NIOX : annual report and accounts for the year ended 31 December 2023

Our market leading device, NIOX VERO,® is increasingly recognised by healthcare professionals as an important tool to improve thediagnosis and management of asthma.

Asthma is one of the biggest healthcare issues globally with 340 million sufferers, many of whom are undiagnosed or are misdiagnosed. NIOX is engaged in the design, development, and commercialisation of medical devices for the measurement of FeNO, a precise biomarker for asthma.

NIOX VERO® is also the device of choice by leading clinical research organisations for respiratory studies. NIOX provides products and services via its direct sales organisation and extensive distributor network in 50 countries.

For more information, please visitwww.niox.com

An introductory presentation about the NIOX Group is available at:www.investors.niox.com/resource/category/presentations/

Contents

Strategic report

Executive Chairman's statement 8

Financial highlights 10

Operational highlights 11

Business review 12

Operating review 16

Our stakeholders 18

Strategy and business model 22

Financial review 24

Corporate social responsibility 28

Risks and risk management 32

Corporate governance

Board of Directors 38

Corporate governance report 42

Audit and Risk Committee report 46

Nomination Committee report 50

Remuneration Committee report 52

Directors' report 66

Statement of directors' responsibilities 68

Independent auditors' report 70

Group financial statements

Consolidated statement of comprehensive income 80

Consolidated statement of financial position 82

Parent Company statement of financial position 83

Consolidated and Parent Company statements of cash flows 84

Consolidated statement of changes in equity 85

Parent Company statement of changes in equity 86

Notes to the financial statements 87

Other information

Reconciliation of alternative performance measures 128

Shareholder information 129

Executive Chairman's statement 8

Financial highlights 10

Operational highlights 11

Business review 12

Operating review 16

Our stakeholders 18

Strategy and business model 22

Financial review 24

Corporate social responsibility 28

Risks and risk management 32

STRATEGIC REPORT

Executive Chairman's statement

I am pleased to report continued strong growth in revenues and operating profit for 2023

Revenue was up 18% to £36.8 million, with our Clinical business performing particularly well growing 29% in constant currency terms.

Adjusted EBITDA improved significantly from £7.3 million in 2022 to £11.4 million in 2023 equating to an operating margin of 31% (2022: 23%). Cash generation remained strong with year-end net cash of £19.9 million, following the payment of a special dividend amounting to £10.5 million in September 2023. The Board is therefore recommending the payment of a final dividend for the financial year ended 31 December 2023 of 1 pence per share. Going forward, the Board intends to pursue a progressive dividend policy, growing future dividends in line with earnings.

Management is continuing to implement the strategy of deepening and broadening global distribution, which coupled with outsourcing sales and manufacturing is expected to drive further profitable growth.

Whilst the current focus is on growing sales in primary care, looking ahead, the Company plans to introduce FeNO testing in other healthcare channels such a pharmacies and occupational health and ultimately to launch a product for use by patients to manage their condition at home.

The Group has made a positive start to 2024 and continues to be highly cash generative, with cash of £22.4 million at 29 February 2024. The Company has a robust strategy in place to expand the business and generate profitable growth from the large underserved target market and has the financial resources to achieve its objectives and further enhance shareholder value.

Ian Johnson Executive Chairman

STATEGIC REPORT Financial highlights

NIOX® sales

Clinical revenue growthGroup adjusted EBITDA

£36.8m24%

£11.4m

Revenue growth of 18% to £36.8 million (2022: £31.3 million) and 22% on a constant currency basisClinical revenue1 growth of 24% (29% on a constant currency basis) to £32.6 million (2022: £26.2 million)Group adjusted EBITDA2 of £11.4 million, in line with upgraded consensus estimates (2022: £7.3 million)

Net cash

31 DEC 2023 £19.9m

£19.9m

(31 December 2022: £19.4m)

31 DEC 2022 £19.4m

Financial progress

Revenue

36.8

31.3

Gross margin

72%

71%

Total expenditure3

(15.1)

(14.9)

Adjusted EBITDA2

11.4

7.3

Adjusted EBITDA2 margin

31.0%

23.3%

Operating profit

4.6

1.8

Beyond Air settlement consideration

-

8.1

Profit before tax

4.1

10.5

Profit for the year from discontinued operations

1.2

2.0

Profit for the financial year

10.7

16.1

Cash at year end

19.9

19.4

• 1 Clinical revenue represents sales to physicians and hospitals for use in clinical practice.

• 2 Earnings before interest, tax, depreciation, amortisation and share option charge. Adjusted EBITDA reconciles to operating profit as shown on page 128.

• 3 Excludes depreciation, amortisation and share option charge. Total expenditure reconciles to the consolidated statement of comprehensive income as shown on page 128.

10

2023 £m

2022 £m