Preliminary Results 2000/ May 2001 Building for Growth PaymentBrand Protection Identity

Ian Much Chief Executive PaymentBrand Protection Identity

Main Achievements Excellent all round performance reflecting Groups profitability and leading market positions Further improvement in Currency margins Recovery in Cash Systems margins with business exiting year at 10% margins as predicted Bolt on acquisitions in Cash Systems to expand product range and geographical reach [e.g., ATS, ASCOM] Progress in Global Services with emphasis on brand and identity markets

Main Achievements continued … Good cash generation for the second consecutive financial year Re-orientation of the Group in core areas of payment, identity and brand protection BUILDING FOR GROWTH

Paul Hollingworth Group Finance Director PaymentBrand Protection Identity

Financial Highlights * Before exceptional items/re-organisation costs

Cash Systems Strong return to profitability with margins up 4.9% on comparable period last year Operating margins target of 10% exit rate hit for final quarter 1750 orders received for Twinsafe II TCR product Sales down (before acquisitions) due to slowdown in sales of large sorters and resignation of customer account in OEM business due to pricing Emphasis now moved to growth with several bolt on acquisitions announced during the year and good order book

Security Paper & Print Operating profits and margins up despite tight market conditions Banknotes had quieter second half but mix good Paper volumes down by 7.4% which has impacted profits India contract pause will affect paper volumes in 2001/02 as predicted, but strong banknote order book should partly offset Non-banknote Security Products business benefiting from focusing on product and solutions and upgrading facilities Cash generation excellent with operating cash flow in excess of operating profit

Global Services Excluding Microsoft, sales up 14.1% (change in Microsoft contract depressed sales not profits) Decrease in profits primarily a result of planned revenue investment which was announced in the previous year New contract won with Microsoft for X-box will partly offset loss of Windows contract Identity Systems had good year with strong sales Focus in future on opportunities in brand protection and identity where there is greatest scope for significant growth

Associates Camelot profits hold up (pre exceptionals) as we approach end of first licence Camelot awarded second seven year licence which starts end January 2002 but profitability will be half of first licence period Second half contribution from De La Rue Giori reflects small improvement on first half Expect small upturn in profits next year from De La Rue Giori [Conditional sale of Giori announced on x May along with settlement of arbitration]

Earnings per Share

Cashflow / Borrowings / Interest

Outlook Banknote order book good (should partly offset India) More upside on Cash Systems next year Benefits of synergies within Global Services from combining with Security Products under common management Focus on core businesses

Ian Much Chief Executive PaymentBrand Protection Identity

Strategic Direction (summary) Maintain and nurture our high margin Security Paper and Print operations whilst recognising top line growth will be limited Emphasis in Cash Systems to offer customer a total service giving them flexibility, choice and value in order to reduce cash handling costs Invest in brand protection and identity opportunities within our Global Services division which have the potential to achieve substantial sales and earnings growth Leveraging core competencies for benefit of Group Use the strong balance sheet, where appropriate, to make acquisitions to complement organic growth GROUP FOCUSSED AROUND SECURE TRANSACTIONS

Acquisitions Strategy Focus on Payment, Identity and Brand Protection Geographic expansion Infill service provision in a number of countries Extend product / service provision ONLY IF WE CAN ADD SHAREHOLDER VALUE

Strategic Focus SECURITY The secure exchange of money between two parties for goods & services INTEGRITY Confidence that goods or services are original, genuine and from a valid source TRUST Assuring the physical and digital identity of individuals IDENTITY PAYMENT BRANDPROTECTION Securing the exchange of money for authentic goods and services between trusted parties FUTURE DEVELOPMENT AND DIRECTION OF GROUP

David Young Group Director of Strategic Marketing PaymentBrand Protection Identity

De La Rue Securing Transactions A Typical Transaction: The exchange of money for goods and services between trading parties. The Security Dimension: The Security of the tokens of money value. The integrity of the goods or services. The Identity of the Individual Parties.

Reminder from yr2000: We provide Secure Transaction products and services for: National and State Governments Banks and Financial Institutions Major Commercial Companies De La Rue Main Market Sectors

Commercial activity in Payment, Identity and Authenticity is Growing. As Markets develop, Growth Comes from Additional Players It starts with Government, adds Financial, then Commercial Developing World Second World First World Future Commercial Financial Government International Evolution of our markets in time and geography

Technology Based High Margin Established No New Entrants Manageable Uniques History Repeatable Simple to Value Patent-able Most Competition Threat Historically Most Profitable Developing World Second World First World Future Very SLOW Evolution Addition, not Substitution Geographic Effects Infrastructure, Legal, Culture, Cost/Effect Delivery Based Standing Costs Competition Changing Rules Risk/Liability Standardisation Partners IT Skills Complex Value Shorter IPR Pace of Market Evolution

Shape of the Business Today

Aligning our Face to Market SPECIALISTS in Protecting Brands SPECIALISTS in Personal Identity SPECIALISTS in protection of Payments

SPECIALISTS in Protecting Brands SPECIALISTS in Personal Identity SPECIALISTS in protection of Payments Technology and Capability Planning Re-Usable IPR in Security Materials, Production, Sensing Transferable Skills & Capabilties in Projects & Solutions Key Customers Need Evolving and Hybrid Solutions Playing to our reputation, capabilities and reach

De La Rue Securing Transactions SECURITY The secure exchange of money between two parties for goods & services INTEGRITY Confidence that goods or services are original, genuine and from a valid source TRUST Assuring the physical and digital identity of individuals IDENTITY PAYMENT BRANDPROTECTION Securing the exchange of money for authentic goods and services between trusted parties

Ian Much Chief Executive PaymentBrand Protection Identity

Global Services – Brand Protection and Identity Focus since launch on payment, identity systems and brand protection markets Overlap in sales and marketing functions particularly in identity and brand protection across the Group Larger opportunities in co-ordinated approach, e.g., end to end solutions leveraging combined Global Services and Security Products capabilities Common leadership and management under Jon Marx

Operational Highlights Further overspill order in Currency Improvement in travellers cheque logistics (manufacturing discipline and inventory procedures) Success of TCR Twinsafe Greater sophistication in Cash Systems service business Brand Protection won business in several sectors Resolution of legacy issues

Summary Clear and effective strategy Looking for leadership position in key growth markets Strong order intake and financial position Existing market opportunities Position for growth – focus on core business BUILDING FOR GROWTH

Rider A – Acquisition of CSI Inc Cash Processing lack of critical mass CSI and Cash Processing operations complementary CSU strong in commercial sorters, high speed, new note sorting and multi-denomination De La Rue strong in desktop sorting and counting technology – central bank relationships Some overlap geographically but give us stronger presence in first world (De La Rue strong in developing worlds) Scope for significant cost savings Integration team to conduct full assessment

SUPPLEMENTARY SLIDES

Currency KPIs Average banknote prices Value per banknote (per order book) Banknote volumes Base/overspill split Paper volumes +7.4% +6.1% +5.2% 77/ % 2000/011999/ % +1.0% -10.0% 81/ %

Security Paper & Print Average banknote prices (indexed from 1990) 7.4% rise

Security Paper & Print Banknote order book Value per banknote - 12 month moving average

Security Paper & Print Banknote volumes (billions of notes) Full year change -10.0% 2nd half change -24.7% 1st half change +9.4%

Security Paper & Print Banknote sales - segmental analysis Percentage of total value

Security Paper & Print

Cash Systems KPIs New product sales as a % of total product sales Product development expenditure (£m) (% of product sales) Sales: product (£m) service/software (£m) 1999/002000/

Preliminary Results 2000/ May 2001 Building for Growth PaymentBrand Protection Identity