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Johnson Matthey

Presentation of Results for the half year ended 30 th September 2001 29 th November 2001. Johnson Matthey. Johnson Matthey. Johnson Matthey. Overview. Profit before tax up 7% to £92.2 million Continued strong performance from Catalysts & Chemicals

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Johnson Matthey

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  1. Presentation of Results for the half year ended 30th September 2001 29th November 2001 Johnson Matthey Johnson Matthey

  2. Johnson Matthey

  3. Overview • Profit before tax up 7% to £92.2 million • Continued strong performance from Catalysts & Chemicals • New Pharmaceutical Materials Division making good progress • Work commenced on new fuel cell components factory

  4. Johnson Matthey

  5. Summary Results 1H 1H 2001 2000 £m £m % Turnover 2,647 2,852 -7 Operating Profit 94.4 82.7 +14 Interest (2.2) 3.3 Profit before tax* 92.2 86.0 +7 Exceptionals 1.6 - Goodwill amortisation (2.4) (0.1) EPS * 29.5p 27.5p +7 Dividend 7.5p 7.0p +7 * Excluding exceptionals & goodwill amortisation

  6. Operating Profit 1H 1H 2001 2000 £m £m % Catalysts & Chemicals 45.1 37.4 +21 Precious Metals 29.3 27.3 +7 Colours & Coatings 14.5 15.5 -6 Pharmaceutical Materials 13.1 8.8 +49 Corporate (7.1) (6.3) Discontinued (0.5) - 94.4 82.7 +14 Excluding acquisitions 90.8 82.7 +10 & disposals

  7. Geographical SplitOperating Profit 1H 2001 £94.4m 1H 2000 £82.7m 10% 7% 8% 7% 43% 37% 40% 48% Asia Europe Rest of the World North America

  8. Interest 1H 1H 2001 2000 £m £m Financial (0.4) 3.7 Gold & Silver leases (1.8) (0.4) (2.2) 3.3

  9. Exceptional Items 1H 2001 £m Sale of unhedged palladium 7.2 Sale of French print business (5.5) Other (0.1) 1.6

  10. Taxation 1H 1H 2001 2000 Restated for FRS 19 £m £m Underlying tax 27.2 25.4 Tax on exceptionals 2.2 - 29.4 25.4 Underlying tax rate 29.5% 29.5%

  11. Free Cash Flow 1H 1H 2001 2000 £m £m Operating profit 99.1 82.7 Depreciation and amortisation 25.4 19.8 Working capital / other (10.1) (25.4) Cash flow from operations114.4 77.1 Interest / tax / dividends (55.3) (42.7) Capex (67.2) (39.6) Free cash flow(8.1) (5.2)

  12. Net Cash Flow 1H 1H 2001 2000 £m £m Free cash flow(8.1) (5.2) Acquisitions (139.6) (1.8) Disposals (1.4) (0.2) Shares issued/(bought) (39.6) 5.8 Net cash flow(188.7) (1.4) Debt acquired with subs. (46.6) - Loan notes issued (18.7) - Exchange 6.0(3.4) Movement in debt(248.0)(4.8)

  13. Capital Sep 01 Mar 01 £m £m Net debt / (cash) 108 (140) Equity and minorities803 812 Capital employed911 672 Gearing 13% n/m

  14. Divisional Performance SalesProfits 1H 1H 2001 2001 £m % £m % Catalysts & Chemicals 746 +20 45.1 +21 Precious Metals 1,729 -17 29.3 +7 Colours & Coatings 130 +4 14.5 -6 Pharmaceutical Materials 41 +157 13.1 +49

  15. Key Issues • Autocatalysts and car sales • Precious metals prices • Pharmaceutical Materials Division • Fuel cells

  16. Autocatalysts • Global car sales down 2-3% • Profits up following new factory at Royston

  17. Autocatalysts • New generation products help customers save costs • Market share growth in Europe • Investment in new production technology continues

  18. US Light Duty Vehicle Sales • Uncertainty in North America post 11th September • Poor September but better car sales in October • Confident of continued profit growth worldwide Source: Automotive News

  19. US $/oz Sep99 Mar00 Sep00 Mar01 Sep01 Platinum & Palladium Prices

  20. Platinum • Platinum most important metal to JM • Robust fundamentals • Autocatalyst • Jewellery in China

  21. European Demand for Platinum in Autocatalysts 1997 - 2001 '000 oz

  22. Demand for Platinumin Jewellery 1997 - 2001 million oz

  23. Pharmaceutical Materials Macfarlan Smith (Meconic) West Deptford Pharm-Eco • Platinum anti-cancer • Controlled substances • Controlled substances • Extraction technology • Contract research • Small scale synthesis

  24. Pharmaceutical Materials Key Features • Focus on active pharmaceutical ingredients, particularly controlled substances • Core skills of catalysis and security • Relationship with regulatory authorities important • Customer base primarily generic and smaller pharma companies

  25. Pharmaceutical MaterialsNew Products Macfarlan Smith (UK) Pharm-Eco WestDeptford (US) Patent Protected Pre-clinical Phase I Phase II Phase III Generic Approval New products in development 12 4 3 10 14

  26. Pharmaceutical MaterialsProfit Growth Opportunities • Market growth • Specialist opiates • Cross–selling • Share R&D, manufacturing processes

  27. Fuel Cells • Work commenced on new MEA plant at Swindon • Important collaborations in small stationary and transport applications • First commercial systems available next year containing JM products

  28. New Fuel Cell Products for 2002 Hydrogenics HyUPS™ for back up power (Photograph courtesy of Hydrogenics Corporation) Ballard NEXA™ power module for portable applications (Photograph courtesy of Ballard Power Systems Inc. )

  29. MEA Factory at Swindon

  30. MEA Factory at Swindon

  31. Outlook • Some impact of US slowdown and lower pgm prices • Continued growth in Catalysts & Chemicals despite weaker markets • Good prospects in Pharmaceutical Materials

  32. Johnson Matthey

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