NCC Group plc Annual Report 2022

3 Alternative Performance Measures (APMs) and adjusting items The consolidated Financial Statements include APMs as well as statutory measures. These APMs used by the Group are not defined terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, Generally Accepted Accounting Practice (GAAP) measures. All APMs relate to the current year results and comparative periods where provided. This presentation is also consistent with the way that financial performance is measured by management and reported to the Board, and the basis of financial measures for senior management’s compensation schemes and provides supplementary information that assists the user in understanding the financial performance, position and trends of the Group. At all times, the Group aims to ensure that the Annual Report and Accounts give a fair, balanced and understandable view of the Group’s performance, cash flows and financial position. IAS 1 ‘Presentation of Financial Statements’ requires the separate presentation of items that are material in nature or scale in order to allow the user of the accounts to understand underlying business performance. We believe these APMs provide readers with important additional information on our business and this information is relevant for use by investors, securities analysts and other interested parties as supplemental measures of future potential performance. However, since statutory measures can differ significantly from the APMs and may be assessed differently by the reader we encourage you to consider these figures together with statutory reporting measures noted. Specifically, we would note that APMs may not be comparable across different companies and that certain profit related APMs may exclude recurring business transactions (e.g. acquisition related costs and certain share-based payment charges) that impact financial performance and cash flows. The Group manages internally its performance at an Adjusted operating profit level (before Individually Significant Items, amortisation of acquired intangibles and share-based payments), which management believes represents the underlying trading of the business; this information is still disclosed as an APM within this Annual Report. This APM is reconciled to statutory operating profit, together with the consequently Adjusted basic EPS (before amortisation of acquisition intangibles, share-based payments and Individually Significant Items and tax effect thereon) to statutory basic EPS. The Group has the following APMs/non-statutory measures: • Adjusted EBITDA (reconciled below) • Adjusted operating profit (reconciled below) • Adjusted basic EPS (pence) (reconciled in Note 11) • Net (debt)/cash excluding lease liabilities (reconciled below)

• Net (debt)/cash (reconciled below) • Cash conversion (reconciled below) • Constant currency revenue (reconciled below) • Revenue excluding IPM acquisition (reconciled below) • Software Resilience revenue excluding IPM acquisition (reconciled below)

The above APMs are consistent with those reported for the year ended 31 May 2021, except for the inclusion of revenue excluding IPM acquisition and Software Resilience revenue excluding IPM acquisition to allow stakeholders to understand the revenue performance of the existing business for the year ended 31 May 2022 prior to acquiring IPM in June 2021. In comparison to those APMs reported for the period ended 30 November 2021, one APM (cash conversion excluding IPM acquisition costs) has been removed to reduce the level of APMs reported. The Group also reports certain geographic regions on a constant currency basis to reflect the underlying performance taking into account constant foreign exchange rates period on period. This involves translating comparative numbers to current period rates for comparability to enable a growth factor to be calculated. As these measures are not statutory revenue numbers, management considers these to be APMs and they are also reconciled below. Further detail is included within the Glossary of terms to these Financial Statements that provide supplementary information that assists the user in understanding these APMs/non-statutory measures.

NCC Group plc — Annual report and accounts for the year ended 31 May 2022

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