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600 Group PLC

600 Group PLC. Annual General Meeting 14 September 2011. Highlights. Revenue up by 11% to £50.6M Underlying operating profit £1.2M (£1.1M) Net operating expenses reduced by £7.3M Net pension credit of £2.6M with the change to CPI Good order book and lower breakeven point

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600 Group PLC

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  1. 600 Group PLC Annual General Meeting 14 September 2011

  2. Highlights • Revenue up by 11% to £50.6M • Underlying operating profit £1.2M (£1.1M) • Net operating expenses reduced by £7.3M • Net pension credit of £2.6M with the change to CPI • Good order book and lower breakeven point • Acquisition in Poland for production of the Group’s machine tools • Successful share placement to finance Poland • Change of bank in the UK to Santander • Move to AIM completed

  3. Operating Profit Trend

  4. Structure of the Group 39% of Sales 20% of Sales 14% of Sales 27% of Sales

  5. Machine Tools (39% sales) • Metal turning machines • Conventional (non CNC) • Workshop CNC • Production CNC • Brands: Colchester and Clausing • Oxford Economics positive market forecast • Double digit growth next 3 years • Pre recession levels by 2012 • Increasing vertical integration following acquisition in Poland

  6. Machine Tools New Business Model • Manufacturing Footprint • EMEA sales organisation relocated • Shorter lead times • Increased margins and earnings • Higher quality • Better market rating as a bona fide engineering operation • Sales Organisation EMEA Leeds Poland Production UK Components North America Michigan Australia Sydney/Brisbane UK Machines South Africa Johannesburg

  7. Poland Benefits • Lower material costs • Skilled workers capable of being trained on CNC machines • Vertically integrated production with low cost foundries in close proximity • Good transport links to main markets plus new highway • Low level of corruption • Access to other CEE markets • Poland latest GDP 4.4%

  8. Precision Engineered Components (20% sales) • Spares for installed base of machines • Bearings and tool holding equipment • High precision tolerances up to 0.5 micron • Poland machining capability • Good recovery for bearings

  9. Laser Marking (14% sales) • Alternative to inkjet marking • Global trend towards traceability • Proprietary software & laser technology • Diverse customer base • Automotive • Aerospace • IT • Solar • Pharmaceutical • Pipeline of development projects

  10. Mechanical & Waste Handling (27% sales) • Sub Saharan Africa • Main drivers: • Infrastructure • Electrification • Mineral extraction • Positive GDP growth forecasts • Contract with Eskom completed in 2011

  11. Major Issues and Response 2009/11

  12. Outlook • More flexibility with the move to AIM • Poland is a medium term solution to the Group’s long term strategic issue on machine tools • Volume of transferred machines is increasing • Integration costs will reduce towards the end of the year • Margin benefits will be visible towards the end of the year • Upside potential over the next two years • The shift from distribution to manufacturing should be well received by the market • Good organic prospects offset by the uncertain macroeconomic environment • Board changes

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