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Material | August 02, 2007

Cookson Electronics revenue fell,<br>reflecting low PCB sales

Cookson Group reported a strong improvement in continuing operations (at constant currency). However the Electronics section Revenue, at reported exchange rates, fell 4% compared with the first half of 2006, but when adjusted for constant currency, disposals and the effect of commodity metal price fluctuations, underlying revenue fell by 2%.
End-market growth for electronic equipment, which accounts for around 85% of the Assembly Materials sector's revenue, whilst marginally lower than that in 2006, has remained ahead of global GDP. Against this background, sales of lead-free solder were flat (by weight). Lower cost SACX™ (0.3% silver) made strong gains and constituted 33% of lead-free sales (by weight) in the first half of 2007 compared with 22% in the same period last year, substituting higher cost 3% silver solder. Sales of traditional lead-based solder were markedly down, but with improved profitability as
the business deliberately focused only on higher-margin sales. The Semi-conductor Packaging Materials business, which represents 5% of Assembly Materials' revenue,made a small loss on revenue down 25% compared with the first half of 2006, when it delivered £1.5 million of trading profit. In March 2007, a change in the management of this business was announced and a turnaround in the second half of 2007 is expected based on some successful recent new product
launches.

In the Chemistry sector, underlying revenue (at constant currency and eliminating the effect of precious metal sales) grew 3%. Industrial and automotive-related revenue grew strongly in Europe and to a lesser extent in NAFTA, particularly in plating-onplastic and corrosion and wear-resistant coating product lines. Electronics-related demand was relatively weak in all regions, reflecting low PCB sales. For the division as a whole, trading profit was up 6% (at constant currency) and return on sales improved to 9.9%.

The previously announced rationalisation projects of Assembly Materials in NAFTA and Chemistry in Europe are now well advanced and should be completed by this year-end. The project to build a new Chemistry sector factory in China has been put back to 2008 due to delays in the permitting
process. Meanwhile, the market is being served from the Group's facilities in Tianjin and Shenzhen in China and from Singapore.

However Cookson Group reported a strong improvement in continuing operations (at constant currency). Revenue for the 2007 Interim results was £785 million, up 4%, trading profit of £78 million, up 20%, while return on sales went up 1.3 %.
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