Summary of interim results for the six month period ended 30 September 2000

Stuart Wallis, Chairman, commented:

"Significant progress has been made during the period in completing the integration process and strengthening manufacturing and commercial operations. Further good progress is anticipated in the second half year, as efficiency gains and additional production capacity come fully on stream. Levels of stock in the market have reduced but remain too high, and we have implemented an action plan to progressively reduce them to more appropriate levels."

Last year, following a change in accounting date, interim and final results were reported for seven months and thirteen months respectively as required by UK accounting standards. This has made meaningful comparisons of current performance more difficult, and so a summary of the actual performance for the six and twelve months comparative periods is attached to this statement.

Compared with the actual performance for the six months ended 30 September 1999, underlying sales have risen by 2.8% to £284.9 million. In arriving at the underlying growth, adjustments have been made for currency differences and the impact of acquisitions and disposals; no adjustments have been made for changes in the levels of stock in the trade or for the effect of terminating distribution agreements.

Sales in the period have been impacted by capacity constraints in surgical gloves and condoms, some short-term supply problems and the effect of discontinuing certain distribution agreements. Further good progress is anticipated in the second half year as efficiency gains and additional production capacity come fully on stream. Levels of stock in the market have reduced but remain too high, and an action plan has been implemented to progressively reduce them to more appropriate levels. This will have an impact of approximately £20 million on sales in each of the current and next financial years.

The operating margin for the group has increased by 2.1% of sales compared with the same period last year. This improvement reflects increased merger benefits and further improvements in operating efficiency. Interest costs have increased as a result of further cash exceptional charges, with interest cover at 4.0 times compared with 4.7 times for the same period last year. Growth in earnings per share before exceptional items and amortisation of goodwill was 17% higher than the comparative actual period.

Exceptional costs
During the period a further £47 million has been charged to exceptional costs, bringing the total charged to date to £190 million. The cash element of this charge is £108 million, of which £86 million has actually been expended. The integration projects detailed earlier in the year have all proceeded well and have now been largely completed. A number of additional restructuring projects have been undertaken, including the sale of the Scholl brand in Latin America, the sale of the Eufaula unbranded condom factory, integration of global business systems and further manufacturing and commercial restructuring.

The additional projects bring the estimate of the total restructuring exceptional item to £225 million, of which approximately £128 million will be cash related. The cash payback of the total exceptional cost is expected to be approximately three years. No further exceptional charges are expected in relation to post-merger group restructuring.

Acquisitions and disposals
On 15 May 2000 the sale of the Scholl UK and Eire retail division to Moss Pharmacy was announced, details of which were given in the last annual report. On 29 September 2000 the sale of the unbranded condom manufacturing facility in Eufaula, USA was also announced, enabling resources to be concentrated on premium branded healthcare products. This completes the disposal of all significant non-core activities.

At the same time, two transactions were announced which strengthen links with Schering Plough Corporation: firstly the sale of the rights to the Scholl brand in Latin America, and secondly the signing of a footcare technology sharing agreement through which the group will benefit from Schering Plough's greater research and development resource.

On 10 November 2000, the Hibi antiseptic product range was acquired, in all countries except Japan, from AstraZeneca plc for approximately £46 million. Hibi is a range of topical infection control agents, which includes the widely recognised Hibiscrub and Hibiclens, based on an advanced antimicrobial agent. The products are principally used in hospitals as medical and surgical skin cleansers for both patients and medical staff. The acquisition will not only strengthen the group's wound management and infection control business, particularly in Continental Europe, but also provide a broader European platform from which to extend Regent surgical gloves distribution.

Manufacturing developments
During the period significant advances have been made in group manufacturing facilities, particularly in the Far East. The first stage of the surgical glove capacity expansion in Kulim, Malaysia has been completed, with the commissioning of a new glove line capable of producing an additional fifty million pairs per annum.

The acquisition of the AMPri surgical glove factory was also completed, and production and packaging commenced in October with the Regent Surgical range.

Following the increase in manufacturing capacity, a building in Kuala Ketil has been acquired, close to the Kulim factory, which will be converted into an additional clean room and sterile packaging facility for surgical gloves. This will provide greater efficiency in packaging and sterilisation.

The Bangkok condom factory expansion has been completed and the equipment transferred from the USA is now fully operational. The Thai condom capacity has been increased from 1.4 million to approximately 3 million gross per annum, and the factory is now producing for the USA market.

Finally, the construction of the new UK pharmaceutical factory in Peterlee is on schedule and will start manufacture in mid 2001. Stock levels are currently being increased to ensure a smooth transition.

Medical division: surgical gloves, wound management and infection control, continence care
Sales growth in the period has been impacted by surgical glove capacity constraints and maintenance downtime that have been addressed by the commissioning of an additional glove manufacturing line in the Kulim factory in October. The presence of high levels of stock in the market, particularly in wound management products, has also contributed to the small decline in medical division sales in the period.

A number of new medical products are in development, including Avance wound dressings and Skinsense synthetic surgical gloves.

Consumer Healthcare division: family planning, Scholl footcare and footwear, OTC products
Overall underlying sales growth for the division was 6%, with strong performances in Scholl products and in family planning.

New consumer product launches during the period include a range of Scholl Gelactiv footcare products which incorporate Silipos mineral oil gel, Scholl Ultima compression hosiery and a range of Scholl toiletries. Scholl Flight socks, designed for use on long haul flights and ProSport Magna magnetic supports are due for launch in the near future.

Household and Industrial Gloves division
Marigold Industrial sales forces in all regions are being strengthened to promote future sales growth. A synthetic industrial glove, Marigold Futura Industrial, will be launched early next year following the successful introduction of the Futura household glove.

Dividend
The Board has declared an interim dividend of 3.9 pence per ordinary share, an increase of 8% over last year. This will be payable on 26 January 2001 to shareholders on the register on 8 December 2000.

Board changes
On 24 November 2000, Alain Strasser was appointed as a non-executive director. Alain, a French national, has worked for Anglo-Dutch and North American multi-national groups and his sector experience includes consumer healthcare, personal hygiene products, food and pet foods.

After five years with the group, formerly as Chief Executive of Scholl PLC, Colin Brown retired from the Board on 31 October 2000. He will continue to be involved with the group on a consultancy basis, supervising a number of projects in Continental Europe. In addition, Paul Sanders, Group Finance Director, will shortly be leaving the group to pursue a career outside the healthcare industry.

Colin and Paul have contributed significantly to the success of the group during the past three years, and have been instrumental in the success of both mergers. The Board would like to thank them for their efforts and wish them well for the future.

  For further information, please contact:

SSL International plc
Stuart Wallis, Chairman 020 7426 4680
Iain Cater, Chief Executive today am: 020 7601 1000
Paul Sanders, Finance Director thereafter: 01565 624000
Kathryn Lamb, Head of Investor Relations 01565 624000

Square Mile - BSMG
Susan Ellis/Louise Robson 020 7601 1000