Interim Statement 2009/2010 Contents 02 Trading Summary 03 - PDF document

Interim Statement 2009/2010

Contents 02 Trading Summary 03 Interim Management Statement 06 Principal risk and uncertainties 07 Responsibility Statement of the Directors in respect of the Interim Statement 08 Independent Review Report to De La Rue plc 09 Group Condensed Consolidated Interim Income Statement – Unaudited 10 Group Condensed Consolidated Interim Statement of Comprehensive Income – Unaudited 11 Group Condensed Consolidated Interim Balance Sheet – Unaudited 12 Group Condensed Consolidated Interim Statement of Cash Flows – Unaudited 13 Group Condensed Consolidated Interim Statement of Changes in Equity – Unaudited 14 Notes to the Condensed Consolidated Interim Financial Statements – Unaudited 22 Shareholders’ Information

We are the world’s largest commercial security printer and papermaker, involved in the production of over 150 national currencies and a wide range of security documents such as passports, authentication labels and fiscal stamps. The company is a leading provider of cash sorting equipment and software solutions to central banks, helping them to reduce the cost of handling cash. De La Rue also pioneers new technologies in government identity solutions for national identification, driver’s licence and passport issuing schemes. De La Rue employs over 4,000 people worldwide and is a member of the FTSE 250.

02 De La Rue Interim Statement 2009/2010 Trading Summary Half Year Half Year Increase/ 2009/2010 2008/2009 (Decrease) £m £m HY to HY Revenue* 252.2 244.7 3% Operating profit* 51.0 43.5 17% Profit before tax** 44.2 47.2 (6%) Headline EPS* 35.1p 23.7p 48% Dividend per share 14.1p 13.7p 3% Headlines – Group revenues* up 3 per cent, and operating profit* up 17 per cent – Currency revenues up 8 per cent and operating profit up 22 per cent to £44.7m – Group operating profit margin* improved by 2.4 percentage points to 20.2 per cent driven by securing an unusually favourable job mix in Currency, increased productivity and foreign exchange – Headline EPS* up 48 per cent to 35.1p due to the effect of the return of capital – Interim dividend per share increased by 3 per cent to 14.1p – Secured £400m UK Passport contract for delivery over 10 years – These results reflect the elimination of central costs which have now been fully achieved * Group revenue, operating profit and headline EPS are reported for continuing operations and before exceptional items of £3.8m in 2009/2010 and £2.6m in 2008/2009 ** Profit before tax decreases versus the prior half year due to movement on exceptional charges (£1.2m), lower income from associates (£2.3m) and increased interest charges (£4.2m)

03 De La Rue Interim Statement 2009/2010 Interim Management Statement De La Rue is pleased to report a strong the premier provider of currency, security Group performance for the half year ended and authentication of payment and identity 26 September 2009. Revenue was up 3.1 per cent transactions for Central Banks, governments to £252.2m in the first half (2008/2009: £244.7m). and international corporations globally. Group operating profit before exceptional items of £51.0m (2008/2009: £43.5m) represented an Over the last twelve months De La Rue has increase of 17.2 per cent. The Group’s operating delivered key long-term contracts and profitable profit margin before exceptional items increased growth in challenging economic conditions. It 2.4 percentage points to 20.2 per cent (2008/2009: has shaped a strongly integrated strategy based 17.8 per cent) driven by securing an unusually on investing to provide customers with improved favourable job mix, increased productivity and performance and stronger innovation to foreign exchange. Overall, the movement in the continue to drive long-term growth. Productivity value of sterling against the US Dollar and euro improvements remain a priority and delivered a contributed £14m to revenue and £4m to operating £3m benefit during the period. profit. These results reflect the elimination of central costs which have now been fully achieved. Board Changes The Board is pleased to welcome Sir Julian Profit before tax decreased 6.4 per cent Horn-Smith, who joined on 1 September 2009. to £44.2m (2008/2009: £47.2m) due to the Sir Julian’s international experience in both the increased interest charges arising as anticipated public and private sectors will prove invaluable from last year’s return of capital, a lower income to De La Rue. from Associates and higher exceptional charges. Headline earnings per share increased by 48 per Philip Nolan stepped down in July 2009 and the cent to 35.1p benefiting from the reduced number Board would like to thank him for the significant of shares in issue following the capital return last contribution he has made to De La Rue over the year. There were exceptional charges of £3.8m last eight years. in the period (2008/2009: £2.6m), reflecting the resolution of a legacy overseas indirect tax Operating Reviews issue and the start of the reorganisation of Cash Group Profit (continuing operations Processing Solutions (CPS) following the Cash before exceptional items) Systems disposal. As announced previously, Half Year Half Year Increase/ these exceptional charges are expected to total 2009/2010 2008/2009 (Decrease) £m £m HY to HY approximately £7.5m in the full year. Currency 44.7 36.6 22.1% CPS (1.6) 0.1 Cash generated from operations in the first half was £32.2m (2008/2009: £13.0m after one-off additional Security Products 7.0 5.5 27.3% pension contribution of £15m). Higher working Identity Systems 0.9 1.3 (30.8%) capital in the period reflected the increased trading Continuing activity, particularly in Currency, and was partly operations 51.0 43.5 17.2% offset by a rise in advance payments from the year end levels. We remain confident in the Group’s cash Associates 2.6 4.9 generation for the year as a whole. Interest on net bank balances (2.5) 2.3 The Group ended the half year with net debt of Interest on £53.4m, compared with £33.1m at the start of retirement benefit the financial year. obligation (3.1) (0.9) Group continuing Progress on Strategy profit before tax 48.0 49.8 (3.6%) De La Rue continues to build on its position as a world leader in the banknote market to become