Preliminary Results 2001/200229 May 2002

“Cash to Secure Transactions”

Paul HollingworthGroup Finance Director

“Cash to Secure Transactions”

Highlights

Profit before tax up 15.7% at £90.6m*

Excellent cash generation : £88.3m of cash inflow from operating activities

Euro benefit estimated at 9% of Group sales

Headline EPS up 3.5p or 11.3%*

Planned share buyback of up to 10% of issued share capital

* Before exceptional items, reorganisation costs and goodwill amortisation charged to operating profits

Financial Highlights

2001/02 2000/01 Change £m £m £m

SalesContinuing operations 641.7 517.4 Discontinued operations 9.5 7.4

651.2 524.8 126.4

Operating profit*Continuing operations 77.6 68.4 Discontinued operations (1.4) (1.5)

76.2 66.9 9.3

Profit before tax andexceptional items 90.6 78.3 12.3

Earnings per share* 34.4p 30.9p 3.5p

Dividend per share 13.4p 12.6p 0.8p

Net cash 50.0 36.1 13.9

* Before exceptional items, reorganisation costs and goodwill charged to operating profit

Cash Systems

2001/02 2000/01 Change £m £m £m

SalesContinuing operations 319.5 262.4 Acquisitions 51.0 -

370.5 262.4 108.1

Operating profit*Continuing operations 32.6 17.0 Acquisitions 3.4 -

36.0 17.0 19.0

Margins (%)Continuing operations 10.2 6.5 3.7%

Sales from continuing operations up 22% and operating profits rise £15.6m to £32.6m. Excellent cash generation Sales of Teller Cash Recyclers and Teller Cash Dispensers strong Operating margin target of 10% hit for year Euro effect 8% of sales (underlying sales growth (exc. euro) still 10%) CSI better second half, with good order book coverage. Integration almost complete Revenue target of £400m sales for division in 2003/2004 financial year

* Before goodwill and amortisation and reorganisation costs

Security Paper & Print

2001/02 2000/01 Change £m £m £m

Sales 226.8 212.8 14.0

Operating profit 41.1 50.4 (9.3)

Margins (%) 18.1 23.7 (5.6%)

Overall operating profits down £9.3m to £41.1m Strong performance from banknotes offsetting continued weakness in papermaking (India effect) Singapore banknote printing facility closure announced – main benefit in 2003/2004 Paper volumes down by 5% Euro banknote order at Gateshead completed in second half Security Products performance disappointing. Preliminary actions have resulted in 90

redundancies at a cost of c. £1.3m

Security Paper and Print

Sales Profits £m £m

2000/01 212.8 50.4

Banknote printing 16.4 4.8 Banknote paper (0.8) (7.7) Non banknote security printing (3.4) (3.1) Security Products redundancy costs - (1.3) Others* 1.8 (2.0)

___________________2001/02 226.8 41.1

*includes intercompany profit in stock swing of £1.2m

Global Services

2001/02 2000/01 Change £m £m £m

Sales 48.1 47.9 0.2

Operating profit 0.5 1.0 (0.5)

Sales up and first half losses reversed Contract with Microsoft for Xbox™ has partly offset loss of Windows™ contract – overall Brand

Protection has faced difficult trading environment Transaction Services disposal in October – shown as discontinued Loss making Digital Security (InterClear) wound up resulting in 20 redundancies and some asset

write offs at a total cost of £1.1m Identity Systems had a good year with strong sales – Mexico / Chile Holographics had a better second half and has secured euro business Holographics more closely aligned with Tapes business

Associates

2001/02 2000/01 Change £m £m £m

Camelot 11.7 10.4 1.3

Other (inc De La Rue Giori) 0.1 (2.2) 2.3 11.8 8.2 3.6

Giori sale completed in May 2001 for CHF50m (£20m), main associate now Camelot Rise in profits at Camelot mainly because of absence of CISL losses Second licence commenced 27 January 2002 when De La Rue’s shareholding decreased from

26.67% to 20% Reduced contribution during second licence period (0.5p for every £1 collected) Dividend of £ 28.3m received from associates, mainly from Camelot following release of

surpluses from first licence period

Earnings per share

2001/02 2000/01 Change

(p) (p) (p)

As calculated under FRS14 40.7 33.1 7.6

Loss on disposal of continuing operations - 1.6 (1.6)

Profit on the disposal of discontinued

operations (0.7) - (0.7)

Profit/(Loss) on disposal of fixed assets

and assets held for resale ( 0.1) 0.1 (0.2)

Profit on sale of investments (12.0) (0.1) (11.9)

Amortisation of goodwill 1.5 1.1 0.4

___________________________________

Headline EPS as defined by the IIMR 29.4 35.8 (6.4)

Reorganisation and arbitration costs 5.0 0.4 4.6

Share of associated exceptional items - 1.3 (1.3)

Exceptional release of tax provision - (6.6) 6.6

___________________________________

Headline EPS before items shown above 34.4 30.9 3.5

2001/02 2000/01 Change £m £m £m

Cash inflow before items 54.1 40.8 13.3shown below

Equity dividends paid (24.1) (24.1) -Associated dividends received 28.3 21.2

7.1 Acquisitions and disposals (38.0) (4.2) (33.8)

____________________________________

Cash inflow 20.3 33.7 (13.4)

Net Cash 50.0 36.1 13.9

Net Interest: Group (0.4) (1.2) 0.8

Associates 3.0 4.4 (1.4)

Cashflow/Borrowings/Interest

FRS 17

Transitional arrangements for 2001/2002

Full adoption for 2002/2003

Gross surplus as at 30 March 2002 of £63.6m (net of tax £44.4m)

SSAP 24 charge for 2001/2002 of £2.0m compares to net pre tax credit underFRS 17 of £0.4m

Outlook

Overall priorities for 2002/2003 are: Realise synergies and potential of CSI Stabilise Security Products and take further action

to secure operational efficiencies

Euro comparator and lower Camelot contribution

Underlying business however, remains strong, particularly Cash Systems

Any earnings progress in 2002/03 will be modest

Ian MuchChief Executive

“Cash to Secure Transactions”

Well placed for sustainable sales growth (6-8%)

Objective set of £400m sales by 2003/2004

Growth drivers: market, e.g. Retail geographic, e.g. China, Russia market penetration e.g. USA product / sector, e.g. self service banking

Committed to 10% plus margin

Cash Systems

Operating in three market sectors: Financial Institutions Currency Systems Retail Payment Systems

Spent £57.6m on acquisitions in 2002, more bolt-ons likely CSI integration now complete

- integrated sales and marketing- refocused manufacturing base- product integration and development plans finalised- cost base rationalised with 110 redundancies- £5m restructuring cost (£3.6m incurred in 2001/02)

Recent Papelaco acquisition gives full capability for end to end solutions to Financial Institutions

Cash Systems

Recent Cash Systems Acquisitions

*Based on announcements made at time of acquisition

COMPANY DATE CONSIDERATION ANNUALISED ACTIVITY £m SALES* £m

Ascom April 2000 3.9 26.4 Cash handlingAscom – Switzerland April 2001 8.3 18.4

ATS May 2001 10.2 9.8 Retail cash management & POS

CSI May 2001 39.0 36.0 Cash processing

Haliburton & White August 2001 1.2 3.4 Cash transaction processing equipment

Papelaco May 2002 16.0 21.7 Self service banking automation

TOTAL 78.6 115.7

Currency

Continue to enhance our position as world’s leading commercial producer of banknotes

Emphasis on managing the cost base (e.g. Singapore) Result - 320 redundancies Cost (expensed in 2001/2002) is £7.3m (pre-tax) Some additional resourcing required and transfer of capital equipment On track to complete within 9 months Main benefits show through in 2003/2004

Deliver consistent profits and cashflow differentiated marketing strategy targeting favourable segments while retaining

critical mass technology differentiation cash substitutes unlikely to affect the business in medium term

Plus – always prospect of enlarging available market (e.g. euro)

Security Products

Markets are mature and in many cases declining/ fragmented

Review of manufacturing strategy now underway to improve competitiveness and reduce cost base

Results of review to be announced in November

Move emphasis to leaner business with emphasis on differentiation logistics substrate customisation

Prune back to healthier base

Global Services

Reorganised in May 2001; completed in November 2001

Action taken: management changes business streams now offer full range of De La Rue

capabilities sharing key functional areas non-core business sold (Transaction Services) InterClear not commercialised

Objective – achieve sales and profits through both organic growth and acquisitions

Global Services–Key Opportunities

Identity Systems

Target De La Rue’s traditional markets offering both products and issuing solutions

September 11 Pipeline good - Mexico

- Chile- New York

Brand

Serving consumer facing industry sectors so likely to be affected by economic downturn

However some significant opportunities e.g. Microsoft:Xbox Brand Protection : Brand Enhancement

David YoungDirector of Strategic Marketing

“Cash to Secure Transactions”

US Voting Systems Market

Lots of elections every year Election Systems market - Ballots, Punch Cards, Scanners, Electronic Only 4 or 5 small players Federal and State level Certification Sales made at the County level Electronic Voting enables multiple ballots, languages,

disabled voters etc Still need remote/early/postal vote scanners Voter Registration/ID Software Security concerns over on-line voting: personal ID, privacy, hacking, vote-buying, etc.

Punched Cards

Paper Ballot Scanners

Lever-Style Kiosks

Touch-Screen Direct Entry

US Elections Recent History

2000 Presidential Elections 38% voted on Punch-Cards … ‘Chads’ Florida 2001: A year of indecision & investment New entrants disillusioned Existing players struggling Diebold purchases #3 player ‘Global’ Electoral Reform Bills in House and Senate c.$3-4bn Federal Funding, plus State Matching Selective out-lawing of Punch Cards 2002: Several Major orders for Electronic Terminals

Sequoia Voting Systems

Based in Oakland, CA 140 staff

Product Range Full suite of election hardware

Direct recording equipment Optical scanning equipment Outsourced manufacture

Software Voter registration, ballot creation and election tabulation

Printing business e.g. Paper ballots Number 2 or 3 in Market

Strong in West Coast, North East USA, more recently Florida

Financials Sales (31 December 2001) US$27m, loss of US$10m – but not a typical year

Acquisition of Sequoia

Deal structure Acquired 85% share capital from Jefferson Smurfit Group (15%

retained for 3 years min.) Consideration US$23m with further payment of up to US$12m

performance related (sales growth)

Strategic rationale Good strategic fit – Security, USA, Government, ID Electro-mechanical devices with Service Opportunities Excellent growth potential (short term USA, medium international)

Management Sequoia Voting Systems brand maintained in USA Peter Cosgrove (President) to report to Ian Much Minimal integration short term

Demonstration Unit

One of 220 Sequoia AVC Edge®Direct Entry Voting Terminals as used in London Borough of Newham, May 02, 2002.

A good fit?

Ian MuchChief Executive

“Cash to Secure Transactions”

Summary

Well established strategy Focussed businesses Opportunities for organic growth Strong cash generation and balance sheet Substantial room for acquisitions Share buy back to enhance shareholder

value 2003/2004

Supplementary Slides

Security Paper and Print

1996

1997

1998

1999

2000

2001

2002

Base Overspill Total

80

20

100

73

27

100

64

36

100

82

18

100

77

23

100

81

19

100

62

38

100

Percentage of total value

Banknote sales - segmental analysis

Average banknote prices

Value per banknote (per order book)

Banknote volumes

Base/overspill split

Paper volumes

2001/02 2000/01

+12.5%

-1.0%

+3.1%

62/38

-5.0%

+7.4%

+1.0%

-10.0%

81/19

-7.4%

Currency KPIs