Press information

CHAIRMAN'S ADDRESS TO AGM

28 JULY 2003

At today's Annual General Meeting of Pilkington plc, the Chairman, Sir Nigel Rudd, made the following statement:

"As I said at the time of our results announcement in May, last year we experienced some of the toughest trading conditions for many years. However the improvement in our competitiveness following the restructuring of recent years meant that we were still able to produce respectable results. Operating profits fell by 9%, but our increased emphasis on cash generation enabled Pilkington to deliver its strongest cash performance for a decade.

As we continue to trade in both difficult and challenging markets, our priorities remain clear - continued cost reduction, further improvement in manufacturing performance, and a focus on the generation of free cash flow to underpin our financial performance.

In this context, last week we announced the sale, which is conditional on regulatory approvals, of our Aerospace business to GKN for £42 million. The sale is consistent with our strategy of concentrating on our core Building Products and Automotive businesses and strengthens further the Group's financial position.

Turning to current trading, I would now like to pick up on the elements in our core businesses that have determined our performance in the early part of the year:

Building Products

As anticipated, most Building Products markets have remained difficult, and whilst trading in the UK continues to be relatively strong, demand in Continental Europe is weak.

In North America, conditions remain challenging in the commercial building market, although we expect the benefits of restructuring and improved manufacturing performance to come through in the results for this year.

Our Australian business continues to perform well and results in South America are benefiting from the improved stabilisation of the Argentinean economy.

Automotive Glass

Vehicle production in Europe and North America is currently running below last year's levels. Nevertheless our sales to the OE manufacturers are slightly better, due to strong demand for some key models featuring Pilkington glass. Efficiency and productivity levels in our OE businesses in Europe and in North America continue to improve, and overall results are a little ahead of last year.

In Automotive Glass Replacement, demand in Europe is generally encouraging, while the market in North America has experienced a slow start to the year. Continuing increases in productivity and cost reductions over the last few years have, however, helped to ensure that results have held up relatively well.

The Automotive businesses in South America, Australasia and China are operating close to or better than last year's performance, despite variable market conditions.

In summary, despite the background of challenging market conditions that I have described, we have had an encouraging start to the year."

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