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Interim Results for the six months to 30 June 2004

Interim Results for the six months to 30 June 2004. Interim 2004 Overview. Another strong first half sales up 8% – EPS* up 12% PBT* up 13% – order book up 7% Margins strengthened despite currency effects Sonobuoy businesses performed well Reduced deliveries of Eurofighter equipment

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Interim Results for the six months to 30 June 2004

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  1. Interim Results for the six months to30 June 2004

  2. Interim 2004 Overview • Another strong first half • sales up 8% – EPS* up 12% • PBT* up 13% – order book up 7% • Margins strengthened despite currency effects • Sonobuoy businesses performed well • Reduced deliveries of Eurofighter equipment • Excellent growth in Information & Power Systems • Good contribution from 2003 acquisitions • DNE Technologies and Videcom acquired since period-end 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

  3. Profit & Loss Account *before goodwill amortisation 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

  4. Interim 2004 Overview Other civil 13% Sonar 24% Civil aircraft equipment 7% Other defence 13% Battlespace IT 30% Military aircraft equipment 13% 2003 H1 sales£135.7m 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

  5. Interim 2004 Overview Other civil 14% Other civil 13% Sonar 24% Sonar 28% Civil aircraft equipment 7% Civil aircraftequipment 7% Other defence 13% Other defence 14% Battlespace IT 30% Battlespace IT 27% Military aircraftequipment 10% Military aircraft equipment 13% 2003 H1 sales£135.7m 2004 H1 sales£146.5m 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

  6. Cash Flow *before goodwill amortisation 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

  7. The Market Environment • US defence • continuing growth with emphasis on electronics and communications • UK defence • fewer platforms in service • some existing platforms to be upgraded • growth focused on mobility and battlespace IT • Homeland security • increased priority worldwide • demand for coastal and border surveillance systems • Transportation • aircraft build rates increasing for ’04 and ’05 • rail and airport infrastructure investment continuing 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

  8. Tactical & Sonar SystemsOPERATIONAL REVIEW Sales £57.6m (+8%) Profit* £6.6m (+22%) Order Book £192.0m (=) • Growth driven by high ASW sales • SSTD programme on track - successful trials completed • Nimrod MRA4 deliveries completing • Next tranches of radio orders received from US andRepublic of Korea • Cryptographic equipment order received from US DoD • Acquisition of DNE Technologies completed since period-end *operating profit before goodwill amortisation 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

  9. Tactical & Sonar SystemsDNE TECHNOLOGIES Sales* $28.4m Profit* $5.8m • Key supplier of communication solutions for military network access • Provides connectivity between variousmilitary network standards • Supplier to US Army, Navy, Marines andAir Force • Complementary to APC and TCS • Differentiated solutions reflected in marginsachieved *year ended 31 December 2003 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

  10. Tactical & Sonar SystemsDRIVERS OF GROWTH • Increasing demand for timely information • Improved battlespace intelligence • Interoperability between allied and coalition forces • Protection for naval assets in shallow waters • enhanced ASW techniques • protection against torpedo attack • mine countermeasures 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. Tactical & Sonar SystemsULTRA OPPORTUNITIES Watchkeeper equipment 2004 £10m Increased bandwidth radios for Korea 2006 £15m+ Sonobuoy partnering agreement 2004 £30m+ Multi-Static Active ASW system 2006 £20m Boeing MMA sonobuoy receivers 2005 £10m+ UK naval mine destruction system 2005 £20m+ US and export torpedo defence systems 2005 £10m+ 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

  12. Aircraft & Vehicle SystemsOPERATIONAL REVIEW Sales £36.7m (-10%) Profit* £6.6m (-7%) Order Book £81.8m (+2%) • Sales impacted by alignment to Eurofighter programme • Armoured vehicle electronics activity increasing • Award of HiPPAG Small Diameter Bomb development contract • Selected for Boeing 7E7 proximity sensor electronics • Ten year sole source agreement for Airbus landing gear controls *operating profit before goodwill amortisation 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

  13. Aircraft & Vehicle SystemsDRIVERS OF GROWTH • New military aircraft build rates increasing • Enhanced capability for existing platforms • Smart munitions • improved weapons ejection systems • More mobile forces • light armoured vehicles • UAVs and UCAVs • Recovery of long term civil aerospace growth • position on Boeing 7E7 • protected position with Airbus 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. Aircraft & Vehicle SystemsULTRA OPPORTUNITIES Eurofighter tranche 2 2005/6 £40m HiPPAG for JSF 2007 £60m+ HiPPAG for Small Diameter Bomb 2005 £15m+ C130 noise cancellation 2006 £10m FRES armoured vehicle 2007 £10m+ Boeing 7E7 proximity sensors 2006 £20m 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

  15. Information & Power SystemsOPERATIONAL REVIEW Sales £52.2m (+25%) Profit* £6.1m (+27%) Order Book £111.2m (+28%) • Strong performance driven by transport infrastructure investment • Increased deliveries of Bowman related equipment • Acquisition of Videcom announced since period-end • Good market acceptance for new ID card printers • Selected for export coastal surveillance system *operating profit before goodwill amortisation 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

  16. Information & Power SystemsDRIVERS OF GROWTH • Submarine equipment upgrades • Power requirements for naval systems • Port and coastal surveillance • Demand for enhanced command and control • Transit system power equipment 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. Information & Power SystemsULTRA OPPORTUNITIES Rolls-Royce reactor control 2004 £20m 2nd batch Astute submarine 2006/7 £10m+ UK aircraft carrier equipment CV (F) 2007 £15m+ US ADSI sustainment 2004 £15m Export coastal defence system 2005 £5m+ Network Rail power equipment 2004/5 £10m+ 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

  18. Ultra Group Prospects • Order book gives good visibility • Programmes running on schedule • Growth augmented by DNE Technologies and Videcom • Positioned in expanding markets • Headroom for further acquisitions • Well placed for 2004 despite exchange rate impact • Ultra’s growth to continue 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

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