Johnson Matthey PLC · LSE:JMAT

Johnson Matthey — H1 2004/05 Earnings Presentation

34 slides from Johnson Matthey's earnings presentation, Nov 25, 2004

  1. Slide 1: Presentation of Results for the half year ended 30th September 2004

     Johnson Matthey Presentation of Results for the half year ended 30th September 2004 25th November 2004

  2. Slide 2: Introduction

     Johnson Matthey Introduction Neil Carson Chief Executive

  3. Slide 3: Strategic Initiatives

    Strategic Initiatives  Focus on delivery of organic growth  Major opportunity in HDD catalysts  Good growth prospects elsewhere in Catalysts and in Pharmaceutical Materials  Improve ROA from current 16% level  Rationalise underperforming assets  Use cash from disposals / rationalisation to buy

  4. Slide 4: Financial Review

     Johnson Matthey Financial Review John Sheldrick Group Finance Director

  5. Slide 5: Summary Results

    Summary Results 1H 1H 2004 2003 £m £m % Statutory basis: Turnover 2,473 2,165+14 Profit before tax 62.0 87.6 -29 Earnings per share 18.5p 27.8p - 33 Before exceptional items and goodwill amortisation: Operating profit 106.1 103.1 +3 Profit before tax 103.3 97.5 +6 Earnings per share 33.6p 31.8p +6 D

  6. Slide 6: Operating Profit

    Operating Profit 1H 1H 1H 2004 at 1H 2003 2004 2003 exchange rates* £m £m % £m % Catalysts 56.9 56.5 59.9 +6 +1 Precious Metals 23.4 21.9 24.4 +11 +7 Pharmaceutical Materials 20.9 20.7 22.2 +7 +1 Colours & Coatings 12.8 10.4 13.8 +33 +23 Corporate (8.3) (7.8) (8.3) *Excluding South 112.0 African+10

  7. Slide 7: Geographical Split

    Geographical Split Operating Profit 1H 1H 2004 2003 £106.1m £103.1m 17% 15% 9% 41% 12% 38% 33% 35% Europe Asia North America Rest of the World 

  8. Slide 8: Return on Sales

    Return on Sales Excluding Precious Metals Sales excl. PM’s ROS 1H 1H 1H 1H 2004 2004 2003 2003Growth % % £m£m % 16.6 Catalysts 342 14.9 380-10 36.6 Metals Precious 37.1 6459 +8 33.3 Pharmaceutical Materials 33.9 6361 +3 10.9 & Coatings Colours 9.5 117109 +7 18.0 586 16.7 609 -4 3.3 Discontinued 12 8

  9. Slide 9: Exceptional Items

    Exceptional Items 1H 2004 £m Included in operating profit: AMC integration costs 1.0 Lancaster integration costs 2.0 3.0 Other exceptionals: Loss on disposal of Pigments & Dispersions 15.3 Loss on closure of UK gold & silver refinery 12.4 30.7 

  10. Slide 10: Interest

    Interest 1H 1H 2004 2003 £m £m Net interest (7.4) (8.5) Net return on retirement 4.6 2.9 benefits assets & liabilities (2.8) (5.6) 

  11. Slide 11: Taxation

    Taxation 1H 1H 2004 2003 £m £m Underlying tax 30.9 29.2 Tax on exceptional items (7.6) - Tax on goodwill amortisation (1.0) (1.2) 22.3 28.0 Underlying tax rate 29.9% 29.9% 

  12. Slide 12: Net Cash Flow

    Net Cash Flow 1H 1H 2004 2003 £m £m Operating profit 92.293.0 Depreciation and amortisation 42.7 40.1 Working capital / other (14.0) 9.3 Cash flow from operations 120.9142.4 Interest / tax / dividends (78.3) (66.2) Capex (34.6) (62.4) Acquisitions / disposals 21.3 2.2 Shares issued 1.13.5 Net cash f

  13. Slide 13: Capital

    Capital Sep 04 Mar 04 £m £m Net debt 363394 Equity and minorities 901 872 Capital employed 1,264 1,266 Gearing 40%45% (debt / equity + minorities) Interest cover 14x12x 

  14. Slide 14: Operating Review

     Johnson Matthey Operating Review Neil Carson Chief Executive

  15. Slide 15: Catalysts Division

    Catalysts Division  Profits up 6% on constant currency basis  Good demand for autocatalysts and process catalysts Growth at actual exchange rates £m £m -2% +1% 640 56.5 56.9 60 593 583 480 45 320 30 160 15 0 1H 1H 1H 1H 0 2003/04 2004/05 2003/04 2004/05 Sales Operating Profit 

  16. Slide 16: 1H 2004/05 Light Vehicle sales and production

    1H 2004/05 Light Vehicle sales and production Growth vs North America Vehicles 1H 2003/04 Sales 10.24m 0 Production 7.8m -0.3% Western Europe Sales 8.17m 1.5% Production 8.01m 1.3% Asia Sales 6.37m 4.2% Production 10.2m 9.7% Global Sales 27.4m 3.0% Production 29.8m 5.5% Source: Global Insight 

  17. Slide 17: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies  Autocatalysts up in Europe with good sales of diesel products  Good demand for autocatalysts in Asia, although China slows  Weaker demand in the US, profits flat  Lower contribution from HDD retrofit programmes  Increased investment in HDD development 

  18. Slide 18: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies Light Duty Vehicles  Emissions legislation continues to provide important growth opportunities  Euro IV and US Tier II tightening standards require increasing level of catalyst performance  Health concerns drive market for advanced catalysed particulate fi

  19. Slide 19: HDD on-road regulation development

    Environmental Catalysts and Technologies HDD on-road regulation development New Models All Models Europe 0.2 Euro 4 Oct-05 Oct-06 Japan 2003 Euro 5 Oct-08 Oct-09 0.18 United States 0.16 US2007 Jan-07 Jan-07 US2010 Jan-10 Jan-10 0.14 US 2002 3/4 Japan PM (g/kW-hr) 0.12 New Short Term EU III 0.1 2.5-1

  20. Slide 20: Process Catalysts and Technologies

    Process Catalysts and Technologies  Good contribution from AMC acquired in March 2004  Catalyst businesses ahead, good demand for gas processing products and syngas catalysts  Margin pressure in pgm refining 

  21. Slide 21: Process Catalysts and Technologies

    Process Catalysts and Technologies  Increased investment in gas to liquids R&D  Lancaster Synthesis acquired from Clariant  Increases JM’s share of research chemicals market 

  22. Slide 22: Fuel Cells

    Fuel Cells  Demand from automotive sector continues to grow  Increased government support  California Hydrogen Highway  Development of stationary market slower than anticipated  Net expense slightly down 

  23. Slide 23: Precious Metals

    Precious Metals  Profits up 11% on constant currency basis  Much improved trading conditions £m Growth at actual exchange rates £m +23% +7% 1,800 1,693 23.4 25 21.9 1,500 1,380 20 1,200 15 900 10 600 300 5 0 1H 1H 1H 1H 0 2003/04 2004/05 2003/04 2004/05 Sales Operating Profit 

  24. Slide 24: Platinum, Palladium and Rhodium Prices

    Platinum, Palladium and Rhodium Prices US$ 1,500 1,200 900 600 300 0 March 2003 September 2003 March 2004 September 2004 Platinum Palladium Rhodium 

  25. Slide 25: Precious Metals

    Precious Metals  Platinum group metals basket price substantially up on last year  Improved trading conditions continue  Impact of Anglo Platinum contract renewal more than offset by improved pgm market and volume growth 

  26. Slide 26: Precious Metals

    Precious Metals  Good growth in fabricated products  Demand for medical parts continues to increase  Gold refining business satisfactory in North America and Hong Kong  UK gold refinery being closed 

  27. Slide 27: Pharmaceutical Materials

    Pharmaceutical Materials  Profits up 7% on constant currency basis  Good growth in specialist opiate products £m Growth at actual exchange rates £m +3% +1% 75 25 65 66 20.7 20.9 60 20 45 15 30 10 15 5 0 1H 1H 1H 1H 0 2003/04 2004/05 2003/04 2004/05 Sales Operating Profit 

  28. Slide 28: Pharmaceutical Materials

    Pharmaceutical Materials  Carboplatin patent cover continued until October 2004  Generic competition for carboplatin will impact second half  Other platinum pharmaceuticals perform well 

  29. Slide 29: Pharmaceutical Materials

    Pharmaceutical Materials  Good growth at Macfarlan Smith  Increase in sales of specialist opiates  New high potency drug facility successfully commissioned and in production  Investment in new capacity  Product pipeline strong with over 80 APIs in development 

  30. Slide 30: Colours & Coatings

    Colours & Coatings  Profits up 33% on constant currency basis  Glass and Structural Ceramics perform well £m Growth at actual exchange rates £m +6% +23% 150 14 12.8 12 118 111 10.4 10 100 8 6 50 4 2 0 1H 1H 1H 1H 0 2003/04 2004/05 2003/04 2004/05 Sales Operating Profit

  31. Slide 31: Colours & Coatings

    Colours & Coatings  Good growth in Glass business  Structural Ceramics continues recovery which started in second half of 2003/04  Pigments & Dispersions sold  Restructuring of remaining Speciality Coatings business  Structural Ceramics to be retained 

  32. Slide 32: Strategy

    Strategy  Focus on core businesses  Well positioned in several new markets  Now focused on delivering these opportunities and improving ROA 

  33. Slide 33: Outlook

    Outlook  All four divisions performed well in first half  PGM market recovery continues  Currency effect – impact of weak dollar  Expect further growth in earnings before exceptional items and goodwill amortisation 

  34. Slide 34: Johnson Matthey

     Johnson Matthey

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