Limited	10081922	England & Wales	Ordinary £1.00	Indirect	100%	Dormant

All entities have a place of business in the UK. The registered office address for all entities is the same as for Forterra plc, being 5 Grange Park Court, Roman Way, Northampton, NN4 5EA.

All subsidiary undertakings are included in the Consolidated Financial Statements. The proportion of the voting rights in the subsidiary undertakings held directly by the Company do not differ from the proportion

of Ordinary shares held.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 168

Notes to the Financial Statements continued

30. Related party transactions

Transactions with key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and

controlling the activities of the Group. The Directors of the Company and the Directors of the Group’s

subsidiary companies fall within this category.

	2025	2024
	£m	£m
Emoluments including taxable benefits	3.5	2.7
Share-based payments	0.8	0.7
Pension and other post-employment benefits	0.2	0.2
	4.5	3.6

Information relating to Directors’ emoluments, pension entitlements, share options and long-term incentive

plans appear in the Remuneration Committee Report within pages 96 to 123.

31. Alternative performance measures

APM	Definition and/or purpose
Adjusted EBITDA, adjusted EBITDA margin, adjusted	These APMs are calculated by excluding both
operating profit (EBIT), adjusted profit before tax, adjusted earnings per share, adjusted operating	exceptional and adjusting items
cash flow
Adjusted operating cash conversion	Operating cash conversion is calculated as adjusted
	operating cash flow/adjusted EBITDA
Net (debt)/cash before leases	Net (debt)/cash before leases is presented as the total
	cash and cash equivalent and borrowings, inclusive of
	capitalised financing costs and excluding lease
	liabilities at the balance sheet date

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 169

Notes to the Financial Statements continued

31. Alternative performance measures continued

Group: Revenue, EBITDA, EBITDA margin, Operating profit, Profit before tax

		Exceptional	Exceptional	Adjusting	Adjusting
	Adjusted	items	items	items	items	Statutory
	£m	£m	£m	£m	£m	£m
			Aborted	Realised gain on	Energy
		Restructuring	corporate	sale of surplus	contract
2025		costs	transaction	energy	derivatives
Revenue	386.0	–	–	–	–	386.0
EBITDA	61.6	(6.7)	–	1.2	(7.2)	48.9
EBITDA margin %	16.0%	–	–	–	–	12.7%
Operating profit (EBIT)	42.0	(6.7)	–	1.2	(7.2)	29.3
Profit before tax	36.0	(6.7)	–	1.2	(7.2)	23.3

		Exceptional	Exceptional	Adjusting	Adjusting
	Adjusted	items	items	items	items	Statutory
	£m	£m	£m	£m	£m	£m
			Aborted	Realised loss on	Energy
		Restructuring	corporate	sale of surplus	contract
2024		costs	transaction	energy	derivatives
Revenue	344.3	–	–	–	–	344.3
EBITDA	52.0	(0.2)	(2.7)	(1.5)	7.1	54.7
EBITDA margin %	15.1%	–	–	–	–	15.9%
Operating profit (EBIT)	31.2	(0.2)	(2.7)	(1.5)	7.1	33.9
Profit before tax	22.1	(0.2)	(2.7)	(1.5)	7.1	24.8

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 170

Notes to the Financial Statements continued

31. Alternative performance measures continued

Segmental: Revenue, EBITDA, EBITDA margin

Bricks and Blocks

	Adjusted	Exceptional items	Adjusting items	Adjusting items	Statutory
	£m	£m	£m	£m	£m
		Restructuring	Realised gain on sale	Energy contract
2025		costs	of surplus energy	derivatives
Revenue	307.7	–	–	–	307.7
EBITDA	56.9	(3.4)	1.2	(7.2)	47.5
EBITDA margin %	18.5%	–	–	–	15.4%

	Adjusted	Exceptional items	Adjusting items	Adjusting items	Statutory
	£m	£m	£m	£m	£m
		Restructuring	Realised loss on sale	Energy contract
2024		costs	of surplus energy	derivatives
Revenue	276.7	–	–	–	276.7
EBITDA	49.0	(0.1)	(1.5)	7.1	54.5
EBITDA margin %	17.7%	–	–	–	19.7%

Bespoke Products

	Adjusted	Exceptional items	Adjusting items	Adjusting items	Statutory
	£m	£m	£m	£m	£m
		Restructuring	Realised gain on sale	Energy contract
2025		costs	of surplus energy	derivatives
Revenue	81.0	–	–	–	81.0
EBITDA	4.7	(3.3)	–	–	1.4
EBITDA margin %	5.8%	–	–	–	1.7%

	Adjusted	Exceptional items	Adjusting items	Adjusting items	Statutory
	£m	£m	£m	£m	£m
		Restructuring	Realised loss on sale	Energy contract
2024		costs	of surplus energy	derivatives
Revenue	71.5	–	–	–	71.5
EBITDA	3.0	(0.1)	–	–	2.9
EBITDA margin %	4.2%	–	–	–	4.1%

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 171

Notes to the Financial Statements continued

31. Alternative performance measures continued

Reconciliation of adjusted operating cash flow to statutory operating cash flow:

		Adjusting	Exceptional
	Adjusted	items	items	Statutory
2025	£m	£m	£m	£m
EBITDA	61.6	(6.0)	(6.7)	48.9
Purchase and settlement of carbon credits	(0.9)	–	–	(0.9)
Other cash flow items 1	0.2	7.2	4.9	12.3
Changes in working capital:
– Inventories	2.5	–	–	2.5
– Trade and other receivables	3.5	–	–	3.5
– Trade and other payables	1.8	–	–	1.8
Operating cash flow	68.7	1.2	(1.8)	68.1

1. For reconciliation purposes, ‘Other cash flow items’ is reported as the sum of: loss on disposal of property, plant

and equipment and leases, movement in provisions, share-based payments and other non-cash items as are detailed

within note 21.

Adjusted operating cash conversion

The calculation for operating cash conversion has been amended in the current year. Previously this metric

was calculated as adjusted operating cash flow, less capital expenditure (excluding spend on strategic

projects), divided by adjusted operating profit. In the current year the calculation has been defined as

adjusted operating cash flow divided by adjusted EBITDA. In making this amendment, management believe

the revised KPI shown is more line with managements view of performance.

	2025	2024
	£m	£m
Adjusted operating cash flow	68.7	60.1
Adjusted EBITDA	61.6	52.0
Adjusted operating cash conversion	111.5%	115.6%

32. Post balance sheet events

Within the year end results, the Company has announced the commencement of a share buyback

programme. The aggregate price of all shares purchased in 2026 will be no more than £20 million (excluding

stamp duty and expenses) and any Ordinary shares purchased under the programme will be cancelled

immediately.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 172

Notes to the Financial Statements continued

Note

2025

£m

2024

£m

Non-current assets

Investment in subsidiary 6 314.2 313.3

Deferred tax assets 7 0.4 0.4

314.6 313.7

Current assets

Debtors 8 0.1 –

Total assets 314.7 313.7

Current liabilities

Creditors – amounts falling due within one year 9 (1.5) (0.8)

Amounts owed to Group undertakings 9 (6.1) (4.7)

Income tax liability 9 (0.2) –

Total liabilities (7.8) (5.5)

Net assets 306.9 308.2

Capital and reserves

Ordinary shares 10 2.1 2.1

Own share reserve (6.0) (5.4)

Capital redemption reserve 0.2 0.2

Retained earnings 310.6 311.3

Total equity 306.9 308.2

As permitted by Section 408 of the Companies Act 2006, an entity profit or loss account is not included

aspart of the published Financial Statements of Forterra plc. The Company profit for the financial year ended

31December 2025 was£6.2m (2024: £19.1m).

The notes on pages 175 to 177 are an integral part of these Financial Statements.

Approved by the Board of Directors on 10 March 2026 and signed on their behalf by:

Neil Ash

Chief Executive Officer

Ben Guyatt

Chief Financial Officer

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 173

Company Balance Sheet as at 31 December 2025

Note

Ordinary

£m

Own share

reserve

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total equity

£m

Balance at 1 January 2024 2.1 (14.2) 0.2 301.2 289.3

Total comprehensive income for the year – – – 19.1 19.1

Dividends paid 5 – – – (6.3) (6.3)

Purchase of shares by Employee Benefit Trust – – – – –

Proceeds from sale of shares by Employee Benefit Trust – 5.1 – – 5.1

Share-based payments charge – – – 1.0 1.0

Share-based payments exercised – 3.7 – (3.7) –

Tax on share-based payments – – – – –

Balance at 31 December 2024 2.1 (5.4) 0.2 311.3 308.2

Total comprehensive income for the year – – – 6.2 6.2

Dividends paid 5 – – – (8.2) (8.2)

Purchase of shares by Employee Benefit Trust – (0.7) – – (0.7)

Proceeds from sale of shares by Employee Benefit Trust – – – – –

Share-based payments charge – – – 1.4 1.4

Share-based payments exercised – 0.1 – (0.1) –

Tax on share-based payments – – – – –

Balance at 31 December 2025 2.1 (6.0) 0.2 310.6 306.9

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 174

Company Statement of Changes in Equity for the year ended 31 December 2025

1. General information

Forterra plc is a public limited company which is listed on the London Stock Exchange and is domiciled and

incorporated in theUnited Kingdom under the Companies Act 2006. The registered office is 5 Grange Park

Court, Roman Way, Northampton, NN45EA.

2. Accounting policies

(A) BASIS OF PREPARATION

The separate Company Financial Statements have been prepared in accordance with applicable accounting

standards, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland

(‘FRS 102’) and the Companies Act2006.

As permitted by Section 408 of the Companies Act 2006, an entity profit or loss account is not included

aspart of the published Financial Statements of Forterra plc. The Company profit for the financial year ended

31 December 2025 was £6.2m (2024: £19.1m).

As permitted by FRS 102, the Company has taken advantage of the disclosure exemptions available under

that standard in relation to presentation of a cash flow statement and related party transactions. Where

required, equivalent disclosures are given in the Consolidated Financial Statements.

The Financial Statements are presented in pounds sterling, rounded to the nearest hundred thousand and

are prepared under the historical cost convention.

After making enquiries, the Directors have a reasonable expectation that the Company has adequate

resources to continue in operational existence for at least one year from the date that the Financial

Statements are signed. The Company therefore adopts the going concern basis in preparing its Financial

Statements.

A detailed going concern assessment for the Group is included within note 2 to the Consolidated Financial

Statements.

(B) INVESTMENTS

Investments are included in the balance sheet at the deemed cost of acquisition upon the Group restructure.

Where appropriate, aprovision is made for any impairment.

Capital contributions arising where subsidiary employees are awarded share options to be settled over the

Company’s equity result in increases to the cost of investment.

Charges for income tax are based on earnings for the period and take account of deferred taxation on timing

differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised without discounting, in respect of all timing differences between the treatment of

certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet

date.

(D) FINANCIAL INSTRUMENTS

The Company follows the financial instrument framework provided with FRS 102, applying the recognition

and measurement principles of sections 11 and 12. The Company determines the classification of financial

assets and financial liabilities at initial recognition. The principal financial assets and liabilities of the Company

are as follows:

(I) Financial assets

Basic financial assets, including amounts due from Group undertakings and other debtors, are initially

recognised attransaction price unless the arrangement constitutes a financing transaction. In this instance

the asset is measured at the presentvalue of future receipts discounted at a market rate of interest. Such

assets are subsequently carried at amortised cost using theeffective interest method and assessed for

objective evidence of impairment or impairment reversal at the end of each reportingperiod.

Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, are

settled or substantially allthe risks and rewards of ownership of the asset are transferred.

(II) Financial liabilities

Basic financial liabilities, including amounts owed to Group undertakings and other payables, are initially

recognised at the transaction price, unless the arrangement constitutes a financing transaction. In this

instance the debt is measured at the present value of the future payments, discounted at a market rate of interest.

Trade and other payables and amounts due to Group undertakings are subsequently carried at amortised

cost, using the effective interest rate method.

(E) SHARE-BASED PAYMENTS

The Company operates a number of equity-settled share-based compensation plans, under which the

Company receives services from the Executive Directors in exchange for equity instruments granted by the

Company. The services received and corresponding increase in equity are measured at the fair value of the

equity instruments granted, on the date granted. The Company also compensates certain key management

and other employees for services provided to Forterra Building Products Limited. The services provided are

recognised as an increase in the cost of investment in subsidiaries and a corresponding increase in equity;

which is measured at the fair value of the equity instruments granted, on the date granted.

The cost of the equity-settled transactions is subsequently recognised over the vesting period, which ends

at the date that the plan participant becomes fully entitled to the award. Fair values are determined using

appropriate pricing models by external valuers. At the end of each reporting period the Company revises

itsestimates of the number of awards that are expected to vest based onnon-market vesting conditions.

Itrecognises the impact of the revision to original estimates, if any, in the profit or loss account, with a

corresponding adjustment to equity.

Further details regarding the share-based payment schemes are set out in note 28 to the Consolidated

Financial Statements.

(F) OWN SHARES HELD BY EMPLOYEE BENEFIT TRUST

The Company has established two separate employee benefit trusts for the purposes of satisfying awards

under share-based incentive schemes. Shares in the Company acquired by the trusts are deducted from

equity until shares are cancelled, reissued ordisposed.

(G) SHARE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares

areshown in share premium as a deduction from the proceeds.

(H) RELATED PARTIES

The Company discloses transactions with related parties which are not wholly owned within the same Group.

Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the Directors,

separate disclosure is necessary to understand the effect of the transactions on the Financial Statements.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 175

Notes to the Company Financial Statements

3. Significant accounting judgements and estimates

(A) IMPAIRMENT OF INVESTMENTS

The Directors periodically review investments for possible impairment when events or changes in circumstances

indicate, inmanagement’s judgement, that the carrying amount of an asset may not be recoverable. The

Company did not record anyimpairment charges during the period ended 31 December 2025.

4. Employee information

The Company has no employees other than the Directors. Full details of the Directors’ remuneration and

interests are set out intheAnnual Report on Remuneration on pages 96 to 123 and includes the amounts

received or receivable by each Director inthe period. The long-term incentives as detailed on page 110 were

recognised in the Company profit and loss account as anexpense over the three-year period to which the

awards relate. The Company recognised a charge of £0.5m (2024: £0.4m) inrelation to share-based

payments for the period.

5. Dividends

2025

£m

2024

£m

Amounts recognised as distributions to equity holders in the year

Interim dividend of 1.9p per share (2024: 1.0p) 4.0 2.1

Final dividend of 2.0p per share in respect of prior year (2024: 2.0p) 4.2 4.2

8.2 6.3

The Directors are proposing a final dividend for 2025 of 4.3p per share, making a total payment for the year

of 6.2p (2024:3.0p). This is subject to approval by the shareholders at the AGM and has not been included

as a liability in the FinancialStatements.

6. Investment in subsidiary

2025

£m

2024

£m

Balance at the start of the year

313.3

312.7

Capital contribution relating to share-based payments 0.9

0.6

Balance at the end of the year 314.2

313.3

The companies in which the Company has an interest at the year end are shown below:

Country of

incorporation Holding

Nature of

holding

% of

class

held

Principal

activity

Forterra Holdings Limited

England & Wales Ordinary £0.01 Direct 100% Holding Company

Forterra Building Products

Limited

England & Wales Ordinary £0.01 Indirect 100% Trading

Red Bank Limited England & Wales Ordinary £1.00 Indirect 100% Dormant

London Brick Company Limited England & Wales Ordinary £1.00 Indirect 100% Dormant

Cradley Special Brick Company

Limited

England & Wales Ordinary £1.00 Indirect 100% Dormant

Butterley Brick Limited England & Wales Ordinary £1.00 Indirect 100% Dormant

Formpave Limited England & Wales Ordinary £1.00 Indirect 100% Dormant

The address of the registered office of all direct and indirect subsidiaries of Forterra plc, is 5 Grange Park

Court, Roman Way, Northampton, England, NN4 5EA.

7. Deferred tax

2025

£m

2024

£m

Deferred tax assets to be recovered after more than 12 months 0.4 0.4

8. Current assets

2025

£m

2024

£m

Debtors 0.1 –

9. Current liabilities

2025

£m

2024

£m

Creditors – amounts falling due within one year (1.5) (0.8)

Amounts owed to Group undertakings (6.1) (4.7)

Income tax liability (0.2) –

(7.8) (5.5)

Amounts owed to Group undertakings are non-interest bearing, unsecured and repayable on demand.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 176

Notes to the Company Financial Statements continued

10. Capital and reserves

2025

Number

2025

£m

2024

Number

2024

£m

Ordinary Shares of £0.01 212,803,389 2.1 212,803,389 2.1

The Ordinary shares are voting, non-redeemable shares and rank equally as to dividends, voting rights

andany return of capital onwinding up.

Movements in the share capital and reserve for own shares are set out in note 27 to the Consolidated

Financial Statements.

11. Related party transactions

The Company is exempt from disclosing related party transactions with companies that are wholly owned

within the Group. Transactions with related parties which are not wholly owned are disclosed within note 30

to the Consolidated Financial Statements. Remuneration to key management personnel has been disclosed

within note 30 to the Consolidated Financial Statements.

12. Controlling party

Forterra plc is not under the control of an ultimate controlling party.

13. Post balance sheet events

Within the year end results, the Company has announced the commencement of a share buyback programme.

The aggregate price of all shares purchased in 2026 will be no more than £20 million (excluding stamp duty and

expenses) and any Ordinary shares purchased under the programme will be cancelled immediately.

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS FORTERRA PLC ANNUAL REPORT AND ACCOUNTS 2025 177

Notes to the Company Financial Statements continued

Five-year summary

2025

£m

2024

£m

2023

£m

2022

£m

2021

£m

Revenue 386.0 344.3 346.4 455.5 370.4

Adjusted EBITDA 61.6 52.0 58.1 89.2 70.4

Adjusted operating profit 42.0 31.2 38.1 72.7 54.0

Adjusted profit before tax 36.0 22.1 31.1 70.6 50.7

Profit before tax (statutory) 23.3 24.8 17.1 72.9 56.8

Adjusted operating cash flow 68.7 60.1 (5.3) 89.0 81.2

Net (debt)/cash (before leases) (55.7) (84.9) (93.2) (5.9) 40.9

Adjusted earnings per share (pence) 12.6 7.6 11.4 26.4 17.5

Dividends per share (pence) 6.2 3.0 4.4 14.7 9.9

Additional Information

Calendar

The following dates have been announced:

2026 Annual General Meeting 19 May 2026

Payment of final 2025 dividend 6 July 2026

2026 Interim results announcement 28 July 2026

Registrars

MUFG Corporate Markets

Statutory auditor

Ernst & Young LLP

Brokers

Deutsche Numis

Investec Bank plc

Bankers

HSBC Bank plc

National Westminster Bank plc

Barclays plc

Clydesdale Bank plc (trading as Virgin Money)

Financial PR

FTI Consulting