1. ‘Trading in an Uncertain Economic Climate ’ June 2009 Mike Copson Director - Barclays Business Support Company Confidential 6/09

2. Sharp decline in GDP and asset values Liquidity crisis in financial sector Job losses / impact on consumer confidence and discretionary spending. £ weakness – impact on cost base and margins. Government led initiatives – both monetary and fiscal. A GLOBAL PROBLEM Company Confidential 1/09 Current state of the economy ….

3. Sharp decline in GDP and asset values – 1990 (NEGATIVE EQUITY) Liquidity crisis in financial sector – BUT NOT TO THE SAME EXTENT Job losses / impact on consumer confidence and discretionary spending. – GEOGRAPHICAL DISTRIBUTION? £ weakness – impact on cost base and margins. - £ EXITING ERM : STG BASE PEAKED AT 15% vs 0.50% NOW RECOVERY PROMPTED BY….. INTEREST RATE CUTS, CYCLICAL UPTURN AND NEW INDUSTRIES (INTERNET, FINANCIAL SERVICES, GLOBALISATION AND GROWTH IN CHINA / INDIA) Company Confidential 6/09 How does this compare with early 90s….?

4. Winners..? And losers? Outdated High St Retail. Motor assembly Pubs / Clubs Out of step with consumer trends Locked into high costs… Company Confidential 6/09 What’s happened since?

5. Sales led turnarounds Poor Leadership High cost structure Poor products or marketing Overtrading Big projects Economic Cycle Supplier costs Competition Loss of licences Superficial forecasting Changes in the market place Loss of key contract/customer Poor Cash Control Company Confidential 1/09 Causes of Corporate failure

6. Cash flow Cash flow Loss of revenues / Margins & profitability squeezed Loss of revenues / Margins & profitability squeezed Failure of key customers or suppliers – ‘knock on effect’ Failure of key customers or suppliers – ‘knock on effect’ Litigation Litigation Fall in asset values Fall in asset values Loss of key staff Loss of key staff Management team unequipped to deal with situation?? Management team unequipped to deal with situation?? …. Relationship Team engages Business Support… ! Company Confidential 6/09... What goes wrong…..?

7. Barclays Business Support : A risk specialist team whose main objective is to : Support customers in financial difficulty Provide expert advice to help them stay in business and banking with Barclays.. or exit the situation in an orderly manner.. Working with the business to try and find solutions to their problems Timely intervention - Average support process takes 12 months Providing additional resource to their Barclays Relationship, not a substitute one Winners of IFT Turnaround Awards in 2008. Company Confidential 6/09 What is Barclays Business Support?

8. Time Health Earnings Decline Balance Sheet Strain Cash Crisis Insolvency Options Need to change ConsensualCoercive The ‘Decline Curve’

9. Position of the business in the industry / market place – power of suppliers and customers? Industry dynamics Legislation / socio – economic developments? Company Confidential 6/09 Understand Business Risk

10. - Well motivated? - Structural and functional expertise? - Experience in turnaround? - Receptive to external advice? - Ability to react to industry developments. Analyse risk and sensitivities? - Internal / external communications? - Succession Company Confidential 6/09 Management Team:

11. Bills paid on time? Crown Creditors Headroom? Sensitivities? Appropriate working capital financing? Company Confidential 6/09 Understand Cash Flow

12. Up to date? Reliable? Audits filed? Budgeting and re-forecasting realistic? ‘What if’ scenarios? Covenant forecasting? Provided to relevant stakeholders in timely manner? Company Confidential 6/09 Management Information

13. engage in profitable and cash generative business activities. quality, retention and enhancement Provide brilliant customer service. Margin management Exchange rates Raw material / consumable costs Fuel / transport costs National Minimum Wage / pay structure Company Confidential 6/09 Focus on Revenue and Margin

14. Review of overheads Staff costs Premises costs / rent reviews Review Standing orders and direct debits What operational expenditure can be trimmed? Company Confidential 6/09 Cost Control

15. Non core assets? Disposals? Return on capital? Are assets performing as the should be… Impact on banking covenants (loan to value)? Company Confidential 6/09 Asset Values

16. New products / markets?. Acquisitions / strategic alliances?. What shape will your industry be in say 5 years time? Winners / losers? Is the team / resource equipped to fulfil strategies? Company Confidential 6/09 Planning of the future

17. Essential to keep stakeholders informed. Use of lawyers and accountants to advise on strategies at early stage. Tell your bank manager what is going on – even if it is bad news… Keep the bank informed! Company Confidential 6/09 Advice and communication

18. Questions and Answers Company Confidential 6/09 ‘Trading in an uncertain economic environment’...