Johnson Matthey Plc · LSE:JMAT

Johnson Matthey — FY2003 Earnings Presentation

48 slides from Johnson Matthey's earnings presentation, Jun 5, 2003

  1. Slide 1: Presentation of Results for the year ended 31st March 2003

     Johnson Matthey Presentation of Results for the year ended 31st March 2003 5th June 2003

  2. Slide 2: Johnson Matthey

     Johnson Matthey 

  3. Slide 3: Overview

    Overview  Operating profit up 6% to £205.7 million  Catalysts performs well led by good growth in ECT  Acquisition of Synetix  Strong growth in Pharmaceutical Materials  PBT up 3% at £192.5 million 

  4. Slide 4: Johnson Matthey

     Johnson Matthey 

  5. Slide 5: Summary Results

    Summary Results 2003 2002 £m £m% Turnover 4,324 4,830 -10 Sales excluding 1,1591,093 +6 precious metals Operating profit* 205.7 193.3 +6 Interest (13.2) (6.1) Profit before tax* 192.5 187.2 +3 Exceptional items (2.7) (23.7) Goodwill amortisation (13.7) (6.8) EPS* 62.6p 60.4p +4 Dividend 25.5p 24.6p

  6. Slide 6: Operating Profit

    Operating Profit 2003 2003 at 2002 2002 exchange rates £m % £m £m % 111.7 +18 51.2 -8 28.2 +11 Catalysts 38.8 +24104.4 94.7 +10 Precious Metals (14.2)50.1 55.9 -10 Colours -& Coatings 28.5 25.5 +12 215.7 +12 Pharmaceutical Materials 36.9 31.3 +18 Corporate (14.2) (13.6) Discontinued - (0.5) 205.7 19

  7. Slide 7: Return on Sales

    Return on Sales Excluding Precious Metals Sales excl. PM’s ROS 2003 2003 2002 2002Growth % % £m£m % 16.0 Catalysts 652 15.9 597+9 38.0 Metals Precious 39.1 132143 -8 11.3 & Coatings Colours 10.2 253251 +1 30.3 Pharmaceutical Materials 30.9 122101 +20 n/m Discontinued n/m -1 17.7 1,159 17.7 1,093 +6

  8. Slide 8: Geographical Split

    Geographical Split Operating Profit 2003 2002 £205.7m £193.3m Europe Asia North America Rest of World 

  9. Slide 9: Interest

    Interest 2003 2002 £m £m Financial (12.0) (2.6) Gold & silver leases (1.2) (3.5) (13.2) (6.1) Interest Cover 15.6x 31.7x 

  10. Slide 10: Exceptional Items

    Exceptional Items 2003 £m Synetix integration (6.5) Sale of unhedged palladium 5.1 Rationalisation of Australia (1.4) Other rationalisation costs (4.8) Formation of AGR Matthey (6.0) Anglo Platinum stake in Fuel Cells 10.9 Total (2.7) Taxation thereon 2.0 Impact on earnings (0.7) 

  11. Slide 11: Taxation

    Taxation 2003 2002 £m £m Underlying tax 57.2 56.0 Tax on exceptionals (2.0) (5.8) Tax on goodwill amortisation (0.7) - 54.5 50.2 Underlying tax rate 29.7% 29.9% 

  12. Slide 12: Return on Investment

    Return on Investment 2003 2002 £m £m Operating profit 206 193 Average assets: Equity and minorities 862 814 Cumulative goodwill w/o 43 46 Net borrowings 281 10 Total investment 1,186 870 Pre-tax ROA 17.3% 22.2% Return on invested capital 12.2% 15.6% WACC 8% 9% 

  13. Slide 13: Impact of FRS17 on Profit

    Impact of FRS17 on Profit 2002/03 Pro forma Current Adjustments FRS17 £m £m £m Catalysts 104.4 (9.1) 95.3 Precious Metals 50.1 (2.1) 48.0 Colours & Coatings 28.5 (3.2) 25.3 Pharmaceutical Materials 36.9 (0.2) 36.7 Corporate (14.2) (1.9) (16.1) 205.7 (16.5) 189.2 Net interest (13.2) - (13.2) 

  14. Slide 14: Free Cash Flow

    Free Cash Flow 2003 2002 £m £m Operating profit 184 169 Depreciation and amortisation 68 55 Working capital / other (22) - Cash flow from operations 230 224 Interest / tax / dividends (110) (113) Capex (125) (131) Free cash flow (5) (20) 

  15. Slide 15: Net Cash Flow

    Net Cash Flow 2003 2002 £m £m Free cash flow (5) (20) Acquisitions / disposals (249) (145) Shares issued / (bought) 3 (44) Net cash flow (251)(209) Debt acquired with subs. -(47) Loan notes issued (7)(41) Finance leases -(4) Exchange 14 2 Movement in debt (244)(299) 

  16. Slide 16: Capital

    Capital Mar 03 Mar 02 £m £m Net debt 402 159 Shareholders’ funds 896 814 Minority interests 11 4 Capital employed 1,309 977 Gearing 44% 19% (debt / equity + minorities) 

  17. Slide 17: Johnson Matthey

     Johnson Matthey 

  18. Slide 18: Catalysts Division

    Catalysts Division 

  19. Slide 19: Catalysts Division

    Catalysts Division  Good growth led by autocatalysts  Synetix performing well £m £m -17% +10% 1,400 1,303 120 104.4 1,200 1,083 94.7 100 1,000 80 800 60 600 40 400 200 20 0 0 2002 2003 2002 2003 Sales Operating Profit 

  20. Slide 20: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies  Global car sales 1% up in our fiscal year  Our volumes flat on last year millions World Car Sales 60 50 40 Asia / ROW 30 USA W Europe 20 10 0 1998/99 1999/00 2000/01 2001/02 2002/03 

  21. Slide 21: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies NOx Emission Standards (gram/mile) 0.75 Current Standards 0.5 0.25 0 1992 1997 2002 2007 California US Federal Japan Europe China (cities) 

  22. Slide 22: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies  China plant operating profitably  Expansion in South Africa and Malaysia  GM business in Europe  Big increase in heavy duty diesel sales 

  23. Slide 23: Process Catalysts and Technologies

    Process Catalysts and Technologies  Good sales of pgm catalysts  PGM refining impacted by lower metal prices  Strong growth in Research Chemicals  Synetix now fully integrated into PCT 

  24. Slide 24: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils Margarine, mayonnaise, chocolate 

  25. Slide 25: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol Fuel of the future 

  26. Slide 26: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol (#1) Fuel of the future Inks For premier packaging 

  27. Slide 27: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol (#1) Fuel of the future Inks (#1) For premier packaging Oleochemicals Speciality and natural 

  28. Slide 28: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol (#1) Fuel of the future Inks (#1) For premier packaging Oleochemicals (#2) Speciality and natural Hydrogen Upgrading the refinery 

  29. Slide 29: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol (#1) Fuel of the future Inks (#1) For premier packaging Oleochemicals (#2) Speciality and natural Hydrogen (#2) Upgrading the refinery Ammonia Food for the world 

  30. Slide 30: A Leading Position in Each Sector

    A Leading Position in Each Sector Edible Oils (#1) Margarine, mayonnaise, chocolate Methanol (#1) Fuel of the future Inks (#1) For premier packaging Oleochemicals (#2) Speciality and natural Hydrogen (#2) Upgrading the refinery Ammonia (#2) Food for the world Alcohols Asian growth market 

  31. Slide 31: Fuel Cells

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  32. Slide 32: Fuel Cells

    Fuel Cells  Phased expansion of Swindon MEA plant progressing to plan  Johnson Matthey selected as MEA supply partner by industry leaders  Growing number of fuel cell collaborations and demonstrations 

  33. Slide 33: Fuel Cell Cars

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  34. Slide 34: Madrid Demonstration Bus

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  35. Slide 35: Precious Metals

    Precious Metals 

  36. Slide 36: Precious Metals

    Precious Metals  Weak palladium and rhodium prices  Sales and profits below last year £m £m -10% -10% 3,500 55.9 60 3,167 3,000 2,857 50.1 50 2,500 40 2,000 30 1,500 20 1,000 500 10 0 0 2002 2003 2002 2003 Sales Operating Profit 

  37. Slide 37: Platinum and Palladium Prices

    Platinum and Palladium Prices US$ 1,200 1,000 800 600 400 200 0 March March March March 2000 2001 2002 2003 Platinum Palladium 

  38. Slide 38: Precious Metals

    Precious Metals  Outlook for platinum remains robust  Noble Metals continues to perform well  Difficult trading conditions in Gold & Silver 

  39. Slide 39: Colours & Coatings

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  40. Slide 40: Colours & Coatings

    Colours & Coatings  Good profit growth, margins up  Rationalisation successfully completed £m £m +1% +12% 300 28.5 30 253 256 25.5 250 25 200 20 150 15 100 10 50 5 0 0 2002 2003 2002 2003 Sales Operating Profit

  41. Slide 41: Colours & Coatings

    Colours & Coatings  Good growth in Glass  New frit capacity in Spain and Brazil  Speciality Coatings benefits from cost reduction  Cash generator

  42. Slide 42: Pharmaceutical Materials

    Pharmaceutical Materials 

  43. Slide 43: Pharmaceutical Materials

    Pharmaceutical Materials  Sales and profits well ahead  Good results in all three businesses £m £m +21% +18% 140 40 128 36.9 120 35 106 31.3 100 30 25 80 20 60 15 40 10 20 5 0 0 2002 2003 2002 2003 Sales Operating Profit 

  44. Slide 44: Pharmaceutical Materials

    Pharmaceutical Materials  Good results from new products  Poppy straw extraction  Expansion at Pharm-Eco  Cascade Biochem 

  45. Slide 45: Pharmaceutical Materials: New Product Pipeline

    Pharmaceutical Materials New Product Pipeline 30 25 20 15 10 5 0 Pre-Clinical Phase I Phase II Phase III Generic Mar 03 15 14 3 11 27 Nov 02 19 13 3 9 24 

  46. Slide 46: Pharmaceutical Materials

    Pharmaceutical Materials  Macfarlan Smith sales into US  Development agreement for Cascade products  Manufacture of morphine & codeine in US  Manufacture of prostaglandin intermediates 

  47. Slide 47: Outlook

    Outlook  Good growth in operating profit  Increased interest charge  Future growth initiatives 

  48. Slide 48: Johnson Matthey

     Johnson Matthey 

Johnson Matthey — FY2003 Earnings Presentation on 6ix