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Preliminary Results for the year ended 31 December 2004

Preliminary Results for the year ended 31 December 2004. 21 February 2005. 2004 Overview. Sales. Another strong performance: sales up 12.4% PBT* up 15.5% EPS* up 15.4% dividend up 12.2% High quality of earnings – cash conversion 111% Margins improved despite currency impact

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Preliminary Results for the year ended 31 December 2004

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  1. Preliminary Resultsfor the year ended 31 December 2004 21 February 2005

  2. 2004 Overview Sales • Another strong performance: • sales up 12.4% • PBT* up 15.5% • EPS* up 15.4% • dividend up 12.2% • High quality of earnings – cash conversion 111% • Margins improved despite currency impact • All divisions contributed to sales and profit growth • Investment in growth market sectors • Record order book of £395m £284.4m £319.7m £260.4m 2002 2003 2004 PBT* £39.7m £29.9m £34.4m 2002 2004 2003 EPS* 44.1p 33.2p 38.2p 2002 2003 2004 *before amortisation of goodwill

  3. Profit & Loss

  4. Sales by Market Sector Other civil equipment13% Othercivil equipment15% Sonar24% Sonar24% Civil aircraftequipment8% Civil aircraftequipment8% Other defenceequipment17% Other defenceequipment13% Battlespace IT27% Battlespace IT29% Military aircraftequipment11% Military aircraftequipment11% 2003 Sales £284.4m 2004 Sales £319.7m

  5. Operating Profit Progression 2004 OP* £42.5m Acquisitions + £1.8m Improved margins + £3.2m 2003 OP* £37.5m Currency translation - £1.0m Sales Growth + £3.3m Currency transaction - £2.3m I N N O V A T I O N T H R O U G H E X P E R I E N C E *before goodwill amortisation

  6. Operating Cash Flow

  7. Net Cash Flow

  8. The Market Environment • Defence • strains on existing budgets • major programmes continue • focus on electronics and battlespace IT • Homeland security • increased priority worldwide • coastal and border surveillance systems • Transportation • rail network investment at reduced level • airport investment continuing • aircraft build rates increasing

  9. Aircraft & Vehicle SystemsOPERATIONAL REVIEW Sales £81.9m (+2.6%) Profit* £14.7m (+5.7%) Order Book £72.3m (-2.6%) • HiPPAG deliveries for F/A-18 E/F at record levels • Eurofighter equipment deliveries aligned to aircraft programme • Armoured vehicle electronics activity increasing • Airbus 10 year deal extended • Significant win on Boeing 787 *before amortisation of goodwill

  10. Feasibility Development Production Support Aircraft & Vehicle SystemsPROGRAMME STATUS F-35 Joint Strike Fighter F/A-18 E/F F/A-18 A/D Tornado updates Eurofighter Small Diameter Bomb X-45 UCAV Boeing 787 “Dreamliner” Airbus – existing range Engineer Tank System Terrier Future Rapid Effects System Future Combat System 2004 2005 2006 2007 2008 2009 I N N O V A T I O N T H R O U G H E X P E R I E N C E

  11. Aircraft & Vehicle SystemsULTRA OPPORTUNITIES Eurofighter tranche 2 2005/6 £40m HiPPAG for Joint Strike Fighter 2007 $100m+ HiPPAG for Small Diameter Bomb 2005/6 $20m+ FRES armoured vehicle electronics 2009 £10m+ Warrior turret upgrade 2006 £10m Boeing 787 production orders 2007 $10m pa

  12. Information & Power Systems OPERATIONAL REVIEW Sales £115.6m (+21.1%) Profit* £14.8m (+34.6%) Order Book £122.1m (+3.6%) • Another strong performance at Airport Systems • Acquisition of Videcom • Battlespace IT growth • ADSI upgrades • Bowman equipment deliveries • Rolls-Royce reactor control contract secured • Key homeland security wins • Strong international sales of Magicard printers *before amortisation of goodwill

  13. Feasibility Development Production Support Information & Power Systems PROGRAMME STATUS ADSI development Type 45 degaussing Astute power equipment New UK aircraft carriers Virginia submarine Littoral Combat Ship degaussing Singapore Delta frigates Rolls-Royce reactor control LHR Terminal 5 system integration UltraTrak LHR, Aus & NZ Network Rail power London Underground power 2004 2005 2006 2007 2008 2009 I N N O V A T I O N T H R O U G H E X P E R I E N C E

  14. Information & Power SystemsULTRA OPPORTUNITIES Astute batch 2 2006/7 £10m New UK aircraft carrier 2007 £15m Anti-FIAC 2005 £20m Minor warship combat system 2006/7 £10m ADSI – development for JSS and CLIP 2005/6 $40m Export coastal defence system 2006 £5m+

  15. Tactical & Sonar SystemsOPERATIONAL REVIEW Sales £122.1m (+12.0%) Profit* £13.0m (+2.7%) Order Book £201.0m (+9.9%) • Acquisition of DNE • SSTD accepted into service by Royal Navy • selected for US Littoral Combat Ship • US technology demonstrator contract secured • Ten year UK sonobuoy partnering deal signed • Further battlespace IT successes • tactical radio upgrade contracts awarded • cryptographic equipment order received from DoD • submarine communication demonstrator programme won *before amortisation of goodwill

  16. Feasibility Development Production Support Tactical & Sonar SystemsPROGRAMME STATUS Nimrod acoustic system NH90 ASW equipment MH60 – system upgrade Canadian MHP ASW equipment MMA SSTD – UK SSTD – export US Navy torpedo defence system UK mine destructor programme Type 45 bow sonar Army radios – US and Korea KG40AR cryptographic equipment Watchkeeper UAV datalinks RTOF submarine communications 2004 2005 2006 2007 2008 2009 I N N O V A T I O N T H R O U G H E X P E R I E N C E

  17. Tactical & Sonar SystemsULTRA OPPORTUNITIES Watchkeeper equipment 2005 £10m Multi-static active ASW system 2006 £20m Boeing MMA sonobuoy receivers 2005 $20m+ Merlin helicopter upgrade 2006 £15m UK mine destructor system 2005 £20m US and export torpedo defence system 2005/6 £10m+ High capacity tactical radios – export 2005/6 £10m+

  18. Ultra Group Prospects • Good order cover for 2005 against projected sales • Increasing investment in civil aerospace • Headroom for further acquisitions • Growth to continue in 2005 despite dollar impact • Seamless management succession

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