Interim Results

1
Interim Results
Six months ended 30 June 2007
Tuesday 31 July 2007
2
Interim Results
millions Continuing and discontinued operations
2006
2007
Sales 197.7 210.9 Adjusted sales 197.7 188.3 5
Operating profit 22.8 18.1 26 Profit before
tax 19.6 14.4 36 EPS - diluted 4.2p 3.2p 31
Net Debt 85.7 109.7 -22
Excludes currency and exited plant capacity
3
Interim Results
Operating Profit millions
2007
2006
Change
Specialty Products 15.3 11.8 30 Chromium 7.5 6.0
25 Surfactants 0.5 0.4 25 Pigments 2.7 3.0 -1
0 Central Costs (3.2) (3.1) 3 22.8 18.1 26

• Most of improvement driven by Specialty Products

Before exceptional items
4
Interim ResultsChromium
2007
2006
millions
Sales 57.2 61.9 Operating
Profit 7.5 6.0

• Favourable market dynamics
• One time energy credit of 1.4 million

5
Interim ResultsPigments
2007
2006
millions
Sales 44.7 50.7 Operating Profit 2.7 3.0

• Lower sales due to
• Weaker US housing market
• Currency (50 of sales decline)
• Maintained profitability despite weaker markets
• Sale of business expected to close by year end

6
Interim ResultsSurfactants
2007
2006
millions
Sales 24.5 24.7 Operating Profit 0.5 0.4

• Shares facility with certain Specialty Products
• Optimizing product mix
• Second quarter better than the first

7
Interim ResultsSpecialty Products
2007
2006
millions
Sales 74.2 76.8 Operating Profit 15.3 11.8

• Volumes increased by 4.5
• Operating margin improved from 15 to 21
• Oilfield, European and Asia Pacific coatings and
  construction strong
• Continuing focus on procurement, supply chain and
  operational efficiencies

8
Specialty ProductsGrowth Opportunities

• Emerging markets
• Current demand in Asia Pacific greater than
  regional capacity
• Capable and well supported Asia Pacific team in
  place
• Procurement and investment opportunities
• Margin enhancement
• Leverage the value of our products to the market
• Incentive plans centred around margin improvement
• Culture of aggressive pursuit of cost
  efficiencies
• Product Development
• Colorant stabilisers and multifunctional
  additives
• Oilfield deep water drilling applications
• Nanoclays for plastics

9
Exchange Rates
H1 2006
H1 2007
Average rate (/) 1.97 1.79 Currency
translation gain/(loss) (1.8)m (0.2)m Hedged
rate 1.77 1.74 Hedging benefit 2.1m 0.6m Net
effect of currency movements on operating
profit 0.3m 0.4m

• Hedged rate for H2 2007 1.88

10
Interim Results
Cash Flow millions
2006
2007
Profit before tax 19.6 14.4 Net finance costs
3.2 3.7 Depreciation 7.1 7.3 Ebitda 29.9 25.4 Wor
king capital (2.7) (16.5) Capital
expenditure (3.2) (5.0) Pensions (1.5) (1.6) Other
(4.2) (3.1) Operating cash flow 18.3 (0.8) Restru
cturing (1.0) (8.1) Free cash flow 17.3 (8.9)
11
Interim ResultsNet Debt
2006
2007
millions
Opening net debt (100.6) (99.4) Free cash flow
17.3 (8.9) Dividend (5.3) (4.8) Other 1.0 (1.0) C
urrency 1.9 4.4 Closing net debt (85.7) (109.7)
12
Interim ResultsTax charge
2006
2007
millions
1.0 0.2 5.0 1.3
Tax charge
Rate

• Low rate due to US goodwill amortisation (23m
  pa) and past losses
• Current level of earnings and Pigments disposal
  expected to utilise losses
• Rate will increase going forward

13
Interim ResultsDividend
2006
2007
Per share 1.3p 1.2p

• Increased by 8
• Financed from free cash flow
• Plan to progress as earnings improve

14
Interim Results

• Summary
• Operating performance improved, led by Specialty
  Products
• Dividend increased
• Debt reduced
• Market conditions in H2 expected to be similar to
  H1
• H2 Objectives
• Continued focus on growth in Specialty Products
• Stable progress in Chromium
• Closing of Pigments disposal by year end