Currency

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INTERIM RESULTS 2000/2001
abc
Cash to Secure Transactions
2
Highlights for the Period

• Operating profit from continuing operations up
  8
• Further improvement in trading position of Cash
  Systems
• Continue to invest in Global Services
• Headline earnings per share up 13
• Strong operating cashflow

before reorganisation costs
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PAUL HOLLINGWORTH Group Finance Director
abc
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Financial Highlights
Before exceptional items/re-organisation costs
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Cash Systems

• Sales down because of slow sales of larger
  sorters within Cash Processing and withdrawal
  from unprofitable account in OEM business
• Margins well up at 4.8 as benefits of
  re-organisation continue to come through
• Strong order books going into second half
  underpins expected upturn in sales
• Orders for Ascom Twinsafe II of 700 units
  received to date and losses should move to
  profits in second half

6
Additional Cash Systems KPIs
1st half 1999/00
1st half 2000/01
New product sales as a of total product
salesProduct development expenditure (m)
( of product sales) Sales product (m)
service/software (m)
20 7.8 9.3 83.5 41.0 124.5
26 7.4 9.6 77.3 42.9 120.2

• On track to exit the final quarter 2000/2001 at
  10operating margin

7
Security Paper Print

• Comparatives restated to exclude Global Services
• Margins improved in banknote business, increased
  usage of added value security features
• Paper volumes down 15 which has impacted profits
• India overstocked and unlikely to order paper
  next year (15 of Portals volumes)
• Sales and profits up at DLR Tapes on back of
  strong banknote demand
• Good performance in a tight market

8
Security Paper Print KPIs
1st half 2000/01
1st half 1999/00
Average banknote price (since year end) Value
per banknote (order book) Banknote
volumes Base/overspill split Paper volumes
3.7 0.7 0.0 78 / 22 -20.5
6.7 4.0 9.4 79 / 21 -14.7
9
Global Services

• Reported on separately for the first time
• Change in nature of Microsoft contract depressed
  sales but not profitability
• Excluding Microsoft, sales up 10.2 and order
  book at half year up 20
• Decrease in profits is as a result of planned
  revenue investment which was forecast last year
  at a net 5m for the year
• Medium term focus is on profitable sales growth

10
Associates

• Camelot has increased sales
• Licence has been extended to November 2001 -
  still await outcome of re-bid
• Giori order book remains depressed
• Actions taken to stimulate sales
• Arbitration is ongoing

11
Earnings per Share
12
Cashflow / Borrowings / Interest
13
IAN MUCH Chief Executive
abc
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Cash Systems

• Excluding Ascom, first half margins were 4.8
• Second half orderbook well up on comparable
  period last year
• New product sales have risen to 26
• Ascom progressing well with 700 orders on
  Twinsafe II - exceeding expectations

15
Cash Systems

• TCR8000c - first orders received
• Service accounts for 30 of divisional sales and
  are up 6 compared to first half last year
• Well placed to see significant sales pick up in
  second half and confident of exiting year at 10
  margins

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Currency

• Sustaining high margins
• Selling more high value security features
• Second paper making machine converted to wide
  thread
• Involved in euro production (JV)
• Sales force now fully integrated
• Continue to drive sales through differentiated
  customer and technology strategy

17
Security Products

• Jon Marx appointed MD in February 2000 and making
  significant operational improvements
• New factory for DLR Tapes almost completed
• Changing focus away from more traditional markets
  to newer areas such as e-commerce and solution
  sales
• Going into second half with good order book,
  particularly for passports

18
Global Services

• Strategy is centred around protection of payment,
  identity and brand
• Global Services well positioned in growth markets
  utilising shared capabilities of the Group
• Orderbook going into the second half is 20 up on
  comparable period, excluding Microsoft

19
Global Services

• Transaction Services making good progress in
  mobile phone top-up market
• Brand Protection has secured new customers
• Holographics has euro accreditation and secured
  first orders
• IDS has won new contracts, Mexico, Macao
• InterClear fully operational by first quarter of
  2001

20
Cross Divisional Initiatives

• Greater degree of collaboration on number of
  initiatives around the Group
• Group RD
• Regional Sales Directors
• Group Procurement

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Outlook

• Strong orderbook going into second half,
  underpins expected pick up in sales
• Cash Systems on track to achieve 10 exit
  margins
• Some improvement in Giori trading expected in
  second half but still likely to incur loss

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Summary

• Global Services up and running
• Continue to make progress in Currency, Security
  Products and Cash Systems
• Clearly committed to a growth strategy

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INTERIM RESULTS 2000/2001
abc
Cash to Secure Transactions