Johnson Matthey PLC · LSE:JMAT
Johnson Matthey — Earnings Presentation (November 2011)
37 slides from Johnson Matthey's earnings presentation, Nov 15, 2011
Slide 1: 15th November 2011
www.platinum.matthey.com 15th November 2011
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 2011
Platinum: key features 2011 • Platinum market to be in surplus by 195,000 oz • Growth in supplies coming mainly from outside South Africa • Heavy duty diesel drives platinum demand in autocatalysts • Record industrial demand led by glass and petroleum refining sectors • China and India provide growt
Slide 5: Platinum supply and demand
Platinum supply and demand ‘000 oz 2010 2011 % change Supply 6,050 6,395 5.7 Gross Demand 7,905 8,080 2.2 Recycling (1,830) (1,880) 2.7 Net Demand 6,075 6,200 2.1 Movements in Stocks (25) 195 www.platinum.matthey.com
Slide 6: Platinum supplies to rise by 5.7%
Platinum supplies to rise by 5.7% million oz Growth in supplies mainly from 7.0 6.395 6.050 outside South Africa, particularly 6.0 North America and Zimbabwe 5.0 • SA supplies to rise by 3% 4.0 • Russian supplies to be flat 3.0 • North American supplies to rise by 2.0 80% to 360,000 oz 1.0 • Zimbabw
Slide 7: Gross platinum demand to rise by 2.2%
Gross platinum demand to rise by 2.2% million oz 9.0 • Platinum demand in 7.905 8.080 8.0 autocatalysts to rise to a 7.0 three-year high of 3.16 million 6.0 ounces 5.0 4.0 • Record industrial demand of 3.0 1.96 million ounces forecast 2.0 • Jewellery demand to grow 1.0 modestly 0.0 2010 2011 Autocat
Slide 8: Platinum demand: Gross autocatalyst
Platinum demand: Gross autocatalyst million oz Worldwide demand for platinum 3.5 3.160 3.075 in autocatalysts to rise by 2.8%: 3.0 • European demand to soften due to 2.5 substitution by palladium 2.0 • Japanese demand affected by 1.5 March disaster 1.0 • North American demand to grow 0.5 strongly le
Slide 9: Industrial platinum demand to rise by 11.7%
Industrial platinum demand to rise by 11.7% million oz Industrial purchasing of platinum 2.5 to reach record highs driven by: 1.960 2.0 1.755 • New capacity in the glass manufacturing sector 1.5 • New petroleum refining capacity 1.0 • Strong chemical and electrical demand 0.5 • New growth areas: non
Slide 10: Platinum jewellery demand to rise slightly
Platinum jewellery demand to rise slightly million oz Gross platinum jewellery 3.0 2.420 2.465 demand to rise by 1.9% 2.5 • Demand to rise modestly in China 2.0 despite competition from gold 1.5 • Demand to remain flat in Japan and North America 1.0 • European demand to soften 0.5 • Rapid growth in
Slide 11: SGE weekly platinum trading volumes
SGE weekly platinum trading volumes 2,000 1,900 Volume of platinum traded (kg) Platinum price ($/oz) 1,500 1,800 1,000 1,700 500 1,600 0 1,500 2010 2011 Weekly Volume (kg), peaks in response to price drops shown in red JM Average Price www.platinum.matthey.com
Slide 12: Platinum investment demand to fall
Platinum investment demand to fall million oz 0.7 Investment demand to be 0.655 160,000 oz lower than in 2010 0.6 0.495 • Price volatility and yen strength 0.5 promotes large bar demand in Japan 0.4 • Growth in European ETF demand 0.3 bolstered by launch of new funds 0.2 • Sharp fall in demand for E
Slide 13: Platinum ETF volume
1,800 Platinum ETF volume 2,100 1,600 Cumulative holdings ('000 oz) 1,400 1,800 Price ($/oz) 1,200 1,000 1,500 800 600 1,200 400 200 0 900 2010 2011 ETFS‐London ZKB ETFS‐US JB iShares Source Others Price www.platinum.matthey.com
Slide 14: Platinum recycling to rise by 2.7%
Platinum recycling to rise by 2.7% million oz 2.0 1.880 • Higher volumes of platinum 1.830 1.8 recovered from end-of-life 1.6 vehicles, particularly diesels 1.4 1.2 • Jewellery recycling to reduce 1.0 overall, due to lower returns 0.8 from manufacturer and retail 0.6 0.4 stock in China 0.2 • More re
Slide 15: Platinum outlook
Platinum outlook • Rate of growth in supply will depend on South Africa and Zimbabwe mining companies achieving expansion targets • Platinum to weather weak economic growth and consumer spending in 2012 due to strong demand drivers: • Automotive demand for platinum to be supported by heavy duty vehi
Slide 16: Platinum price forecast: the next six months
Platinum price forecast: the next six months $/oz 2,000 1,800 $1,800 1,600 $1,650 $1,450 1,400 1,200 1,000 800 2009 2010 2011 www.platinum.matthey.com
Slide 17: Palladium
Palladium www.platinum.matthey.com
Slide 18: Palladium: key features 2011
Palladium: key features 2011 • Palladium market to be in surplus by 725,000 oz due to sale of Russian state stocks and negative net investment • Rise in primary mined supplies, especially in North America and Zimbabwe • Growth in autocatalyst demand for palladium due to higher output, substitution a
Slide 19: Palladium supply and demand
Palladium supply and demand ‘000 oz 2010 2011 % change Supply 7,355 7,420 0.9 Gross Demand 9,735 8,890 (8.7) Recycling (1,850) (2,195) 18.6 Net Demand 7,885 6,695 (15.1) Movements in Stocks (530) 725 www.platinum.matthey.com
Slide 20: Palladium supplies to rise
Palladium supplies to rise million oz 8.0 7.420 • South African supplies to 7.355 7.0 decline slightly 6.0 • Russian primary mined 5.0 supplies to remain flat 4.0 • Russian state stock shipments 3.0 to take place, but at a lower 2.0 level than the past three years 1.0 0.0 • Growth in supplies from N
Slide 21: Gross palladium demand to fall by 8.7%
Gross palladium demand to fall by 8.7% million oz 12.0 • Autocatalyst demand to rise to 9.735 8.890 5.92 million ounces 10.0 8.0 • Industrial demand to grow to 6.0 2.65 million ounces 4.0 • Jewellery demand to decline 2.0 • Investment sector to be a net 0.0 ‘supplier’ of palladium to the 2010 2011 ‐
Slide 22: Gross palladium autocatalyst demand to rise by 6.0%
Gross palladium autocatalyst demand to rise by 6.0% million oz • European demand to rise due 7.0 5.580 5.915 to use in diesels and growth in 6.0 exports of (gasoline) vehicles 5.0 • Japanese demand to fall due 4.0 to disruption from disaster 3.0 2.0 • North America demand to rise following strong H1
Slide 23: Imports of European-made passenger cars to China
Imports of European-made passenger cars to China vehicles 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep 2010 2011 Johnson Matthey / China Automotive Information Net www.platinum.matthey.com
Slide 24: Industrial palladium demand to grow by 7.3%
Industrial palladium demand to grow by 7.3% million oz 3.0 A return to pre-recession levels 2.645 2.465 is forecast: 2.5 • Downstream demand for 2.0 products driving purchases in 1.5 chemical applications by 23% 1.0 • Demand for palladium in 0.5 electronic components to remain robust 0.0 2010 2011 C
Slide 25: Gross palladium jewellery demand to fall by 8.4%
Gross palladium jewellery demand to fall by 8.4% million oz 0.7 • Lower demand in China due 0.595 to: 0.6 0.545 - Lack of effective marketing 0.5 0.4 - Higher prices 0.3 - Low consumer interest 0.2 - Fewer manufacturers 0.1 • Flat demand in Europe due to 0.0 price, lower demand in North 2010 2011 Eu
Slide 26: Palladium investment demand to be negative
Palladium investment demand to be negative million oz 1.2 1.095 Weaker investor sentiment for palladium in 2011: 1.0 0.8 • Net liquidation in the US ETF 0.6 • Net investment in newer 0.4 European ETFs have offset 0.2 ‐0.215 declines in the more 0.0 established funds ‐0.2 ‐0.4 2010 2011 Europe Japan
Slide 27: Palladium ETF volume
3,000 Palladium ETF volume 900 Cumulative holdings ('000 oz) 2,500 800 Price ($/oz) 2,000 700 1,500 600 1,000 500 500 400 0 300 2010 2011 ETFS‐London ZKB ETFS‐US JB iShares Source Others Price www.platinum.matthey.com
Slide 28: Palladium recycling to rise by 18.6%
Palladium recycling to rise by 18.6% million oz 2.5 • Boost to palladium recovery 2.195 from autocatalysts due to: 1.850 2.0 - Higher sales of vehicles 1.5 - More highly loaded catalysts entering the refining stream 1.0 • More electronic scrap being 0.5 recycled in Europe 0.0 • Higher jewellery recy
Slide 29: Palladium outlook
Palladium outlook • Tighter supplies in 2012 due to lower Russian state stock sales, partly offset by higher output from South Africa • Auto demand growth in 2012 to be at least as strong as this year due to greater use in diesel catalysts, and growth in vehicle output in Asia and the Americas • Exp
Slide 30: Palladium price forecast: the next six months
Palladium price forecast: the next six months $/oz 900 $800 750 $650 600 $500 450 300 150 0 2009 2010 2011 www.platinum.matthey.com
Slide 31: Rhodium
Rhodium www.platinum.matthey.com
Slide 32: Rhodium supply and demand
Rhodium supply and demand ‘000 oz 2010 2011 % change Supply 734 768 4.6 Gross Demand 887 905 2.0 Recycling (241) (260) 7.9 Net Demand 646 645 0.0 Movements in Stocks 88 123 www.platinum.matthey.com
Slide 33: Rhodium supplies to rise by 4.6%
Rhodium supplies to rise by 4.6% '000 oz 900 • Higher refined output 800 734 768 expected from South African 700 producers 600 • Flat supplies from Russia 500 400 • North American producers to 300 ramp up to full production 200 100 • Additional supplies from new 0 operations in Zimbabwe 2010 2011 So
Slide 34: Gross rhodium demand to rise modestly
Gross rhodium demand to rise modestly '000 oz • Autocatalyst demand to 1,000 905 887 900 decline by 3% due to thrifting, 800 lower gasoline share in 700 Europe and disruption in 600 Japan 500 400 • 25% rise in demand for 300 rhodium in the glass sector 200 100 due to capacity expansions in 0 LCD and
Slide 35: Rhodium autocatalyst recycling
Rhodium autocatalyst recycling '000 oz 260 • Higher recycling of rhodium in 241 250 autocatalysts as more highly- 200 loaded rhodium-containing end-of-life vehicles enter the 150 recycling stream 100 • Recovery from spent autocatalysts, together with 50 higher supplies, expected to 0 keep the rhodiu
Slide 36: Rhodium outlook
Rhodium outlook • Supplies forecast to increase in 2012 due to higher output in South Africa and Zimbabwe. Higher recycling levels are expected • Return to full vehicle production in Japan will be positive for rhodium demand in autocatalysts • Weaker glass demand due to less expansion in global melt
Slide 37: 15th November 2011
www.platinum.matthey.com 15th November 2011
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