Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — FY2004 Earnings Presentation
41 slides from Johnson Matthey's earnings presentation, Jun 3, 2004
Slide 1: Presentation of Results for the year ended 31st March 2004
E Johnson Matthey Presentation of Results for the year ended 31st March 2004 3rd June 2004
Slide 2: Johnson Matthey
UME) Johnson Matthey
Slide 3: Overview
Overview • Operating profit up 9% to £206.0 million despite adverse currency effects • Catalysts well ahead with good contribution from former Synetix businesses • Strong growth in Pharmaceutical Materials • PBT up 3% at £195.7 million. EPS 4% ahead at 64.0 pence E
Slide 4: Johnson Matthey
UME) Johnson Matthey
Slide 5: Summary Results
Summary Results 2004 2003 restated £m £m % Turnover 4,493 4,324 +4 Sales excluding precious metals 1,224 1,159 +6 Operating profit 188.3 167.9 +12 Profit before tax 178.0 173.5 +3 Earnings per share 56.0p 55.4p +1 Before exceptional items and goodwill amortisation: Operating profit 206.0 189.2 +9 Pr
Slide 6: Operating Profit
Operating Profit 2004 2003 2004 at 2003 restated exchange rates* £m £m % £m % Catalysts 109.2 95.3 +15 112.9 +18 Precious Metals 44.2 48.0 -8 45.2 -6 Colours & Coatings 26.7 25.3 +6 25.0 -1 Pharmaceutical Materials 42.3 36.7 +15 44.6 +22 Corporate (16.4) (16.1) (16.4) 206.0 189.2 +9 211.3 +12 *Exclu
Slide 7: Return on Sales
Return on Sales Excluding Precious Metals Sales excl. PM’s ROS 2004 2003 Growth 2004 2003 £m £m % % % Catalysts 720 652 +10 15.2 14.6 Precious Metals 121 132 -9 36.7 36.4 Colours & Coatings 252 253 - 10.6 10.0 Pharmaceutical Materials 131 122 +8 32.2 30.1 1,224 1,159 +6 16.8 16.3 E
Slide 8: Geographical Split
Geographical Split Operating Profit 2004 2003 £206.0m £189.2m 16% 16% 9% 40% 7% 31% 46% 35% Europe Asia North America Rest of World E
Slide 9: Interest
Interest 2004 2003 restated £m £m Financial (15.3) (12.0) Gold & silver leases (1.0) (1.2) (16.3) (13.2) Interest Cover 12.6x 14.3x E
Slide 10: Net Return on Retirement Benefits Assets and Liabilities
Net Return on Retirement Benefits Assets and Liabilities 2004 2003 restated £m £m Expected return on scheme assets 37.5 46.4 Interest on scheme liabilities (31.5) (32.5) 6.0 13.9 E
Slide 11: Exceptional Items
Exceptional Items 2004 £m Litigation settlement 14.8 Catalysts’ rationalisation (12.7) Total 2.1 E
Slide 12: Taxation
Taxation 2004 2003 £m £m Underlying tax 58.3 56.4 Tax on exceptionals 1.6 (2.0) Tax on goodwill amortisation (2.0) (0.7) 57.9 53.7 Underlying tax rate 29.8% 29.7% E
Slide 13: Return on Investment
Return on Investment 2004 2003 restated £m £m Operating profit 206 189 Average assets: Equity and minorities 835 803 Cumulative goodwill w/o 41 43 Net borrowings 398 281 Total investment 1,274 1,127 Pre-tax ROA 16.2% 16.8% Return on invested capital 11.4% 11.8% WACC 8% 8% E
Slide 14: Free Cash Flow
Free Cash Flow 2004 2003 restated £m £m Operating profit 188 168 Depreciation and amortisation 84 69 Working capital / other (12) (7) Cash flow from operations 260 230 Interest / tax / dividends (116) (110) Capex (114) (125) Free cash flow 30 (5) E
Slide 15: Net Cash Flow
Net Cash Flow 2004 2003 £m £m Free cash flow 30 (5) Acquisitions / disposals (18) (249) Shares issued / (bought) (9) 3 Net cash flow 3 (251) Loan notes issued (1) (7) Exchange 6 14 Movement in debt 8 (244) E
Slide 16: Capital
Capital Mar 04 Mar 03 restated £m £m Net debt 395 403 Shareholders’ funds 862 787 Minorities 9 11 Capital employed 1,266 1,201 Gearing 45% 50% (debt / shareholders’ funds + minorities) E
Slide 17: Johnson Matthey
UME) Johnson Matthey
Slide 18: Catalysts Division
Catalysts Division E
Slide 19: Catalysts Division
Catalysts Division • Good performance from ECT led by growth in Asia and diesel • PCT well ahead. Good contribution from Synetix £m £m +5% +15% 1,200 1,143 120 1,083 109.2 1 1,000 95.3 100 800 80 600 60 400 40 200 20 0 0 2003 2004 2003 2004 Sales Operating Profit 1= Restated for FRS 17 E
Slide 20: Environmental Catalysts and Technologies
Environmental Catalysts and Technologies • Asian region well ahead • 37% market growth in China light duty vehicles • Domestic US customers’ production down • Diesel cars now 46% of European market • End of old production technology E
Slide 21: Environmental Catalysts and Technologies
Environmental Catalysts and Technologies Light Duty Diesel • JM share increasing • New technologies include: – Catalysed soot filters – Use of palladium E
Slide 22: Environmental Catalysts and Technologies
Environmental Catalysts and Technologies Heavy Duty Diesel • Very strong retrofit sales in Japan • Good growth in US and Europe • Joint development programmes with major OEMs worldwide E
Slide 23: Process Catalysts and Technologies
Process Catalysts and Technologies E
Slide 24: Process Catalysts and Technologies
Process Catalysts and Technologies • Successful integration of Synetix • Process catalysts perform strongly • PGM refining impacted by Pd and Rh prices • Research Chemicals performs well E
Slide 25: Process Catalysts and Technologies
Process Catalysts and Technologies • Acquisition of AMC • New pgm catalyst plant in India E
Slide 26: Fuel Cells
Fuel Cells E
Slide 27: Fuel Cells
Fuel Cells • Fuel Cells business making encouraging progress • Increased sales to automotive sector • £3.2 million grant from UK Government for MEA development • Net expense down 12% E
Slide 28: Precious Metals
Precious Metals E
Slide 29: Precious Metals
Precious Metals • Subdued trading conditions for most of year • Market conditions improving £m £m +3% -8% 3,500 60 2,956 3,000 2,857 48.0 1 50 44.2 2,500 40 2,000 30 1,500 20 1,000 500 10 0 0 2003 2004 2003 2004 Sales Operating Profit 1= Restated for FRS 17 E
Slide 30: Platinum and Palladium Prices
Platinum and Palladium Prices US$ 1,000 800 600 400 200 0 March March March March 2001 2002 2003 2004 Platinum Palladium E
Slide 31: Precious Metals
Precious Metals • Trading conditions improving • Good growth in fabricated pgm products • Weak demand for primary gold refining E
Slide 32: Colours & Coatings
Colours & Coatings
Slide 33: Colours & Coatings
Colours & Coatings • Profits and margins up £m £m -1% +6% 300 30 256 1 26.7 254 25.3 250 25 200 20 150 15 100 10 50 5 0 0 2003 2004 2003 2004 Sales Operating Profit 1= Restated for FRS 17
Slide 34: Colours & Coatings
Colours & Coatings • Glass performs well • Tile market impacted by strong euro, now improving • Speciality Coatings benefits from lower costs
Slide 35: Pharmaceutical Materials
Pharmaceutical Materials E
Slide 36: Pharmaceutical Materials
Pharmaceutical Materials • Strong growth in profits • Good results at West Deptford and Macfarlan Smith £m £m +9% +15% 150 140 50 128 42.3 120 36.7 1 40 90 30 60 20 30 10 0 0 2003 2004 2003 2004 Sales Operating Profit 1= Restated for FRS 17 E
Slide 37: Pharmaceutical Materials
Pharmaceutical Materials • Expanded range of platinum drugs • Growth in specialist opiates • Recovery in demand at Pharm-Eco • Development of prostaglandins E
Slide 38: Pharmaceutical Materials
Pharmaceutical Materials • Carboplatin patent to expire in 2004 • New opiates facility at West Deptford commissioned • New production capacity for specialist products at Macfarlan Smith • New product pipeline increased to over 80. Several new products introduced in year E
Slide 39: Outlook
Outlook • Markets improving • Further growth from Catalysts and Pharmaceutical Materials • Currency effect – impact of weak US dollar E
Slide 40: Longer Term Growth
Longer Term Growth • Heavy duty diesel catalysts • Growth in opiates and prostaglandins • Gas to liquids catalysts • Fuel Cells E
Slide 41: Johnson Matthey
UME) Johnson Matthey