Low & Bonar PLC

Preliminary Results Year Ended 30 November 2006

Today’s Agenda

• 2006 financial performance

• Divisional performance, strategy and prospects

Appendix

• Low & Bonar at a glance

Financial Overview

• Revenue up to £224.5m (+28.0%)

• PBT up to £14.7m* (+20.5%)

• Normalised EPS** 8.75p (2005: 9.50p)

• Final dividend of 2.80p – full year 4.38p (2005: 4.15p**)

• First full year announcement under IFRS

• Successful £41.1m rights issue (net of costs) and new debt

facility of £175m

* Before tax, non recurring items and amortisation** After bonus adjustment factor

• Acquisitions performing ahead of plan– Colbond (July 2006)– Geo-Tipptex (March 2006)

• Floors– Profit performance and margin improvement strong– Sales of branded products more than compensate for

expected MoD slowdown

• Technical Textiles– Strong sales growth following acquisitions and progress from

global activities in Fabrics business– Grass yarns (16% of our Technical Textiles Division)

experienced increased competitive activity in price and volume

– Raw material/energy increases of £5m+

Financial Overview

Income Statement Summary

+20.5%_ 12.2__14.7_Normalised profit*

(1.1)(2.3)Financing costs

+27.8%13.317.0Operating profit

+28.0%175.4224.5Revenue

2005£m

2006£m

*Before non-recurring items and amortisation

Income Statement Measures

10.57p12.38pPre tax EPS**

9.50p8.75pNormalised EPS*

(6.39)p5.80pBasic EPS/ (loss)

9.8%28.6%Tax rate

20052006

* Before non-recurring items and amortisation of non-current assets

** EPS before tax, non-recurring items and amortisation

Income Statement Measures

2.3x2.0xDividend cover**

12.1x7.4xNet interest cover

4.15p4.38pDividend per share**

20052006

** after bonus adjustment factor

Revenue Analysis

224.5127.2_97.3FY 2006

__7.4__5.2__2.2Underlying growth

(2.6)-(2.6)Reductions in MOD business

44.344.3-Acquisitions

175.477.797.7FY 2005

Total£m

Technical Textiles

£mFloors

£m

Normalised Profit Bridge*

*before tax, non-recurring items and amortisation

0.2Other

14.7FY 2006

____

(1.2)Financing costs

1.7Technical Textiles Division

1.8Floors Division

12.2FY 2005

£m

Non-recurring Items

0.79.9Cash spend

_9.5__2.5_

(0.1)__-__Other

-2.0Technical textiles reorganisation:-Colbond integration-Relocation of construction fibres-Rationalisation of specialist yarns

1.1-Floors restructuring

8.5-EU fine

-0.5Aborted transaction costs

2005£m

2006£m

Balance Sheet

_68.6_116.9Net assets

__10.9_(46.1)(Net debt) / cash

23.794.0Other net assets

34.069.0Goodwill and intangible assets

2005£m

2006£m

Cash Flow

0.1Repayment of loans (net)

(5.2)Other movements

16.2

(7.8)Working capital

(11.2)

41.6Rights issue and share purchase

(35.2)Acquisition of subsidiaries

(9.9)Non-recurring cash costs

(8.7)Capital expenditure (net)

(10.1)Interest, tax and dividends

7.0Depreciation

17.0Operating profit

£m

Movement in Net Debt

(1.9)IAS 32, IAS 39

(46.1)Net debt at 30 November 2006

_0.1_Exchange difference

(45.9)Debt acquired within acquisition

(0.3)

(11.2)Net cash flow for the year

12.8Net cash at 1 December 2005 (UK GAAP)

Capital Expenditure

_10.2_Total Group

_0.1_Group7.9Technical Textiles2.2Floors

2006£m

Impact of Acquisitions

9.7

2.9

(0.2)

2.8

4.2

Geo-Tipptex£m

72.3Net cash outflow*

19.1Goodwill arising

(6.6)Fair value adjustments

12.5Intangible recognised

47.3Assets Acquired

Colbond£m

5.9 2.6

* Includes cash consideration, costs and cash and debt acquired within business

Today’s Agenda

• 2006 financial performance

• Divisional performance, strategy and prospects

Appendix• Low & Bonar at a glance

• A portfolio of strong market positions

: Global leadership in flocked flooring

: Leading European entrance systems supplier

: Leading UK carpet tile suppler

: Growing position in specialist vinyl flooring

: Unique global contract with MoD

Floors Division

22.6%26.8%ROCE

9.1%11.0%Margin

£8.9m£10.7mOperating profit*

£97.7m£97.3mRevenue

20052006

*Before non-recurring items and amortisation

Bonar Floors 2006 highlights

• Continued margin progress and growth in branded product sales

• Increased product launch activity continues; growth across all

contract brands

• Productivity and pricing offset raw material energy increases

• Service levels support market share gains, especially in Tessera

• Channel/ bundling strategy proving successful, especially in

France and Benelux

• New technology platform for Flotex: increased design capability

• MoD contract extended until at least 2009

Bonar Floors 2007 and beyond…

• Focus on contract flooring: “the easiest and most complete

business partner for installers/ specifiers”

• Build on bundling strategy to satisfy customer preference

and leverage sales force

• Expansion across Europe and, via distribution, Asia and

North America

• Continued “raising of the game” in new product introduction

and service offerings

• Acquisitions, where appropriate, to be pursued

“Performance fabrics, yarns or fibres where functionality, not aesthetics, is key”

Technical Textiles

Technical Textiles: the market

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

• Two major segments: industrial and consumer products. Low &

Bonar focuses on industrial

• Multiple production technologies and raw material types

• Highly fragmented, with many specialist niches sustaining

double-digit margins.

• Some shift from product-led to customer–led approach

developing

Technical TextilesOur Market Presence

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

Other

Leading global supplier of grass and carpet yarns

Grass yarns

Leading global position in greenhouse screens and in ground covers

Agro textiles

Leading European, North American and Chinese supplier: woven/ non-woven

Carpet backing

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

Geotextiles

Technical TextilesOur Market Presence

Geotextiles

Carpet backing

Agro textiles

Grass yarns

Other

Source: Management Estimate; Annualised Basis

Technical Textiles Division

13.5%5.7%ROCE

9.5%7.2%Margin

£7.4m£9.1mOperating profit*

£77.7m£127.2mRevenue

20052006

*Before non-recurring items and amortisation

Technical Textiles 2006 highlights

• Colbond acquisition in July, doubling the size of the TT business

• Geo-Tipptex acquisition in March, consolidating our leading

geotextile position in Europe

• Business realigned to exploit cost and customer synergies

• Woven and non-woven textiles businesses globally grew sales

and profit

• Issues in grass yarns market impacted sales and profit, but are

being addressed

• Raw material and energy cost escalation continued: £5m+ y.o.y

Colbond: Rationale and subsequent performance

The acquisition:

– Brought us leading niche positions in Europe/US in non-woven textiles

and polymeric mats

– Materially enhanced the innovation capability within Technical Textiles

– Diversified our raw material purchases away from PP/PE

– Offered market and product synergies in civil engineering

– Had clear cost-saving opportunities through capital spend

– A good quality management team

So far…

– The collaboration has been good

– The performance has been ahead of plan

– The post merger integration programme is on track

Technical Textiles Division: Organised for synergies and growth

Low & Bonar

Europe and North America Asia

Fabrics Specialist Yarns Colbond

Geo-Tipptex BTF/ Adfil Xirion

Bonar Yarns, Dundee

Yihua Bonar

• Commercial coordination

• Supply chain benefits

• Single face to customer

• Sharing innovation, infrastructure/ capabilities across T.T.

• Skill sharing with BTF/ Adfil

• Selective outsourcing by BTF

Technical Textiles: Progress in Fabrics/ Yihua Bonar

• Good growth in sales and profit due to:

– New product launches

– Underlying market growth

– Market share gain from cost/quality proposition

– Ability to imitate material cost growth with pricing

• Integration of Adfil’s manufacturing into BTF proving successful

• Investment in capacity in Central Europe and China happening to sustain

growth in 2007

• Changes to organisation, collaboration with Colbond and continued focus

on new product development will sustain this progress

Grass Yarns: Situation and Solutions

• Profit/ volume pressure in ’06 due to:

– Competitive price pressure– Raw material cost escalation– Customer-specific accelerated moves from fibrillated to monofilament

• Recent announcements on structural changes with TenCate buying Mattex

(supplier) and allying with Fieldturf/Tarkett (a leading customer)

• Xirion and Bonar Yarns combined in a single management structure

• Actions on cost in Dundee and production capacity at Xirion have had an

impact.

• Well positioned to capitalise on strong forecast market growth.

Raw Materials

• Significant price rises during the year (£5m +)

• Average price for 2007 expected marginally higher

than average 2006

• Visibility of new capacity leads to expectation of price

fall for 2008

PET, PP and LLDPE historic market prices

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

0

500

1,000

€1,500

Price per Ton

PolyethyleneLinearLow Density

PolypropyleneRaffia

PET,PolyethyleneTerephthalate,Bottle Resin

Source: CMAI

Significant new production of PP entering from Middle East from 2007/8

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1.3 1.5 1.51.9 2.2

2.5

3.33.8

6.3

7.8

8.7

0

2

4

6

8

10M T

Polypropylene Production in Middle East

Note: 2006 Global production capacity ~ 46MT: New capacity in ME represents 2% growth alone and 10% by 2009Source: CMAI

PE capacity increases from Middle East and China

2006 2007 2008 2009 2010 2011

1.61.8

1.3

2.42.3

2.4

0

1

2

3M T

Increase in HDPE Capacity

PercentageIncreasein Capacity

7% 7% 5% 8% 7% 7%

Note: 2006 Global production capacity HDPE 24MT, LLDPE 11MTSource: CMAI

2006 2007 2008 2009 2010 2011

1.1

0.60.7

2.42.2

1.3

0

1

2

3M T

Increase in LLDPE Capacity

MiddleEast

NortheastAsia

Other

10% 5% 6% 17% 14% 7%

Technical Textiles:The Benefits of Scale

Create scale

Fund innovation

Drive product

development

Gain market share

Improve margins

Growth

Technical Textiles: 2007 and Beyond

• Scale to drive innovation-led differentiation

• Focus primarily on industrial segment to underpin margins and

play to our strengths

• Take advantage of market, costs and skill synergies in existing

portfolio

• Continue to drive grass yarn improvements to take advantage of

strong market growth

• Assess long-term supply chain opportunities – purchasing and

manufacturing

• Expansion using M&A in existing or new segments with similar

profiles

Low & Bonar: Summary

• Encouraging results in 2006 – a year of major, positive

change and underlying progress

• 2007 has started as expected

• Well positioned in our chosen markets which will sustain

good margins

• Clarity of strategy and strong base for continued profitable

organic growth; with strong management teams to drive it

• Some prospective relief in raw material environment

• Material opportunities for value-adding M&A in both divisions.

Low & Bonar at a glance

• Global advanced materials business, focusing on technical textiles and specialist flooring products/services

• 16 manufacturing sites across Europe, the US and Asia, selling into 50+ countries

• Market capitalisation c. £210m

• 2100 employees

• FTSE Small Cap, Construction & Building (Code: LWB)

Appendix