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Presentation of Results for the half year ended 30 th September 2003 27 th November 2003. E. Johnson Matthey. E. Johnson Matthey. Overview. Operating profit up 13% to £103.1 million PBT up 4% to £97.5 million, EPS up 5% to 31.8p
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Presentation of Results for the half year ended 30th September 2003 27th November 2003 E Johnson Matthey
E Johnson Matthey
Overview • Operating profit up 13% to £103.1 million • PBT up 4% to £97.5 million, EPS up 5% to 31.8p • Strong growth in Catalysts with good contribution from former Synetix businesses • Good performance from Pharmaceutical Materials • Renewed long term contracts agreed with Anglo Platinum • Group to divest Structural Ceramics and Speciality Coatings
E Johnson Matthey
Summary Results 1H 1H 2003 2002 restated £m £m % Turnover 2,165 2,247 -4 Sales excluding precious metals 625.1 562.1 +11 Operating profit* 103.1 91.0 +13 Interest (8.5) (4.3) Net return on pension 2.9 7.0 Profit before tax* 97.5 93.7 +4 Exceptional items - - Goodwill amortisation (9.9) (4.8) EPS * 31.8p 30.4p +5 Dividend 8.2p 7.8p +5 * Before goodwill amortisation
1H 2003 at 1H 2002 exchange rates* £m % 58.1 +32 22.3 -8 11.0 -5 21.5 +13 (7.8) 105.1 +15 *Excluding South African rand Operating Profit 1H 1H 2003 2002 restated £m £m % Catalysts 56.5 44.0 +28 Precious Metals 21.9 24.2 -10 Colours & Coatings 11.8 11.6 +2 Pharmaceutical Materials 20.7 19.1 +8 Corporate (7.8) (7.9) 103.1 91.0 +13
Geographical SplitOperating Profit 1H 2002 restated £91.0m 1H 2003 £103.1m 15% 16% 28% 7% 37% 12% 49% 36% Asia Europe Rest of the World North America
Interest 1H 1H 2003 2002 £m £m Financial (8.0) (3.7) Gold & silver leases (0.5) (0.6) (8.5)(4.3)
Net Return on Retirement Benefits Assets and Liabilities 1H 1H 2003 2002 restated £m £m Expected return on scheme assets 18.8 23.3 Interest on scheme liabilities (15.9) (16.3) 2.9 7.0
Taxation 1H 1H 2003 2002 restated £m £m Underlying tax 29.2 27.8 Tax on goodwill amortisation (1.2) - 28.0 27.8 Underlying tax rate 29.9% 29.7%
Net Cash Flow 1H 1H 2003 2002 restated £m £m Operating profit 93.086.2 Depreciation and amortisation 41.029.9 Working capital / other 8.4(0.4) Cash flow from operations142.4115.7 Interest / tax / dividends (66.2)(60.5) Capex (62.4)(58.3) Acquisitions / disposals 2.21.0 Shares issued / (bought) 3.5 1.7 Net cash flow19.5(0.4)
Capital Sep 03 Mar 03 restated £m £m Net debt 380 402 Equity and minorities860 811 Capital employed1,240 1,213 Gearing 44% 50% (debt / equity + minorities) Interest cover 12x 14x
1 Restated for FRS 17 Catalysts Division • ECT ahead with growth in Asia and HDD • Strong performance from PCT
Environmental Catalysts and Technologies • US light vehicle sales 1% down, production more than 7% lower • European sales slightly up, production 2% down on last year • Car sales in China strongly ahead spearheading good growth in Asia • Excellent progress in heavy duty diesel catalysts
0.20 Japan 2003 0.18 0.16 0.14 US 2004 0.12 EU III (2000) Particulate matter emissions (g/kW-hr) 0.10 0.08 0.06 0.04 Japan 2005 EU IV (2005) 0.02 US 2007 US 2010 0 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 EU V (2008) NOx emissions (g/kW-hr) Global HDD Legislation JM current technology
Heavy Duty Diesel • Full portfolio of HDD technologies • Strong market position, proven durability • Retrofit programmes in cities around the world • Opportunities in light duty diesel markets
Process Catalysts and Technologies • Successful integration of Synetix • Good growth in process catalysts • PGM refining business continues to be affected by weak palladium prices • Research Chemicals business again performs well
Process Catalysts and Technologies • Focus on seven catalyst markets • Leading positions in each of these segments • Major strategic growth opportunity in GTL
Fuel Cells • Numbers of pre-commercial small stationary fuel cells almost double • Vehicle test fleets continue to expand • Growing demand for MEA products from Swindon
1 Restated for FRS 17 Precious Metals • Fall in palladium and rhodium prices • Platinum demand remains robust
US$ Platinum, Palladium and Rhodium Prices
Precious Metals • PGM basket price very similar to last year • Strong platinum price offset by much weaker palladium and rhodium • Continued decline in trading activity • Fabricated pgm businesses continue to perform well • Gold refining business down. Margins remain under pressure
Precious Metals • Renewed Anglo Platinum contracts • Carries relationship well into next decade • Short term fall in group income • Income will grow as pgm sales increase • Underpins longer term growth of division
1 Restated for FRS 17 Pharmaceutical Materials • Good growth in profits • Strong performances from West Deptford and Macfarlan Smith
Pharmaceutical Materials • West Deptford – increased sales of controlled substances and platinum drugs • Macfarlan Smith – profits well ahead with good growth in sales of specialist opiates • Pharm-Eco – weak market in first quarter, however gained new business and market since recovered
Pharmaceutical Materials • New opiates facility at West Deptford completed. In production by end of fiscal year • New production capacity for specialist products at Macfarlan Smith • Significant progress on prostaglandins • New product pipeline increased to 71 compounds in development, with several new products introduced this year
Colours & Coatings 1 Restated for FRS 17 • Good progress despite mixed markets • Glass performs well
Colours & Coatings • Good growth in Glass business • Structural Ceramics down in weak markets • Speciality Coatings benefits from lower costs
Colours & Coatings • Strategic review by Board • Invite offers for combined Structural Ceramics and Speciality Coatings businesses • Retain businesses with close links to rest of Johnson Matthey
Outlook • Further growth from Catalysts and Pharmaceutical Materials • PMD impacted by renewed Anglo Platinum contracts • Currency effect – impact of weak US dollar • Confident of growth in earnings and dividends
Longer Term Outlook • Major growth opportunities in Catalysts, Fuel Cells and Pharmaceutical Materials • Renewed Anglo Platinum contracts underpin long term growth of Precious Metals
E Johnson Matthey