Johnson Matthey PLC · LSE:JMAT
Johnson Matthey — Investor Presentation (November 2005)
36 slides from Johnson Matthey's investor presentation, Nov 15, 2005
Slide 1: Platinum 2005 Interim Review
Platinum 2005 Interim Review 15th November 2005
Slide 2: Platinum Demand To Reach New High
Platinum Demand To Reach New High million oz 7 • Strong growth from the 6 autocatalyst sector 5 • Jewellery purchases set to fall 4 for 3rd year in a row 3 • Glass and electrical use driving 2 increased industrial demand 1 • Total demand to rise 2% to 0 6.71 million oz 2004 2005 Auto Jlry Ind. www.p
Slide 3: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst Up 8% to 3.86 million oz million oz 4.0 3.86 3.56 3.5 RoW 3.0 N.America 2.5 2.0 Japan 1.5 1.0 Europe 0.5 0.0 2004 2005 www.platinum.matthey.com
Slide 4: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst Europe: up 16% to 1.94 million oz www.platinum.matthey.com
Slide 5: European Demand for Platinum in Autocatalysts 1999-2005
European Demand for Platinum in Autocatalysts 1999-2005 2,000 55 Euro IV 1,750 50 1,500 45 1,250 Euro III 40 1,000 35 '000 oz 750 30 % 500 25 250 20 0 15 1999 2000 2001 2002 2003 2004 2005 2006 Pt in Gasoline Pt in Diesel LDD market share www.platinum.matthey.com
Slide 6: Platinum Demand: Autocatalysts
Platinum Demand: Autocatalysts Europe: up 16% to 1.94 million oz North America: up 2.5% to 820,000 oz Japan: down 4% to 580,000 oz China + RoW: up 9% to 520,000 oz www.platinum.matthey.com
Slide 7: Platinum Demand: Jewellery
Platinum Demand: Jewellery Down 6% to 2.02 million oz million oz 2.4 2.16 2.02 RoW 2.0 1.6 Europe 1.2 N.America 0.8 Japan 0.4 China 0.0 2004 2005 www.platinum.matthey.com
Slide 8: Jewellery Demand: China
Jewellery Demand: China Down 10% to 910,000 oz • Increased metal financing costs; higher retail prices − Manufacturers only producing to order; destocking by retailers continuing − Palladium offers a lower cost, higher margin alternative − Consumers exchanging old jewellery for new • Excess inventor
Slide 9: Jewellery Demand: Elsewhere
Jewellery Demand: Elsewhere High Pt price affects demand Japan: down 2% to 550,000 oz North America: down 10% to 260,000 oz Europe: unchanged at 195,000 oz www.platinum.matthey.com
Slide 10: Platinum Demand: Industrial
Platinum Demand: Industrial Up 5% to 1.615 million oz million oz 1.8 1.615 1.6 1.535 Petroleum 1.4 1.2 Glass 1.0 Electrical 0.8 0.6 Chemical 0.4 0.2 Other 0.0 2004 2005 www.platinum.matthey.com
Slide 11: Platinum Supply
Platinum Supply Up 2% to 6.59 million oz million oz 7 6.46 6.59 Other 6 5 N.America 4 3 Russia 2 S.Africa 1 0 2004 2005 www.platinum.matthey.com
Slide 12: Platinum Supply: South Africa
Platinum Supply: South Africa Up 3% to 5.12 million oz • Smelter problems hold back growth at Anglo Platinum • Progress on Eastern Bushveld slow • Geology more difficult on Western Bushveld www.platinum.matthey.com
Slide 13: South African Platinum Supplies in 2005 – Changing Expectations
South African Platinum Supplies in 2005 – Changing Expectations million oz 7 6 -910,000 oz 5 4 3 2 1 0 Forecast in Current 2000 forecast www.platinum.matthey.com www.platinum.matthey.com
Slide 14: Platinum Supply: Elsewhere
Platinum Supply: Elsewhere net change -20,000 oz Russia: up 1% to 860,000 oz North America: down 12% to 340,000 oz Zimbabwe: up 5% to 155,000 oz www.platinum.matthey.com
Slide 15: Platinum Supply and Demand
Platinum Supply and Demand ’000 oz 2004 2005 % Demand 6,590 6,710 +2 Supply 6,460 6,590 +2 Movements in stocks (130) (120) www.platinum.matthey.com
Slide 16: Platinum – Demand Outlook: Jewellery
Platinum – Demand Outlook Jewellery: Price Dependent million oz Jewellery Demand Av. Price $ per oz 3.0 900 800 2.5 700 2.0 600 500 1.5 400 1.0 300 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 www.platinum.matthey.com
Slide 17: Platinum – Demand Outlook: Autocatalyst
Platinum – Demand Outlook Autocatalyst: Diesel Driven • Euro IV plus DPF in Europe • HDD regulations in North America • Light vehicle production & emissions limits in Asia www.platinum.matthey.com
Slide 18: Platinum – Supply Outlook
Platinum – Supply Outlook South Africa: Stronger Growth Expected Rand per oz $ per oz 7,000 1000 6,500 900 6,000 800 5,500 5,000 700 4,500 600 4,000 500 3,500 3,000 400 2001 2002 2003 2004 2005 Av. Pt Price PGM basket price www.platinum.matthey.com
Slide 19: NYMEX Positions vs Platinum Price
NYMEX Positions vs Platinum Price Jan–Oct 2005 $ per oz '000 oz 960 600 Total Net Spec. Weekly Average Price 940 500 920 400 900 300 880 200 860 100 840 0 J F M A M J J A S O www.platinum.matthey.com
Slide 20: Forecast Platinum Price For The Next 6 Months
Forecast Platinum Price For The Next 6 Months $ per oz 1,050 1,000 950 $890 – $1,030 900 850 800 750 J F M A M J J A S O N D J F M A M 2005 2006 www.platinum.matthey.com www.platinum.matthey.com
Slide 21: Palladium Demand Improving
Palladium Demand Improving million oz 7 • Jewellery to become the 6 second largest application 5 • Autocatalyst purchases little 4 changed, scrap recovery rising 3 2 • Industrial & investment demand both positive 1 0 • Total demand to grow 6% to 2004 2005 6.89 million oz Auto Jlry Other www.platinum
Slide 22: Palladium Demand: Autocatalyst
Palladium Demand: Autocatalyst Marginally lower at 3.69 million oz million oz 4.0 3.72 3.69 3.5 RoW 3.0 2.5 Japan 2.0 1.5 N.America 1.0 0.5 Europe 0.0 2004 2005 www.platinum.matthey.com
Slide 23: Autocatalyst Demand for Palladium
Autocatalyst Demand for Palladium North America: down 3% to 1.395 million oz • Vehicle sales weakening; still some thrifting Europe: down 9% to 1.005 million oz • Demand to drop for 5th year as diesels take further market share Japan: up almost 2% to 645,000 oz • Greater output of light vehicles wit
Slide 24: Palladium Demand: Jewellery
Palladium Demand: Jewellery Up 55% to 1.43 million oz Chinese demand to soar to 1.2 million oz, up from 700,000 oz last year www.platinum.matthey.com
Slide 25: Palladium Demand: Jewellery
Palladium Demand: Jewellery Basis for Chinese Growth • Low metal funding costs plus relatively low price volatility • Attractive profit margins for retailers • Consumers like: − Purity (Pd 990) − Affordability − Whiteness − Association with platinum − ‘Potential for price to appreciate’ www.platinum
Slide 26: Palladium Demand: Other
Palladium Demand: Other Up 3% to 2.45 million oz • Electronics demand up 5% to 970,000 oz • Dental demand marginally higher at 860,000 oz • Moderate growth in chemicals sector • Strong interest in physical investment products in North America www.platinum.matthey.com
Slide 27: Palladium Supply
Palladium Supply Down 5% to 7.54 million oz 8 7.91 7.54 7 Other 6 million 5 N. America oz 4 3 Russia 2 South Africa 1 0 2004 2005 www.platinum.matthey.com
Slide 28: Palladium Supply: Russia
Palladium Supply: Russia Down 9% to 3.73 million oz • Norilsk releases data: production forecast at 3.08 million oz • Stillwater on course to sell 440,000 oz of Norilsk stock • Substantial sales from State inventories in Q4 2004; some carried over to Q1 2005 www.platinum.matthey.com
Slide 29: Palladium Supply Elsewhere
Palladium Supply Elsewhere South Africa: up 4% to 2.6 million oz • Production increasing in line with expanding platinum output North America: down 11% to 925,000 oz • Production difficulties & low grades at NAPd • Lower output at Inco www.platinum.matthey.com
Slide 30: Palladium Supply and Demand
Palladium Supply and Demand ’000 oz 2004 2005 % Demand 6,480 6,890 +6 Supply 7,910 7,540 -5 Movements in stocks 1,430 650 www.platinum.matthey.com
Slide 31: Palladium – Demand Outlook: Autocatalyst
Palladium – Demand Outlook Autocatalyst • Thrifting to have less impact • Switching from Pt to Pd in gasoline vehicle catalysts to accelerate • Rising light vehicle production and tightening emissions limits in Asia www.platinum.matthey.com
Slide 32: Palladium – Demand Outlook: Jewellery
Palladium – Demand Outlook Jewellery • Further growth potential in China: – No co-ordinated marketing of Pd jewellery – Not available via Shanghai Gold Exchange – Not popular in Shanghai and Beijing • An alternative to white gold in other markets? www.platinum.matthey.com
Slide 33: Palladium – Supply Outlook
Palladium – Supply Outlook • Stillwater inventory sales to end in Q1 2006 • Growth expected in South African & North American mine production • Further sales from Russian stocks? www.platinum.matthey.com
Slide 34: NYMEX Positions vs Palladium Price
NYMEX Positions vs Palladium Price Jan–Oct 2005 $ per oz '000 oz 350 1,000 Total Net Spec. Average Price 300 800 250 600 200 400 150 200 100 0 J F M A M J J A S O www.platinum.matthey.com
Slide 35: Forecast Palladium Price For The Next 6 Months
Forecast Palladium Price For The Next 6 Months $ per oz 300 250 $190 – $270 200 150 100 J F M A M J J A S O N D J F M A M 2005 2006 www.platinum.matthey.com www.platinum.matthey.com
Slide 36: Platinum 2005 Interim Review
Platinum 2005 Interim Review 15th November 2005
Johnson Matthey — Investor Presentation (November 2005) on 6ix