Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — Investor Presentation (November 2008)
41 slides from Johnson Matthey's investor presentation, Nov 18, 2008
Slide 1: Platinum 2008 Interim Review
Platinum 2008 Interim Review 18th November 2008
Slide 2: Platinum
UME) Johnson Matthey Platinum
Slide 3: Platinum Price in 2008 (US$)
Platinum Price in 2008 (US$) $ per oz 2,500 2,000 1,500 1,000 500 J A J O J A J O 2007 2008 www.platinum.matthey.com
Slide 4: Platinum: Key features
Platinum: Key features • Platinum market set to be in deficit by 240,000 oz in 2008 • South African supplies fall to lowest since 2003 • Autocatalyst demand grows due to European diesel market • Jewellery demand driven lower by high prices and increased recycling • Industrial demand forecast to clim
Slide 5: Platinum Supply and Demand
Platinum Supply and Demand ’000 oz 2007 2008 % Supply 6,555 6,280 (4.2) Demand 6,675 6,520 (2.3) Movements in stocks (120) (240) www.platinum.matthey.com
Slide 6: Platinum Supply Falls by 4.2%
Platinum Supply Falls by 4.2% million oz 8 • South African supplies to drop 6.555 6.280 to a forecast 4.78 million oz 7 6 • Russian production expected to fall to 855,000 oz 5 • ROW production forecast to 4 rise to 520,000 oz 3 2 1 0 2007 2008 RSA Russia Other www.platinum.matthey.com
Slide 7: South African Platinum Supply
South African Platinum Supply • Supplies will fall again, from 5.03 million oz in 2007 to 4.78 million oz in 2008 • Major causes include: • Amandelbult flooding • Safety stoppages • Smelter outages • Labour disruption • Power supply issues • Finding and retaining skilled staff www.platinum.matthey.c
Slide 8: Platinum Demand Drops by 2.3%
Platinum Demand Drops by 2.3% million oz 8 • Total net demand to fall by 6.675 6.520 155,000 oz to 6.52 million oz 7 6 • Gross autocatalyst demand set to rise by 85,000 oz to 5 4.23 million ounces 4 • Jewellery demand to drop by 3 340,000 oz to 1.12 million oz 2 • Investment demand to fall to 1 145,
Slide 9: Platinum Demand: Autocatalyst
Platinum Demand: Autocatalyst million oz • Gross auto sector platinum 5 4.145 4.230 purchases rise by 2.1% to 4.23 million oz 4 • North American weakness cuts 3 demand by 305,000 oz • European demand driven 335,000 oz 2 higher by diesel demand 1 • Growth in China and the Rest of the World region des
Slide 10: Platinum Demand: European Autocatalyst
Platinum Demand: European Autocatalyst million oz 2.5 2.40 • European autocatalyst demand 2.065 2.06 driven 16.2% higher to 2.40 2.0 million ounces 1.5 • Use on light and heavy duty diesel vehicles accounts for over 1.0 2 million ounces of demand • Additional fitment of diesel 0.5 particulate filter
Slide 11: Platinum Demand: Jewellery
Platinum Demand: Jewellery million oz 1.8 • Jewellery demand negatively 1.460 1.120 impacted by high prices in 1.6 much of 2008 1.4 1.2 • Global manufacturer purchases of new metal set to 1.0 fall by 23% to 1.12 million oz 0.8 • Affordability hit by high prices 0.6 in the first half of 2008 0.4 • Re
Slide 12: Cumulative Purchases on SGE
Cumulative Purchases on SGE kg 20,000 15,000 2008 10,000 2007 5,000 0 Jan 01/03/08 01/01/08 Mar 01/05/08 May 01/07/08 Jul Sep 01/09/08 www.platinum.matthey.com
Slide 13: Platinum Demand: Industrial
Platinum Demand: Industrial million oz 2.5 • Industrial demand forecast to 1.805 1.995 rise by 10.5% to 1.995 million 2.0 oz despite economic slowdown 1.5 • Demand expected to rise for chemical sector, glass and petroleum refining, driven by 1.0 growth in Asian economies 0.5 • Thrifting drives elect
Slide 14: Platinum Demand: Investment
Platinum Demand: Investment '000 oz 250 • Investment demand forecast to fall to 145,000 oz in 2008 200 • First and second half of 2008 likely to show very 150 different demand 100 • ETF demand likely to decline to an estimated 130,000 oz 50 • Japanese net investment 0 demand for large bars set to be
Slide 15: Platinum Update
Platinum Update • Price has softened further in October • North American automotive sales continue to weaken • The pace of sales by funds has slowed • Physical demand has strengthened in Asia; record sales on Shanghai Gold Exchange in October • Smelter outages in final quarter • Market still in defi
Slide 16: Platinum Outlook
Platinum Outlook • Platinum supplies from South Africa should recover somewhat in 2009 • Automotive demand to be supported by European diesel sector • Industrial demand likely to weaken • Jewellery demand to recover if prices stabilise • Physical investment demand unlikely to rise significantly www.
Slide 17: Forecast Platinum Price for the Next 6 Months
Forecast Platinum Price for the Next 6 Months $ per oz 2,500 2,000 1,500 1,000 500 J A J O J A J O J A 2007 2008 2009 www.platinum.matthey.com
Slide 18: Forecast Platinum Price for the Next 6 Months
Forecast Platinum Price for the Next 6 Months $ per oz 2,500 2,000 1,500 $700 – $1,400 1,000 500 J A J O J A J O J A 2007 2008 2009 www.platinum.matthey.com
Slide 19: Palladium
UME] Johnson Matthey Palladium
Slide 20: Palladium Price in 2008 (US$)
Palladium Price in 2008 (US$) $ per oz 600 500 400 300 200 100 J A J O J A J O 2007 2008 www.platinum.matthey.com
Slide 21: Palladium: Key features
Palladium: Key features • Palladium market expected to be in reduced surplus of 320,000 oz in 2008 • Supplies from both South Africa and Russia to fall • Gross autocatalyst demand rises marginally despite North American weakness • Global palladium jewellery demand rebounds • Physical investment dema
Slide 22: Palladium Supply and Demand
Palladium Supply and Demand ’000 oz 2007 2008 % Supply 8,585 7,510 (12.5) Demand 6,930 7,190 3.8 Movements in stocks 1,655 320 www.platinum.matthey.com
Slide 23: Palladium Supply Falls by 12.5%
Palladium Supply Falls by 12.5% million oz • Supply shrinks by 1.065 million oz 9 8.585 7.510 8 to 7.51 million oz 7 • Russian supplies forecast to fall to 6 3.74 million oz due to large 5 decrease in sales of state stocks 4 3 • South African shipments to 2 decline to 2.525 million oz 1 0 • North Am
Slide 24: Russian Palladium Supplies
Russian Palladium Supplies million oz • Annual Russian primary 5 production is forecast to fall below 4 3 million oz 3 • Sales of 800,000 oz of state stocks included in supplies 2 • September shipment from Russia 1 to Switzerland to be sold in future years 0 2006 2007 2008 Norilsk State Sales www.pl
Slide 25: Palladium Demand Climbs by 3.8%
Palladium Demand Climbs by 3.8% million oz • Global palladium demand to 8 6.930 7.190 increase by 260,000 oz to 7.19 million oz 7 • Autocatalyst palladium demand 6 grows in China and Europe but falls 5 in North America 4 • Jewellery demand forecast to rise 3 in China, Europe and North America 2 • Ph
Slide 26: Palladium Demand: Autocatalyst
Palladium Demand: Autocatalyst million oz • North American demand to fall by 5 4.545 4.575 350,000 oz to 1.345 million oz 4 • Palladium demand in China and 3 the Rest of the World region expected to grow strongly 2 • Greater use of palladium in diesel 1 sector to help lift European demand by 190,000
Slide 27: Pgm choice in Autocatalysts
Pgm choice in Autocatalysts Gasoline percentage of pgm used (Pt/Pd) 100 75 50 25 0 2005 2006 2007 2008 Palladium Platinum www.platinum.matthey.com
Slide 28: Pgm choice in Autocatalysts
Pgm choice in Autocatalysts Gasoline Diesel percentage of pgm used (Pt/Pd) percentage of pgm used (Pt/Pd) 100 100 75 75 50 50 25 25 0 0 2005 2006 2007 2008 2005 2006 2007 2008 Palladium Platinum Palladium Platinum www.platinum.matthey.com
Slide 29: Palladium Demand: Jewellery
Palladium Demand: Jewellery million oz 1.50 • Chinese new palladium purchases to climb by 50,000 1.25 oz to 550,000 oz 1.00 • Use of recycled old palladium 0.75 stock diminishing 0.50 • European and North American demand set to rise 0.25 • Japanese demand expected 0.00 2003 2005 2007 to decrease Chi
Slide 30: Palladium Demand: Industrial and Dental
Palladium Demand: Industrial and Dental million oz • Chemical demand expected 2.5 2.355 2.440 to rise to 425,000 oz 2.0 • Electronics demand to grow 1.5 for seventh successive year, to 1.29 million oz 1.0 • Dental purchases forecast 0.5 to shrink by 5,000 oz to 630,000 oz 0.0 2007 2008 Chemical Dent
Slide 31: Palladium Demand: Investment
Palladium Demand: Investment '000 oz 500 450 • Palladium investment demand 400 forecast to rise to 470,000 oz 350 • Demand through European 300 ETFs to rise to 430,000 oz 250 200 • Demand from coins and bars 150 in North America turns 100 positive in 2008 50 0 -50 2007 2007 2008 2007 2008 2008 ETFs
Slide 32: Palladium Update
Palladium Update • Production to be reduced by temporary closure of North American Palladium • Shutdown of Anglo Platinum’s Polokwane smelter will increase pipeline stocks • Jewellery demand in China has picked up sharply in the third quarter • Automotive production weakening further • Market still
Slide 33: Palladium Outlook
Palladium Outlook • Palladium production expected to rise in 2009 • Size and fate of Russian stocks remains unclear • Mixed prospects for industrial demand • Jewellery demand likely to increase • Continued substitution of platinum by palladium expected in diesel and gasoline sectors www.platinum.mat
Slide 34: Forecast Palladium Price for the Next 6 Months
Forecast Palladium Price for the Next 6 Months $ per oz 600 500 400 300 200 100 J A J O J A J O J A 2007 2008 2009 www.platinum.matthey.com
Slide 35: Forecast Palladium Price for the Next 6 Months
Forecast Palladium Price for the Next 6 Months $ per oz 600 500 400 300 200 $125 – $300 100 J A J O J A J O J A 2007 2008 2009 www.platinum.matthey.com
Slide 36: Rhodium
UME] Johnson Matthey Rhodium
Slide 37: Rhodium
Rhodium • Supplies set to fall to $ per oz Rhodium price 748,000 oz 11,000 10,000 9,000 • Demand forecast to drop 8,000 to 810,000 oz 7,000 6,000 5,000 • Market in deficit again in 4,000 2008, by 62,000 oz 3,000 2,000 • Price hits a series of 1,000 J A J O J A J O J A J O records in early 2008 2006
Slide 38: Rhodium Supplies to Fall by 9.2%
Rhodium Supplies to Fall by 9.2% '000 oz 1,000 • Global supplies to slip by 824 748 76,000 oz to 748,000 oz 800 • South African supplies forecast to decline to 620,000 600 oz in 2008 400 • Second half of 2008 expected to be stronger than first half 200 • Rhodium supplies from Russia to be unchanged
Slide 39: Rhodium Demand to Decline by 5.6%
Rhodium Demand to Decline by 5.6% '000 oz 1,000 • Net demand expected to shrink 858 810 by 48,000 oz to 810,000 oz 800 • Gross autocatalyst demand 600 forecast to fall to 829,000 oz due to fall in North America 400 • Autocatalyst recycling will rise to 184,000 oz 200 • Glass demand predicted to 0 gr
Slide 40: Rhodium Outlook
Rhodium Outlook • Growth in vehicle manufacturing in China, Russia and elsewhere to support rhodium demand • Thrifting in autocatalyst to continue • Autocatalyst recycling volumes to increase • Rhodium production to recover next year • Market to be close to balance in 2009 www.platinum.matthey.com
Slide 41: Platinum 2008 Interim Review
Platinum 2008 Interim Review 18th November 2008
Johnson Matthey — Investor Presentation (November 2008) on 6ix