1. 2002 Results
17 March 2003

2. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

3. Proudfoot Consulting—core service
The enhancement and design of processes to increase sales
and reduce costs, overheads and capital expenditure
Process improvement
Behavioural analysis, training and communications to enhance skills and embrace change
Tight, structured approach with measurable payback in predetermined timescales
People
solutions
Project management
Proudfoot installation
co-venturing
“We are obsessed by measuring improvements and your earnings enhancement”
© 2003 Management Consulting Group PLC All rights reserved

4. Proudfoot Consulting’s no net cash promise
“Your annualised earnings enhancement will exceed our fee”
year 1
Proudfoot fees
Earnings enhancement
Earnings enhancement
year 2
sustainability
“Can you afford not to discuss your issues with us?”
© 2003 Management Consulting Group PLC All rights reserved

5. Clients

6. Parson Group business Financial management practice:
Engagements in finance and business support (back office) departments
Ensures management information has:
Greater reliability (higher accuracy, reduced risk)
Greater speed (ability to make informed decisions faster)
Cost effective production processes

7. Parson Consulting – core services
Finance and support services
Process change
Finance:
Management reporting
Financial reporting
Process improvement
Budgeting and forecasting
Treasury management
Capital project control
Expense reduction
Activity based costing
Solutions to audit letters and due diligence reports
Technology applications:
Design
Selection
Software upgrades
Software implementations
Optimisation
Organisational change
Process change
Process change
Technology infrastructure:
Maximise benefits from current systems
Organisational change

8. Parson Group - representative clients
© 2003 Management Consulting Group PLC All rights reserved

9. D Consulting (complementary to B)
Group structure
B Consulting
C Consulting
Central services
D Consulting (complementary to B)
MCG will become an umbrella organisation for different consulting offerings
© 2003 Management Consulting Group PLC All rights reserved

10. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

11. 2002 highlights
Turnover up 49% to £107.3 million (2001: £72.1 million)
Proudfoot Consulting turnover up 29% (2001 year: +34%):
Despite 10% depreciation of US dollar
Compared with market growth of about 5% (2001: 10%)
Parson Consulting, acquired on 28 May 2002, contributed turnover of £14.1 million and now stabilised
Operating profit before goodwill amortisation of £7.6 million (2001: loss of £0.3 million excluding exceptional pension credit of £2.0 million)
EBITDA of £9.2 million (2001: £0.9 million)
Cash of £21.9 million (2001: £18.9 million)
Return to dividend list – 0.5 pence per share (2001: nil)
Strong order input to date in 2003 will offset weak final quarter of 2002; most of benefit will be seen in second half

12. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

13. Profit and loss account
2002
2001

14. Geographical analysis: turnover

15. Geographical analysis: operating profit

16. Results commentary - Proudfoot
Revenue growth of 29% (2001: 34%) compared to market c. 5% (2001: 10%)
North American business mainly outside financial sector
European market slower to react to economic conditions than North America
Africa and Asia Pacific dependent upon individual contracts
Slowdown in business won in Q4 2002
No softening of prices
Continued penetration of multi-national businesses—average size of project £1.3 million (2001: £1.2 million)

17. Results commentary - Parson
Revenue decline continued until October timeframe
Stabilised business levels late in year but at unprofitable level
Management changes commenced in November
New York/Stamford and Los Angeles/Orange County combined
Marketing commenced for Sarbanes-Oxley

18. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

19. Balance sheet

20. Commentary on balance sheet
New equity issue raised £38.8 million in May 2002
Parson acquired for £38.5 million, related goodwill £40.3 million, fully equity financed because loss making
Long term investments of £1.0 million comprise share scheme associated with acquisition of IMR
Receivables 11 days (2001: 23 days)
Cash of £21.9 million (2001: £18.9 million)
Pension liability reflected on balance sheet £13.5 million (2001: £7.3 million) together with post-retirement health care liability £3.8 million (2001: £4.9 million)

21. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

22. Issues addressed in second half 2002
Continued to strengthen sales executives
Closely monitored market requirements
Mail shots to increase meeting counts
Increased focus on past clients
Repositioned to capitalise on market opportunity
Clearer marketing material
Emphasised performance management
New incentive plans
Recruited more sales executives
Increased prices
Managed sales pipeline closely
Commenced management changes
Cross referral programme between Parson and Proudfoot is bearing fruit

23. Issues to be addressed in first half 2003
Strengthening of sales management
Continue to strengthen European management
Close monitoring of market requirements
Continue to strengthen management
Capitalise on Sarbanes-Oxley
Continue to increase prices
Continue to closely manage sales
Sales effectiveness installation by Proudfoot
Establish training courses
Improve management information systems
Continue cross referral programme between Parson and Proudfoot
Continue to build order book for H2 2003

24. Agenda Introduction 2002 highlights Profit and loss account
Balance sheet
Issues
Outlook

25. 2003 outlook
Proudfoot:
Cost reduction remains a priority for clients in difficult economic conditions
Proudfoot order book started year lower than previous year following weak 2002 final quarter. Input in 2003 has been strong
Parson:
Sarbanes-Oxley engagements and opportunities now coming through
Revenue stable, expect growth in second half
Group:
Directors expect turnover growth to continue to out-perform consulting market
Directors remain optimistic about future growth