Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — H1 2024/25 Earnings Presentation
39 slides from Johnson Matthey's earnings presentation, Nov 27, 2024
Slide 1: Presentation of results for the half year ended 30th September 2024
Presentation of results for the half year ended 30th September 2024 27th November 2024
Slide 2: Cautionary statement
Johnson Matthey, Confidential Cautionary statement This presentation contains forward-looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which Johnson Matthey o
Slide 3: Agenda
Agenda 01 02 03 04 Overview Financial Strategic Q&A results progress 3
Slide 4: Catalysing the net zero transition
01. Overview 02. Financial results 03. Strategic update Catalysing the net zero transition Resilient 1H performance – full year outlook maintained Delivering on commitments in Delivering benefits from transformation a challenging market environment Progressing strategic milestones 4
Slide 5: Focused on the areas we can control
01. Overview 02. Financial results 03. Strategic update Focused on the areas we can control Delivering in 1H… …with more to come …and expect much more in 2H Clean Air Catalyst Technologies PGM Services Hydrogen Technologies › Margin up 80bps › Margin up 250bps › Higher refining volumes › Reducing co
Slide 6: Agenda: Financial results
Agenda 02 Financial results 6
Slide 7: Resilient performance
01. Overview 02. Financial results 03. Strategic update Resilient performance Sales -3%¹ Operating profit -4%¹ Earnings per share 57.4p, -3% Free cash flow £347m Net debt Interim dividend maintained: £783m (1.4 times²) 22.0p per share £250m share buyback ongoing Expect stronger 2H – transformation b
Slide 8: Sales down 3% in a challenging market
01. Overview 02. Financial results 03. Strategic update Sales down 3% in a challenging market Sales for half year % change, 2024 2023 ended 30th September constant £m £m FX rates Clean Air 1,165 1,286 -7 PGM Services 207 230 -9 Catalyst Technologies 336 282 +20 Hydrogen Technologies 20 37 -46 Elimin
Slide 9: Operating profit benefiting from transformation
01. Overview 02. Financial results 03. Strategic update Operating profit benefiting from transformation Underlying operating profit (portfolio adjusted) 4% decline¹ £35m £180m (£26m) £1m (£14m) £166m (£14m) £159m (£3m) (£3m) £156m 1. 4% decline at constant FX and adjusting for the divestment of Valu
Slide 10: Delivering transformation benefits
01. Overview 02. Financial results 03. Strategic update Delivering transformation benefits Cost savings 1H Cumulative By end of (£m) 2024/25 to date 2024/25 Management 10 60 80 spans and layers Procurement 15 60 70 Real estate - 15 20 On track to deliver IT and JM Global £200m cost savings 10 20 30
Slide 11: Underlying results
01. Overview 02. Financial results 03. Strategic update Underlying results Underlying results for half 2024 2023 % year ended 30th September¹ £m £m change Sales excluding precious metals 1,722 1,967 -12 Operating profit 156 180 -13 Finance charges (23) (41) Profit before tax 133 139 -4 Taxation (29)
Slide 12: Reported results
01. Overview 02. Financial results 03. Strategic update Reported results Half year ended 2024 2023 30th September £m £m Underlying operating profit 156 180 Profit on disposal of businesses¹ 484 - Major impairment and restructuring charges² (63) (42) Amortisation of acquired intangibles (2) (2) Repor
Slide 13: Clean Air: resilient performance despite challenging market
01. Overview 02. Financial results 03. Strategic update Clean Air: resilient performance despite challenging market Sales down 7% Sales for half year 2024 2023 % change, ended 30th September £m £m constant • Decline in global vehicle FX rates production Light duty diesel 530 532 +2 • Historic platfo
Slide 14: PGM Services: impacted by soft end markets
01. Overview 02. Financial results 03. Strategic update PGM Services: impacted by soft end markets Sales down 9% Sales for half year 2024 2023 % change, ended 30th September £m £m constant • Lower volumes across refining, FX rates including metal recoveries • Market-driven softness Total sales 207 2
Slide 15: Catalyst Technologies: strong sales and profit growth
01. Overview 02. Financial results 03. Strategic update Catalyst Technologies: strong sales and profit growth Sales up 20% Sales for half year 2024 2023 % change, ended 30th September £m £m constant • Higher first fill volumes FX rates • Strong growth in Licensing Catalysts 276 254 +10 • Continued m
Slide 16: Hydrogen Technologies: operating loss flat despite lower sales
01. Overview 02. Financial results 03. Strategic update Hydrogen Technologies: operating loss flat despite lower sales Sales down 46% Sales for half year 2024 2023 % change, ended 30th September £m £m constant • Slowdown in market development FX rates • Customer de-stocking Total sales 20 37 -46 Ope
Slide 17: Net debt
01. Overview 02. Financial results 03. Strategic update Net debt . 1.6 times 1.4 times net debt net debt to EBITDA¹ Working capital to EBITDA¹ £951m £146m £123m £2m £101m £783m (£250m) £117m £171m (£578m) 1 1. Net debt including post tax pension deficits. 17
Slide 18: Improving cash flow
01. Overview 02. Financial results 03. Strategic update Improving cash flow Levers to drive cash flow Transformation and efficiencies supporting higher margins Cumulative capex £1.1bn Up to £0.9bn Driving capex down HT CT New efficient PGM refinery Clean Air delivers working capital improvement PGMS
Slide 19: Outlook for year ending 31st March 2025
01. Overview 02. Financial results 03. Strategic update Outlook for year ending 31st March 2025 Group guidance maintained: at least mid single digit growth in underlying operating performance¹ Clean Air PGM Services Catalyst Technologies Hydrogen Technologies FY guidance: Modest growth in operating
Slide 20: Agenda: Strategic progress
Agenda 03 Strategic progress 20
Slide 21: Catalysing the net zero transition: Our aspiration
01. Overview 02. Financial results 03. Strategic update Catalyst Hydrogen Clean Air Technologies Technologies Catalysing the Leading in #1 in Market leader net zero transition autocatalyst markets syngas-based chemicals and in performance components for fuels technology fuel cells and electrolysers
Slide 22: Progressing our strategic milestones
01. Overview 02. Financial results 03. Strategic update Progressing our strategic milestones End of End of Long- 2024/25 2025/26 term On track to deliver at least £4.5bn of cash in the decade to 2030/31¹ from Clean Air Customers Won 3 additional large scale projects ’ ( 6 : ) Progressing new Hydroge
Slide 23: Clean Air: accelerating the next phase of our transformation
01. Overview 02. Financial results 03. Strategic update Clean Air: accelerating the next phase of our transformation Optimising manufacturing footprint and increasing utilisation Targeting mid-teens margins by 2025/26 Procurement, manufacturing and supply chain excellence Capex well below depreciati
Slide 24: Catalyst Technologies: winning with customers in sustainable technologies
01. Overview 02. Financial results 03. Strategic update Catalyst Technologies: winning with customers in sustainable technologies 13 project wins worth more than £350m sales over 5 years¹ Low carbon hydrogen Sustainable fuels bp H2Teesside in UK EDL HyKero plant in Germany ABEL Energy green methanol
Slide 25: Case study: DG Fuels Louisiana SAF plant
01. Overview 02. Financial results 03. Strategic update Case study: DG Fuels Louisiana SAF plant The world’s largest FT SAF plant – fuelling more than 30,000 transatlantic flights per year¹ Gasification Upgrading and blending Process to convert waste HyCOgenTM technology FT CANSTM technology Process
Slide 26: Winning with partners to strengthen the offering
01. Overview 02. Financial results 03. Strategic update Winning with partners to strengthen the offering Natural gas Sustainable feedstocks¹ Sustainable feedstocks¹ Natural gas LCHTM FT CANSTM Methanol LCHTM technology² technology³ technology technology Hydrogen Synthetic wax/oil Methanol Hydrogen u
Slide 27: Building capability
01. Overview 02. Financial results 03. Strategic update Building capability Catalyst Technologies – PGM Services – engineering capacity new world-class PGM refinery 22% uplift in engineering capacity New refinery will deliver: in the half to support licensing growth¹ • Working capital benefit (>£250
Slide 28: Transforming at pace
01. Overview 02. Financial results 03. Strategic update Transforming at pace Cost savings JM Global Solutions Employee engagement £155m cost savings Enabling cost effective Continued uptick in delivered to date business processes employee engagement Accelerating next phase of Successfully launched G
Slide 29: Sustainability is embedded in everything we do
01. Overview 02. Financial results 03. Strategic update Sustainability is embedded in everything we do Protecting the planet Protecting our people Recognised by leading › Launched our Nature › Celebrated our third annual ESG rankings³ strategy Global Safety Day › Completed our double 96th percentile
Slide 30: Catalysing the net zero transition
01. Overview 02. Financial results 03. Strategic update Catalysing the net zero transition Resilient 1H performance – Delivering benefits Progressing full year outlook maintained from transformation strategic milestones Delivering on commitments in a challenging market environment 30
Slide 31: Agenda: Q&A
Agenda 04 Q&A 31
Slide 32: Q&A
Q&A 32
Slide 33: Appendix
Appendix 33
Slide 34: Group operating profit
Appendix Group operating profit Underlying operating profit for 2024 2023 % change, half year ended 30th September £m £m constant FX rates Clean Air 121 124 +2 PGM Services 51 78 -35 Catalyst Technologies 50 35 +43 Hydrogen Technologies (26) (26) - Corporate (42) (45) Underlying operating profit exc
Slide 35: Free cash flow and net debt
Appendix Free cash flow and net debt Free cash flow for period 2024 2023 ended 30th September £m £m Underlying operating profit 156 180 Depreciation and amortisation¹ 93 93 – Precious metal working capital (outflow) / inflow (2) 234 – Non precious metal working capital (outflow) (146) (169) Net work
Slide 36: Net debt to EBITDA 1.4 times
Appendix Net debt to EBITDA 1.4 times¹ £m £m Net debt at the beginning of the year (951) Free cash flow 347 Dividends (101) Share buyback (123) Movement in net debt 123 Lease adjustments² (7) Disposal of businesses 5 Net debt before FX and other movements (830) FX and other non-cash movements³ 47 Ne
Slide 37: Capital allocation framework
Appendix Capital allocation framework Sources of capital Uses of capital Operating cash Priority flows from the Investment into business businesses 1 Up to £900m cumulative capex over the three years to 2026/27 Maintaining a strong Efficiency and balance sheet with Dividend cost saving 2 At least ma
Slide 38: PGM prices
Appendix PGM prices US$ per troy oz 20,000 3,000 Price Current 1H 1H (US$ per (22nd Nov 2024/25 2023/24 troy oz) 2024) average average 15,000 2,000 Platinum 978 982 990 10,000 1,000 5,000 Palladium 1,038 986 1,363 0 0 01/10/2022 01/10/2023 01/10/2024 Rhodium Platinum Palladium Rhodium 4,600 4,699 5,
Slide 39: Financial guidance summary
Appendix Financial guidance summary Group underlying operating profit growth¹: Accelerating to high single digit growth over the medium-term, and strong long-term growth Clean Air – At least £4.5 billion of cash in the decade to 2030/31². Mid-teens operating margins by 2025/26 PGM Services – At leas