Low & Bonar PLC

Paul FormanGroup Chief Executive

Technical Textiles

Steve GoodDivision Managing Director

Today’s Agenda

• Overview of Technical Textiles

• Leading by innovating in industrial technical textiles

• Summary

A good ‘hand of cards’ to deliver exceptional earnings growth

• £50bn global market with volume growing at c. 2x GDP

• Positive underlying growth drivers

• Strong market positions

• Outstanding innovation capabilities and extended market/technology combinations

• Continuing opportunities to improve operational efficiencies in all businesses

Key growth drivers in our marketsThe underlying fundamentals are positive

• Growth in carpet tiles at the expense of broadloom in Europe and the US

• New build and refurbishment of commercial, industrial and institutional buildings globally

• Infrastructure investment in Europe and US

• European freight haulage volumes, especially Germany and Eastern Europe

• Demand for artificial sports pitches and landscapes – practice and legislation

• Agri-flation and energy cost reduction in horticulture

Technical Textiles Division – Strategic PositioningLeading market positions in all main segments …

Civil engineering

Carpet manufacture

Agriculture

Artificial grass yarns

• Leading European and Chinese supplier of woven/ non-woven fabrics and composites

• Leading European and NA non-woven supplier

• Leading Chinese woven supplier• Leading global position in industrial

greenhouse screens and premium ground covers

• Leading global supplier of grass and carpet yarns

• Leading European positions in concrete additive fibres, polymeric mats for buildings and industrial wovens

Building & Construction

Transport, architecture and print

• Leading European position for high performance technical coated fabrics

Revenue by sector

Europe 69%UK 5%

USA 15%

Technical Textiles Product and Geographical Breakdown

Revenue by geography

Divisional operating margins of 8.5%; targeting 10% +

Civil engineering

22%

Carpet manufacturing

20%

Building and construction

18%

rass 8%

Print 5% Agriculture 5%

Other 8%

Other 11%

Transport 14%

Artificial g

A consolidation strategy in industrial technical textile markets underpinned by excellence in M&A and innovation

Driveproduct/process

development

Gain market share

Improve margins

Growth

• Building our position• in current markets• entering new markets with similar

profiles• expanding technology platform to

broaden the customer offering• geographic focus Europe and

increasingly ME & Asia

• Outstanding innovation delivering real value to our customers

• clearly understanding their business

• and their needs making them more successful

Create scale

Fund innovation

Technical TextilesFinancial history

Technical Textiles Division

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Technical Textiles organisation

Low & Bonar

Technical Textiles

Europe, ME, and North America

STEVEGOOD

Asia/New Business

NORBERTVERFAILLIE

Technical Fabrics

ORWIGSPELTDOORN

Technical Yarns

MARCULEMAN

Colbond

JANVAN BOLDRIK

Yihua Bonar

ZHANGYUNJI

Technical Coatings

STEFAN GEYLER

Technical Fabrics

ORWIG SPELTDOORN

Technical Yarns

MARC ULEMAN

Colbond

JAN VAN BOLDRIK

Technical Coatings

STEFANGEYLER

Today’s Agenda

• Overview of Technical Textiles

• Leading by innovating in industrial technical textiles

• Summary

Jan van Boldrik

CEO Colbond

Innovation in Colbond

You may not always see our products, but they invariably add key performance characteristics to our customers products

Colback®

You may not always see our products, but they invariably add key processing benefits to our customers operations

Enka®-Fusion

You may not always see our products, but they invariably add key performance characteristics to our customers products

Enkagrid®

Our Development and Application Centre: Where ideas turn into innovations

Colbond’s Development and Application Centre is based in Arnhem (NL).

We maintain in-house laboratories in Arnhem (NL) and Asheville (NC, USA) for:

• Improvement of current products and processes

• Support of existing technology platforms(Colback®, Enkamat®, Enkagrid®)

• Product and application development• Sales and marketing support

Spotlight on most recent product innovations

Enka®-Moss Colback® SMR Colback® F2F

EnkaRetain & Drain®

A pioneer improving air quality

Enka®-MossAbsorbs particulate matter

An Enkamat®

technology invention

Enka-Moss – The mat which absorbs particulate matter

• Three-layer composite (nonwoven fabric, moss sprouts, Enkamat)

• Benefits– Improves air quality:

Huge moss leaf surface is negatively charged and captures positively charged elements contained in particulate matter

– Requires no maintenance = saves costs • 1st field test in August 2007• Great response from potential customers

and general press

Efficiency in both horizontal and vertical use

Main application areas:

• Central reservations

• Noise barriers

• Industrial & commercial building roofs

PM captured on Enka-Moss

EnkaRetain & Drain –High-performance solution for green roofs

Substrate

Roof Membrane

Root Barrier

Drain & Filter Layer

Pre-Vegetated Mat

Growth Medium

Plant Material

Water Retention Layer

Product innovation developedto suit demands of new US market:

– Drainage core made of post-industrial recycled poly-propylene

– Multiple component/function product

– Outstanding performance – R&D work paired with industry

partnerships and support of associations

Our answer to growing ecological awareness

• Primary backing for tufted carpet tiles and broadloom carpet: Bi-component nonwoven using 100% post-consumer recycled polyester

• Developed in close co-operation with customers seeking strategic benefits from eco-friendly components in their products

• To date, the only primary backing in the market using major amounts of post-consumer recycled polyester

Colback SMR –Environmentally friendly carpet backing

• A unique innovation in the market

• High-performance Colback with one gray and one black side

• Carrier for both light and dark coloured carpet (no “grin-through”)

• Resulting flexibility offers customers significant efficiency improvements and cost savings in their tufting operations

Colback F2F –Making our customers more successful

Marc Uleman

MD Technical Yarns

Innovation in Technical Yarns

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Box table with row header

Sentence case, not bold

Row header: • First level bullet– Second level dash

• Third level arrow

– Fourth level dash

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Fundamentals of the artificial grass market

One of the fastest growing markets within TT…

• The use of artificial grass is estimated to grow between 12.5 and 15% per year.

• Market drivers are:- increased use in sports fields, because of better performance and reduced maintenance- landscaping, increasingly due to water restrictions.

=>One m2 natural grass in a hot climate uses up to 10liters a day!

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Artificial grass segments: sports and landscaping

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Drivers for artificial grass

Water is becoming a major issue in many regions of the world..

• First level bullet– Second level dash

• Third level arrow

– Fourth level dash

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Innovation is key to securing growth

In 2007, the Grass Development Center in Arnhem has been launched

• Integrated approach to all components of an Artificial Grass Pitch (yarn, infill and backing)

• Several new products launched, one patent has been filed• In 2007, 34% of sales realized with products of less then 1 year old

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Recent innovations in Technical Yarns

New shapes and improved polymer blends

Collaboration with leading polymer suppliers to come to enhanced product properties, leading to enhanced player comfort

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A unique new offer in the market

- One of the main factors influencing player comfort in hot climates is pitch surface temperatures

- By applying technology developed in Military Stealth Applications, the surface temperature of Cool Grass is reduced by up to 15 degrees C.

- Patent filed for this technology

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Leveraging expertise within the division in our innovation

• An integrated development program has lead to Colturf, the backing material used for artificial grass pitches. This combines our know how of the top and base layer

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Box table with row header

Sentence case, not bold

Row header: • First level bullet– Second level dash

• Third level arrow

– Fourth level dash

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Bonar Emirates TY Industries

A major step to improve our cost structure, that gives us presence in a high growth area

• Joint venture agreement with leading regional partner (Abu Dhabi Basic Industries) signed.

• This plant will capture local market and global monofilament growth.

• Start up is planned January 2009• We will be well positioned to grow market

share.• A further expansion is possible after phase 1

Steve Good

Divisional MD

Innovation in Technical Fabrics and Coatings businesses

Leading player in Agrotextile fabricsNiche products for today's global food problems

Problem Contribution of Bonar TF

Impact

Food shortage resulting in “agriflation”

Bonar is a world leader in greenhouse-screens

Screens influence the climate (temperature, light and humidity) in greenhouses. Improved climate conditions results in a higher yield. Bonar Technical Fabrics has a complete range allowing the grower to choose the best solution for his specific crop and region where he is located.

High energy prices Greenhouse-screens Screens separate hot and cold air in the greenhouse, and reflect heat radiation. Resulting in an energy-saving between 25 % and 75 %. The same production of food can be realized with less energy and less greenhouse gases.

Pollution by herbicides and herbicide-resistant weeds

Groundcovers Groundcovers have no light transmission preventing weeds to germinate. Groundcovers are water and air-permeable to keep the ground underneath in perfect condition. They are used by consumers, professional growers, and in public places.

Leading player in AgrotextileNiche products for today's global food problems

Leading in geotextile fabrics for civil engineering projects

• Geotextile : environmentally friendly product • Less aggregate in contructions• Longer lifespan and lower maintenance of structures

• Fast growing market : infrastructure needs in emerging economies(East & Central Europe, China, India)

• Fastest growing nonwoven geotextile manufacturer in Europe with unique non woven and woven product range

– Strong manufacturing footprint : Belgium, Hungary, China– Technically superior to competing products : highest raw material yield

(Weight/Tensile strength)– Excellence in manufacture and logistics with strong distribution

partnerships

Geotextiles applications

Leveraging divisional expertise to create specialist fabrics which add value to our customers

New cherry cloths• Protection• Unique confection allows grower to install and remove in a short period

Phormidrain• Taking advantage of our expanding technology/market combinations•Replacing expensive lava stones used in drainage

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Innovation in the recently acquired Mehler Texnologies

• A coated fabric for ceiling and wall lining clamped to an invisible frame that is assembled in front of ceilings and walls.

• AIRTEX® base fabric with highly pigmented coating for an even matt and non-streaky surface and very low translucency

• No seams because of widths of up to 5 metres• Easy, low priced installation

– Easy tensioning with hot air – Base frame is low priced and quick to assemble,– No need to clear out big equipment, devices, furniture.

• Applications in retail, restaurants, bars/discos, public buildings, hospitals, private homes, booth construction

VALMEX® Ceil FR Making our customers more successful

• Movie Screen is a high-tech fabric for cinemas, projection screens, and home entertainment.

• New innovative lacquer for the final top coating leading to a matt-finish surface with a very high reflection coefficient.

• From every seat in the cinema the screen reflects light with the same light-intensity and contrast.

High contrast movie screen -Improving the experience for all movie goers

• Development of thermal regulating systems in technical coated fabrics

• Processing of „Cooloasis“ (synthetic resin)

• Absorb, store, and emit heat at a later date.

• Avoids heat accumulation

• Applications in fabrics for tents in regions with extreme variations in temperature, partition walls in offices, canopies, marquees, large-scale umbrellas

Temperature regulating composites

Today’s Agenda

• Overview of Technical Textiles markets, strategy

• Leading by innovating in industrial technical textiles

• Summary

Summary

• Our product innovation and service provision are the keys to oursuccess

• We are market leaders in our chosen areas• We have scope for both volume and margin growth

• Major capacity investments to service growth in attractive segments on stream by Q1 2009

– Carpet backing EU and ME

– Artificial grass ME Growth

– Enkamat for commercial building and construction markets

• Likely emergence of more favourable raw material markets within the next 6 -12 months

Bonar Floors - Leadership through Innovation

Mark SeftonDivision Managing Director

FloorsOverview

• Market leading player in contract flooring in U.K. and Europe• £7bln UK and European market growing at 1 x GDP • Our superior growth driven by presence in higher growth niches

and market share gain• Innovation, broadest product suite and excellent customer

service are key to organic growth• Opportunity for significant value creation through M&A

FloorsKey Growth Drivers

• Refurbishment and new build expenditure in UK/European schools, hospitals and nursing homes

• UK office refurbishment and new build levels

• Substitution of broadloom carpets by carpet tiles across the European office/retail sector

• UK/European expenditure on retail/government building refurbishment

• Non-residential new build expenditure in Central Europe and Asia

Current margins of 12%+ are sustainable

FloorsProduct and Geographic Breakdown

Tessera & Westbond32%

Flotex 35%MoD10%

Coral & Nuway17%

Chocflex 6%

Europe 40%

UK 49%

USA 2%

Revenue by geography

Other 9%

Revenue by product

FloorsFinancial history

Flotex 35% UK 49%

*Before amortisation and non recurring items

Floors Division

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The leadingEuropean entrancesystems supplier

• Removes moisture and dirt

One of two leadingUK carpet tilesuppliers

• Tiles enable access to underfloor cabling

FloorsProducts

Global leadershipin flocked flooring

• Cleanable• Resilient• Hard wearing

Specialist vinylflooring

• Sound absorbing vinyl

Leading Europeanmanufacturer ofhigh-end carpettiles

• Tiles enable access to underfloor cabling

Market leadership due to product performance

and strong brand image

Only supplier of product in

commercial widthNew digital printing

capabilities

Strong position in largest market -

France

Top of the range carpet tiling

Mid-market carpet tiling

FloorsGrowth Strategy

Organic

• New product innovations– Recycled content– Digital printing on Flotex

• Selective geographic expansion– Penetrate further into Europe– Build on existing base in Asia

• Maintenance of best in class service

• Effective selling of full range via direct salesforce

Acquisitive

• Geographic expansion• Additional product areas

Innovation & Design

Markets change and flooring is no exception

Changing product mix

New aesthetics

Focus on sustainability

Impatient customers

Web based design support

Global specifications

Local variations

‘Design is the only thing that differentiates one productfrom another in the marketplace’Norio Ohga

Whenever we have the chance we’re adding sensory,emotional appeal to the ordinary function.’Virginia Postrel

Sottsass Collection

Flotex30 years of extraordinary function

Unique performance– Water proof– Wear resistant

Unique surface– Uniform rich incredibly dense pile

… allied to process innovation

White base

6 dyes, digital design files

136 pre-dyed bases

>300 screens, >100 unique dye blends

From complexity & limited aesthetic appeal

To simplicity & design freedom

FlotexTechnology enabled marketing innovation

London Design Museum

Gent Design Museum

Blue Print

Metropolis

Interior Design “best of year” nomination

Lyon – Keith Haring

U-design

Custom recolouring or bespoke design service

Partnership collections from leading designers.

Sottsass final instalment June 08

New collaborations for 2009

Collections

Technology enabled differentiated marketing

In the world of carpet tiles there is is the proverbial “or similar”

after many architects’ specifications

Original and inspiring designs using the latest cmc texturisingtechnology are an important part of our strong and sustainable margins.

• freshness and energy• futuristic styling

• light reflection

core inspiration

• modern surface materials• urban shapes• curves and geometrics in architecture

sometimes things only make sense

when you see the bigger picture

sometimes things only make sense

Commoditized products, services

and capabilities

Commoditized products, services

and capabilities

Changes in business processes will emphasize self-service.Your costs as a business go down and perceived service goes upbecause customers are conducting it themselves.

Ray Lane, Oracle

Our newly acquired Westbond business empowers our customers with I bond technology. The ability to make just 1m2 of any colour opens an enormous colour

pallete available in different weights and fibre types.

For the ultimate in sustainable flooring we are proud to stand behind natural from Westbond

A polyester backing with 20% recycled contentThe wool yarn is completely undyedAll wool is sourced locally for this productThe product is 100% recyclable.

New Coral Logo – Customized high performance entrance matting to capture the spirit of the building.

FloorsConclusion

• The contract flooring market has differentiated channels and sustainable margins compared to the residential market

• We are market leaders in our chosen segments

• Innovation is key to our success – technology, design & marketing

• Geographic expansion will be a major driver of growth