Interim Results 2001/ November 2001 PaymentBrand Identity Cash to Secure Transactions

Ian Much Chief Executive PaymentBrand Identity

Highlights * before exceptional items, reorganisation costs and goodwill amortisation charged to operating profits Earnings up Operating profits* up 7% at £29.8m Profit before tax* up 13% at £35.6m Headline EPS up 7% at 13.4p Dividend increased by 5% Excellent trading performance in Cash Systems Currency profits down as predicted (India effect) Action taken to reorganise Global Services Positive second half outlook underpinned by good order book visibility in Cash Systems and Currency Strong balance sheet with scope for acquisitions

Paul Hollingworth Group Finance Director PaymentBrand Identity

Financial Highlights * Before exceptional items, re-organisation costs and goodwill amortisation charged to operating profits

Cash Systems Sales up 23% and operating profits rise £10.2m to £14.0m (excluding acquisitions) First half sales uplift – euro and Twinsafe II benefit On schedule to reach 10% margin target for year – first half 9.5% (excluding acquisitions) Service organisation continues to grow and accounts for 30% of sales in the first half Good order books maintained into second half (particularly Branch Cash Solutions) but revenue growth will not be at first half levels Currency Systems sales disappointing but should be some second half improvement

Security Paper & Print Banknote paper profits and margins down, as predicted, because of India paper order wind down and adverse mix Banknote business continues to flourish with good order coverage and good sales visibility in second half Euro order fulfilment on track; second large overspill order secured in first half Non-banknote business profits and margins down mainly due to Tapes business relocation to larger facility and lower tape sales to Currency which adversely impacted profits

Global Services* Sales disappointing - down 18% to £19.3m and division incurred a loss Transaction Services disposal for £6m (£3m in Alphyra shares) De La Rue now retaining a higher proportion of the Microsoft labels Holographics sales and margins under pressure but euro orders now secured Identity Systems timing delays on several contracts adversely affected profits but contracts now secured for second half Outlook more positive for second half and action has been taken * Excludes Transaction Services

Associates Rise in profits before interest and tax due to absence of De La Rue Giori losses Camelot profits down in first half as a result of lower sales Second licence commences 27 January 2002 when De La Rues shareholding decreases from 26.67% to 20% Dividend of £15.4m received from Camelot post half year

Earnings per Share

FRS 19 : Restatement of Taxation Recognised on balance sheet as deferred tax asset of £35m The asset of £35m mainly reflects the recognition of taxable losses and other timing differences in Germany and USA As a result of no longer recognising the benefit of taxable losses through the tax charge, last years effective tax rate of 23% has been increased to 27% The increase in this years effective tax rate to 28% from 27% is mainly because of the increase in profits in higher tax rate jurisdictions

Cashflow / Borrowings / Interest * Excludes £12.7m net debt acquired

Outlook Since half year overall trading ahead of last year and in line with our expectations Good order book going into second half (Cash Systems and Currency) On track to achieve 10% margin target in Cash Systems Global Services restructuring will lead to better second half Second half concentration on: Driving through synergies and implementation plan for CSI Improvement of operational performance of Global Services Delivery of order book

Ian Much Chief Executive PaymentBrand Identity

Cash Systems Strong first half performance even allowing for euro and ongoing Twinsafe benefit Ascom Banking Automation acquisition very successful Cash Systems now represents over 50% of Group revenues Underlying growth opportunities excluding euro through; Geographical expansion and new market opportunities eg retail Expanding and improving product range (organically and by acquisition) Service Three acquisitions in first half (CSI, ATS, Ascom Belgium & Switzerland) underline this strategy

CSI Acquisition - Rationale Industry rationalisation needed CSI and Cash Processing operations complementary: CSI 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 gives us stronger presence in first world (De La Rue strong in developing world) Synergies will drive up profitability through: Lower and tighter controlled cost base Combined product range, distribution networks and manufacturing strategy Technology migration between product families

CSI Acquisition - Progress Progress to date: Combined business renamed Currency Systems Integrated sales and marketing operations Finalised product integration and development Now evaluating impact on manufacturing strategy

Currency Overall profits down due to adverse mix in papermaking business (India) Latest view is India will not require further deliveries before second half of 2003 Banknote business strong with good coverage for the second half Good visibility of earnings for second half

Use of Cash in G-10 Countries UK is the most cashless economy in the G-10 Source: Bank for International Settlements

Finland – A Model of Cashlessness? Even in the most cashless of societies, the use of cash is stable. Source: Bank of Finland

Non-cash threat summary UK is relatively cashless but UK public want cash (NOP/ De La Rue poll) 66% prefer cash 77% dont want physical cash replaced with e-cash First signs of decline should be in the advanced economies but demand for cash remains strong Currencys markets are generally not in advanced economies

Security Products Business merged with Global Services but results reported separately due to budgets etc this year Factory move at DLR Tapes caused some first half disruption Other Security Products operations in line with expectations Going into second half with better order book but trading continues to be challenging

Global Services Restructuring Restructuring announced in May now complete Action taken: Made management changes – Jon Marx, MD Business Directors recruited for three business streams of Brand, Identity Systems, Finance Business streams offer full range of De La Rue capabilities sharing key functional areas Holographics and Tapes business more closely aligned and under new management Non-core Transaction Services business sold Growth opportunities a priority going forward

Global Services - Organisational Structure Managing Director Jon Marx Brand Business Director Colin Frey* Financial & Government Business Director Keith Brown Marketing Services Director Pippa Wells HR Director Kate Price* MD, Tapes, Holographics & Interclear Julie Furber R&D Director Bryan Christophersen Manufacturing Director Gary Carter* MD, Portals Bathford Simon Jarvis Finance Director Patrick Spencer Customer Services Director Tracey Graham* Identity Business Director Patrick Dexyl * External Appointments

Global Services Identity Opportunities as Governments upgrade security of national identity and passport schemes - post Sept 11 Progress now being made since half year Mexico,Chile, Malta Brand Serving consumer facing industry sectors so likely to be affected by economic downturn Clearly some significant opportunities eg China Finance Ongoing benefit for tapes and holograms from euro Continued focus on operational efficiencies

Summary Group is very profitable and cash generative Growth opportunities focused around; Short term (and medium term) opportunities in Cash Systems and; Still committed to Global Services but growth more medium term Acquisitions - but strict strategic and financial criteria Confident about future prospects – through financial strength, leading market positions and strong order books

Interim Results 2001/ November 2001 PaymentBrand Identity Cash to Secure Transactions