Johnson Matthey PLC · LSE:JMAT
Johnson Matthey — Investor Presentation (May 2011)
36 slides from Johnson Matthey's investor presentation, May 16, 2011
Slide 1: 16th May 2011
16th May 2011 www.platinum.matthey.com
Slide 2: Disclaimer
DISCLAIMER Johnson Matthey PLC endeavours to ensure the accuracy of the information and materials contained within this presentation, but makes no warranty as to accuracy, completeness or suitability for any particular purpose. Johnson Matthey PLC accepts no liability whatsoever in respect of relian
Slide 3: Platinum
Platinum www.platinum.matthey.com
Slide 4: Platinum: key features 2010
Platinum: key features 2010 • The platinum market was close to balance in 2010 • Supplies rose slightly to 6.06 million ounces • Gross demand increased by 16% to 7.88 million ounces with heavy purchasing by the automotive and industrial sectors • Net physical investment demand remained robust but wa
Slide 5: Platinum supply and demand
Platinum supply and demand ‘000 oz 2009 2010 % change Supply 6,025 6,060 0.6 Gross Demand 6,795 7,880 16.0 Recycling (1,405) (1,840) 31.0 Net Demand 5,390 6,040 12.1 Movement in stocks 635 20 www.platinum.matthey.com
Slide 6: Platinum supplies rose by 0.6%
Platinum supplies rose by 0.6% million oz 7 6.03 6.06 • South African supplies remained 6 flat at 4.64 million ounces 5 4 • Russian supplies increased by 3 40,000 oz 2 • North American shipments fell 1 0 • Supplies from Zimbabwe grew by 2009 2010 South Africa Russia 50,000 oz North America Others ww
Slide 7: Platinum supply by region
Platinum supply by region Million oz South Africa Russia North America Others 7 6 5 4 3 2 1 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 www.platinum.matthey.com
Slide 8: Gross platinum demand rose by 16%
Gross platinum demand rose by 16% million oz 9 7.88 • Autocatalyst demand surged by 8 6.80 7 43% to 3.13 million ounces 6 5 • Industrial demand climbed by 4 48% to 1.69 million ounces 3 2 • Jewellery demand declined 1 relative to 2009 0 2009 2010 • Physical investment demand Autocatalyst Jew ellery
Slide 9: Platinum demand: Gross autocatalyst
Platinum demand: Gross autocatalyst million oz Global demand for platinum in 3.5 3.13 autocatalysts in 2010 increased by 3.0 940,000 oz. This increase was 2.5 2.19 made up of: 2.0 1.5 • Europe: 495,000 oz 1.0 • Japan: 150,000 oz 0.5 0.0 • North America: 115,000 oz Europe 2009 Japan 2010 North Americ
Slide 10: European light duty vehicle production profile
European light duty vehicle production profile 2009 2010 Diesel 38% Diesel 48% Gasoline 62% Gasoline 52% Sources: Johnson Matthey / IHS Global Insight www.platinum.matthey.com
Slide 11: Industrial platinum demand grew by 48%
Industrial platinum demand grew by 48% million oz 1.8 1.69 • Strong purchasing by the 1.6 chemical industry as plants run at 1.4 1.2 1.14 higher capacity 1.0 0.8 • Electrical demand driven by 0.6 sales of hard disk drives 0.4 0.2 • Expansion of glass production 0.0 2009 2010 facilities to meet consu
Slide 12: Gross platinum jewellery demand fell by 14%
Gross platinum jewellery demand fell by 14% million oz 3.0 2.81 • Platinum jewellery demand in 2.42 2.5 China down 20% due to high 2.0 prices and adequate stocks 1.5 • More consumer confidence in 1.0 Japan, but trend towards lighter 0.5 weight platinum pieces 0.0 2009 2010 • Growth in USA and India
Slide 13: Platinum investment demand was robust
Platinum investment demand was robust '000 oz 660 • Net ETF investment demand 700 650 grew to a record 570,000 oz 600 500 • Strong growth in physical 400 demand from US-based ETF 300 (launched January 2010) 200 • Growth in European ETFs was 100 tempered by some liquidation 0 2009 2010 • Demand for J
Slide 14: Platinum ETF demand
1.5 Platinum ETF demand $2,400 $2,100 Cumulative Holdings (million ounces) 1.0 $1,800 Price ($/oz) $1,500 0.5 $1,200 $900 0.0 $600 2007 2008 2009 2010 2011 ETFS‐London ZKB JB ETFS‐US Price www.platinum.matthey.com
Slide 15: Platinum recycling increased by 31%
Platinum recycling increased by 31% million oz 2.0 1.84 1.8 • Higher recycling of spent 1.6 1.41 autocatalysts driven by higher 1.4 metal prices, returns from 1.2 1.0 scrappage schemes, and higher 0.8 sales of new vehicles 0.6 0.4 • Strong growth in jewellery 0.2 recycling in China and Japan 0.0 200
Slide 16: Platinum outlook
Platinum outlook • Modest rise in platinum supplies forecast, with cautiously optimistic outlook for South African production in 2011 • Gross automotive and industrial demand for platinum to increase as economic growth continues, but Japanese disaster may have some lingering effects locally • Jewell
Slide 17: Platinum price forecast: the next six months
Platinum price forecast: the next six months JM Base Prices (US$ per ounce) $2,400 $2,200 $2,000 $2,000 $1,870 $1,800 $1,750 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 2008 2009 2010 2011 www.platinum.matthey.com
Slide 18: Palladium
Palladium www.platinum.matthey.com
Slide 19: Palladium: key features 2010
Palladium: key features 2010 • The palladium market was in a deficit of 490,000 oz in 2010 • Supplies rose slightly. Russian state stock sales totalled 1 million ounces • Gross demand reached a record high of 9.63 million ounces with strong growth in the autocatalyst sector • Industrial palladium de
Slide 20: Palladium supply and demand
Palladium supply and demand ‘000 oz 2009 2010 % change Supply 7,100 7,290 2.7 Gross Demand 7,850 9,625 22.6 Recycling (1,430) (1,845) 29.0 Net Demand 6,420 7,780 21.2 Movement in stocks 680 (490) www.platinum.matthey.com
Slide 21: Palladium supplies rose by 3%
Palladium supplies rose by 3% million oz 8 • South African supplies 7.29 7.10 7 increased by 9% 6 • Newly mined Russian 5 supplies increased by 45,000 4 oz 3 2 • Sales of Russian state stocks 1 were once again at around 0 1 million ounces 2009 2010 South Africa Russia North America Others • North Am
Slide 22: Gross palladium demand increased by 23%
Gross palladium demand increased by 23% million oz 10 9.63 • Gross demand increased to a 9 record 9.63 million ounces 7.85 8 7 • Autocatalyst demand increased by 6 35% with double-digit growth in all 5 regions 4 3 • Investment demand reached a 2 record 1.09 million ounces 1 0 • Industrial demand gre
Slide 23: Palladium autocatalyst demand rose by 35%
Palladium autocatalyst demand rose by 35% million oz 6 5.45 Vehicle production grew in all regions, driving up palladium 5 4.05 demand. Key features: 4 3 • Recovery in North America 2 • Growth in China 1 • Substitution 0 Europe 2009 Japan2010 • Exports from Europe North America China Rest of the Wor
Slide 24: Chinese annual light duty vehicle imports from Europe
Chinese annual light duty vehicle imports from Europe '000 units 400 350 300 250 200 150 100 50 0 2006 2007 2008 2009 2010 Source: China Automotive Information Net www.platinum.matthey.com
Slide 25: Industrial palladium demand grew by 3%
Industrial palladium demand grew by 3% million oz 3.0 2.47 • Use of palladium in the chemical 2.40 2.5 industry rose by 22% with higher 2.0 consumer demand for plastics 1.5 and other products 1.0 • Dental demand softened 0.5 • Electrical demand increased, 0.0 building on a strong second half 2009 20
Slide 26: Gross palladium jewellery demand fell by 20%
Gross palladium jewellery demand fell by 20% '000 oz 900 775 • Manufacturing fell by around a 800 700 620 third in China 600 • Retailer and consumer demand 500 400 declining 300 • Palladium jewellery grew in 200 100 Europe and North America, 0 particularly in the men’s wedding 2009 2010 Europe Japan
Slide 27: Palladium investment demand grew to unprecedented levels
Palladium investment demand grew to unprecedented levels million oz 1.2 1.09 Physical investment demand for 1.0 palladium grew by 74%, reaching 0.8 1.09 million ounces: 0.63 0.6 • Heavy buying into the new US- 0.4 based palladium ETF 0.2 • New investment in Europe was 0.0 2009 2010 more than offset
Slide 28: Palladium ETF demand
Palladium ETF demand 2.5 $870 $810 $750 2.0 Cumulative Holdings (million oz) $690 $630 1.5 Price ($/oz) $570 $510 1.0 $450 $390 $330 0.5 $270 $210 0.0 2007 2008 2009 2010 2011 $150 ETFS‐London ZKB JB ETFS‐US Price www.platinum.matthey.com
Slide 29: Palladium recycling
Palladium recycling million oz 2.0 1.85 • Higher returns of end-of life 1.8 1.6 1.41 vehicles led to recycling of 1.4 autocatalysts increasing by 38% 1.2 1.0 • Jewellery recycling increased by 0.8 14% 0.6 0.4 • Electrical recycling, mainly in 0.2 Europe, rose by 11% 0.0 2009 2010 Autocatalyst Electr
Slide 30: Palladium outlook
Palladium outlook • Supplies of palladium are forecast to decrease overall, sales from Russian state stocks are expected to be lower than in each of the last three years • Palladium demand is expected to grow in line with higher purchasing by the automotive and chemical sectors, particularly in emer
Slide 31: Palladium price forecast: the next six months
Palladium price forecast: the next six months JM Base Prices (US$ per ounce) $1,000 $975 $900 $800 $825 $700 $715 $600 $500 $400 $300 $200 $100 $0 2008 2009 2010 2011 www.platinum.matthey.com
Slide 32: Rhodium
Rhodium www.platinum.matthey.com
Slide 33: Rhodium supplies fell by 3%
Rhodium supplies fell by 3% '000 oz 770 751 • Supplies of rhodium fell 800 700 slightly due to a build up 600 of pipeline stocks in 500 South Africa 400 • Production in North 300 America fell due to labour 200 100 problems and poor 0 grades 2009 2010 South Africa Russia • Supplies from Zimbabwe Nort
Slide 34: Rhodium demand increased by 22%
Rhodium demand increased by 22% '000 oz 1,000 • Autocatalyst demand for 873 900 rhodium increased by 17% to 800 716 700 724,000 oz 600 • Glass demand rose by 200% 500 400 due to increase in manufacture 300 200 of LCD panels 100 • Expansion in the chemical 0 2009 2010 sector led to increased demand A
Slide 35: Rhodium autocatalyst recycling increased by 26%
Rhodium autocatalyst recycling increased by 26% '000 oz 250 236 • Returns from end-of-life vehicles stimulated by higher 200 187 pgm prices 150 • Impact of national car scrappage schemes 100 continued to be felt as scrap 50 catalysts were processed through 2010 0 2009 2010 • Rhodium market surplus f
Slide 36: 16th May 2011
16th May 2011 www.platinum.matthey.com