SIG plc Preliminary Results March 2004 Delivering the goods to construction and industry

2 Overview Solid performance in generally difficult markets Record sales, profits and EPS Significant improvements in cash generation and gearing Dividend up by 6.9% Tenth successive year of dividend growth

Financial Review Gareth Davies, Finance Director

Delivering the goods to construction and industry 4 Summary Profit and Loss Jan - Dec, £m Change Turnover 1, , % Operating profit before goodwill % Goodwill amortisation (4.8) (4.5) Operating Profit % Interest (6.5) (0.7) (7.1) - Financial charges Profit before tax % Interest cover (x) § § Interest cover is pre-FRS 17

Delivering the goods to construction and industry 5 Operating Profit Jan - Dec, £m Change UK & ROI % Mainland Europe % USA % % Parent (2.7) OP pre-goodwill 63.4 (4.8) 57.9 (4.5) +9.5% Goodwill Operating Profit %

Delivering the goods to construction and industry 6 Earnings, Dividend and Tax EPS up 8.7% to 28.6p Tax rate at 32.6% Final recommended dividend of 8.3p Full year 12.4p (up 6.9%) Dividend cover 2.3x

Delivering the goods to construction and industry 7 Balance Sheet £m Dec Dec Capex / Depreciation 71% 126% Capital employed Net debt Average net debt Gearing 38% 70% R.O.C.E. 14.9% 12.9% Comparable capital employed, gearing and ROCE have been restated to reflect FRS 17 retirement benefits

Delivering the goods to construction and industry 8 Average Working Capital to Sales % of Sales Dec Dec Dec Stocks 7.5% 7.7%7.5% Debtors 20.0% 19.2%19.6% Creditors (13.8%) (11.1%)(12.2%) Average Working Capital / Sales 13.7% 15.1%14.9% (Decrease) / Increase in Working Capital (£18.0m) £8.8m£21.9m

Delivering the goods to construction and industry 9 Working Capital December 2003 Dec Dec Stock days Debtor days Bad & doubtful debt as a % of sales 0.78% 0.71% Creditor days Working Capital is calculated to eliminate the effect of acquisitions

Delivering the goods to construction and industry 10 Cash flow £m Dec Dec Cash inflow from trading Change in working capital 18.0 (8.8) Cash inflow from operations Interest and tax (18.2) (21.4) Capex and dividends (26.1) (33.6) Operating cash inflow Acquisitions, exchange & shares (6.5) (23.8) Net reduction / (increase)47.1 (14.1)

Delivering the goods to construction and industry 11 Pensions update FRS 17 adopted early Reduction of £0.2m in PBT (c/f SSAP24) Comparative Balance Sheet restated by £16.9m Net pension liability £13.7m Triennial actuarial valuation ongoing

Delivering the goods to construction and industry 12 IAS project Detailed analysis complete Project on track Key effects: Small positive impact on P&L Minimal impact on B/S

Delivering the goods to construction and industry 13 Financial Summary Record sales and profits Sales up 9.8% PBT up over 11% Improvements in our key ratios Working capital reduced Strong balance sheet

Trading Review David Williams, Chief Executive

Delivering the goods to construction and industry 15 Trading Highlights Sales increased in all three main business streams Profits up in Insulation and Roofing Profits down in Commercial Interiors Sales and profits up in our two largest regions UK & ROI and Mainland Europe Sales and profits down in USA

Delivering the goods to construction and industry 16 Sales by region % 02 FY 03 FY Δ UK & ROI Europe USA £1,269m

Delivering the goods to construction and industry 17 Sales Growth by region

Delivering the goods to construction and industry 18 Sales by sector % 02 FY 03 FY Δ Ins Roofing Comm. Int Others Premium Office Interiors 6.4% Industrial Insulation 17.7%

Trading Review Regional Detail

Delivering the goods to construction and industry 20 USA 03FY / 02FY SalesOP Sterling -9.8%-40% Local Curr. -1.7%-34% -£6.9 Operating profit impact -£0.6m

Delivering the goods to construction and industry 21 USA Demand sluggish Costs reduced Second half trading showed some signs of improvement £$ Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 22 Mainland Europe 03FY / 02FY SalesOP Sterling +12.7%+43% Local Curr. +2.9%+29% +£44.3 Like for like sales in Sterling up 11.5% Gross margin improved Operating margin up Operating profit impact +£3.3m

Delivering the goods to construction and industry 23 Germany Sales up in local currency Gross and Operating margins improved Operating profit up £ Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 24 France Continued growth - operating profit up Margin decline due to product mix Geographic expansion £ Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 25 The Netherlands Market demand down Like for like sales down Commercial Interiors Insulation sales up £ Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 26 Poland Second half sales strongly ahead Traded profitably in the second half New branch performing well £zł Market demand Sales Pricing Operating Loss Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 27 UK & ROI 03FY / 02FY SalesOP Total +10.4%+5.4% Like for Like sales up 6% Sales and Profits up in all sectors, other than premium office +£76.2 Operating profit impact +£2.8m

Delivering the goods to construction and industry 28 UK & ROI Insulation Regulation continued to increase demand New build and upgrading both strong Next energy efficiency regulations now expected in 2005/6 Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 29 UK & ROI Roofing Like for like sales up Acquisitions traded well, margins not yet up to core business levels Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share

Delivering the goods to construction and industry 30 UK & ROI Commercial Interiors Premium office products Sales and Profits down significantly Mainstream Commercial Interiors traded well Sales and Profits up Market demand Sales Pricing Operating Profit Market Outlook Margin SIG Market Share Without Prem. Off.

Trading Review Strategy & Outlook

Delivering the goods to construction and industry 32 Acquisitions Five acquisitions made during 2003 SectorAcquiredStrategy UK: Insulation2 bolt-onGeographic in-fill UK: Roofing1 bolt-onGeographic in-fill France: Comm. Int.1 bolt-onGeographic in-fill France: Air handling1 bolt-onGeographic in-fill All acquisitions are trading profitably and integrating well. Process of targeting and evaluating opportunities for both greenfield and acquisitive expansion well advanced

Delivering the goods to construction and industry 33 Strategic Objectives Develop Market Share in all core operations Enhance Quality of Earnings from overseas businesses Maintain tight cost control Strengthen Balance Sheet and reduce Gearing Improve Earnings Per Share Increased share in several main markets Overseas profits and margins increased Costs down as percentage of sales Gearing significantly reduced EPS up 8.7% 2003 Progress Report

Delivering the goods to construction and industry 34 Focus for 2004 Maintain focus on strong cash flow Increase investment in trading locations Accelerate bolt-on acquisition programme

Delivering the goods to construction and industry 35 Outlook UK construction and building sector positive Insulation demand set to grow both short and long term Commercial Interiors market decline levelling off German building sector more stable USA - more project work expected Start to 2004 on course

Summary Barrie Cottingham, Chairman

Questions and Answers

Appendix

Delivering the goods to construction and industry 39 Trading Site changes Dec Net organic Net acquired Dec UK & ROI Europe USA Total branches

Delivering the goods to construction and industry 40 Market position UK & ROIGERFRANETHPOLUSA Insulation 111 a 211 a,b Comm. Int c3 c - Roofing a Industrial Insulation b Regionally c Not clear – insufficient data

Delivering the goods to construction and industry 41 Market volume & price indicators UK & Republic of IrelandVolumePrice Insulation Roofing Commercial Interiors Others Mainland Europe Germany France Netherlands Poland USA

Delivering the goods to construction and industry 42 Market sectors Indicative breakdown of SIG main business sectors, based on company estimates. % of Group Total New Build % of Subgroup RMI % of Subgroup Housing 27% 39%61% Non-housing Building & Construction 56% 57%43% Industry (non- construction) 17% 44%56% Note: It is not possible to sharply define sales into the respective sectors, as many products are used for all types of work, in all types of construction