De La Rue plc Interim Results 25 November 2003

De La Rue plc Ian Much Chief Executive

De La Rue plc Stephen King Finance Director

Trading Summary * before exceptional charges of £17.9m (2002/2003 £18.7m) and goodwill amortisation of £1.7m (2002/2003 £1.7m)  Underlying trading ahead of last year  Turnover increased by 7.6% from £269.6m to £290.1m  Profit before tax, exceptional items and goodwill amortisation of £19.7m* (2002/2003 £19.6m*), achieved despite additional pension costs of £3.7m. Result ahead of the Board’s original expectations at the start of the year  Strong cash flow performance with net cash inflow from operating activities of £35.0m (2002/2003 £2.5m) in the first half (aided by customer prepayments). The Group ended the first half with net cash of £13.9m  Interim dividend 4.4p (2002/2003 : 4.4p)

Trading Summary  Strong first half in Security Paper and Print underpinned by higher levels of activity in the papermaking business and our success in winning the Iraq banknote contract  Operating profits in Cash Systems ahead of our expectations reflecting the benefit of the ongoing cost reduction programmes, although down on last year’s result  Global Services strategic review completed. An exit from low margin and declining product areas announced today. Global Services to cease as a separate division.

1 st Half 1 st Half 2003/ /03 £m £m Sales Continuing operations Acquisitions Operating profit* Continuing operations Acquisitions Share of profits of associated companies Interest (0.1) 1.1 Profit before tax, exceptional items and goodwill amortisation Earnings per share* 8.1p 7.3p Dividend per share 4.4p 4.4p Net cash/ (debt) 13.9 (21.0) Financial Summary * before exceptional charges of £17.9m (2002/2003 £18.7m) and goodwill amortisation of £1.7m (2002/2003 £1.7m)

Security Paper and Print  Excellent first half in Currency  Significantly high level of activity in papermaking business  Commencement of deliveries in first half relating to exceptional Iraq banknote contract (completed in second half)  Strong order book in Currency going into second half in both papermaking and printing  Continuing weak markets in Security Products led to poor first half performance. Some improvement in second half expected due to lower overheads. Completed closure of High Wycombe on schedule. 1 st Half 2003/04 £m 1 st Half 2002/03 £m SalesContinuing Operations Acquisitions Operating Profit*Continuing Operations Acquisitions Margins % * before exceptional items of £0.8m (2002/2003 : £17.7m) and goodwill amortisation credit of £0.2m (2002/2003 : nil)

 Revenues down as tough trading conditions seen in second half of 2002/2003 continued  Better than expected operating profits achieved through early benefit of cost reduction programme  Weakness of financial institutions markets, particularly in Europe continues to be partially offset by North American business. Strong Teller Cash Dispenser volumes in first half. Self service business formed from Papelaco acquisition also performed well  Foreign Exchange - transactional loss largely offset by translation benefit Cash Systems 1 st Half 2003/04 £m 1 st Half 2002/03 £m Sales Operating Profit* *before exceptional items of £1.9m (2002/2003 : £1.0m) and goodwill amortisation of £1.6m (2002/2003 : £1.5m)

Global Services  Revenues up 19% due to inclusion of Sequoia but continuing poor margins  Holographics’ revenues were down in the first half due to the timing of banknote order receipts particularly in the first quarter  Identity business – volumes down in installed base of contracts. New system sales continue to be deferred  Sequoia loss making in first half due to continued margin pressure as a result of competitive pricing. Closure of Exeter and outsourcing of ballot printing facility now complete 1 st Half 2003/04 £m 1 st Half 2002/03 £m Sales Operating Profit / loss*(2.3)(2.8) *before exceptional items of £12.6m (2002/2003) : nil) and goodwill amortisation of £0.3m (2002/2003 : £0.2m)

Associates  Main associated company is Camelot, the UK lottery operator  Strong first half reflects phasing of marketing expenditure. Sales flat on last year 1 st Half 2003/04 £m 1 st Half 2002/03 £m Profit before interest and tax5.63.6

Earnings per Share 1 st Half 2003/04 p 1 st Half 2002/03 p As calculated under FRS 14 (2.2) (0.6) Loss on disposal of fixed assets and assets held for resale1.3- Amortisation of goodwill Headline earnings per share as defined by IIMR Reorganisation costs Headline earnings per share before items above The EPS of (2.2)p as calculated under FRS14 is the £3.9m loss for the period divided by 176,792,599 shares in issue

2003/042002/03 Half year Half year £m £m Net free cash flow Exceptional cash flows (11.5) (2.7) Capital expenditure (14.0) (7.6) Equity dividends paid (16.2) (25.4) Share buy back/ own shares - (32.4) Acquisitions and disposals (4.9) (31.4) Sale of investments Associate dividends received Share capital issued Exchange Cash inflow / (outflow) 5.7 (71.0) Net cash / (debt) 13.9 (21.0) Cash flow / Net Debt

Exceptional Items Cash Non Cash Total £m Reorganisation costsCash Systems(1.9) - Security Products(0.8) - Loss on disposal of fixed assets- (2.6) Sequoia goodwill impairment- (12.6) _________ Exceptional pretax costs (2.7) (15.2) (17.9)

Pensions  Triennial review was assessed at 6 April 2003  Reflects poor performance of financial markets during the period  Deficit approximately £40m as expected  Equity markets improving  Net charge to P&L under SSAP 24 in current year will be £9.5m (2002/2003 £1.9m)  Similar charge to operating profit under FRS 17  Company now reviewing the UK pension scheme arrangements and discussions with key stakeholders under way  At half year, SSAP 24 charge was £4.7m compared with £1.0m in 2002/2003

Currency Volumes 1 st Half 2003/04 % 1 st Half 2002/03 % Banknote volumes (underlying) Overspill Paper volumes

De La Rue plc Ian Much Chief Executive

Currency  Papermaking business improving as expected  Strong order book  Return to market of significant overspill customer  Knock-on effect for currency components business in second half  Banknote business continues to perform strongly  Iraq  Good first half at Debden, integration proceeding well  Strong order book and earnings visibility underpins second half  Expect both paper and print markets to return to historical ordering patterns and volumes in 2004/2005.

Cash Systems - Markets  As expected, tough market conditions in financial institutions business continues, particularly in Europe  Germany and Spain  Partially offset elsewhere, particularly North America  Papelaco self service offering continues to be rolled out to developed markets  Investment in enhancing our solutions and service portfolio for Retail market continues  Focus on large retailers in Europe and North America  Customer Services business remains significant profit driver of division

Cash Systems - Cost Reduction  Actions to date:  Cost reduction programme on track  300 redundancies announced (February 2003)  Additional 50 identified in first half  Of total, 250 now completed  Balance to follow in second half  Specific action taken to reduce cost base in large sorter business  Dallas manufacturing facility  Much more encouraging first half

Global Services Strategic Review  Two principal conclusions:  Cessation of Global Services division  Exit from low margin and declining product areas in Security Products  Costs  £10m restructuring charge - taken in the second half, substantially cash  12 month completion timescale  Savings will benefit the Group by approximately £3.0m per annum  £12.6m goodwill in relation to Sequoia (non-cash)

Security Products  UK site consolidation  Exit from Peterborough and Byfleet  200 redundancies likely, subject to employee consultation  Transfer of gravure equipment into Dunstable to support Royal Mail contract  Consolidate all UK security printing to Dunstable  Does not require significant transfer of equipment or overheads  Flexible expansion space available  Considerable margin synergies  Reduced inter-plant transportation  Increased utilisation of plant and equipment already at Dunstable

Security Products  Security Products will focus on:  Authentication labels  Travellers cheques  Postage stamps (domestic supply)  Passports  Authentication labels contract recently secured with global software company  Exit from:  UK personalised cheques  Vouchers  Export stamps  Coin bags

Global Services Strategic Review  Security Paper and Print division will now comprise:  Banknote printing and papermaking  Tapes and Holographics  Intrinsically linked to the banknote market  Benefits from their market presence/ reputation  Security Products  Principal production at Dunstable, Dulles and Bathford (paper)  All constituent businesses will be profitable in 2004/2005

Global Services Strategic Review  Sequoia reported within Cash Systems  Natural fit with self service and customer service  Hardware sales encouraging but competitive pressure affecting margins  Expect profitable second half  Fair value assessment accelerated to reflect new competitive environment resulting in £12.6m non-cash goodwill write-off

Outlook  Continuation into the second half of the favourable conditions that resulted in an improvement in underlying first half performance leads the Board to expect a strong second half result

De La Rue plc