The Roxboro Group PLC Interim Results 6 Months to 30th June 2003 interim results 2003 the roxboro group plc H1 2003 k e y p o i n t s y Weston sold to Esterline for £55 million y £39.8 million returned to shareholders y First half results in line with expectations y Solartron steady y Dialight suffered supplier disruption y Order book stronger y Worst is behind us y Difficult six months following a difficult year y We believe operationally we are on the turn interim results 2003 Financial Review interim results 2003 the roxboro group plc group profit and loss account 2003 £m y Turnover 73.3 Continuing Operations Discontinued operations 2002 79.2 58.7 14.6 62.8 16.4 4.8 4.9 2.0 2.8 2.8 2.1 (0.3) (0.5) y Profit before goodwill & exceptionals 4.5 4.4 – Goodwill – Profit on disposal of Weston (0.6) 15.6 (0.5) - 19.5 3.9 y Operating Profit Continuing operations Discontinued operations y Interest y Profit before tax interim results 2003 the roxboro group plc group profit and loss account-continued £m y Profit before taxation Tax Dividends y Retained Profit 2003 2002 19.5 3.9 (1.6) (1.4) 17.9 2.5 (0.9) (1.8) 17.0 0.7 y Operating Margin* 6.5% 6.2% y Trading Margin ** 6.1% 5.6% * before profit on disposal, goodwill, amortisation and interest ** before profit on disposal, goodwill amortisation and after interest interim results 2003 the roxboro group plc taxation 2003 2002 y Actual rate including disposal 8.0% 36.5% y Actual rate excluding disposal 35.7% 36.5% y Underlying rate excluding goodwill 30.7% 32.1% y Continuing operations rate excluding goodwill 30.9% - interim results 2003 the roxboro group plc dividends and earnings per share y Dividends per share 2003 2002 3.1p 3.1p 31.6p 5.5p 4.4p 5.3p 19.0x 2.7x 3.4x 1.4x 1.4x 1.7x y EPS Basic Adjusted y Dividend Cover half year Basic Adjusted for profit on disposal Adjusted for profit on disposal and goodwill y Continuing Operations 0.8x - y Cash Cover - continuing operations 2.9x - interim results 2003 the roxboro group plc summarised cashflows £m 2003 2002 4.2 4.3 – Depreciation / Goodwill 2.8 3.1 – Working capital 0.1 (2.6) – Other non-cash items - (0.1) y Operating Profit (after goodwill) y Operating Cash Flow 7.1 4.7 – Capital Expenditure (1.0) (1.3) – Interest (0.3) (0.5) – Taxation (1.2) (0.9) y Free Cash Flow 4.6 2.0 interim results 2003 the roxboro group plc movement in debt £m 2003 2002 y Free Cash Flow – Dividends – Acquisitions – Disposals – Issue of shares 4.6 (3.9) (0.1) 53.6 0.1 2.0 (3.9) (4.4) - y Net Cash Inflow / (Outflow) 54.3 (6.3) (11.7) (0.6) (8.6) (0.1) y Closing Net Cash / (Debt) 42.0 (15.0) Return of Capital July 2003 (39.8) - 2.2 (15.0) – Opening Net Debt – Translation y ‘Proforma’ Net Cash / (Debt) interim results 2003 the roxboro group plc continuing operations proforma cashflow £m 2003 2002 1.4 2.4 – Depreciation and amortisation 2.1 2.2 – Working capital 1.1 (3.5) 4. 6 1.1 – Capital Expenditure (0.7) (1.0) – Interest (0.3) (0.5) – Taxation (0.9) (0.5) y Free Cash Flow 2.7 (0.9) y Operating Profit (after goodwill) interim results 2003 the roxboro group plc continuing operations proforma cash flow £m 2003 y Free Cash Flow – Dividends – Acquisitions – Disposals – Issue of Shares – Cash drawn from Weston Net Cash Inflow / (Outflow) – Opening Net Debt – Translation Closing Net Cash / (Debt) – Return of Capital July 2003 y Proforma Net Cash / (Debt) 2002 2.7 (0.9) (3.9) (0.1) 53.6 0.1 1.9 54.3 (3.9) (4.4) 2.9 (6.3) (11.7) (0.6) (8.6) (0.1) 42.0 (15.0) (39.8) - 2.2 (15.0) interim results 2003 the roxboro group plc profit on disposal of Weston £m Initial Sales Proceeds 55.0 Cash adjustment net of assumed tax 0.7 55.7 Expenses (2.4) 53.3 Less cost of investment – net assets (16.0) – goodwill previously written off (21.7) (37.7) Profit on disposal 15.6 Tax due on disposal (0.2) Exit P/E (2002 actuals) Exit EBITDA (2002 actuals) 25x 11x interim results 2003 the roxboro group plc capital reorganisation Ordinary shares split 30 June 2003 – 1 new ordinary share for every 1.89 old ordinary share – 1 new B redeemable share for every old ordinary share Old share capital : 56,800,170 New share capital : 30,053,000 ordinary shares of 1.89p 56,800,170 B 75p redeemable preference shares Weighted average number of shares first half 56.65m Weighted average number of shares full year 43.35m interim results 2003 the roxboro group plc capital reorganisation Redeemable B shares Redeemed on 7th July 51,612,199 Redeemed on 23rd July 1,492,366 Future redemption dates: 31st December and 30th June each year up to 31st December 2008 Dividend equal to 70% LIBOR based on 6 month LIBOR (Period to 31.12.03 : B shares still issued: 3.696m Capital reserves utilised for B shares: £56.8m 2.48%) Revenue reserves utilised for redemption: Shares redeemed Shares redeemable £39.8m £2.8m interim results 2003 the roxboro group plc proforma balance sheet-post 30June 2003 £m half year Fixed assets (incl goodwill) Current assets less creditors Cash less borrowings Provisions Capital and Reserves Share capital Share premium Capital redemption reserve Profit and loss account adjustments proforma 30.1 23.1 42.0 (1.6) 93.6 (39.8)* (39.8) 30.1 23.1 2.2 (1.6) 53.8 43.2 5.9 0.1 44.4 93.6 (39.8)* 39.8** (39.8)** (39.8) 3.4 5.9 39.9 4.6 53.8 * redemption of B shares in July ‘03 ** creation of capital redemption reserve fund from revenue reserves interim results 2003 Operational Review interim results 2003 Operational Review Group now reduced to 2 divisions sensors & instruments for oil & gas industries applied LED technology in lighting and indication interim results 2003 Operational Review markets ● Oil & Gas : early uncertainty but signs of improvement ● Process : generally weak particularly in USA ● Telecoms : steady but no immediate sign of recovery ● Signals : USA – slower activity in H1 Europe – developing well ● Transportation : slow with bus manufacturers in USA on short time interim results 2003 Solartron Group First Half Highlights y Market uncertainty marked first half y Signs of market improvement y Underlying performance flat y Good progress in Asia/E. Europe offset by USA/Europe weakness y Business growth in China checked temporarily A Roxboro Group Company Solartron Group First Half Highlights y Market uncertainty marked first half y Signs of market improvement y Underlying performance flat y Good progress in Asia/E. Europe offset by USA/Europe weakness y Business growth in China checked temporarily A Roxboro Group Company Solartron Metrology First Half Highlights y Very slow US market - better in Asia y Excellent progress with digital gauging y Very steady result y Continuing good cash generation A Roxboro Group Company Solartron Mobrey (including ISA and Analytical) First Half Highlights y US/Europe weak - Asia/E. Europe stronger y Good contract secured in Iran y ISA wins Sakalin project with Dualstream II y Analytical business in China temporarily slowed y H1 underlying performance flat A Roxboro Group Company Solartron Mobrey/ISA Product Segmentation Other 8% Viscosity 3% Density 9% Level 48% Flow 26% Pressure 6% A Roxboro Group Company Solartron Mobrey/ISA Market Segmentation Other 8% Oil & Gas 36% Marine 8% Water & Waste 12% Power 16% Process 20% A Roxboro Group Company Solartron Mobrey/ISA Geographic Segmentation Europe & Middle East 33% UK 45% Asia Pacific 9% Americas 13% A Roxboro Group Company Solartron Group Strategy Objective: º To become a leading global supplier of specialised level, flow and fluid analysis measurement solutions By supplying: º Best-of-breed products º Exceptional service and delivery º Application knowledge In the following markets: º General process º Power generation and boilers º Water º Oil and gas production and transmission A Roxboro Group Company interim results 2003 interim results 2003 interim results 2003 Solartron Group Key Points y Name is a byword for Quality and Performance y Emerging products such as Dualstream II gaining ground y International presence y Leveraged to a recovery in process market A Roxboro Group Company interim results 2003 First Half Highlights Losses at BLP impacted result Profit better but still poor Sales limited by production transfer to Mexico Supplier base slow to ramp up volumes Signals showed improved result Some Opto OEMs showing signs of life but no recovery yet New VP Operations appointed A Roxboro Group C ompany interim results 2003 Employee Analysis Farmingdale, NJ Wang, Germany Admin 23 Admin 5 Engineering 23 Engineering 8 Marketing & Sales 24 Marketing & Sales 10 Field Sales 13 Ops Direct 27 Ops Indirect 14 Ops Indirect Total 5 Total 97 Roxboro, NC 55 Ensenada, Mx Direct: 65 Direct: 333 Admin 15 Admin 43 Ops Indirect 18 Ops Indirect 54 Total 98 Total 430 A Roxboro Group C ompany interim results 2003 First Half Highlights All key metrics up on H2’02 Some OEMs showing increased demand Distribution channels remain flat Luxeon design centre shows good promise Dell design Dialight into range of new products Division has begun to recover A Roxboro Group Company interim results 2003 First Half Highlights Orders secured exceeded sales by over 10% US traffic demand constrained by lower tax income Output limited by supplier ramp-up in Mexico All assembly now in Ensenada, Mexico Changes to FAA requirements slow aviation demand Vehicle OEM market slower Excellent European growth in traffic Losses halved A Roxboro Group Company Market Position on LED Signals Traffic Lights 1 2 Rail Signals 1 2 Heavy Duty Vehicle 2 Air Field Lighting 1 2 Dialight Product Obstruction Lighting 1 2 Dialight Product 3 4 5 3 1 3 Dialight Product 3 4 3 A Roxboro Group Company interim results 2003 Solid State Lighting The Vision The LED is to florescent lamps what transistors were to vacuum tubes, or what the automobile was to the horse and bug gy. It is a revolutionary technological innovation that promises to change the way we light our homes and businesses. Remarks by the US Secretary of Energy Spencer Abraham, 6/12/2002 A Roxboro Group C ompany Solid State Lighting The Vision z Cut the Global Lighting Energy by 50% by 2025 z Cumulative Energy Savings of $115 billion z Elimination of more than $50 billion in new power plants Source: US DOE, NGL (Next Generation Lighting Initiative) A Roxboro Group Company High Bright LED is the fastest growth Semiconductor Market 250 High Bright Opto 200 Relative Scale Laser: Non Telecom 150 100 Semiconductors 50 Laser: Telecom 0 1999 2000 2001 2002 Source: Strategies Unlimited A Roxboro Group Company Hi-Bright CAGR 2002 to 2007 Mobile: 15% Automotive: 14% Illumination: 58% Signals: 18% Signage: 20% Other: 15% A Roxboro Group Company interim results 2003 Our Strategy Establish Dialight as the global leader of value added solutions for specialty applications of Light Emitting Diodes (LEDs). Capitalizing on… z The market opportunity presented by the rapid advances in LED technology z The value proposition that LEDs offer over traditional light sources. z Our core strength as an application enabler between the LED manufacturer and the OEM user or systems integrator. A Roxboro Group Com pany Our Position in the Supply Chain Dialight LED Component Suppliers z z Develop & Produce Semiconductor First level encapsulation z Applications Expertise z Optics Design z Thermal Ma nagement z LED array Assembly (Binning Menus) z Driver Design z Fixture Packaging Lighting Fixture OEMs Specialty Lighting OEMs Traffic Controller OEMs Architects & Lighting End Users Others ???? A Roxboro Group Company THE SCHINDLER ELEVATOR EXAMPLE A Roxboro Group C om pa ny interim results 2003 interim results 2003 interim results 2003 interim results 2003 interim results 2003 Luxeon Design Centre Dialight is global leader in applied LED technology Dialight has a unique skills set Dialight does not compete with OEM customers Dialight well positioned to grow sector strongly A Roxboro Group C om pa ny Summary Well positioned to grow through the Luxeon Design Centre Investment being maintained to retain No. 1 spot at Signals The worst is behind us Highly leveraged to a telecom recovery A Roxboro Group C om pa ny the roxboro group plc summary y Weston deal completed - capital returned to shareholders y Central costs reduced y Group now more focussed y Lower cost base in place at Dialight y Strong balance sheet and cash position y Significant leverage to industrial recovery interim results 2003 The Roxboro Group PLC Interim Results 6 Months to 30th June 2003 interim results 2003