LucyGroup-ARA2024_spreads web ready_FINAL

BUSINESS REVIEW – LUCY ELECTRIC

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

Product development and innovation Our main switchgear engineering focus continues to be on the Sabre and Aegis EcoTec range of environmentally friendly ring main unit (RMU) solutions, with products up to 17.5KV now launched (and installed) and with 24kV solutions set to be launched mid-2025. The EcoTec range, which uses synthetic air in lieu of SF6 gas, was launched at the successful UK Technology Day we staged at Silverstone in March. Also, a number of value engineering projects have resulted in products originally developed for a specific application in one country being adapted to meet local requirements in other geographies. Our new AcuTec LV switchboard has started to gain traction, with several contracts secured with distribution network operators. The product facilitates active LV network monitoring in real time, including the ability to adapt to rapidly changing demand patterns and predict grid load more precisely. The development of our digital solutions capability is very encouraging. Our embedded remote terminal units (RTUs) within the RMU have been particularly well received. The acquired SYNAPS AI fault detection on underground cables is generating interest and undergoing trials on several DNO circuits, not only helping with predictive maintenance but also reducing costs and downtime, while providing resilience against ageing infrastructure. SYNAPS is being integrated with the next generation of Gridkey LV monitoring, for launch as a single network management platform in 2025. Alongside our standard products, custom solutions continued to be popular. This has always been a key strength of Lucy Electric, listening to customer requirements and delivering application-specific solutions to exacting specifications.

Manufacturing and supply chain Investment in additional manufacturing capacity and new technology has ensured our manufacturing units have coped with significant growth in 2024 while maintaining product and service quality levels, in many cases reducing lead times and improving availability. In September, we inaugurated a modern new manufacturing unit in Saudi Arabia, replacing two existing facilities and bringing production under one roof. A major expansion of our sub-assembly manufacturing facility in India was completed in November and we completed an extension to one of our Dubai-based global manufacturing units in December. Supply-chain challenges caused by geopolitical unrest in certain regions of the world have continued. Contingency planning has helped us overcome most of them, the downside being added cost and longer lead times. Rollout of the Microsoft D365 suite continued, with applications such as Copilot using advanced generative AI to provide contextual recommendations and insights that support operational improvements.

Sustainability Sustainability is of great importance to Lucy Electric, not only in the products we supply that connect renewables to the grid, but also in the way we run our operations. We are committed to emissions reduction and are constantly making incremental improvements. One example is the solar installations that went live in the UK and India in 2024, soon to be added to by similar installations in the UAE and Saudi Arabia. Such initiatives have resulted in a 22.3% decrease in Lucy Electric’s overall carbon intensity from our baseline figure in 2021, calculated using tCO 2 e and third party sales. This year, we began working with BEAMA (the trade association for energy infrastructure and systems) on a standardised measurement for product embodied carbon, and on the future UK business regulations for industrial decarbonisation. We will also continue to form partnerships to provide an end-of-life service for our products. In addition, we are investing in used SF6 gas purification equipment. Corporate Social Responsibility is integral to the way we run our businesses and we were delighted to win the ‘Social Value’ category at the inaugural Scottish and Southern Electricity Networks (SSEN) Supplier Sustainability Awards.

People Our success is largely down to our talented workforce and it is particularly gratifying to have won Utility Week’s 2024 ‘Utilities Partner of the Year’ award, demonstrating the great teamwork, dedication, and collective effort across our entire business. With so much change in our industry, we need to ensure we recruit and retain people with the right skills and keep training them. Certain skills are in short supply, so we have adopted a ‘grow your own’ approach that spans apprentices and graduates who join our early career schemes through to more experienced talent that we nurture in our Future Leaders programme. We also work hard to create an appealing work environment – this includes promoting equal opportunities in what has been a male-dominated industry, and encouraging employees to get involved in initiatives among our local communities. Outlook We are in unprecedented times for our industry. Urbanisation and the rise in renewable energy mean that electrical utilities around the world are having to reinforce – and in some cases replace – ageing infrastructure to cope with increasing demand for clean, reliable and sustainable energy. In the developed world, digitalisation is also a key focus, supporting decentralised energy generation and distributed resources. Lucy Electric is well positioned in several geographic territories to help meet these challenges and has plans for further regional diversification. We continue to invest to provide the technology, industry knowledge and engineering capabilities needed to support our customers and ensure a positive outlook for future generations.

John Griffiths CEO Lucy Electric

“ 2024 not only marked a year of robust sales growth, but also significant investment in product development, operational improvements and expansion in manufacturing capacity. ”

Financial performance for Lucy Electric has been strong across most regions, with the exception of Southeast Asia, which has yet to rebound since the pandemic.

In 2024, the UK saw strong activity in the Independent Distribution Network Operators (IDNOs) market, largely serving housing developments, industrial estates and renewable energy projects. India made significant renewable energy expansion and grid modernisation. The Middle East also experienced significant infrastructure growth, with large-scale projects across various sectors, including transportation and urban development. Southeast Asia continued to suffer from low government investment in infrastructure, with reduced foreign investment and a post-Covid drop in tourism hampering economic recovery. strides in enhancing its electric infrastructure, both in terms of

Market review Demand for secondary power distribution is driven largely by the macro trends of electrification, energy decentralisation, and the need for energy independence. The integration of multiple power sources means that grids must handle higher loads, which calls for capacity expansion, network resilience, and advanced monitoring and control. While many developing economies are focused on expansion, with limited funding, in wealthier countries we are starting to see investment in modernisation to upgrade network reliability and efficiency.

John Griffiths CEO Lucy Electric

20 March 2025

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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