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SMT & Inspection | May 25, 2006

Lead-free benefits Cookson

The transition to lead-free solder is continuing to benefit Cookson Group's Assembly Materials sector with 37% of solder revenues in the first quarter now being in lead-free products, up from 32% in the fourth quarter of 2005.
Main end-markets and general trading conditions have continued to evolve in line with the guidance given in Cookson Group's Preliminary Results announcement on 14 March 2006. Furthermore, the benefits of the restructuring and cost reduction initiatives undertaken over the past two years continue to materialise in line with expectations.

Whilst metal market prices (notably for tin, gold and silver) have risen sharply in recent weeks, these costs are typically "pass through" in nature such that the principal impact is to increase reported revenues in the Assembly Materials and Precious Metals businesses.

Accordingly, the trading results for the year to date are progressing in line with previous expectations; with the performance well ahead of the equivalent period last year.

As expected, end-market growth in the electronics markets is ahead of global GDP but there is some softness in automotive markets. The transition to lead-free solder is continuing to benefit the Assembly Materials sector with 37% of solder revenues in the first quarter now being in lead-free products, up from 32% in the fourth quarter of 2005. Market penetration of the new low silver, lead-free product is also encouraging. There has been no repeat of the significant copper damascene de-stocking issue which negatively impacted the first quarter of 2005.

Formal regulatory approval for the sale of the Laminates business was recently obtained and the transaction was completed on 21 April 2006 for a consideration of US$91 million (£51 million). During the period prior to disposal, the Laminates business had been treated for accounting purposes as a business "held for sale" and its trading results will be included within "discontinued operations". As a consequence, no depreciation charge is recorded for the period up to disposal. Following the restructuring of this business undertaken in 2005, the Laminates sector traded profitably this year in the period up to disposal.

Based on general market conditions and the trading results for the first four months of the year to date, Cookson Group continue to expect an improvement in the overall performance of the operations in 2006.
A pre-close period trading statement will be issued at the end of June, with Interim results for the six months ending 30 June 2006 being announced on 3 August.

Cookson Group plc is a materials science company operating on a worldwide basis in Ceramics, Electronics and Precious Metals markets. The Electronics division is a supplier of surface treatment and plating chemicals and assembly materials to the automotive, construction and electronics markets.

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