Johnson Matthey PLC · LSE:JMAT
Johnson Matthey — Investor Presentation (November 2004)
36 slides from Johnson Matthey's investor presentation, Nov 16, 2004
Slide 1: Platinum 2004 Interim Review
abcd Platinum| Platinum 2004 Interim Review 16th November 2004
Slide 2: Platinum
Platinum • Demand to edge up to 6.47 million oz • Good growth in auto & industrial demand • Purchasing by Chinese jewellers slides • Supplies to grow to 6.43 million oz • Market moving close to balance • Fund long positions help to support the price www.platinum.matthey.com
Slide 3: Platinum Demand by Application
Platinum Demand by Application Autocatalyst: +7% 3,210 3,430 3,500 RoW 3,000 2,500 N.America 2,000 '000 oz Japan 1,500 1,000 Europe 500 0 2003 2004 www.platinum.matthey.com
Slide 4: Diesel share of European new car sales, 1999 vs 2004
Diesel share of European new car sales, 1999 vs 2004 1999 2004 Diesel Diesel Gasoline Gasoline www.platinum.matthey.com
Slide 5: European Demand for Platinum in Autocatalysts 1999 - 2004
European Demand for Platinum in Autocatalysts 1999 - 2004 '000 oz 2,000 1,750 1,500 1,250 1,000 750 500 250 0 1999 2000 2001 2002 2003 2004 Pt in Diesel Pt in Gasoline www.platinum.matthey.com
Slide 6: Autocatalyst demand: emission regulations tightening
Autocatalyst demand: emission regulations tightening Europe: Euro IV from Jan. 2005 Japan: National HDD regulations from Oct. 2005 Other Asia: China, South Korea, India, Thailand… USA: Tier 2 phase-in from Jan 2004 www.platinum.matthey.com
Slide 7: Platinum Demand by Application
Platinum Demand by Application Jewellery: -10% 2,440 2,200 2,500 2,000 RoW Europe 1,500 '000 oz N.America 1,000 Japan 500 China 0 2003 2004 www.platinum.matthey.com
Slide 8: Falling Chinese Jewellery Demand for Platinum – Why?
Falling Chinese Jewellery Demand for Platinum – Why? Higher platinum price: Metal costs up but retail prices static = lower profit margins Lower margins = increased production of WG plus addition of Pd jewellery Platinum stock levels reduced throughout the trade Greater competition in stores from le
Slide 9: Demand for Platinum in Jewellery – Other Markets
Demand for Platinum in Jewellery – Other Markets Retail sales fall in Japan but less inventory recycling High Pt price = pressure on market share in USA UK bridal the bright spot in Europe www.platinum.matthey.com
Slide 10: Platinum Demand by Application
Platinum Demand by Application Industrial: +9% 1,600 1,400 1,530 1,400 Petroleum 1,200 Glass 1,000 '000 oz 800 Electrical 600 Chemical 400 200 Other 0 2003 2004 www.platinum.matthey.com
Slide 11: Platinum Demand by Application
Platinum Demand by Application ‘000 oz 2003 2004 % change Autocatalyst: gross 3,210 3,430 7 recovery (645) (695) 8 Jewellery 2,440 2,200 (10) Industrial 1,400 1,530 9 Investment 15 5 (67) TOTAL DEMAND 6,420 6,470 1 www.platinum.matthey.com
Slide 12: Platinum Supply by Region
Platinum Supply by Region Total supply: +4% 6,200 6,430 7,000 6,000 Other 5,000 N. America 4,000 '000 oz 3,000 Russia 2,000 South 1,000 Africa 0 2003 2004 www.platinum.matthey.com
Slide 13: South African Supply Factors
South African Supply Factors Industrial relations: Anglo Platinum, Impala Operational: Anglo, Impala, Northam, Aquarius, Southern Platinum Rand strength: All producers www.platinum.matthey.com
Slide 14: Other Supply
Other Supply Russia: sales close to mine production North America: Inco’s output up strongly Zimbabwe: modest growth www.platinum.matthey.com
Slide 15: Platinum Supply by Region
Platinum Supply by Region ‘000 oz 2003 2004 % change South Africa 4,630 4,980 8 Russia 1,050 850 (19) North America 295 360 22 Others 225 240 7 TOTAL SUPPLY 6,200 6,430 4 www.platinum.matthey.com
Slide 16: Platinum Supply and Demand
Platinum Supply and Demand ‘000 oz 2003 2004 % change Demand 6,420 6,470 1 Supply 6,200 6,430 4 Movements in Stocks (220) (40) www.platinum.matthey.com
Slide 17: Platinum price
Platinum price January - October 2004 $ per oz 950 925 900 875 850 825 800 775 750 J F M A M J J A S O Average Price www.platinum.matthey.com
Slide 18: Platinum price vs NYMEX net speculative position
Platinum price vs NYMEX net speculative position January - October 2004 $ per oz '000 oz 950 350 925 300 900 250 875 200 850 150 825 100 800 50 775 0 750 -50 J F M A M J J A S O Total Net Spec. Average Price www.platinum.matthey.com
Slide 19: Palladium
Palladium • Demand to improve to 6.14 million oz • US auto industry stocks falling, purchases rising • Chinese jewellers introduce palladium products • Mine output rising and large sales from stocks • Market surplus to again exceed 1 million oz • Price subdued despite large investment by funds www.p
Slide 20: Palladium Demand by Application
Palladium Demand by Application Autocatalyst: +5.5% 3,460 3,650 4,000 3,500 RoW 3,000 2,500 Japan '000 oz 2,000 1,500 Europe 1,000 N.America 500 0 2003 2004 www.platinum.matthey.com
Slide 21: Palladium Demand by Application
Palladium Demand by Application Industrial & other: +28% 2,360 3,015 3,500 3,000 Other 2,500 2,000 Jewellery '000 oz 1,500 Dental 1,000 500 Electronics 0 2003 2004 www.platinum.matthey.com
Slide 22: Palladium Demand: Jewellery fabrication
Palladium Demand Jewellery fabrication Large scale production of palladium jewellery began in Q1 Strong purchasing of metal in March/April as trade stocked up Mixed reception at retail level Chinese jewellery demand to climb from 25k oz to 510k oz this year www.platinum.matthey.com
Slide 23: Palladium Demand: Electronics
Palladium Demand Electronics: +2% Strong demand from HIC and plating markets MLCC sales up but thrifting & miniaturisation continue www.platinum.matthey.com
Slide 24: Palladium Demand: Dental and Other
Palladium Demand Dental and Other Dental +2% - modest increase in Japan, little change elsewhere Significant investment demand for small bars in the USA www.platinum.matthey.com
Slide 25: Palladium Demand by Application
Palladium Demand by Application ‘000 oz 2003 2004 % change Autocatalyst: gross 3,460 3,650 5 recovery (410) (525) 28 Electronics 895 915 2 Dental and Other 1,465 2,100 43 TOTAL DEMAND 5,410 6,140 13 www.platinum.matthey.com
Slide 26: Palladium Supply by Region
Palladium Supply by Region Total supply: +11% 6,460 7,160 8,000 7,000 Other 6,000 5,000 North America '000 oz 4,000 South 3,000 Africa 2,000 Russia 1,000 0 2003 2004 www.platinum.matthey.com
Slide 27: Palladium Supply by Region
Palladium Supply by Region Russia – mine production plus sales of 376,000 oz of inventory by Stillwater South Africa – output rising in line with increased platinum production USA – Inco, NAPd output up www.platinum.matthey.com
Slide 28: Palladium Supply by Region
Palladium Supply by Region ‘000 oz 2003 2004 % change Russia 2,950 3,300 12 South Africa 2,320 2,570 11 North America 945 1,025 8 Others 245 265 8 TOTAL SUPPLY 6,460 7,160 11 www.platinum.matthey.com
Slide 29: Palladium Supply and Demand
Palladium Supply and Demand ‘000 oz 2003 2004 % change Demand 5,410 6,140 13 Supply 6,460 7,160 11 Movements in Stocks 1,050 1,020 www.platinum.matthey.com
Slide 30: Palladium – NYMEX net speculative position versus price
Palladium – NYMEX net speculative position versus price January – October 2004 $ per oz 350 300 250 200 150 100 J F M A M J J A S O Average Price www.platinum.matthey.com
Slide 31: Palladium – NYMEX net speculative position versus price
Palladium – NYMEX net speculative position versus price January – October 2004 S per oz '000 oz 350 1200 300 1000 800 250 600 200 400 150 200 100 0 J F M A M J J A S O Total Net Spec. Average Price www.platinum.matthey.com
Slide 32: Conclusion - Platinum
Conclusion - Platinum • Auto / industrial demand to stay firm • Return to growth in jewellery possible but price dependent • Supplies to rise more rapidly in 2005 • Market to move into surplus www.platinum.matthey.com
Slide 33: Forecast Platinum Price For The Next 6 Months
Forecast Platinum Price For The Next 6 Months $ per oz 1,000 950 900 850 $760 – $880 800 750 700 J F M A M J J A S O N D J F M A www.platinum.matthey.com
Slide 34: Conclusion - Palladium
Conclusion - Palladium • Recovery to continue in auto / electronics markets • Chinese jewellery demand likely to ease back • Supplies to climb further as stock sales continue • Substantial surplus to persist www.platinum.matthey.com
Slide 35: Forecast Palladium Price For The Next 6 Months
Forecast Palladium Price For The Next 6 Months $ per oz 400 350 300 250 $160 – $250 200 150 100 J F M A M J J A S O N D J F M A www.platinum.matthey.com
Slide 36: Platinum 2004 Interim Review
abcd Platinum| Platinum 2004 Interim Review www.platinum.matthey.com
Johnson Matthey — Investor Presentation (November 2004) on 6ix