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swallowfield plc

swallowfield plc. INVESTOR BRIEFING FY2007 [Year to 30 June 2007] September 2007. Creating and Delivering Solutions for our Customers’ Success. swallowfield plc. Key Highlights. Resumption of dividends proposed 1.3p per share payable on 30 Nov (approval at AGM)

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swallowfield plc

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  1. swallowfield plc INVESTOR BRIEFING FY2007 [Year to 30 June 2007] September 2007 Creating and Delivering Solutions for our Customers’ Success

  2. swallowfield plc Key Highlights • Resumption of dividends proposed • 1.3p per share payable on 30 Nov (approval at AGM) • Net debt down 32% to £4.88m • Cumulative decline since 30 June 2005 is £3.5m • EPS 3.9p v’s loss of (2.4p) last year • Trading in H2 better than expected Creating and Delivering Solutions for our Customers’ Success

  3. swallowfield plc Background to Results • No real change in market place • Growth in some sectors offset by declines in others • Signs of easing pricing pressure at start of year have dissipated • Raw material costs increasing (but expect at or near peak) • Energy costs now declining • Greater focus on and understanding of core strengths • Continuous Improvement adds value • Winning some higher value opportunities Creating and Delivering Solutions for our Customers’ Success

  4. swallowfield plc Financial Highlights- Results Better than Expected • Net Debt £4.9m down £2.3m • Operating Profit* +122% to £1.3m • EBITDA* +25% to £2.6m • Revenue £45m with higher margins • Pretax Profit £0.69m • Earnings Per Share 3.9p • Final Dividend of 1.3p *Pre Exceptional Costs of £244k Creating and Delivering Solutions for our Customers’ Success

  5. swallowfield plc Operational Highlights • Improved operational efficiencies • Cost control better than expected • Czech Republic on track: • From idea to production in <12m • Signed heads of terms for Chinese JV • Sale & Leaseback progressing – but slower than expected • Focus on non-stockholding accounts • Inventories down £1.3m • Continuous Improvement in Quality, Cost, Service and Innovation showing signs of success Creating and Delivering Solutions for our Customers’ Success

  6. swallowfield plc Five Year Summary Creating and Delivering Solutions for our Customers’ Success

  7. swallowfield plc Cosmetics • Full year operating profit £0.3m before corporate costs • Overheads down by 16% in last 12 months • £2.9m of cash generated over last two years • 3 new launches in last 12 months • See later slide for Czech strategy Creating and Delivering Solutions for our Customers’ Success

  8. swallowfield plc Toiletries • Noticeable improvement on last year • Lower revenue but improved margins • Restructuring enhancing profitability • Continuous improvement making a positive impact • Higher quality business coming through Creating and Delivering Solutions for our Customers’ Success

  9. The Operational Strategy - A reminder swallowfield plc We will champion “Customer Intimacy” Look to lifetime value of customers to Swallowfield Make sure each customer gets exactly what they really want Build customer loyalty for the long-term People Safety Profitable Sales Growth Creating and Delivering Solutions for our Customers’ Success

  10. swallowfield plc Summary of Progress Since June 2006 • Continued profitable trading in a difficult market • Profits and working capital management leads to further debt reduction • New customers won and new products launched • Completed strategic review of cosmetics division • Czech Republic and China – later slides • Sale & Leaseback Planned • Large scale NVQ training Creating and Delivering Solutions for our Customers’ Success

  11. swallowfield plc Looking Forward- Czech Republic Progress • Pre-contract lease signed • Building on track for mid November hand-over • Local operations Director hired • Other hires in progress • Production will start by January Summary • Filling & finishing • Cosmetics (excl pencils) • Liquids & Fragrances • Gift Packing • Located in Tabor • Approx 100kms due south of Prague • 3300 sqm • Building layout, ventilation and GMP specification dictated by us • Complementary to UK and Far East operations Creating and Delivering Solutions for our Customers’ Success

  12. swallowfield plc Looking Forward- China JV • Office set up in 2004 continues to progress • Heads of terms signed • Expect to sign contracts by end November • Swallowfield will own 10% at cost of c.£0.04m • Seat on Board • Our GMP standards and formulations in the future • Royalties on sales containing our IP • Exclusivity in Europe • Located in Boashan – Shanghai airport 2hrs • Factory opens on 25 September • Manufacturing, filling & packing Creating and Delivering Solutions for our Customers’ Success

  13. swallowfield plc Looking Forward • H1 weaker than same period last year • New products/ranges will launch in Q2/Q3 CY2008 • Prior year better than expected • Continued withdrawal from non-core products • Reducing dependency on stock holding accounts • But expect improvement for the full year • Continuous improvement in Q,C,D,I,P,S showing signs of success • Sale & leaseback and sale of property at Bideford to reduce net debt • Increase in capital expenditure on efficiency, Czech Republic, and Health and Safety Creating and Delivering Solutions for our Customers’ Success

  14. swallowfield plc Summary • Exceeded market expectations in a challenging market • Further significant debt reduction – lowest level for 5 years • Dividend resumed • Strategic review of cosmetics division with low-cost alternatives • Planned disposal of surplus assets Creating and Delivering Solutions for our Customers’ Success

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