Headlam Group plc (‘Headlam’ or the ‘Company’) is committed to trading ethically, with zero tolerance for Modern Slavery (including human rights violations, child and forced labour or human trafficking in any form) in both its operations and supply chain.

This is Headlam’s Modern Slavery and human trafficking statement for the financial year ended 31 December 2024 and is published in compliance with the Modern Slavery Act 2015 (the 'Act').  It sets out the steps taken by Headlam and its UK subsidiaries to prevent human trafficking and slavery in its business and supply chain.  The Modern Slavery Statement is published on Headlam’s website (www.headlam.com) and additionally on each of the websites of the various trading businesses operated by the Company and its UK subsidiaries.  It has also been uploaded to the Government’s online registry.

The Chief Executive has responsibility for this statement on behalf of the Board, supported by the Chief Financial Officer, Chief People & Sustainability Officer, the ESG Director and the Responsible Sourcing Lead.

Operating for over 30 years, Headlam is the UK’s leading floorcovering distributor.

Headlam works with suppliers across the globe manufacturing the broadest range of products, and gives them a highly effective route to market, selling their products to the large and diverse trade customer base.

Headlam has an extensive customer base spanning independent and multiple retailers, small and large contractors, and house builders. It provides its customers with a market-leading service through the largest product range, in-depth knowledge, ecommerce and marketing support, and nationwide next-day delivery service.

In 2024, we consolidated 32 of our local trading businesses under the Mercado brand, a name that has been a trusted flooring brand in the UK For nearly 100 years. This unification will enable us to offer a wider range of flooring products across England and Wales, with unparalleled product availability and next-day delivery or collection through our nationwide trade counters. With our trade counters, improvements have been made which will allow customers to order and pick up from any location, providing flexibility and convenience.

In 2024, purchases from suppliers in the EU and the UK accounted for approximately 91.4% of total purchases (based on actual purchase prices from suppliers).  According to the Company’s risk assessment, the greatest risk of modern slavery and human trafficking arises from non-EU parts of the supply chain (‘Higher Risk Areas’) which represent 8.6% of total purchases during 2024.

Headlam’s commitment to ensure there is no Modern Slavery or human trafficking in our supply chain or business, is supported by the work we do and our approach to mitigating risks. In addition to Headlam's Code of Conduct which sets out our expectations of our suppliers, we published our first Human Rights Policy in 2024 to strengthen our approach. The policy applies to all Headlam colleagues and suppliers, and outlines that Headlam is committed to respecting all internationally recognised human rights in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs), it also covers our key commitments as a business.

All suppliers to Headlam businesses must agree to uphold the Group’s Ethical code of conduct in line with the Ethical Trading Initiative (ETI) base code and sets out our expectations of suppliers to ensure they have suitable practices within their business and supply chain to recognise and respect human rights.

There are additional policies published on Headlam’s website covering the following:

• Anti-bribery & Corruption
• Environmental
• Inclusion and Respect at Work
• Speak Up
• Freedom of Association and Collective Bargaining
• Grievance
• Mental Health and Wellbeing

Headlam undertakes a variety of due diligence measures to mitigate risks in our supply chain and our operations.

We have partnered with Track Record Global who conduct due diligence on our timber supply chain, to ensure our suppliers are responsibly sourcing timber. TRG have comprehensive technical knowledge of existing and upcoming legislative compliance requirements and they help suppliers comply with those requirements. Working in partnership, Headlam are able to demonstrate compliance with UKTR, EUR, EUDR and the UK Environment Act.

All suppliers must undertake a periodic due diligence assessment to demonstrate that they have suitable policies, practices and procedures in place to support commitments signed up to in both the Code of Conduct and Sustainability Charter.

In regards to supplier manufacturing sites due diligence, where a supplier is manufacturing products on behalf of a Headlam brand, a full ethical audit must be undertaken by an independent audit body, to a recognised internal standard. Headlam prefers a Sedex 4 pillar SMETA format. We also require suppliers to complete the Sedex Self-Assessment Questionnaire. Headlam has an AB Sedex membership so we have full visibility of our supply chain, and from this we can download reporting in order to manage supplier findings.

In 2024, the Responsible Sourcing lead and Quality manager visited a number of current and potential suppliers in Turkey to carry out an assessment from an ethical and quality perspective to report back to the relevant business units. This was an extremely valuable visit and allowed Headlam to gain a thorough understanding of manufacturing practices in the area, including reviewing factory capacity, worker profiles, working hours, health and safety and grievance mechanisms.

It is essential for colleagues to have an understanding and awareness of Modern Slavery, and how to spot the signs and raise any concerns they may have in order to mitigate risks of Modern Slavery in our operations and supply chain.

In 2024, we rolled Human Rights and Modern Slavery e-learning module assigned to targeted colleagues in specific roles across our business, however it is available on the training platform for anyone to complete. The course is currently at 87% completion for those it has been assigned to, and we aim to get it to 100% completion in 2025. The module covers the basics of Human Rights, an overview of what Modern Slavery is and some case studies, with guidance on how to spot the signs and report concerns.

Headlam’s commitment to addressing Modern Slavery risks and uphold the human rights of everyone in our business and supply chain is an ongoing process. Our commitments for 2025 are:

• Enhance the training and awareness available for colleagues
• Look to increase supply chain transparency across all suppliers
• Our own brand suppliers to provide ethical audits every 2 years
• Continue to review existing policies and procedures, and look to strengthen them to mitigate Modern Slavery risks
• Work with Suppliers to ensure all Business Critical/Critical findings in ethical audits are closed out in a timely manner