Final Results - Year Ended 31 Dec 1999, Part 1

Cookson Group PLC 6 March 2000 Part 1 COOKSON GROUP plc ANNOUNCEMENT OF 1999 PRELIMINARY RESULTS FINANCIAL SUMMARY* Year 2nd Half 1999 1998 1999 1998 Ongoing Operations Sales (£m) 1,615 1,377 +17% 912 690 +32% Operating profit£m) 144 131 +10% 86 62 +39% Return on sales(%) 8.9 9.5 9.5 9.0 Group Pre-tax profit(£m) 149 151 -2% 84 71 +18% Earnings per 15.5 16.0 -3% 8.6 7.6 +13% share(p) Dividends per 9.5 9.4 +1% 5.2 5.1 +2% share(p) Free cash flow(£m) 27 27 47 57 *(before exceptional items and goodwill amortisation) Strategic Initiatives - Group transformed: £900 million of transactions in 1999 - Disposal of Neptco and Plastic Moldings underway - Rationalisation and integration programmes on track - Group clearly focused on three market-leading divisions - Electronics, Ceramics and Precious Metals Financial Highlights - Profit before tax for year in line with expectations - Strong sales and profit growth in the second half of 1999 - Positive free cash flow for fifth successive year Commenting on the outlook, Stephen Howard, Group Chief Executive, said: 'The improvement in trading conditions experienced in the fourth quarter of 1999, particularly by our Electronics and Ceramics divisions, is expected to be sustained in the coming months. We anticipate that the divestments currently underway should be concluded during the first half and thus these businesses will only add marginally to the Group's earnings in 2000. The Premier, Enthone and Plaskon acquisitions, which all took place in the second half of 1999, will contribute an entire year's earnings in 2000, though the full beneficial effects of the restructuring initiatives will only flow through to Group earnings from 2001. The key task for management in the year ahead is to complete the integration of these acquisitions and concentrate on achieving operational excellence throughout the Group.' STRATEGIC OVERVIEW The transformation of Cookson was substantially completed during 1999. The Group is now clearly focused on the three activities in which it has demonstrable market leadership and excellent long-term prospects: Electronics, Ceramics and Precious Metals. Our goal over the past two years has been to create a Group with fewer, stronger, leaner businesses that offer the best potential for profitable growth. Over the past year, we have: - finalised our plans to exit from those activities identified as non-core; - stepped up investment in the businesses which now represent Cookson's future; - begun to reap the benefits from the major restructuring programme launched in late 1998. During the year, we began to execute a strategy to focus the Group's Engineering division solely on its Precious Metals activities. As a consequence, Cookson Fibers and our interests in Zimco and Entek were disposed; the divestment of Focas was initiated; and the process of disposing Neptco and Cookson Plastic Moldings is underway. When these businesses have been disposed, the reconstitution of the Engineering division will be complete. The division now consists exclusively of the Group's Precious Metals activities - fine businesses with market leadership positions and a long tradition of consistent, profitable growth. The sale of TAM and Polyflex in the Electronics division during the year also underscores our determination to optimise our leadership positions within our core activities. The year has also seen Cookson make its two most significant acquisitions to date; significant both in size and strategic importance. The purchase of Premier Refractories ('Premier') for £254 million and its integration into our Ceramics division creates a world class, global refractories group with a pre-eminent product range and unparalleled service capability. The more recent acquisition of the Enthone-OMI group of companies ('Enthone') for £315 million has created for our Electronics division a global player with the broadest product range in the printed circuit board ('PCB') fabrication industry. It also advances our strategy of supplying integrated solutions which encompass the full range of products and services that our PCB fabrication and assembly customers require. The addition of these two businesses to Cookson has contributed materially to our strategy of providing customers with a breadth of offering and depth of service that will give us a tangible competitive edge in our markets. Importantly, the performance of these acquisitions will, when integrated, meet our fundamental goal of earning a return on investment that exceeds our cost of capital. They are expected, therefore, to be value creating for shareholders. The wide-ranging restructuring initiative which commenced in late 1998 and which encompassed the rationalisation of activities at over 30 manufacturing sites; the discontinuation of certain product lines; and the streamlining of managerial and divisional functions, has proceeded on track. The benefits began to accrue in 1999 and cost savings of £15 million in 2000 are targeted. Cookson has placed considerable emphasis in all its businesses on the development of, and investment in, e-business strategies and solutions. Delivery of total customer service and supply chain velocity are already key competitive advantages for Cookson. E-business creates opportunities to extend these advantages and to strengthen relationships further with our customers and suppliers. A number of key e-business initiatives have already been implemented across all three divisions and we have recently set up a Group e-business function, with a direct reporting line to the Group Chief Executive, to co-ordinate and maximise the Group's e-business capabilities. Over the course of 1999 we have experienced an increased momentum in our core markets. Specifically, the Electronics division began to see improvements take hold in the second quarter and this gathered strength throughout the second half. For our Ceramics division, the recovery of the steel industry only began to manifest itself in the fourth quarter of the year but has been sustained since then. For the Precious Metals division, the markets remain sound. We believe that our leading industry positions will allow us to benefit from the improved trends in 2000. TRADING RESULTS - ONGOING OPERATIONS The review of the Trading Results for 1999 concentrates on the Group's ongoing operations and on the profits and returns generated by these businesses before goodwill amortisation and exceptional items. The operating results of Discontinued Operations - Cookson Fibers, Zimco, TAM Ceramics, Polyflex and Entek which were all sold in 1999, and the To be Disposed Operations - Neptco, Cookson Plastic Moldings and Focas, which are all in the process of disposal, are dealt with separately in this review. All financial results in this section are stated at 1999 exchange rates. Group Year 2nd Half 1999 1998 1999 1998 Sales (£m) 1,615 1,390 912 694 Operating Profit(£m)144 133 86 63 Return on Sales(%) 8.9 9.5 9.5 9.1 Return on 11 12 Investment (%) Sales in 1999 increased by 16% over 1998 and, after excluding the contribution of acquisitions, sales grew by 3%. In the second half, the rate of growth accelerated significantly, rising to 32% due to the contributions of the Premier and Plaskon acquisitions and from an improvement in market conditions for the Electronics and Ceramics divisions. Excluding acquisitions, sales in the first half were down 1% over the previous year, but in the second half rose by a healthy 8%. Operating profit increased by 9% in 1999 to £144.1 million. A sharp improvement in operating profit was achieved in the second half with an increase of 37% being recorded. Excluding acquisitions, operating profit declined by 2% for the year whereas in the second half a rise of 15% was achieved when compared with the corresponding period for 1998. Operating profit now takes into account precious metal consignment fees, which amounted to £5.2 million in both 1998 and 1999, and which had previously been classified as interest. Return on sales for 1999 declined to 8.9% in comparison with last year but, encouragingly, in the second half return on sales improved to 9.5%, above the same period last year. Pre-tax return on investment ('ROI') of 11% for 1999 is within range of the Group's current estimated pre-tax cost of capital of approximately 13% (9% after tax). An improvement in ROI was registered by the Electronics division; the excellent return achieved by the Precious Metals division remains at a level well in excess of the Group's cost of capital; whereas the ROI of the Ceramics division decreased from the high levels achieved in prior years. As more than 90% of the Group's trading profit arises from operating locations outside the UK, reported earnings are influenced by changes in the average sterling exchange rate. During 1999, the US dollar and Asia-Pacific currencies appreciated moderately against sterling whereas Continental European currencies depreciated. This had a net positive currency translation effect of £2.2 million on the Group's operating profit when compared with 1998. Divisional Activities Electronics Year 2nd Half 1999 1998 1999 1998 Sales (£m) 790 693 425 340 Operating Profit(£m) 65 52 38 23 Return on Sales(%) 8.2 7.5 8.8 6.7 Return on 10 9 Investment (%) The improvement in market conditions which began to emerge during the second quarter of 1999 gathered pace during the second half of the year. This, together with the contribution from acquisitions, culminated in an increase in sales of 14% for the full year and 25% in the second half. Excluding acquisitions, sales growth was 8% for the year and 14% in the second half. Operating profit was up by 24% for the full year and 64% in the second half. Profit growth excluding the contribution of acquisitions was 14% for the year, which was reflected in the strong improvement in return on sales and return on investment. The results for the Alpha-Fry Technology sector were excellent. Sales volumes in paste, spheres and coating products grew strongly and improved margins were achieved, although the performance of the Industrial related activities was less than satisfactory. Market acceptance of recent product introductions, including ball grid array ('BGA') solder spheres and the UP78 solder paste, remain positive and higher sales were achieved in stencils. The integration of IRI, a manufacturer of stencils used in the PCB and semiconductor packaging industries has been finalised, giving this business a global presence. The Plaskon Electronics Materials business, which was acquired in September, has been integrated smoothly. Plaskon manufactures polymer based compounds, which are used primarily to encapsulate electronic devices such as semiconductor components, with most of its sales into the Asia-Pacific region. The combination of Alpha-Fry's market leading position in the manufacture of BGA spheres, together with that of Plaskon in the supply of encapsulation compounds for BGAs, reinforces the division's pre-eminent role in the fastest growing sector of the integrated circuit packaging market. In the Speedline Technologies sector, demand was strong throughout the year with sales and profits well up on 1998. Importantly, the order book at the end of 1999 was 28% higher than at the end of the previous year. Sales in North America were buoyant, grew strongly in the Asia-Pacific region and improved in the second half in Europe. A number of new product offerings were launched, including the UP 1500 screen printer which addresses the mid- range market. Increased sales volumes and better manufacturing yields resulted in an improved performance by the Polyclad Technologies sector. Prices, however, remained under pressure for most of the year due to customer consolidation and industry overcapacity which held back sales growth. Some easing of this pressure emerged towards the end of the year, bringing more stability. In Asia, market conditions for laminates remained excellent, with all large customers reporting significant order books. Demand for high technology multi-layer printed circuit board substrates has remained strong, supported by buoyant conditions in the mobile phone and PC markets. During the year, two significant acquisitions within the Sector were announced, which will enable Polyclad Technologies to provide its PCB fabrication customers with the most comprehensive range of products and process capabilities in the market. The first was the acquisition of the PCB materials business of the Dexter Corporation which manufactures process chemicals, imaging products and solder primarily for fabricators of printed circuit boards. This was followed by the acquisition of Enthone which was announced in December. Enthone manufactures speciality chemicals for the electronics, surface metal finishing and jewellery industries in North America, Europe and Asia and employs 1,300 people. The majority of Enthone's products, which include metalising, plating and surface finishing chemicals, solder masks, and photo-imageable materials are used in the fabrication of PCBs. Enthone also manufactures and supplies semiconductor fabrication chemicals to the high growth semiconductor packaging industry, complementing Cookson Electronics' existing BGA spheres activities and the Plaskon encapsulants business. The integration of Enthone should be substantially completed by the end of 2000 with approximately £12 million in annual savings being derived from 2001 onwards, at a cost in 2000 of approximately £12 million. The Cookson Performance Solutions sector is a new venture which was launched during the year to enhance the division's integrated solutions strategy. This new service group will provide customised consulting services and training programmes to capitalise on the unique process capabilities which Cookson Electronics has developed in support of its market-leading product range. The focus is currently on internet delivered e-training and process consultancy services for customers of the Alpha-Fry Technologies and Speedline Technologies sectors. Ceramics Year 2nd Half 1999 1998 1999 1998 Sales (£m) 542 418 338 207 Operating Profit(£m)50 53 31 23 Return on Sales(%) 9.1 12.6 9.2 10.9 Return on 10 15 Investment (%) Two thirds of the division's businesses serve the steel industry worldwide. The considerable weakness exhibited by the global steel market during the second half of 1998 continued throughout the first half of 1999, during which period worldwide steel production decreased by 5%. Market conditions in the second half of the year improved considerably and global steel production was up 1% for the year, though the level of activity was still well below that of the first half of 1998. Most of the recovery was in the fourth quarter with strong growth from the Asia-Pacific region. Of particular note was the recommissioning of thin slab projects in the Asia-Pacific region which had been put on hold in 1998. The division's largest markets - USA and Europe - also began to recover in the fourth quarter, albeit more gradually. In light of the generally depressed market conditions experienced for most of the year, sales and operating profit, excluding acquisitions, were down 3% and 22% respectively on the prior year. Including acquisitions, primarily Premier, sales were up 30%, though operating profits were down 6%. The second half was more encouraging with improved results being achieved. Return on sales and on investment for the year were adversely affected primarily as a consequence of the decline in profit. In August, the acquisition of Premier was completed. Premier is a manufacturer and supplier of refractory products, services and systems for the steel, glass, foundry, aluminium and cement industries. The majority of Premier's products and services are complementary, enabling the division to provide customers in the steel, glass, aluminium and foundry industries with a more comprehensive range of products and services. Since the acquisition, considerable progress has been made on the integration of Premier into the Ceramics division. The costs associated with the integration have been revised upward but with a commensurate increase in cost savings. These savings are now expected to amount to £13 million in 2000, rising to £30 million per annum from 2001 onwards. In the Glass Sector, shipments of fused-cast products for lining glass furnaces remained low, as expected, throughout the year. The acquisition of the glass refractory activities of the German-based group VGT-Dyko took place in April and its integration into the sector has progressed smoothly, strengthening the division's position in Europe. In the Foundry and Industrial Products sector, tighter market conditions progressively impacted throughout the period, particularly in the investment casting business. Some positive signs have, however, begun to emerge in the primary aluminium markets and generally in Asia. Precious Metals Year 2nd Half 1999 1998 1999 1998 Sales (£m) 283 279 149 147 Operating Profit(£m)30 28 18 18 Return on Sales(%) 10.6 10.0 11.9 11.9 Return on 20 20 Investment (%) The division comprises two sectors: Jewellery and Precision Products. The Jewellery sector, which contributes approximately three-quarters of the division's sales and operating profit, is one of the world's leading suppliers of fabricated precious metals to the gold jewellery and silversmith industries. With operations in the USA and in Europe, its Mill businesses supply gold and silver wire, sheet, tubing and casting grains and is also a major supplier of blanks for coins and medals to customers in the USA, including the US Mint. The sector also produces 'findings', which are high quality gold, gold-filled and silver jewellery components. The Precision Products sector manufactures and supplies electrical contacts, contact assemblies and complex and intricate stampings, as well as a range of dental products. Sales for the full year were up 1%, although if the precious metal content is excluded, sales were up 5%. This reflects an underlying increase in volumes and a particularly good performance from the Precision Products sector. Operating profit was up 8% over 1998. Return on sales rose and the return on investment remained at levels well above the Group's cost of capital. The results of the division now take account of precious metal consignment fees previously charged to Group interest. In the Jewellery sector, the US mill business encountered patchy trading conditions at the start of the year, but performance improved in the second half. In the UK, increased imports continued to put pressure on margins. Sound trading conditions were experienced in the findings businesses, where improved results arose from new product initiatives and increased market penetration. In the Precision Products sector, performance was sound. Matrix, the integrated moulding component business which was acquired in 1998, performed above expectations. GROUP PROFIT BEFORE TAX Operating profit before goodwill amortisation and exceptional items for all of the Group's activities was £172.5 million, 1% higher than the £170.0 million achieved in 1998. The £2.5 million increase arose as follows: £ millions Actual Inc/(Dec) 1999 vs 1998 Ongoing operations (analysed above) 144.1 11.6 : Electronics 64.6 12.5 : Ceramics 49.5 (3.0) : Precious Metals 30.0 2.1 To be disposed (analysed below) 20.4 1.7 : Neptco, Moldings, Focas Discontinued operations (all sold in 8.0 (13.0) 1999) : Cookson Fibers, Zimco, TAM, Entek, Polyflex Exchange rate variance - 2.2 GROUP 172.5 2.5 Net interest paid of £24.0 million in 1999 was £5.3 million higher than the previous year. The increase was due primarily to a rise in borrowings that took place in the second half to fund the acquisitions of Premier, Plaskon, Dexter and the initial payment for Enthone. This resulted in net interest of £15.0 million in the second half, an increase of £4.8 million over the same period in 1998. Profit before taxation, exceptional items and goodwill amortisation of £148.5 million for 1999 was 2% lower than the £151.3 million achieved in 1998. In the second half, however, due to the marked improvement in performance from ongoing operations, profit before tax rose by 18% to £84.0 million. Goodwill arising on acquisitions since 1 January 1998 is capitalised and amortised over 20 years. The charge for 1999 was £12.9 million (1998: £2.8 million). Profit before tax but after all exceptional items and goodwill amortisation amounted to £71.6 million in 1999, well up on the £9.4 million achieved in 1998. EXCEPTIONAL ITEMS Operating Exceptionals The restructuring initiative that commenced in the fourth quarter of 1998 was substantially completed in 1999. The cost savings that were derived from this initiative amounted to £8 million in 1999 and are expected to rise to £15 million per annum from 2000 onwards. The total cash related cost of implementation was £30 million, £21 million of which was expensed in 1999, with the balance being outlaid in 1998. Following the acquisition of Premier in August 1999, an extensive programme was embarked upon to integrate it into the Ceramics division. As a consequence, exceptional costs of £23 million were incurred in 1999 of which £10 million were in respect of a write down of assets affected by the programme. In addition, a further £23 million of costs are expected to arise in 2000 to complete the programme. The cost savings that are targeted to arise from this initiative are approximately £13 million in 2000 and £30 million per annum from 2001 onwards. Non-operating exceptional items Exceptional charges of £18.4 million arose in 1999 (1998: £89.6 million). These relate primarily to losses arising from the disposals of TAM and Entek and additional costs relating to businesses disposed of in prior years. The 1998 charge related to the losses arising from the disposals of Cookson Fibers and Zimco. TAXATION The taxation charge on Group profit before tax, goodwill amortisation and exceptional items for 1999 was £38.5 million, representing an effective rate of 26.0% (1998: 26.0%). The tax credit on exceptional items amounted to £5.2 million (1998: £11.9 million). SHAREHOLDER RETURNS Earnings Profit after tax and minority interests, but before goodwill amortisation and exceptional items, was £108.4 million in comparison with £109.9 million for 1998. This represents basic earnings per share of 15.5p for 1999, 3% lower than the 16.0p achieved in 1998. However, in the second half, earnings per share rose by 13% to 8.6p. After taking account of goodwill amortisation and all exceptional items, earnings per share were 5.2p (1998: 2.9p deficit). The weighted average number of shares in issue in 1999 was 700 million, up 2% on last year. Dividends The Board has proposed a final dividend of 5.2p per share, which is a 2% increase over the 5.1p final dividend for 1998. This would result in total dividends per share for 1999 of 9.5p, 1% up on the 9.4p of the previous year. Dividends for 1999 are covered 1.6 times by earnings per share before goodwill amortisation and exceptional items and are fully covered by Free Cash Flow. The final dividend will be paid on 1 June 2000 to shareholders on the Register at 17 March 2000. FREE CASH FLOW £ millions Year 1999 1998 Operating Activities before 192 223 Rationalisation Costs less : Capital Expenditure (net) 67 71 : Tax Paid 15 46 : Interest and Dividends 83 79 Free Cash Flow before 27 27 Rationalisation Costs less : Rationalisation Costs 21 7 Free Cash Flow 6 20 The £31 million decrease in cash flow from operating activities before rationalisation costs primarily arose from an increased investment in working capital. This was mainly due to the strong levels of trading activity that were experienced at the end of 1999, especially when compared with the depressed levels at the end of 1998. Working capital balances were, on average, lower than 1998 and, expressed as a percentage of sales, improved from 24.1% to 23.7%. Capital expenditure in 1999 of £81 million was 5% down on the previous year as was the rate of spend for the year at 1.5 times depreciation. Fixed asset disposals, primarily land and buildings, generated £14 million (1998: £15 million) of cash. The decrease in tax paid of £31 million arose principally from a recovery of Advance Corporation Tax following the decision to pay dividends in 1998 and 1997 in the form of Foreign Income Dividends, and from a refund of prior year tax payments in the USA. Free cash flow of £27 million before exceptional costs was unchanged from 1998 and after exceptional items amounted to £6 million. In each of the past five years the Group has generated positive free cash flow, and the cumulative free cash flow for that five-year period amounts to £112 million. ACQUISITIONS AND DISPOSALS Acquisitions. Cash outlaid in 1999 for the £736 million of acquisitions that were concluded in the year amounted to £394 million. The major acquisitions were as follows: Effective Consideration Date (£m) Total Cash paid 1999 Electronics Enthone December 315 31 Plaskon September 75 75 Dexter December 21 21 IRI April 11 11 Others 12 12 Ceramics Premier August 254 196 Others 22 22 Precious Metals 10 10 Other 16 16 GROUP 736 394 The consideration of £284 million that was due to the vendors of Enthone at the end of 1999 was paid on 11 January 2000. As part of the consideration paid to the vendors of Premier, the Group issued 32.3 million shares at £1.83 per share. Disposals. Cash received for disposals completed in 1999 amounted to £158 million as the Group continued to pursue its strategy of focussing on its core activities. The disposals consisted of the following: Cookson Fibers (£92 million), Zimco (£3 million) and Entek (£14 million) all of which had been part of the former Engineering division; and TAM Ceramics (£49 million), a non-core activity in the Electronics division. Agreement has been reached to dispose of Polyflex, another non-core business in the Electronics division, for £12 million. Completion took place in March 2000. FINANCIAL CONDITION Shareholders' funds amounted to £578 million at 31 December 1999, up £39 million in comparison with 1998. The increase arose primarily from the issue of 33.6 million ordinary shares, 32.3 million of which were used to fund partially the acquisition of Premier. Gross borrowings at 31 December 1999 were £512 million (1998: £316 million) and cash balances £50 million (1998:£97 million). Following the completion of the acquisition of Enthone on 11 January 2000 and payment of the proceeds then due, the Group's net borrowings rose to approximately £750 million. At the end of 1999, the Group had committed facilities of £922 million and uncommitted lines of approximately £70 million. The Group aims to optimise its weighted average cost of capital whilst maintaining a prudent mix of debt and equity. To this end, the current funding strategy incorporates a greater use of borrowings than in recent years. The Group's internal funding policy indicates interest cover of between four and five times as being currently appropriate, with interest cover being expressed as operating profit before goodwill amortisation and exceptional items divided by net interest. For 1999, interest was covered 7.2 times (1998: 9.1 times). On a proforma basis, which assumes that the Premier, Enthone and Plaskon acquisitions had been acquired with effect from the beginning of 1999, interest cover would have been 4.4 times. BUSINESSES TO BE DISPOSED Year 2nd Half 1999 1998 1999 1998 Sales (£m) 223* 179 127* 93 Operating Profit(£m)20 19 10 10 Return on Sales(%) 9.1 10.5 8.1 10.8 *(includes £28 million sales to capitalise ELI investment - see below) Cookson Plastic Moldings achieved sound results for 1999 with sales and operating profits well up on last year. Features of the year were the ramp up in production of plastic pallets for CHEP and a solid performance from its recreational products business. Neptco had an excellent year and sales and profits grew strongly with the performance of the cover-tapes business particularly noteworthy. Focas had a difficult year and registered an operating loss. The US activities suffered from a number of projects being postponed or cancelled, whereas the UK based activities performed well. The construction by Focas of a fibre-optic cable network for Electric Lightwave, Inc. ('ELI') was substantially completed during 1999. A revenue sharing agreement, which derives from a partnership with ELI for this network, is expected to begin to generate income from 2000 when the network becomes operational. This investment has been capitalised at £28 million. YEAR 2000 The Group's Year 2000 programme was successfully implemented across the Group. No material problems were encountered within the Group's operations or have been notified by its customers and suppliers. The total cost incurred in order to minimise the impact of the Year 2000 date change was £15 million, of which £12 million was capitalised as it related to computer systems which have ongoing benefit to the Group and will help facilitate the development of the Group's e-business strategies. OUTLOOK The improvement in trading conditions experienced in the fourth quarter of 1999, particularly by our Electronics and Ceramics divisions, is expected to be sustained in the coming months. We anticipate that the divestments currently underway should be completed during the first half and thus these businesses will only add marginally to the Group's earnings in 2000. The Premier, Enthone and Plaskon acquisitions, which all took place in the second half of 1999, will contribute an entire year's earnings in 2000, though the full beneficial effects of the restructuring initiatives will only flow through to Group earnings from 2001. The key task for management in the year ahead is to complete the integration of these acquisitions and concentrate on achieving operational excellence throughout the Group. It is clear that our leading industry positions enabled the Group to weather the difficult conditions in the first half of 1999. We believe that this will also stand Cookson in good stead to benefit from the improved market trends. For further information please contact: Stephen Howard Dennis Millard Group Chief Executive Group Finance Director Cookson Group plc Cookson Group plc London WC2N 6HJ London WC2N 6HJ Tel: +44 (0)20 7766 4500 Tel: +44 (0)20 7766 4500 Fax: +44 (0)20 7747 6600 Fax: +44 (0)20 7747 6600 E-mail: stephen_howard@cookson.co.uk E-mail: dennis_millard@cookson.co.uk Copies of the 1999 Annual Report will be mailed to the shareholders of the Company by no later than 31 March and will be available at the Registered Office of the Company, Cookson Group plc, at The Adelphi, 1-11 John Adam Street, London WC2N 6HJ. 6 March 2000 MORE TO FOLLOW

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