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Presentation of Results for the half year ended 30 th September 2003 27 th November 2003

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 30 th September 2003 27 th November 2003

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  1. Presentation of Results for the half year ended 30th September 2003 27th November 2003 E Johnson Matthey

  2. E Johnson Matthey

  3. 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

  4. E Johnson Matthey

  5. 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

  6. 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

  7. 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

  8. Interest 1H 1H 2003 2002 £m £m Financial (8.0) (3.7) Gold & silver leases (0.5) (0.6) (8.5)(4.3)

  9. 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

  10. 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%

  11. 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)

  12. 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

  13. 1 Restated for FRS 17 Catalysts Division • ECT ahead with growth in Asia and HDD • Strong performance from PCT

  14. 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

  15. 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

  16. 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

  17. 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

  18. Process Catalysts and Technologies • Focus on seven catalyst markets • Leading positions in each of these segments • Major strategic growth opportunity in GTL

  19. 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

  20. 1 Restated for FRS 17 Precious Metals • Fall in palladium and rhodium prices • Platinum demand remains robust

  21. US$ Platinum, Palladium and Rhodium Prices

  22. 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

  23. 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

  24. 1 Restated for FRS 17 Pharmaceutical Materials • Good growth in profits • Strong performances from West Deptford and Macfarlan Smith

  25. 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

  26. 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

  27. Colours & Coatings 1 Restated for FRS 17 • Good progress despite mixed markets • Glass performs well

  28. Colours & Coatings • Good growth in Glass business • Structural Ceramics down in weak markets • Speciality Coatings benefits from lower costs

  29. 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

  30. 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

  31. Longer Term Outlook • Major growth opportunities in Catalysts, Fuel Cells and Pharmaceutical Materials • Renewed Anglo Platinum contracts underpin long term growth of Precious Metals

  32. E Johnson Matthey

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