Strategy Update

FOR IMMEDIATE RELEASE

28 March 2025

Ricardo plc ("Ricardo" or the "Company")

Strategy Update

Introduction

The Board of Ricardo (the "Board") notes that Science Group plc ("Science Group") has continued to build its stake in the Company and currently holds shares representing approximately 16.2% of Ricardo's entire issued share capital.

Since it became a shareholder, Science Group has levelled a number of criticisms at the Board and management of the Company and threatened to requisition a general meeting to make a number of changes to the Board. In particular, Science Group has demanded the removal of Ricardo's Chairman. It is the Board's understanding that, if this demand is met, Science Group will seek to replace him with the Executive Chairman of Science Group. This would give Science Group effective control of the Board without paying a premium for that control.

The Board believes Science Group's actions are being taken solely for the benefit of Science Group and its own shareholders and are contrary to the interests of Ricardo's other shareholders. Accordingly, the Board has informed Science Group that, having met to consider its demand that the Chairman be replaced, the remaining Non-Executive directors of Ricardo have resolved unanimously to reject it. The Board directors continue to fully support and have confidence in Mark Clare as Chairman.

Science Group's stake building in Ricardo has come at a time when the Company has been facing significant market headwinds which have impacted its short-term financial performance and share price, with delays in government budgetary allocations as a result of the unprecedented level of election activity around the world in 2024 and geo-political uncertainty impacting environmental and energy transition agendas. Indeed, Science Group itself, while present in different areas of the market, recently reported a (11)% decrease in its consulting revenues for the year to 31 December 2024.

Against this background, the Board considers it is appropriate to set out some context as to why it believes that the Company is delivering good progress against its strategy to transform the portfolio and improve performance in order to deliver significant value creation for all Ricardo shareholders.

Portfolio transformation

In 2022, Ricardo announced a revised strategy to refocus the Company and reinforce its competitive differentiation, shifting its portfolio from mobility services towards environmental and energy transition solutions which are supported by long term resilient markets.

The Company has made good progress in implementing this strategy and driving the transformation of Ricardo's portfolio, including:

· The successful divestment of the Defense operating segment in 2024 after having secured a major $385m US Army contract renewal in 2023, thereby generating an attractive price for Ricardo shareholders;

· Redeployment of the Defense sale proceeds into the acquisition of E3 Advisory Pty Ltd ("E3A"), a high growth and high margin business which has increased the Company's consulting capabilities in energy and infrastructure markets; and

· The successful completion and integration of three further acquisitions within the environmental and energy transition consulting industry which, together with E3A, have each been completed at attractive valuation multiples.

The Company's Energy & Environment segment today is well positioned to drive long-term sustainable growth through its expertise across areas including energy decarbonisation and climate change. The business has a strong order book and delivers attractive mid-teens operating margins.

In Rail, the Company has taken actions to enhance its exposure to key growth geographies in the US and Asia. The business today has a strong orderbook after record order intake in H1 2024/25 and consistently generates double digit operating margins.

As a result, on a pro forma basis, Ricardo's Environmental and Energy Transition portfolio today accounts for approximately 85% of the Company's operating profits (pre unallocated central costs).

Strategic development of other businesses

The Board also remains focused on enhancing the value of its broader portfolio and continues to see positive results from its strategic actions. Notable examples include:

· In Performance Products, the new multi-year marine framework programme, the largest single framework agreement in Ricardo's history, will drive growth and diversify the segment's sector exposure over the medium term. In addition, the business has secured major programme wins in its high-performance automotive activities, including a six-year extension of a driveline contract with a leading European OEM. Together these major programmes underpin the future performance of the business; and

· In Automotive & Industrial, restructuring actions have been taken to return the business to profitability. The business is also successfully diversifying its exposure to broader industrial end markets such as aerospace & defence, marine and stationary power.

Actions to improve financial performance

Ricardo has been working to improve its financial performance against the background of challenging market conditions. Recent highlights include:

· Delivering strong order intake of £221m in H1 2024/25 on the back of multi-year wins (up 11% on H1 2023/24). Energy & Environment and Rail both delivered record order intake in H1 2024/25, with their strong order books underpinning confidence in their near and medium term performance;

· Improvement in underlying operating profit in H1 2024/25 to £8.3m (a very significant increase on H1 2023/24 performance of £1.0m), driven by higher margins and ongoing focus on costs to underpin profitability; and

· Progressing the centralisation of enabling functions, which is driving material efficiencies in indirect costs.

Business and strategy update

The Board believes it is important to ensure that its shareholders have a full understanding of the actions that are being undertaken to drive performance. Therefore, Ricardo announces that it plans to provide a further update on its financial performance and strategic initiatives to the market in mid-April 2025 (the "Business and Strategy Update").

The Business and Strategy Update will focus on the following key areas:

· YTD 2024/25 trading and outlook;

· Actions the Company is taking to further reduce costs and improve cash generation in the near and medium term; and

· Greater detail on the Company's plans to focus on environmental and energy transition solutions.

The Company confirms it continues to trade in line with the Board's expectations.

Mark Clare, Chair of Ricardo, said:

"The Board has confidence in Ricardo's business and strategy and looks forward to providing an update to our shareholders in mid-April, setting out a clear path to significant value creation for the benefit of all shareholders."

This announcement has been issued by, and is the sole responsibility of Ricardo plc.

The person responsible for arranging the release of this announcement on behalf of Ricardo is Harpreet Sagoo (Group General Counsel and Company Secretary).

About Ricardo plc

Ricardo plc is a global strategic, environmental, and engineering consulting company, listed on the London Stock Exchange. With over 100 years of engineering excellence and close to 3,000 employees in more than 20 countries, we provide exceptional levels of expertise in delivering innovative cross-sector sustainable outcomes to support energy transition and scarce resources, environmental services, together with safe and smart transport solutions. Our global team of consultants, environmental specialists, engineers, and scientists support our customers to solve the most complex and dynamic challenges to help achieve a safe and sustainable world.

Visit www.ricardo.com.