In order to provide a clear focus on delivery and accountability, new operational and organisational structures were introduced with effect from 1 January 2009.

The senior management team was strengthened during the year with the appointment of new leaders for the Sensors and General Industrial divisions. We also appointed a new Divisional Chief Executive for the Components division in January 2010.

We recognise that our people form the foundations for our future. In 2009, we established core values for the Group. These provide a set of guiding principles and behaviours to ensure that all employees are aligned to our strategic objectives, as outlined above. During the final quarter of this year, we began the roll-out of a new web-based performance management system. This system is enabling us to assess the managers across our businesses, identify and address their development needs, and set and track objectives, ensuring that these are aligned with the Group’s key goals. Finally, a revised management incentive plan has been introduced with a focus on the achievement of strategic objectives and cash generation, as well as profit.

We continue to improve the way in which we interface with our customers. For example, on 1 July 2009, we implemented a new unified sales structure across Europe in order to help the businesses within the Components division address specific markets and customers. Following the success of this initiative, similar regional sales structures were implemented in the USA and Asia on 1 January 2010, in each case creating a single route to market which will allow us to better serve our customers.

A key account management programme, focused primarily on the defence and aerospace and medical markets, has been applied to 14 major customers, each of which now benefits from a nominated key account manager with global responsibility. In certain market areas, we have established virtual teams to enable us to bring together the full extent of the Group’s world-class facilities, technologies and skills in order to enhance our customer offering. In particular, we are seeing good progress by the defence and aerospace team, with the combined Group capabilities being presented to key customers via an ongoing programme of technical roadshows. Our connectors business has secured a substantial new customer in Smiths Detection in support of their chemical detection products, and a number of other new opportunities have been identified with major defence companies. The creation of the hybrid vehicle electronics team has allowed us to map our Group-wide capabilities against specific applications including in the areas of battery management and powertrain and we are working on over 20 separate projects, including a number with major car manufacturers. Although slower to develop, the medical electronics team is also now making good progress in identifying opportunities that can be better served on a co-ordinated Group-wide basis.

The development and introduction of new technologies and applications is key to the Group’s continued success. During 2009, the engineering teams in a number of our businesses in the Components, Sensors and Secure Power divisions began to work more closely together. They are sharing technologies and expertise across businesses within each division, including within the framework of the virtual market teams and we expect this to continue through 2010.

Good progress was made in 2009 to reduce inventories and increase manufacturing efficiency. During 2010, we will conduct an assessment of 10 businesses within the Components and Sensors divisions to establish areas for further improvement.

We have identified a number of markets which we believe will provide the Components and Sensors divisions with the opportunity for higher growth and margins. These include the defence and aerospace and medical markets. We have also identified certain segments within the automotive, broader transportation and industrial markets, which we believe represent attractive opportunities for us. Although our revenue was adversely impacted during 2009 by the global economic downturn, we made progress on developing our position in the target segments. This was driven by the key account management programme, the virtual market teams and by specific actions on a business-by-business basis. In addition, we have de-emphasised a number of lower growth or lower profit market segments and completed the withdrawal from the AB Automotive climate control business.

The Strategic Review identified clear priorities for each of the divisions for 2009. Progress was made during the year across all divisions and this is set out in more detail on Sector summaries.

The Group generated an underlying operating cash flow of £83.9 million during 2009, principally due to a reduction in working capital. As a result, Group net debt was nearly halved to £56.9 million from an opening position of £113.2 million, improving the Group’s ability to fund programmes to develop the business in line with its strategy.