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Interim Results for 6 months ending 30 June 2006

Interim Results for 6 months ending 30 June 2006. Dr Julian Blogh, Chairman Douglas Caster, Chief Executive David Jeffcoat , Finance Director. 2004. 2004. 2004. 2005. 2005. 2005. 2006. 2006. 2006. Ultra Electronics Interim Results 2006. Interim 2006 Overview. Sales £m.

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Interim Results for 6 months ending 30 June 2006

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  1. Interim Results for 6 months ending 30 June 2006 Dr Julian Blogh, Chairman Douglas Caster, Chief Executive David Jeffcoat, Finance Director Ultra Electronics

  2. 2004 2004 2004 2005 2005 2005 2006 2006 2006 Ultra Electronics Interim Results 2006 Interim 2006 Overview Sales £m 310.7 342.4 • Another strong first half: • revenue up 14% • PBT* up 15% • EPS* up 14% • DPS up 13% • Margins maintained, despite currency impact • Continuing investment to underpin medium-term growth • £56m Eurofighter Litening pod contract • Good cash generation • Order book boosted to over £550m, giving good visibility 143.4 158.2 180.7 PBT* £m 40.1 47.4 17.9 20.7 23.8 EPS* pence 43.7 50.7 * before amortisation of intangibles arising on acquisition and profit on fair value movements on derivatives 19.7 22.4 25.5 Ultra Electronics

  3. Ultra Electronics Interim Results 2006 Profit & Loss * before amortisation of intangibles arising on acquisition** before amortisation of intangibles arising on acquisition and profit on fair value movements on derivatives Ultra Electronics

  4. Ultra Electronics Interim Results 2006 Sales Analysis 2006 H1 sales by sector 2006 H1 sales by region Sonar24% (2005:24%) Civilequipment14% (2005:15%) UK39%(2005:41%) RoW8%(2005:11%) Civilaircraftequipment10% (2005:9%) MainlandEurope9%(2005:11%) Defenceequipment10% (2005:14%) Battlespace IT31% (2005:28%) North America44%(200:37%) Military aircraftequipment11% (2005:10%) Ultra Electronics

  5. Operating Profit Progression Ultra Electronics Interim Results 2006 2006 H1 OP* £25.3m Acquisitions +£1.0m Improved margins +£2.0m 2005 H1 OP* £22.3m Currency -£1.7m Sales Growth +£1.7m Ultra Electronics * before amortisation of intangibles arising on acquisition

  6. Ultra Electronics Interim Results 2006 Currency Effects US$27m @1.18 US$32m @1.77 Profit impact Transaction Translation US$ into C$ N/A -11% -£2.0m US$ into £ -2% -£0.4m 4% +£0.4m C$ into £ 13% +£0.3m N/A Total profit impact -£1.7m (-8%) Revenue translation impact +£5.2m (+3%) Ultra Electronics

  7. Ultra Electronics Interim Results 2006 Cash Flow Ultra Electronics * before amortisation of intangibles arising on acquisition

  8. Ultra Electronics Interim Results 2006 Operational Review Ultra Electronics

  9. Aircraft & Vehicle SystemsOVERVIEW Financial results Revenue £45.6m +15% Profit £6.9m -10% Order book £150.6m +101% New customer-funded development programmes – early stages Operating margin impacted by currency Investment in Boeing 787 continues Market trends Civil aircraft build rates increasing Civil aerospace aftermarket buoyant Continuing focus on mobility, smart munitions and capability upgrades Ultra Electronics Interim Results 2006 25% of Group sales 27% of Group OP Business highlights • Further contracts on A400M military transport aircraft • Selected for de-icing system on Joint Strike Fighter engine • Development milestones for Boeing 787 met • Polyflex acquired and now integrated into Precision Air Systems

  10. Airbus A400M Military Transport Aircraft Ultra Electronics Interim Results 2006 Cargo bay load management control modules Active noise and vibrationcontrol in cargo area Landing gear harnesses Active noise and vibration controlin load master’s work station Landing gear controls and sensors Total value to Ultra £56m • Excellent return on investment • £4.5m development costs will go on balance sheet • Cash but no profit impact Design, manufacture and support • Contracts for 192 aircraft sets of equipment • Fixed design, along the civil aircraft model • First flight in 2008 • First deliveries in 2009

  11. Aircraft & Vehicle SystemsSELECTED OPPORTUNITIES Ultra Electronics Interim Results 2006 Programme Estimated date EstimatedUltra value Products $20m+ 2006 HiPPAG for Small Diameter Bomb • HiPPAG for weapons ejection Joint Strike Fighter 2006 $100m+ • Engine inlet ice protection • WIPS • Proximity sensor electronics 2007 Boeing 787 production orders $10m+ pa Warrior turret upgrade 2007/10 £10m • Crew controls • Power distribution A380 freighter cargo handling 2008 $30m • Network interface electronics • Power distribution FRES armoured vehicle electronics 2009 £25m+ • Indirect vision system • Power controls • HUMS capability

  12. Information & Power SystemsOVERVIEW Financial results Revenue £60.1m +2% Profit £9.1m +25% Order book £115.6m +2% Revenue growth impacted by contract timing Margin improved through ADSI system sales Strong growth of airport IT systems Market trends Continuing strong demand for battlespace IT Growth in passenger miles driving investment in airport infrastructure Ultra Electronics Interim Results 2006 33% of Group sales 36% of Group OP Business highlights • ADSI position in US national missile defence programme • Continuing high level of activity at Heathrow T5 • Good progress on naval nuclear power control system development

  13. Nuclear Reactor Control Capability • Ultra has domain expertise in key elements of reactor control • High integrity control and instrumentation equipment • Rod control gear – the ‘throttle’ • Simulation and stimulation systems

  14. Information & Power SystemsSELECTED OPPORTUNITIES Ultra Electronics Interim Results 2006 Programme Estimated date EstimatedUltra value Products JSS and CLIP additional funding 2006+ $40m • ADSI systems • ADSI function enhancements Minor warship combat system 2006/7 £10m • Command and control system • Navigation system • Weapons direction control MoD Air Movement Order 2006/7 £20m • Airport IT for MoD ‘internal airline’ FRES development – next phase 2007/8 £15m • Electronic architecture Astute batch 2 2007/8 £20m • Power equipment • Signature management • Reactor control equipment UK aircraft carrier equipment 2008 £15m+ • Signature management • Power equipment

  15. Tactical & Sonar SystemsOVERVIEW Financial results Revenue £75.0m +25% Profit £9.3m +27% Order book £287.4m +31% Contribution from 2005 acquisitions Higher sonobuoy output Royal Navy torpedo defence system in series production Market trends Greater communications capacity needed Investment continuing in new ASW platforms Continuing US Navy interest in torpedo defence capability Ultra Electronics Interim Results 2006 42% of Group sales 37% of Group OP Business highlights • Sonobuoy receiver award for Brazilian P-3 aircraft upgrades • Litening pod award for Typhoon • Successful early system design work for Tornado secure comms • Highly successful trial of torpedo defence system by US Navy

  16. Military Tactical Radio Systems Ultra Electronics Interim Results 2006 International success • Ultra is supplying the two largest army radio procurement programmes • US Army • S. Korean Army • Additional current international customers • British Army (Project Falcon) • Canadian DND • Chilean Army • Jordanian Army System solution • Ultra has solutions for differing layers in communications hierarchy • Continuing strong demand for communications capacity • ‘On the move’ capability demonstrated Typical Equipment Quantities: 10000s 2000s 500s 100s Corps Division Brigade Battalion Company Platoon Trunk radio (backbone links) Access radios Ad-hoc network radios Combat Net Radio (CNR)

  17. Ultra Electronics Interim Results 2006 Tactical & Sonar SystemsSELECTED OPPORTUNITIES Programme Estimated date EstimatedUltra value Products Loitering munition for British Army Loitering munition for British Army 2006/7 2006 £10m+ £10m+ • UAVs with warheads Multi-static active ASW system 2006+ £20m • New sonobuoy type • Aircraft system upgrades • Communications control system • Cryptographic protection Secure comms upgrade for UK Tornado aircraft 2006/7 £10m High capacity tactical radios – export 2006/7 $20m+ • High capacity tactical radio systems Litening pod for UK Tornado aircraft 2007/8 £10m • Surveillance and targeting pod • Technology transfer and support US torpedo defence system 2007/8 $20m+ • Torpedo detection • Countermeasure system

  18. Ultra Electronics Interim Results 2006 Summary & Outlook

  19. Summary & Outlook • Good results for H1 • Buoyant market conditions • large defence budgets, with focus on achieving force superiority • buoyant civil aerospace and airport IT markets • Broad spread of niches and programmes • Proven implementation capability • Strong balance sheet, capable of funding further acquisitions • Record £554m order book gives good visibility • Growth to continue Ultra Electronics

  20. Ultra Electronics

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