Roxboro

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The Roxboro Group PLC
Preliminary Results 2003
15th March 2004
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t h e r o x b o r o g r o u p p l c
2 0 0 3 - t h e o p e n i n g c h a l l e n g
e

• Economic climate continued to be difficult in key
  markets
• Telecoms market remained soft
• Process segment remained flat
• Oil and Gas segment was mixed
• Aerospace was beginning to improve
• Very few bright spots
• Market capitalisation 82million

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t h e r o x b o r o g r o u p p l c
2 0 0 3 - o u r r e s p o n s e

• Disposal of aerospace sensors business for
  55.7million
• Returned 42.6million to shareholders
• Relocated Dialight production from USA to Mexico
• Drove hard on RoBuST programmes
• Kept costs tight
• Redirected selling effort
• Maintained RD spend

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t h e r o x b o r o g r o u p p l c
t h e r e s u l t

• Sale proceeds 61 of market cap. at the time of
  the deal
• Generated shareholder value
• Created more focus in Group
• Reduced operating and central costs
• Positioned Group for new growth

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Financial Review2003
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t h e r o x b o r o g r o u p p l c
g r o u p p r o f i t a n d l o s s a c c o
u n t m
2002
2003

• Turnover 136.8 156.0
• Continuing Operations 122.2 124.6
• Discontinued operations 14.6 31.4
• Operating Profit 8.2 8.6
• Continuing operations 5.4 5.2
• Discontinued operations 2.8 3.4
• Interest (0.3) (0.9)
• Profit before goodwill exceptionals 7.9 7.7
• Goodwill (1.2) (1.1)
• Profit on disposal of Weston 15.6 -
• Profit before tax 22.3 6.6

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t h e r o x b o r o g r o u p p l c
g r o u p p r o f i t a n d l o s s a c c o
u n t - c o n t i n u e d m
2002
2003

• Profit before taxation 22.3 6.6
• Tax (2.6) (2.5)
• 19.7 4.1
• Dividends (3.0) (5.7)
• Retained Profit 16.7 (1.6)
• Operating Margin 6.0 5.5
• Trading Margin 5.8 4.9
• before profit on disposal,
• goodwill, amortisation and interest
• before profit on disposal,
• goodwill amortisation and after interest

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t h e r o x b o r o g r o u p p l c
c o n t i n u i n g o p e r a t i o n s f i r s
t a n d s e c o n d h a l f c o m p a r i s o
n m
First Half
Second Half
Movement

• Sales Profit Sales Profit Sales Profit
• Dialight 27.6 0.3 30.3 0.7 10 133
• Solartron 31.1 2.8 33.2 3.8 7 36
• 58.7 3.1 63.5 4.5 8 45
• Central (1.1) (1.1) -
• 2.0 3.4 70
• Interest (0.3) -
• 1.7 3.4 100

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t h e r o x b o r o g r o u p p l c
p r o f i t o n d i s p o s a l o f W e s t o
n 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) 25x
• Exit EBITDA (2002 actuals) 11x

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t h e r o x b o r o g r o u p p l c
d i v i d e n d s a n d e a r n i n g s p e r
s h a r e
2002
2003

• Dividends per share 10.0p 10.0p
• EPS
• Basic 45.4p 7.2p
• Adjusted 12.6p 9.1p
• Dividend Cover
• Basic 6.5x 0.7x
• Adjusted for profit on disposal 1.4x 0.7x
• Continuing Operations 0.8x -
• Cash Cover - continuing operations 1.6x -

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t h e r o x b o r o g r o u p p l c
m o v e m e n t i n n e t d e b t m

• Free Cash Flow 6.8 8.0
• Disposals 52.7 -
• Issue of ordinary shares 0.1 -
• Redemption of B shares (40.1) -
• Share issue expenses (0.5) -
• Dividends (4.9) (5.7)
• Acquisitions - (4.8)
• Net Cash Inflow/(Outflow) 14.1 (2.5)
• Opening Net Debt (11.7) (8.6)
• Translation (0.4) (0.6)
• Closing Net Cash/(Debt) 2.0 (11.7)

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Operational Review2003
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Operational Review

• SOLARTRON

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t h e r o x b o r o g r o u p p l c S o l a r
t r o n b u s i n e s s b y m a r k e t s e c
t o r
Level Flow Measurement in Process Sector Flow
Metering in Oil and Gas Gauging Products in
Metrology Sector Laboratory Instruments for
Materials Analysis
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t h e r o x b o r o g r o u p p l c
S o l a r t r o n o v e r v i e w

• Good tight performance in slack markets
• Margins in double digits
• Strong H2 performance up 36 up on H1
• RoBuST initiatives making a difference
• Good growth in Service Business
• Brighter environment towards year end

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t h e r o x b o r o g r o u p p l c
S o l a r t r o n h i g h l i g h t s

• Dualstream II granted international recognition
• Sakhalin contract expanded and on schedule
• Won first Dualstream II contract in China
• Completed North Sea contract for Shell
• Acquired novel radar technology
• Ultrasonic product family launched
• Markets looking better than for past three years

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t h e r o x b o r o g r o u p p l c
S o l a r t r o n - k e y d r i v e r s i n 2
0 0 4

• Overall expected market recovery
• New product introductions
• Geographic expansion
• Dualstream II Wet Gas Growth
• Far East appetite for laboratory instruments
• Increasing glass gauging

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Operational Review

• DIALIGHT

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t h e r o x b o r o g r o u p p l cD i a l i
g h t - 2 0 0 3 k e y p o i n t s

• Significant operational issues related to supply
  chain transfer to Mexico
• Gross Margin Increase 17 in and 2.3 in COS
• Inventory reduced 8
• Sales up 7 despite fall in Traffic pricing
• Material and direct labour savings yet to be
  fully realised

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t h e r o x b o r o g r o u p p l cD i a l i
g h t - O p t o e l e c t r o n i c s

• Distributor POS up strongly from Q4/02
• Expanded distribution channels - Future
  Electronics and Regional Industrial
• Continued strong position in Distribution and
  with proprietary products
• Fourth quarter - strongest bookings for 12
  quarters
• Continuing price pressures at CEMs
• LED costs continue to reduce
• Electronics market growth expected to continue
• Expansion into new markets - Gaming, Industrial,
  and other non-telecom

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t h e r o x b o r o g r o u p p l cD I a l i
g h t - S i g n a l s - t r a f f i c

• US Traffic sales up 7 in units but slightly down
  in turnover
• Major cost reductions implemented giving improved
  margins
• Strong dealer network protecting small/medium
  business
• Major contracts bid selectively- wins at NC, CT,
  KY, Detroit, Edmonton, Calgary
• IntelliLED, Expanded View and Incandescent
  Arrow introduced
• European Signals sales show double digit growth
• New supply agreements signed with Peek and
  Siemens
• Some price pressure coming to Europe
• New low cost Traffic Signal to be introduced in
  March at Intertraffic Show

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t h e r o x b o r o g r o u p p l cD i a l i
g h t - S i g n a l s

• Expect good growth
• Continued cost reductions
• FAA Obstruction Contract to ship in 2004
• Balance of NYCT Rail contract to ship with follow
  on expected
• New products differentiation continues

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t h e r o x b o r o g r o u p p l cD i a l i
g h t - L i g h t i n g

• Luxeon Design Centre established
• Partnering with Lumileds and Future
• 2003 was a year of prospecting
• Strategy is similar to Opto - selling to OEMs
• Trial OEM Customers in Lifts / Street Sign /
  Marine / Vending / Theatre / Swimming
• Secured substantial OEM Pool Light order
• Good revenues expected in 2004

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t h e r o x b o r o g r o u p p l cD i a l i
g h t - P r o s p e c t s

• Continued electronics market recovery expected
• Dialight leveraged to recovery
• Further Signals cost reductions yet to show
• Shipment of new technology products to begin in
  2004
• Improving Mexican improvements
• Anticipate a much improved overall performance

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t h e r o x b o r o g r o u p p l cS u m m a
r y

• Conditions more favourable than past 3 years
• Relocation project completed
• New product introductions
• Exciting prospects in Lighting
• Looking for better progress in 2004
• Group mission remains generation of shareholder
  value

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The Roxboro Group PLC
Preliminary Results 2003
15th March 2004