Capital Markets Day. 18 th September 2013

Transcription

1 Capital Markets Day 18 th September 2013

2 Schedule of Presentations Introduction to the G&H team Julian Blogh, Chairman Our Vision Gareth Jones, CEO Growth Plans from a Financial Perspective Andy Boteler, CFO Organic Growth Strategy Murray Reed, CTO Andrew Robertson, SVP Coffee (approx. 4:00pm) Acquisitions Gareth and Murray Market Examples Murray and Andrew Wrap-up, Q&A Gareth and All Drinks + conversation with G&H team (approx. 5:00pm) PRELIMINARY RESULTS SEPTEMBER PAGE 2

3 Welcome and Introductions - Julian Blogh, Chairman Objectives for the day To provide : - an update on G&H strategy and opportunities a chance to meet and talk with members of the team and Board Introduction to the team Background, progress and prospects that lie ahead PRELIMINARY RESULTS SEPTEMBER PAGE 3

4 G&H Vision - Gareth Jones, CEO PRELIMINARY RESULTS SEPTEMBER PAGE 4

5 Our Vision - Gareth Jones, CEO To build a global technology business with photonics at its core A business that:- Has unconstrained growth potential Addresses diverse applications Evolving our brand Delivers systems capability via complementary technologies Is market led and customer focussed Is vertically integrated for defensibility and resilience Possesses strong IP and exceptional know-how Leads or dominates its chosen sectors, and therefore. Is able to command high margins G&H provides Enabling Photonic Technologies PRELIMINARY RESULTS SEPTEMBER PAGE 5

6 G&H today - a vertically integrated photonics business System Manufacturing Design Engineering Spectroscopic Instrumentation Photonic Subsystems Fibre Optics Electro Optics Acousto Optics Revenues: $100m Headcount: manufacturing sites: 6 in the US 2 in the UK European CM partner Crystal Optics Precision Optics Crystal Growth PRELIMINARY RESULTS SEPTEMBER PAGE 6

7 Photonics Today Increasingly, photonics is providing the solutions that enhance our everyday lives Optics and Lasers Growth Laser technology invented in 1960 was a solution looking for a problem for many decades Research and military requirements sustained extended development This finally resulted in widespread commercial applications starting in the late 1980 s. Photonics Markets Today Many industries that we take for granted are critically dependent on photonics: Industrial materials processing Semiconductor and microelectronics manufacturing Telecommunications Security, surveillance, sensing, guidance and navigation systems Biomedical research, diagnostics and surgery Historical Laser Revenue Growth ($B) Photonics technology is replacing electronics in multiple applications Some Application PRELIMINARY RESULTS SEPTEMBER PAGE 7

8 G&H s Competition Traditional Competition Small specialist companies similar to G&H sites Today s Competition Large consortiums rolled up but weakly coordinated = = = Emerging Competition or Future Partners? Large contract electronic manufacturers Sanmina, Paramit, Fabrinet G&H will acquire, integrate and partner to compete effectively PRELIMINARY RESULTS SEPTEMBER PAGE 8

9 Key Customers PRELIMINARY RESULTS SEPTEMBER PAGE 9

10 G&H tomorrow achieving the vision PRELIMINARY RESULTS 30 SEPTEMBER PAGE 10

11 Growth Plans from a Financial Perspective - Andy Boteler, CFO PRELIMINARY RESULTS 30 SEPTEMBER PAGE 11

12 Financial Overview Delivering long term, profitable growth Operating Profit m Revenue m Microelectronics Boom Global Downturn Dotcom Boom Revenues dominated by Q Switch sales into the Industrial Laser Market Diversification delivering broader based revenues * Since the IPO the business has delivered an almost 10 fold increase in revenue Andrew Boteler - CFO PRELIMINARY RESULTS 30 SEPTEMBER PAGE 12

13 Growth Through Diversification The newer markets of Aerospace & Defence and Life Sciences offer the potential for significant growth through their rapid adoption of photonic technologies. INDUSTRIAL M AEROSPACE & DEFENCE LIFE SCIENCES M* SCIENTIFIC RESEARCH Five Year Growth Rates By Market 42% 745% 407% 5% * Consensus forecast June 2013 PRELIMINARY RESULTS 30 SEPTEMBER PAGE 13

14 Margin Stability & Growth Through Diversification As well as producing absolute growth in EBIT, the diversification strategy has delivered greater margin stability and the route to EBIT margin growth EBIT 5.3M 20.0% 15.0% 10.0% 5.0% 0.0% EBIT % EBIT 9.8M* The EBIT margin trough in 2009 & peak in 2011 were both caused by volatility in our traditional Industrial Laser market. As we diversify into our new markets, the business is becoming less prone to such movements. Moreover, the increased volumes in our new markets benefits our percentage EBIT margins through operational gearing INDUSTRIAL AEROSPACE & DEFENCE LIFE SCIENCES SCIENTIFIC RESEARCH Andrew Boteler - CFO * Consensus forecast June 2013 PRELIMINARY RESULTS 30 SEPTEMBER PAGE 14

15 G&H - a well invested technology company that delivers on cash generation. NET (DEBT)/CASH m In the last four years G&H has (2) (4) (6) (8) (10) (12) invested 10.9m in capital plant & equipment. implemented world class, A&D accredited quality systems. invested in working capital to effectively address A&D customers requirements continued its commitment to R&D, with 15.1m invested. staffed its operations with programme management, business development & sales talent capable of delivering to the A&D market. (14) Whilst at the same time. G&H has delivered cash generation which has transformed a 12m net debt position in 2009 to a comfortable net cash position in This has enabled the business to increase its dividend in each of the last four years. PRELIMINARY RESULTS 30 SEPTEMBER PAGE 15

16 Balance Sheet strength and debt headroom Business supported by a strong Balance Sheet Net Assets (excluding intangibles) m FY09 FY10 FY11 FY12 HY13 Significant debt headroom gross debt m as at 31 March 2013, compared to 18.8m in Sept 2008 gross gearing level 17.5% as at 31 March 2013 cash m as at 31 March 2013 committed & unused banking facilities m a supportive & pro-active banking relationship PRELIMINARY RESULTS 30 SEPTEMBER PAGE 16

17 A strong near term addressable order book that reflects our more diversified business 35 Order Book 'M A&D currently accounts for 31% of the order book Six month rolling average book to bill has remained above 1:1 for the last eight months. 5 0 FY10 HY11 FY11 HY12 FY12 HY13 Jul has been typified by a strong order book underpinned by steady Industrial business and some significant Aerospace & Defence order wins Terry Scribbins - COO JULY M INDUSTRIAL AEROSPACE & DEFENCE LIFE SCIENCES SCIENTIFIC RESEARCH PRELIMINARY RESULTS 30 SEPTEMBER PAGE 17

18 Organic Growth Strategy - Murray Reed, CTO PRELIMINARY RESULTS 30 SEPTEMBER PAGE 18

19 Major Growth Strategies Diversify into New Markets Move up the Value Chain into Systems Expand R&D and Applications Engineering Continue with Strategic Acquisitions PRELIMINARY RESULTS 30 SEPTEMBER PAGE 19

20 Diversify into New Markets Diversification within the Industrial Market Expand with micro-electronics manufacturing Dominate modulators for high power fibre lasers Find further openings in fibre-optic sensing Expansion in Aerospace & Defence Continue domination of navigational optical assemblies Continue military laser sub-system contract wins Establish a leading position in satellite and avionic photonics Expansion in Life Sciences Leverage our market leading position in Optical Coherence Tomography (OCT) Expand in laser scanning microscopy Find openings in fibre laser based therapeutics Establish a partnership for spectral imaging diagnostics Fibre-laser modulators now constitute > 10% of G&H s Acousto- Optic business G&H has multiple new photonics opportunities G&H laser diode module being qualified on the International Space Station as part of NASA ASCENDS program PRELIMINARY RESULTS 30 SEPTEMBER PAGE 20

21 Move Up the Value Chain into Systems Sub-assemblies Enabled by the excellence of our components Current A&D and LS customers pulling G&H into this space Not just build to print, focus on adding value Offering electronic drivers for all of our Acousto-Optics (AO) and Electro-Optics (EO) devices Lasers and Instruments Developing test instruments for display and LED manufacturing Developing G&H fibre and semiconductor laser systems G&H Non-Component Revenue 2012 Revenue: 13.1m (2011 : 9.1m) 21% of Group Revenue System Technology Group (STG) Corporate team offering full system design services: optics, modelling, packaging, electronics and software. Designing system level products that can be transferred into site manufacturing and ramped to high volume. Initial contracts from new OCT and satellite customers PRELIMINARY RESULTS 30 SEPTEMBER PAGE 21

22 Expand R&D and Application Engineering Improved Coordination R&D engineering now under CTO leadership Best practice new product introduction processes Priorities are aligned to growth strategies Targeted Expansion Program Management Electronics and Software Engineering System Engineering and Application Engineering Increasing Investment by G&H in Research and Development: 2011 R&D spend 3.7m = 6.1% of revenue 2012 R&D spend 4.3m = 7.1% of revenue H R&D spend 2.4m = 8.3% of revenue Application Engineering More support for customers that need, but are not expert in, photonics Partnership on development locks in customers G&H is investing in people and tools that create solutions for our customers Application engineers plan design and deploy custom equipment PRELIMINARY RESULTS 30 SEPTEMBER PAGE 22

23 Systems Technology Group - Andrew Robertson, SVP PRELIMINARY RESULTS 30 SEPTEMBER PAGE 23

24 System Technology Group Corporate Level Investment Respond to customer requests beyond the capability of any individual site Use design expertise from senior experts at all sites Program management and senior system engineering in Torquay Expanding by 2x in New Lab space and Offices under construction Use consultants and outside engineering to provide flexible resource STG Focus Areas Fibre Lasers (multiple flavours to address hot application requirements) Optical Coherence Tomography (OCT) Satellite Communications The largest technical transformation in the laser industry in the last decade has been the replacement of legacy gas and solid state lasers by telecom fiber based lasers. STG is bringing together global engineering expertise to rapidly respond to customer needs G&H has assembled an 11W yellow fibre laser system for retinal photocoagulation treatment PRELIMINARY RESULTS SEPTEMBER PAGE 24

25 UK and Europe Government Funded Programs Seed Funding for New Technology 10 programs totaling ~ 600k/year. These span all 4 main markets STG program management, Torquay and Ilminster engineering. Developing high-power fibre lasers for materials processing and medical applications Developing fibre lasers at 2um wavelength for communications and marking plastics Developing lasers in the mid-ir for medical imaging, chemical detection Developing fibre optical amplifier system for satellite communication links G&H Funded Program Partners Locks G&H into customers development roadmaps PRELIMINARY RESULTS SEPTEMBER PAGE 25

26 Examples of STG Fibre Lasers ISLA Develop a common set of building blocks for 2um fibre lasers High power CW lasers, ns pulses and ultrafast Target designs for ROFIN-Sinar Laser Industrial material processing G&H s 2um Faraday Isolator TESLA Miniature fibre optic amplifier Satellite to ground optical communications G&H EDFA Module design STG is leveraging G&H s new fibre laser components PRELIMINARY RESULTS SEPTEMBER PAGE 26

27 Coffee Break PRELIMINARY RESULTS 30 SEPTEMBER PAGE 27

28 Schedule of Presentations Introduction to the G&H team Julian Blogh, Chairman Our Vision Gareth Jones, CEO Growth Plans from a Financial Perspective Andy Boteler, CFO Organic Growth Strategy Murray Reed, CTO Andrew Robertson, SVP Coffee (approx. 4:00pm) Acquisitions Gareth and Murray Market Examples Murray and Andrew Wrap-up, Q&A Gareth and All Drinks + conversation with G&H team (approx. 5:00pm) PRELIMINARY RESULTS 30 SEPTEMBER PAGE 28

29 Acquisitions - Gareth Jones, CEO - Murray Reed, CTO PRELIMINARY RESULTS 30 SEPTEMBER PAGE 29

30 Organic & Acquisitive Growth M CAGR 14% M* Organic Growth Acquisitive Growth 1/3rd 2/3rds Whilst we continue to see acquisitions forming an important part of our future growth strategy, we expect the above ratio to be reversed in the next five years Gareth Jones - CEO The G&H Fibre Q Switch delivered 2M of revenues in This product was developed organically utilising both traditional and acquired technologies. PRELIMINARY RESULTS 30 SEPTEMBER PAGE 30

31 Continue with Strategic Acquisitions Acquisitions to add critical new technology Fibre Optics - Torquay (2007), Boston (2011), Palo Alto (2011) Super-Polishing - Moorpark (2008) High Speed Acousto-Optic Modulators - Palo Alto (2011) Space Qualified Photonics - Boston (2011) Acquisitions to add routes to new markets A&D - Boston (2011), Moorpark (2008) LS - Torquay (2007), Palo Alto (2011) Future Targets Earnings enhancing Adjacent Optical Component Technology mid IR optics, DUV optics, Faraday isolators Market Focused Photonic and Fibre Systems space photonics, industrial measurement, fibre sensors, imaging diagnostics, fibre laser therapeutics G&H selects the best in class photonics technology PRELIMINARY RESULTS 30 SEPTEMBER PAGE 31

32 Market Examples - Murray Reed, CTO - Andrew Robertson, SVP PRELIMINARY RESULTS 30 SEPTEMBER PAGE 32

33 G&H Areas of Strategic Focus G&H has a wide array of differentiated photonic technology. We are constantly evaluating new opportunities to enable profitable business for ourselves and our clients. This year, for the first time we have shared our strategy with key customers and prospects. This presentation details just some of the current areas. PRELIMINARY RESULTS 30 SEPTEMBER PAGE 33

34 Growth in the Industrial Market Industrial Growth Strategies Invest in R&D and applications engineering to stay ahead of competition Expand into new CO 2, Ultraviolet (UV) and ultrafast laser areas Concentrate on high value markets not commoditised products Expand worldwide sales Industrial Revenue: 35.8m (2011 : 36.3m) FY Strategic Highlights Strong growth of AO modulators for fibre lasers including multiple new Chinese customers. New UV AO deflector design wins for micro-electronics Prototype narrow-line semiconductor laser for fiber sensing networks New sales office in Japan, additional people in China and Singapore Expanded supply chain discipline to drive cost reduction programs Operating Profit: 6.6m (2011 : 9.7m) Percentage of Company Revenue: 59% G&H continues to find new opportunities in its core market area. PRELIMINARY RESULTS SEPTEMBER PAGE 34

35 Industrial Segment: Microelectronics Manufacture Segment Prospects Advanced laser techniques for processing, cutting and patterning for tablets, smart phones, and automotive electronics are driving new applications using CO 2 and UV lasers Robust growth Current G&H Activities UV AO deflectors for semiconductor wafer and mask inspection 48-channel UV AO modulators for direct write PCB production UV & IR AO deflectors for wafer level circuit repair G&H Growth Plans Develop superior high power CO 2 laser AO deflector and drivers for existing via drilling and flex circuit equipment manufacturers Develop display test equipment for OLED manufacturers Expand UV coatings and crystal growth for UV lasers Lasers for Microelectronics Market Forecast 2013 Revenue: $1.0B 19% CAGR Source: LFW & Gartner G&H will extend its AO dominance to the long wavelength mid-ir and short wavelength UV 48-Channel DUV AOM PRELIMINARY RESULTS 30 SEPTEMBER PAGE 35

36 Industrial Segment: Fibre Lasers Segment Prospects Fibre lasers are rapidly displacing legacy gas and solid state lasers Strong growth for IPG, Fortune magazine s #9 fastest-growing company in 2012 IPG has inspired multiple international competitors Current G&H Activities IPG is one of G&H s top ten customers, buying >10,000 devices per year for pulsed lasers This is driving G&H innovation in manufacturing to address high volume and aggressive cost reduction Sales to other fibre laser customers will expand significantly in FY 13 Fibre Laser Market Forecast 2011 Revenue: $600M 2015 Revenue: $1.4Bn 23% CAGR Source: Laser Focus World (LFW) G&H Growth Plans Expansion in G&H engineering capability to multiple new fiber coupled devices and components directly used in fibre laser devices Make more complex assemblies based on these. G&H s acquisition strategy has turned the fibre laser threat into an opportunity Non-Diode Lasers vs Fiber Lasers global Market ($Bn) LFW PRELIMINARY RESULTS 30 SEPTEMBER PAGE 36

37 Industrial Segment: Fibre-Optic Sensing Segment Prospects Continuous Expansion of Applications and Technologies for the replacement of electronics systems by fiber optic systems. Strong Growth with 20% CAGR predicted Current G&H Activities Laser scanner AO modulator and fibre module for laser radar (LIDAR) AOM network modules for oil & gas pipeline monitoring Ruggedized acousto-optic tunable filters (AOTFs) for down well petroleum analysis Fibre-Optic Sensor Market Forecast 2012 Revenue: $1.6Bn 2017 Revenue: $4.0Bn 20% CAGR Source: ElectroniCast Consultants G&H Growth Plans Fibre-coupled AOTFs being evaluated for industrial spectroscopy G&H internal development of proprietary narrow-line semiconductor laser for fiber sensing networks High volume coupler opportunity for seismic seabed networks G&H plans to produce new enabling components for emerging sensor systems G&H manufactured Network Module used for oil & gas pipeline monitoring PRELIMINARY RESULTS 30 SEPTEMBER PAGE 37

38 Growth in Aerospace and Defence Growth Strategy Investment in quality and program management to provide the controls needed by this market Leverage G&H s experience as a recognised player in UK A&D to approach more potential clients Move up the value chain to being a sub-systems provider and systems design house 2013 Strategic Highlights Strong growth of optical subsystems for defence Wide acceptance of pyro-reduced Lithium Niobate Q switch material Design and test of miniature Q-switched rod laser module First orders for fibre optic datacom module used in naval defence First contracts for fibre modules for satellite communication Contract for study and prototype build for laser countermeasures Aerospace & Defence Revenue: 15.4m (2011 : 15.4m) Operating Profit: 2.2m (2011 : 2.6m) Percentage of Company Revenue: 25% FY 2012 G&H photonics technologies play a key role in increasing A&D accuracy PRELIMINARY RESULTS SEPTEMBER PAGE 38

39 Military: Pulsed Targeting Lasers & IRCM Segment Prospects Mature Diode Pumped Solid State Lasers (DPSSL) have been widespread for target designation, range finding and mid-ir counter measures (IRCM) in combat for decades New technology semiconductor and fiber amplifier systems are replacing discrete crystal and glass optics Current G&H Activities Optics sets and assemblies for Target Lasers and Laser Range Finders Improved Lithium Niobate EO Q-switch crystals Supplying mid-ir frequency conversion crystals and fibre coupled modules for IRCM Prototyping a miniature Q-switched rod laser module G&H fibre module assembly for avionic IRCM pod G&H Growth Plans Pursue expanding demand to outsource laser assemblies Contract for prototype build for laser countermeasures Develop complete Lithium Niobate EO Q-switch assemblies G&H is prepared for a new wave of defence assembly technologies G&H miniature passively Q- switched laser module design for target designation PRELIMINARY RESULTS SEPTEMBER PAGE 39

40 Aerospace: Satellite Communications Segment Prospects Laser based high bandwidth communication is in the process of being qualified for use for inter-satellite and downlink communication and replacement of bulky RF electronics could be rapid. ESA wants to incubate UK Competition. The UK Space Agency is set to invest 1.2 billion in space projects over the next 5 years. Current G&H Activities G&H Boston has completed and continues with multiple NASA funded space qualification and component deployment contracts. STG satellite EDFA Fiber Amplifier contract with RUAG. STG successful bid for EU Space project HIPPO: High Power Photonics for Satellite Laser Communication for Thales Alenia Space. G&H Growth Plans Leverage the US space heritage to pursue ESA sponsored contracts Develop full portfolio of space qualified photonic components. Transfer of complimentary technologies between Boston and Torquay fibre optics facilities. G&H plans to be a lead supplier of satellite photonics in Europe Global Satellite Market 2012 Revenue: ~$190Bn ~7% CAGR ~100 Satellite Launches Source: SIA 2012 G&H EDFA Module designed for high bandwidth communication for airplanes and developing areas. PRELIMINARY RESULTS SEPTEMBER PAGE 40

41 Growth in Life Sciences Growth Strategy Investment in R&D and applications engineering, new products and capabilities and expanding into new segments Identify large, world-wide markets with strong benefits to society Leverage G&H s experience as a recognised player in OCT Move up the value chain to become a sub-systems provider and systems design house 2013 Strategic Highlights New design wins for OCT ophthalmic modules New design wins for OCT cancer modules Cervical cancer pilot study with Memorial Sloan Kettering using AOTF spectral imaging diagnostics Life Sciences Revenue: 5.7m (2011 : 5.7m) Operating Profit: 1.2m (2011 : 0.9m) Percentage of Company Revenue: 10% FY 2012 Life Sciences applications offer the largest potential for G&H s expansion PRELIMINARY RESULTS SEPTEMBER PAGE 41

42 Diagnostics: Optical Coherence Tomography Segment Prospects Ophthalmic applications are maturing. New areas include the anterior eye and optometry, and OCT with new surgical tools. New applications with new technologies and wavelengths include cardiology, gastroenterology and oncology. G&H Details Premium performance ultra-wide band OCT couplers that enable higher resolution and consistent manufacture are gateway products. G&H provides >10,000/year fiber optic couplers and >3,000/year fiber optic modules for 3 of the top 4 OCT companies. G&H are sampling multiple new fibre and free space OCT components G&H Growth Plans New components such as AO frequency shifters, swept lasers, and wide bandwidth fibre couplers for existing and new customers. STG offering higher level design services including optical delay lines, spectrometers and balanced detector circuits. OCT Market Forecast 2011 Revenue: $1.0Bn 2014 Revenue: $1.7Bn 20% CAGR Source: octnews,org G&H Ophthalmic OCT Module G&H continues to expand as the premium global manufacturer of OCT subsystems PRELIMINARY RESULTS 30 SEPTEMBER PAGE 42

43 Therapeutics: Ultrafast Laser Surgery Segment Prospects Blades and UV lasers for cataract, refractive and other eye surgeries are rapidly being replaced with high repetition rate ultra-fast lasers Industry Consolidation is intense. Abbott acquired OptiMedica for $400M, Technolas Perfect Vision was re-acquired by Bausch + Lomb for 450M, Alcon paid $744M LenSx Lasers System providers are working in areas beyond the eye and developing OCT to use with the laser surgery US Surgery Markets 2012 Eye Surgery: $20Bn Lasik 1M procedures Cataract 3M procedures 2012 Robotic Surgery: $1Bn 35% CAGR G&H Details G&H provides ~400/year EO and ~300/year AO modulators to ultrafast laser manufacturers G&H provides ultrafast surgery laser manufacturers with diode pumps G&H Growth Plans Developing low, mid and high repetition rate OEM EO drivers Offering more complete fibre laser assemblies G&H is levering enabling components into ultrafast laser surgery modules Robotic non-invasive surgery benefits include shorter hospital stays, less blood loss, faster recovery, smaller incisions (less scarring), and lowered costs to both the patient and hospital PRELIMINARY RESULTS 30 SEPTEMBER PAGE 43

44 Spectral Imaging Diagnostics Spectral Imaging in Cellular Diagnostics Spectral Imaging is the measurement of many wavelengths at each pixel of an image. The allows good discrimination between similar colours and identification and separation of hidden features. AOTF Digital Microscopy An acousto-optic tunable filter can be designed to pass not just a narrow laser beam but a complete image. An AOTF placed before a digital camera enables the use of spectral imaging in high throughput and real-time applications. G&H has multiple patents on optimized designs and applications An AOTF and camera allow rapid high resolution spectral imaging G&H Details G&H has developed an AOTF-based Spectral Imaging research microscope accessory that includes fast electronics and custom software for real-time spectral un-mixing. G&H is creating new photonics instruments G&H s HSi 440C Hyper Spectral Imaging microscope accessory integrates an AOTF and camera module with extensive software tools for customizable image processing. PRELIMINARY RESULTS 30 SEPTEMBER PAGE 44

45 Diagnostics: Pap+2 for Cervical Cancer Pathology G&H Cancer Diagnostics Proposal 65 million Pap tests are performed per year in the USA In a conventional Pap test stained images of cells are reviewed by a pathologist to identify cervical cancer Spectral Imaging allows the integration of modern molecular diagnostics into traditional microscopic imaging of cellular morphology Combining Pap, HPV and Transformative Protein Marker identification in a single imaging test will improve cervical cancer detection and risk assessment very significantly G&H has worked with US research lab Memorial Sloan Kettering to develop a prototype system with: - - Automated slide prep and staining protocol - Semi-automated slide scan and AOTF Spectral Imaging - Digital imager, processing and and display software Currently we are completing a 50 slide pilot study We hope to validate this opportunity by establishing a commercial partnership G&H is pioneering new application developments Pathology is being reshaped by advances in digital imaging and the use of molecular identification technologies as part of the cellular diagnosis. An AOTF allows rapid spectral imaging of Pap stains and 2 additional molecular markers. False colour digital displays then make these biomarkers obvious to the pathologist. PRELIMINARY RESULTS 30 SEPTEMBER PAGE 45

46 Summary: G&H Plans for Growth Clear Strategic Initiatives Diversify into New Markets Move up the Value Chain into Systems Expand R&D and Applications Engineering Continue with Strategic Acquisitions Multiple Market Opportunities Industrial: Microelectronics, Fibre Lasers, Fibre Sensing Aerospace and Defence: Defence Lasers, Space Communication Guidance Gyros Life and Health Sciences: OCT, Fibre Laser Surgery, Spectral Imaging, Laser Microscopy. Gareth Jones CEO Terry Scribbins COO Andy Boteler CFO Murray Reed CTO Jon Fowler EVP Andrew Robertson SVP PRELIMINARY RESULTS 30 SEPTEMBER PAGE 46

47 Q & A PRELIMINARY RESULTS 30 SEPTEMBER PAGE 47