LUXFER HOLDINGS PLC (LXFR)

Item 2.           Management's Discussion and Analysis of Financial Condition and Results of Operations

Information regarding forward-looking statements

This Interim Report on Form 10-Q contains certain statements, statistics and projections that are, or may be, forward-looking, including with respect to the Transaction. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Interim Report, as well as:

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Table of Contents

Please read the sections "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," on Form 10-K and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk factors" of this Interim Report on Form 10-Q for a more complete discussion of the factors that could affect our performance and the industries in which we operate, as well as those discussed in other documents we file or furnish with the SEC.

About Luxfer

Luxfer Holdings PLC ("Luxfer," "the Company," "we," "our") is a global industrial company innovating niche applications in materials engineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies to help create a safe, clean and energy-efficient world. Luxfer's high performance materials, components and high-pressure gas containment devices are used in defense, first response and healthcare, transportation and specialty industrial applications.

Recent Developments

On July 26, 2026, the Company entered into the Transaction Agreement with Buyer. Pursuant to the Transaction Agreement, upon the terms and subject to the conditions set forth therein, Buyer will acquire the entire issued share capital of the Company pursuant to the Scheme of Arrangement. Upon the terms and subject to the conditions set forth in the Transaction Agreement and the Scheme of Arrangement, at the Effective Time, all of the ordinary shares of the Company then outstanding will be transferred from the Company’s shareholders to Buyer, and the Company’s shareholders will be entitled, pursuant to and in accordance with the terms of the Scheme of Arrangement, to receive $17.37 in cash per ordinary share. The Company Board approved and declared the Transaction Agreement, and the transactions contemplated thereby, including the Transaction, the Scheme of Arrangement and the other transactions contemplated thereby fair to and in the best interests of the Company and its shareholders as a whole. See Note 16 of the Notes to Condensed Consolidated Financial Statements for additional information.

Key trends regarding our existing business

Operating objectives and trends

In 2026, we expect the following operating objectives and trends to impact our business:

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Table of Contents

CONSOLIDATED RESULTS OF OPERATIONS

The consolidated results of operations for Luxfer in the Second Quarter of 2026 and 2025 were as follows:

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Table of Contents

The consolidated results of operations for Luxfer in the first six months of 2026 and 2025 were as follows:

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Item 7.        Management's Discussion and Analysis of Financial Condition and Results of Operations

Information regarding forward-looking statements

This Annual Report on Form 10-K contains certain statements, statistics and projections that are, or may be, forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause our actual results of operations, financial condition, liquidity, performance, prospects, opportunities, achievements or industry results, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. The accuracy and completeness of all such statements, including, without limitation, statements regarding our future financial position, strategy, plans and objectives for the management of future operations, is not warranted or guaranteed. These statements typically contain words such as "believes," "intends," "expects," "anticipates," "estimates," "may," "will," "should" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors identified in "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," or elsewhere in this Annual Report, as well as:

•general economic conditions, or conditions affecting demand for the services offered by us in the markets in which we operate, both domestically and internationally, being less favorable than expected;

•worldwide economic and business conditions and conditions in the industries in which we operate;

•potential or actual tariffs, and other political risks worldwide;

•future pandemics;

•fluctuations in the cost and / or availability of raw materials, including Chinese rare earths, labor and energy, as well as our ability to pass on cost increases to customers;

•currency fluctuations and other financial risks;

•our ability to protect our intellectual property;

•the amount of indebtedness we have incurred and may incur, and the obligations to service such indebtedness and to comply with the covenants contained therein;

•relationships with our customers and suppliers;

•increased competition from other companies in the industries in which we operate;

•changing technology;

•our ability to execute and integrate new acquisitions;

•claims for personal injury, death or property damage arising from the use of products produced by us;

•the occurrence of accidents or other interruptions to our production processes;

•changes in our business strategy or development plans, and our expected level of capital expenditure;

•our ability to attract and retain qualified personnel;

•restrictions on the ability of Luxfer Holdings PLC to receive dividends or loans from certain of its subsidiaries;

•climate change regulations and the potential impact on energy costs;

•regulatory, environmental, legislative and judicial developments; and

•our intention to pay dividends.

Please read the sections "Business," "Risk factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report on Form 10-K for a more complete discussion of the factors that could affect our performance and the industries in which we operate, as well as those discussed in other documents we file or furnish with the SEC.

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About Luxfer

Luxfer Holdings PLC ("Luxfer," "the Company," "we," "our") is a global industrial company innovating niche applications in materials engineering. Luxfer focuses on value creation by using its broad array of technical know-how and proprietary technologies to help create a safe, clean and energy-efficient world. Luxfer's high performance materials, components and high-pressure gas containment devices are used in defense, first response and healthcare, transportation and specialty industrial applications.

Key trends regarding our existing business

Operating objectives and trends

In 2026, we expect the following operating objectives and trends to impact our business:

•Focus on navigating near-term uncertainties while maintaining strategic discipline for long-term growth;

•Completion of recently launched centers of excellence programs involving footprint optimization, manufacturing excellence through automation and margin improvement;

•Navigating market volatility, tariffs and wider impact from these, including alternative sourcing arrangements for rare earth materials;

•Execution of select capital investment projects to support our strategy of profitable growth while improving our infrastructure;

•Continued emphasis on operating cash generation and maintaining strong working capital performance; and

•Focus on recruiting, developing, maintaining talent, and driving a high-performance culture.

•Continued evaluation of strategic alternatives in response to the strategic review concluded in 2024.

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CONSOLIDATED RESULTS OF OPERATIONS

The consolidated results of operations from continuing operations of Luxfer were as follows:

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Net sales

Adjusting for foreign exchange tailwinds of $3.0 million (2024: tailwind of $1.7 million), and excluding Graphic Arts sales of $13.4 million (2024: $29.6 million) consolidated net sales have increased by $5.9 million or 1.6% in 2025 from 2024. Lower volumes and unfavorable mix reduced sales by $0.5 million, more than offset by $6.4 million from the pass-through of price increases.

Excluding Graphic Arts, sales in our Specialty Industrial and Defense, First Response and Healthcare end market have increased by 11.9% and 2.9% respectively, whilst our sales in our Transportation end market have decreased by 4.8%.

Revenue was positively impacted from:

•Strong sales of Meals Ready to Eat (MREs) and Unitized Group Rations (UGR-E);

•Greater demand for magnesium aerospace alloys;

•Increased sales of magnesium powders for both commercial and defense use; and

•Higher demand for cylinders used in aerospace and space exploration projects.

These increases have been partially offset by:

•Significant reduction in Alternative Fuel cylinder sales, as well as those used for SCBA and medical purposes; and

•Decrease in sales of zirconium powders, specifically those used for automotive catalysis.

Gross profit

Excluding Graphic Arts there was a 0.8 percentage point increase in gross profit as a percentage of sales in 2025 from 2024. This increase was primarily the result of positive sales mix, pricing discipline and continued operational execution across end markets, partially offset by the impact of higher fixed costs in the Elektron division linked to increased volumes and infrastructure investment.

Selling, general and administrative expenses ("SG&A")

Excluding Graphic Arts, SG&A costs as a percentage of sales have increased by 0.5 percentage points in 2025 from 2024.

Research and development costs

Excluding Graphic Arts, research and development costs as a percentage of sales remained flat in 2025 from 2024.

Restructuring charges

The $9.0 million restructuring charges in 2025 predominantly relates to costs aimed at reducing our fixed cost structure and generating savings through enhanced operational alignment, in particular to centralize our North American gas cylinders and magnesium powders businesses. We ceased manufacturing at our Pomona, California facility in December 2025.

As part of this initiative, we recognized impairment charges of $3.8 million related to property, plant and equipment in accordance with ASC 360, and $1.9 million related to right-of-use assets from operating leases in accordance with ASC 842, which applies the long-lived asset impairment model in ASC 360. The impairments were triggered by a strategic decision to relocate operations, resulting in the affected assets no longer being used for their originally intended period. Asset impairments of $0.8 million were recognized in relation to inventory to reflect inventory no longer recoverable as part of the relocation.

The remaining $2.5 million restructuring charge related to severance and other costs.

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Disposal related costs

On July 2, 2025, the Company completed the divesture of its Graphic Art

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