Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — Investor Presentation (November 2007)
31 slides from Johnson Matthey's investor presentation, Nov 13, 2007
Slide 1: Platinum 2007 Interim Review
Platinum 2007 Interim Review 13th November 2007
Slide 2: Platinum
UME) Johnson Matthey Platinum
Slide 3: Platinum: Key features
Platinum: Key features • Platinum market to return to deficit in 2007 • Autocatalyst demand growth outweighs effects of thrifting and substitution • Jewellery demand not significantly affected by price • South African supply well below expectations • Limited impact of ETFs • Record price due to weak
Slide 4: Platinum Supply and Demand
Platinum Supply and Demand ’000 oz 2006 2007 % Demand 6,730 6,925 +2.9 Supply 6,795 6,660 -2.0 Movements in stocks 65 (265) www.platinum.matthey.com
Slide 5: Platinum Demand Rises 195,000 oz
Platinum Demand Rises 195,000 oz million oz 8 • Total demand climbs 2.9% to 7 6.730 6.925 6.93 million oz 6 • Autocatalyst demand (net of 5 recovery) rises by 65,000 oz 4 • Jewellery demand falls by only 3 25,000 oz to 1.60 million oz 2 • Growth in other sectors 1 including investment 0 2006 2007 Au
Slide 6: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst million oz 5.0 • Auto industry purchases increase 4.5 4.140 4.235 by 2.3% to 4.24 million oz 4.0 • Increasing fitment of DPFs 3.5 3.0 • Further growth in heavy duty 2.5 diesel aftertreatment 2.0 • Strong demand for platinum from 1.5 rising Asian vehicle production 1.0 0
Slide 7: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst million oz 5.0 4.0 3.0 2.0 1.0 0.0 2003 2004 2005 2006 2007 Gasoline www.platinum.matthey.com
Slide 8: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst million oz 5.0 4.0 3.0 2.0 1.0 0.0 2003 2004 2005 2006 2007 Gasoline Diesel www.platinum.matthey.com
Slide 9: Platinum Demand: Jewellery
Platinum Demand: Jewellery million oz 2.0 1.620 1.595 • Jewellery demand steady, despite high prices 1.5 • Global demand for new metal falls by 1.5% to 1.595 million oz 1.0 • Demand expected to grow in China and Europe 0.5 • Recycled metal again a 0.0 significant input to Asian 2006 2007 manufacturi
Slide 10: Platinum: Chinese Jewellery Manufacture
Platinum: Chinese Jewellery Manufacture million oz 1.2 • Chinese demand for new 1.0 metal climbs 20,000 oz to 780,000 oz 0.8 • Strong consumer 0.6 purchasing helped by 0.4 economic growth 0.2 • High prices have little 0.0 further effect on 2005 2006 2007 recycling rates Demand Recycling www.platinum
Slide 11: Platinum Supply
Platinum Supply million oz 8 6.795 6.660 • 2007 South African output 7 falls to 5.22 million oz due to strikes, safety issues and 6 processing problems 5 4 • Challenges of finding and retaining staff remain key 3 2 • Russian primary production 1 to fall but export licence issues will have no effect
Slide 12: Platinum Outlook
Platinum Outlook • Increasing use of light duty diesel filters and heavy duty catalysts to support demand growth • Consumer interest in Pt jewellery still strong but effects of high price uncertain • Limited price sensitivity in industrial sectors • Supply to grow but challenges remain • Market like
Slide 13: Forecast Platinum Price for the Next 6 Months
Forecast Platinum Price for the Next 6 Months $ per oz 1,600 1,500 1,400 1,300 1,200 1,100 1,000 900 J A J O J A J O J A 2006 2007 2008 www.platinum.matthey.com
Slide 14: Forecast Platinum Price for the Next 6 Months
Forecast Platinum Price for the Next 6 Months $ per oz 1,600 1,500 $1,350 – $1,575 1,400 1,300 1,200 1,100 1,000 900 J A J O J A J O J A 2006 2007 2008 www.platinum.matthey.com
Slide 15: Palladium
UME) Johnson Matthey Palladium
Slide 16: Palladium: Key features
Palladium: Key features • Palladium market to be in fundamental surplus • Substitution for platinum in gasoline catalysts and further use in diesel catalysts • Chinese jewellery demand drops – manufacturing levels down and recycling up • Supplies rise, boosted by Russian stock sales • Price supporte
Slide 17: Palladium Supply and Demand
Palladium Supply and Demand ’000 oz 2006 2007 % Demand 6,470 6,605 +2.1 Supply 8,060 8,320 +3.2 Movements in stocks 1,590 1,715 www.platinum.matthey.com
Slide 18: Palladium Demand Climbs 135,000 oz
Palladium Demand Climbs 135,000 oz million oz • Total demand grows by 2.1% 8 6.470 6.605 to 6.605 million oz 7 6 • Rising Asian car production 5 and substitution for platinum 4 drive autocatalyst growth 3 • Decline in demand for new 2 palladium for jewellery to 1 745,000 oz 0 2006 2007 • ETFs boost
Slide 19: Palladium Demand: Autocatalyst
Palladium Demand: Autocatalyst million oz 5.0 • Asian palladium demand 4.5 4.040 4.380 grows due to rising vehicle 4.0 production 3.5 3.0 2.5 • Palladium continues to 2.0 replace platinum 1.5 1.0 – Approaching limit in gasoline 0.5 sector 0.0 2006 2007 China Japan N. Am. – Still potential growth in
Slide 20: Pgm choice in Autocatalysts
Pgm choice in Autocatalysts Gasoline percentage of pgm used (Pt/Pd) 100.0 75.0 50.0 25.0 0.0 2005 2006 2007 Palladium Platinum www.platinum.matthey.com
Slide 21: Pgm choice in Autocatalysts
Pgm choice in Autocatalysts Gasoline Diesel percentage of pgm used (Pt/Pd) percentage of pgm used (Pt/Pd) 100.0 100.0 75.0 75.0 50.0 50.0 25.0 25.0 0.0 0.0 2005 2006 2007 2005 2006 2007 Palladium Platinum Palladium Platinum www.platinum.matthey.com
Slide 22: Palladium Demand: Jewellery
Palladium Demand: Jewellery '000 oz 1,500 • Chinese new metal 1,250 purchases drop 260,000 oz 1,000 to 500,000 oz 750 • Manufacturing demand falls 500 • Significant use of recycled 250 palladium 0 2003 2004 2005 2006 2007 • Retail sales picture mixed China RoW www.platinum.matthey.com
Slide 23: Palladium Supply
Palladium Supply million oz 9 8.060 8.320 • Supply grows 260,000 oz to 8 7 8.32 million oz 6 • Russian supplies boosted by 5 4 sales of Dec. 2006 shipments 3 • South African production falls 2 1 to 2.795 million oz 0 2006 2007 S.Africa Russia N.Am. Other www.platinum.matthey.com
Slide 24: Palladium Supply: Russia
Palladium Supply: Russia million oz 5 3.900 4.240 • Norilsk primary production 4 from Russia expected to fall 3 • All Stillwater/Norilsk metal now sold 2 • Forecast does not include any 1 potential 2007 shipments of 0 state stocks 2006 2007 Primary State sales Stillwater www.platinum.matthey.com
Slide 25: Palladium Outlook
Palladium Outlook • Palladium to continue to take share from platinum in autocatalysts • Growth in Chinese jewellery demand possible if recycling slows and marketing is extended • Timing of Russian stock sales unknown • Market to remain in surplus - fund and investor interest remain vital to the pri
Slide 26: Forecast Palladium Price for the Next 6 Months
Forecast Palladium Price for the Next 6 Months $ per oz 450 400 350 300 250 J A J O J A J O J A 2006 2007 2008 www.platinum.matthey.com
Slide 27: Forecast Palladium Price for the Next 6 Months
Forecast Palladium Price for the Next 6 Months $ per oz 450 400 $320 – $420 350 300 250 J A J O J A J O J A 2006 2007 2008 www.platinum.matthey.com
Slide 28: Other pgm
UME) Johnson Matthey
Slide 29: Rhodium
Rhodium $ per oz Rhodium price • Market to be in small deficit 7,000 again in 2007 6,500 6,000 • Supplies to fall 20,000 oz to 5,500 804,000 oz due to lower 5,000 Russian shipments 4,500 4,000 • Demand falls to 808,000 oz 3,500 3,000 on lower glass sector 2,500 demand J A J O J A J O • Price support
Slide 30: Ruthenium
Ruthenium $ per oz Ruthenium price • Demand to rise 53,000 oz 900 800 to record 1.344 million 700 oz 600 500 • PMR hard disk market 400 share increases 300 200 • Expansion of refining 100 capacity and 0 concentration on J A J O J A J O reduction of inventory 2006 2007 limits increase in demand www.p
Slide 31: Platinum 2007 Interim Review
Platinum 2007 Interim Review 13th November 2007
Johnson Matthey — Investor Presentation (November 2007) on 6ix