32816-Lucy-Group-AR-2025 web ready spreads_FINAL

Operational Review

STRATEGIC REPORT

“ We continued to invest in our operations to build capacity, unlock efficiencies and support long term sustainable growth.” replaces the legacy master planning approach, addressing long-standing challenges and improving material availability, scheduling accuracy and planner confidence. Planning run times have been reduced from overnight processing to minutes during the working day. D365 Asset Management was implemented across multiple sites, providing remote visibility for maintenance teams, QR-coded assets and integrated Power BI reporting. These capabilities support preventative maintenance, improved spares visibility and higher equipment uptime. Phase two, linking spares consumption more closely to financial reporting, is nearing completion. D365 Field Service Management went live at Lucy Electric Energy Services, improving scheduling, visibility and service execution. Additional value was delivered through process redesign initiatives, paperless purchase approval workflows, and standardised planning and quality processes. AP automation went live at several UK sites using Microsoft D365 Invoice Capture, enabling automated processing of accounts payable invoices. As Microsoft continues to enhance AI-driven invoice recognition, the Group is actively engaged with our commercial teams to shape the development roadmap. The result is faster invoice processing,

During 2025, we made significant progress in strengthening our operational platform across the Group. We established new business entities within Lucy Electric to sharpen strategic focus (see pages 32 and 33), commenced volume production at our new Saudi Arabian factory and continued to invest in manufacturing capability, automation and digital systems. In parallel, we expanded the use of Microsoft Dynamics 365 (D365), unlocking greater integration, visibility and control across finance, planning and shopfloor operations.

of automated guided vehicles, autonomous mobile robots and manufacturing execution systems, helping to reduce manual handling, improve material flow and support consistent production execution. Microsoft D365 rollouts As part of the Future Factory programme, pilot implementations were completed on production lines in India and the UK. In the interim, new and upgraded applications are live across several businesses, supporting traceability, rework management, quality data capture and tighter integration with Microsoft D365. Work also commenced to assess whether enhanced D365 traceability features could reduce or eliminate the need for bespoke digital birth certificates, simplifying long-term support and maintenance. Microsoft D365 Planning Optimisation was successfully tested and is now live in four Lucy Electric entities, with further rollout planned in 2026. This

At Sowerby Bridge, the expanded EV Centre of Excellence was completed and is now operating under Lucy Electric. Manufacturing of EV substations was successfully transferred from Thame to Sowerby Bridge, consolidating expertise and improving operational focus in this growing segment. Standardised Power BI dashboards were introduced across Lucy Electric manufacturing sites, with further rollouts underway. These dashboards provide near-real-time visibility of production, quality and operational performance for factory teams and leadership. A key enhancement was the introduction of Overall Equipment Effectiveness (OEE) reporting using machine-captured data rather than manual inputs, improving data accuracy, trust and the speed of decision-making. Automation upgrades during the year focused on improving efficiency, flexibility and quality across multiple sites. These included the deployment

Production initiatives The opening of the new Lucy Electric factory in Saudi Arabia represented a major milestone, significantly enhancing manufacturing capacity in the Middle East while creating skilled employment opportunities for Saudi nationals. At Flashnet, production capacity increased substantially following the extension of automated production lines and warehousing facilities, supported by targeted operational efficiencies. Annual production more than doubled. Building on its strong momentum in North America, Flashnet established a US company to provide local expertise and closer collaboration with municipalities, utilities and technology partners. Lawson Fuses continued the transition of its manufacturing footprint from the UK to India, doubling capacity on the existing site and introducing additional automation to improve efficiency and scalability.

reduced manual effort and improved auditability. Lucy Developments invested in a new management information system and migrated to a fully supported Microsoft D365 Finance & Operations platform, streamlining processes, improving efficiency and providing a scalable foundation for future growth. Data, processes, reporting spreadsheet-based processes. These tools reduce administrative effort, improve compliance and enhance operational visibility, particularly for factory-based and site-based teams. Sustainability reporting continued to mature, moving away from manual collation toward automated, visual reporting. Waste dashboards are under active development, integrating quality and factory data to support reduction initiatives and strengthen the data foundation for future sustainability programmes and regulatory reporting. A new Group intranet, Connect2, was launched on Microsoft SharePoint, providing a central hub for communication, knowledge sharing and collaboration across all sites. Acquisition In December 2025, the Group acquired Blakley Electrics in the UK. The business operates from and communications A growing portfolio of Power Apps has replaced manual and

manufacturing and engineering centres in Crayford, Kent and Harlow, Essex. Blakley Electrics manufactures the majority of its products in-house, drawing on more than 50 years of experience in specialist sheet metal fabrication and the assembly of electrical distribution, protection and transformer products. Manufacturing is supported by continued investment in modern facilities, advanced production technologies and high-performance machinery. Summary and outlook Throughout 2025, we continued to invest in strengthening our operational capabilities, laying firm foundations for long-term productivity, resilience and growth. Key initiatives included targeted capacity expansion, increased automation and the continued rollout of Microsoft D365 capabilities, supported by enhanced data, dashboards and planning optimisation. Looking ahead, we will build on this progress by scaling proven technologies, further integrating digital and AI-enabled tools, and continuing to optimise planning and execution. Our focus remains on delivering sustainable productivity gains, improving service levels and ensuring our operations are well positioned to support long term growth in a changing market environment.

28

|

Lucy Group Ltd Annual Report & Accounts 2025

LUCYGROUP.COM

|

29