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<p><strong>As with any investment, your capital is at risk and income is not guaranteed. Past performance is not a guide to future returns.</strong></p>
<p> </p>
<p><strong>James Dow</strong>: 2025 was a frustrating year for Saints. The good news was the company’s earnings grew solidly, resulting in another healthy increase in the dividend of 7 percent. On the other hand, the share price and NAV lagged behind the global equity market. </p>
<p>The vast majority of Saints’ investments are equities, and these equity portfolio holdings delivered robust earnings growth of around 8 percent. That growth also translated into cash flow, which allowed Saints to increase its dividend by more than double the rate of UK CPI inflation. But this progress in the earnings and dividends of Saints’ investments did not, frustratingly, translate into share price gains.</p>
<p>Valuation multiples fell across many of our holdings, broadly offsetting their earnings growth. Markets last year rose very strongly and were dominated by two themes, enthusiasm for AI and optimism around interest rate cuts. Whilst this certainly benefited several of Saints’ holdings, the portfolio is more diversified than simply relying on these two themes alone. The short-term price of this diversification is that the share prices of some of Saints’ investments, for example in businesses like consumer goods or health care or industrials, lagged behind the wider stock market. In the long term, however, share prices follow earnings growth. So the continued growth in the earnings of these companies, even if the stock market is not currently excited by them, should in time be rewarded in stronger capital growth for Saints.</p>
<p>In the meantime, that good earnings growth amongst the portfolio’s investments enabled the board to recommend a final dividend, which will take the total for the year to 15.92 pence. That’s an increase of 7 percent on the previous year, well above UK inflation, and it marks the 52nd year of consecutive dividend growth for Saints. </p>
<p>Now an update on what we’ve been doing in the portfolio. First, we reviewed every single holding to make sure we are confident growth remains on track. That includes Novo Nordisk and Edenred, the two weakest performers in the portfolio last year. Even there, despite well-publicised headwinds for both companies, our research and engagement has reaffirmed our conviction in the long-term growth opportunity at both companies. Secondly, we exited a few holdings where our ongoing monitoring raised concerns, and we saw better opportunities for Saints elsewhere. For example, we divested from UPS, the parcel delivery company, where our research points to intensifying competition in the years ahead. It was the same concern that led us to divest from Man Wah, TCI and Cognex, three more companies where our investigations left us concerned that growth would not meet our expectations.</p>
<p>In each case, we upgraded these holdings with new investments where the growth prospects look much stronger. We’ve been helped by the fact that in the past year, many high-quality companies have fallen out of favour with the market. And we’ve been able to take advantage of this shift in sentiment by investing in companies that we’ve admired for a long time, but whose share prices have now become very attractive. These include Jack Henry, a provider of mission-critical software to banks and credit unions in the US, where we see strong market growth in the years ahead. MediaTek, one of the world’s leading designers of specialised chips for smartphones and increasingly for AI data centres. Zoetis, the world’s most innovative pharmaceutical company for pets, where we see many years of innovations in the pipeline driving future growth. And Alphabet, the company behind Google, YouTube and fast-growing AI-related hardware and cloud services.</p>
<p>Overall, we believe Saints’ portfolio is in a strong place. The equity holdings are high-quality, resilient businesses with attractive growth opportunities ahead of them. And we have high confidence that these companies will continue to innovate and grow just as impressively as they have in the past. So we expect them to deliver the strong capital and dividend growth that shareholders expect from Saints.</p>
<p>We also have the benefit of the continued contribution from Saints’ property portfolio, fixed income and infrastructure investments. These continue to provide a boost to the trust income sources and make use of the company’s prudent low-cost gearing. </p>
<p>2026 is so far proving to be an even choppier environment than the year just passed. We believe this is the right type of portfolio to own through thick and thin.</p>
<p>Saints is invested in high-quality businesses which, yes, can lag during periods of exuberance like 2025. But they usually repay shareholders’ patience in spades when conditions get tougher. After the derating we’ve seen in the past year, valuations across the portfolio are even more compelling, and the underlying fundamentals remain strong. So our focus remains consistent, owning good businesses with high potential for 10 percent compound earnings growth for many years to come, whilst paying resilient dividends along the way. And we hope you agree that’s a compelling formula for long-term investment success.</p>
<p>In summary, the fundamentals of Saints’ portfolio are robust. The dividend has grown for a 52nd consecutive year by more than double the rate of inflation at 7 percent, and we remain optimistic that capital growth will follow. For more details, please do head to our website to read the annual report, and I look forward to seeing many of you at the AGM.</p>
<p> </p>
<p><strong>The Scottish American Investment Company P.L.C. (SAINTS)</strong></p>
<p>Annual past performance to 31 December each year</p>
<table border="1" cellspacing="0" cellpadding="0" width="598">
<tbody>
<tr>
<td width="130">
<p> </p>
</td>
<td width="78" valign="top">
<p align="right">2021</p>
</td>
<td width="97" valign="top">
<p align="right">2022</p>
</td>
<td width="97" valign="top">
<p align="right">2023</p>
</td>
<td width="97" valign="top">
<p align="right">2024</p>
</td>
<td width="97" valign="top">
<p align="right">2025</p>
</td>
</tr>
<tr>
<td width="130">
<p>Share Price (%)</p>
</td>
<td width="78">
<p>19.5</p>
</td>
<td width="97">
<p>-3.5</p>
</td>
<td width="97">
<p>8.2</p>
</td>
<td width="97">
<p>-4.1</p>
</td>
<td width="97">
<p>6.7</p>
</td>
</tr>
<tr>
<td width="130">
<p>NAV (%)</p>
</td>
<td width="78">
<p>21.5</p>
</td>
<td width="97">
<p>-3.6</p>
</td>
<td width="97">
<p>11.8</p>
</td>
<td width="97">
<p>6.1</p>
</td>
<td width="97">
<p>2.5</p>
</td>
</tr>
<tr>
<td width="130">
<p>FTSE All World Index (%)</p>
</td>
<td width="78">
<p>20.0</p>
</td>
<td width="97">
<p>-7.3</p>
</td>
<td width="97">
<p>15.7</p>
</td>
<td width="97">
<p>19.8</p>
</td>
<td width="97">
<p>14.6</p>
</td>
</tr>
</tbody>
</table>
<p><span class="source-text" lang="EN-US">Source: Morningstar, FTSE. Total return in sterling. </span></p>
<p> </p>
<p><strong>Annual SAINTS dividends</strong></p>
<table border="1" cellspacing="0" cellpadding="0">
<tbody>
<tr>
<td width="108" valign="top">
<p>2020</p>
</td>
<td width="110" valign="top">
<p>2021</p>
</td>
<td width="108" valign="top">
<p>2022</p>
</td>
<td width="108" valign="top">
<p>2023</p>
</td>
<td width="88" valign="top">
<p>2024</p>
</td>
<td width="80" valign="top">
<p>2025</p>
</td>
</tr>
<tr>
<td width="108" valign="top">
<p>12.00</p>
</td>
<td width="110" valign="top">
<p>12.68</p>
</td>
<td width="108" valign="top">
<p>13.82</p>
</td>
<td width="108" valign="top">
<p>14.10</p>
</td>
<td width="88" valign="top">
<p>14.875</p>
</td>
<td width="80" valign="top">
<p>15.92</p>
</td>
</tr>
</tbody>
</table>
<p><span class="source-text">Source: Baillie Gifford & Co. Total dividend per ordinary share. Pence per share. Year to December.</span></p>
<p>The index data referenced herein is the property of one or more third party index provider(s) and is used under license. Such index providers accept no liability in connection with this document. For full details, see <a href="http://www.bailliegifford.com/legal">www.bailliegifford.com/legal</a></p>
<p><strong>Past performance is not a guide to future returns. </strong></p>
<p> </p>
<p><strong>Important information and risk factors</strong></p>
<p>This communication was produced and approved in April 2026 and has not been updated subsequently. It represents views held at the time of recording and may not reflect current thinking.</p>
<p>This communication should not be considered as advice or a recommendation to buy, sell or hold a particular investment. This communication contains information on investments which does not constitute independent investment research. Accordingly, it is not subject to the protections afforded to independent research and Baillie Gifford and its staff may have dealt in the investments concerned. </p>
<p>The investment trusts managed by Baillie Gifford & Co Limited are listed UK companies and are not authorised or regulated by the FCA. The value of their shares, and any income from them, can fall as well as rise and investors may not get back the amount invested. </p>
<p>Baillie Gifford & Co and Baillie Gifford & Co Limited is authorised and regulated by the Financial Conduct Authority (FCA). The level of income is not guaranteed. </p>
<p> </p>
<p><strong>The specific risks associated with the Trust include:</strong></p>
<p> </p>
<ul>
<li>SAINTS invests in overseas securities. Changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up.</li>
<li>The Trust can borrow money to make further investments (sometimes known as “gearing” or “leverage”). The risk is that when this money is repaid by the Trust, the value of the investments may not be enough to cover the borrowing and interest costs, and the Trust will make a loss. If the Trust's investments fall in value, any invested borrowings will increase the amount of this loss.</li>
<li>SAINTS has some direct property investments, which may be difficult to sell. Valuations of property are only estimates based on the valuer's opinion. These estimates may not be achieved when the property is sold.</li>
<li>The Trust invests in emerging markets, which includes China, where difficulties with market volatility, political and economic instability including the risk of market shutdown, trading, liquidity, settlement, corporate governance, regulation, legislation and taxation could arise, resulting in a negative impact on the value of your investment.</li>
<li>The Trust can buy back its own shares. The risks from borrowing, referred to above, are increased when a trust buys back its own shares.</li>
<li>The Trust can make use of derivatives which may impact on its performance.</li>
<li>Values for securities which have become difficult to trade may not be readily available and there can be no assurance that any value assigned to such securities will accurately reflect the price the Trust might receive upon their sale.</li>
<li>Corporate bonds are generally perceived to carry a greater possibility of capital loss than investment in, for example, higher rated UK government bonds. Bonds issued by companies and governments may be adversely affected by changes in interest rates and expectations of inflation.</li>
<li>Share prices may either be below (at a discount) or above (at a premium) the net asset value (NAV). The Company may issue new shares when the price is at a premium which may reduce the share price. Shares bought at a premium may have a greater risk of loss than those bought at a discount.</li>
</ul>
<p> </p>
<p>Further details of the risks associated with investing in the Trust, including a Key Information Document and how charges are applied, can be found in the Trust specific pages at <a href="http://www.bailliegifford.com">www.bailliegifford.com</a>, or by calling Baillie Gifford on 0800 917 2113.</p>
<p> </p>
<p> </p>
<p><strong>Glossary </strong></p>
<p>Valuation multiples - Financial metrics that express the relationship between a company’s market or enterprise value and a specified financial measure (including, but not limited to, earnings, sales, or cash flow).</p>
<p>Compound earnings growth - Represents the annualised rate of increase in earnings over a specified period, calculated on a compounded basis.</p>
<p> </p>
