Johnson Matthey Plc · LSE:JMAT

Johnson Matthey — FY2004 Earnings Presentation

41 slides from Johnson Matthey's earnings presentation, Jun 3, 2004

  1. Slide 1: Presentation of Results for the year ended 31st March 2004

     Johnson Matthey Presentation of Results for the year ended 31st March 2004 3rd June 2004

  2. Slide 2: Johnson Matthey

     Johnson Matthey

  3. Slide 3: Overview

    Overview  Operating profit up 9% to £206.0 million despite adverse currency effects  Catalysts well ahead with good contribution from former Synetix businesses  Strong growth in Pharmaceutical Materials  PBT up 3% at £195.7 million. EPS 4% ahead at 64.0 pence 

  4. Slide 4: Johnson Matthey

     Johnson Matthey

  5. Slide 5: Summary Results

    Summary Results 2004 2003 restated £m £m% Turnover 4,493 4,324+4 Sales excluding precious metals 1,224 1,159+6 Operating profit 188.3 167.9 +12 Profit before tax 178.0 173.5 +3 Earnings per share 56.0p 55.4p +1 Before exceptional items and goodwill amortisation: Operating profit 206.0 189.2 +9 Profi

  6. Slide 6: Operating Profit

    Operating Profit 2004 2003 2004 at 2003 restated exchange rates* £m £m % £m % 112.9 +18 Catalysts 109.2 95.3 +15 45.2 -6 Precious Metals 44.2 48.0 -8 25.0 -1 Colours & Coatings 26.7 25.3 +6 44.6 +22 Pharmaceutical Materials 42.3 36.7 +15 *Excluding South (16.4)African rand Corporate (16.4) (16.1) 21

  7. Slide 7: Return on Sales

    Return on Sales Excluding Precious Metals Sales excl. PM’sROS 2004 2003 2004 2003 Growth % % £m £m % 15.2 Catalysts 14.6 720 652 +10 36.7 Metals Precious 36.4 121 132 -9 10.6 & Coatings Colours 10.0 252 253 - 32.2 Pharmaceutical Materials 30.1 131 122 +8 16.8 16.3 1,224 1,159 +6 

  8. Slide 8: Geographical Split

    Geographical Split Operating Profit 2004 2003 £206.0m £189.2m Europe Asia North America Rest of World 

  9. Slide 9: Interest

    Interest 2004 2003 restated £m £m Financial (15.3) (12.0) Gold & silver leases (1.0) (1.2) (16.3) (13.2) Interest Cover 12.6x 14.3x 

  10. Slide 10: Net Return on Retirement Benefits Assets and Liabilities

    Net Return on Retirement Benefits Assets and Liabilities 2004 2003 restated £m £m Expected return on scheme assets 37.5 46.4 Interest on scheme liabilities (31.5) (32.5) 6.0 13.9 

  11. Slide 11: Exceptional Items

    Exceptional Items 2004 £m Litigation settlement 14.8 Catalysts’ rationalisation (12.7) Total 2.1 

  12. Slide 12: Taxation

    Taxation 2004 2003 £m £m Underlying tax 58.3 56.4 Tax on exceptionals 1.6 (2.0) Tax on goodwill amortisation (2.0) (0.7) 57.9 53.7 Underlying tax rate 29.8% 29.7% 

  13. Slide 13: Return on Investment

    Return on Investment 2004 2003 restated £m £m Operating profit 206 189 Average assets: Equity and minorities 835 803 Cumulative goodwill w/o 41 43 Net borrowings 398 281 Total investment 1,274 1,127 Pre-tax ROA 16.2% 16.8% Return on invested capital 11.4% 11.8% WACC 8% 8% 

  14. Slide 14: Free Cash Flow

    Free Cash Flow 2004 2003 restated £m £m Operating profit 188 168 Depreciation and amortisation 84 69 Working capital / other (12) (7) Cash flow from operations 260 230 Interest / tax / dividends (116) (110) Capex (114) (125) Free cash flow 30 (5) 

  15. Slide 15: Net Cash Flow

    Net Cash Flow 2004 2003 £m £m Free cash flow 30 (5) Acquisitions / disposals (18) (249) Shares issued / (bought) (9) 3 Net cash flow 3 (251) Loan notes issued (1) (7) Exchange 6 14 Movement in debt 8 (244) 

  16. Slide 16: Capital

    Capital Mar 04 Mar 03 restated £m £m Net debt 395 403 Shareholders’ funds 862 787 Minorities 911 Capital employed 1,266 1,201 Gearing 45%50% (debt / shareholders’ funds + minorities) 

  17. Slide 17: Johnson Matthey

     Johnson Matthey

  18. Slide 18: Catalysts Division

    Catalysts Division 

  19. Slide 19: Catalysts Division

    Catalysts Division  Good performance from ECT led by growth in Asia and diesel  PCT well ahead. Good contribution from Synetix £m £m +5% +15% 1,200 1,143 120 1,083 109.2 1 1,000 95.3 100 800 80 600 60 400 40 200 20 0 0 2003 2004 2003 2004 Sales Operating Profit 1 = Restated for FRS 17 

  20. Slide 20: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies  Asian region well ahead  37% market growth in China light duty vehicles  Domestic US customers’ production down  Diesel cars now 46% of European market  End of old production technology 

  21. Slide 21: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies Light Duty Diesel  JM share increasing  New technologies include: – Catalysed soot filters – Use of palladium 

  22. Slide 22: Environmental Catalysts and Technologies

    Environmental Catalysts and Technologies Heavy Duty Diesel  Very strong retrofit sales in Japan  Good growth in US and Europe  Joint development programmes with major OEMs worldwide 

  23. Slide 23: Process Catalysts and Technologies

    Process Catalysts and Technologies 

  24. Slide 24: Process Catalysts and Technologies

    Process Catalysts and Technologies  Successful integration of Synetix  Process catalysts perform strongly  PGM refining impacted by Pd and Rh prices  Research Chemicals performs well 

  25. Slide 25: Process Catalysts and Technologies

    Process Catalysts and Technologies  Acquisition of AMC  New pgm catalyst plant in India 

  26. Slide 26: Fuel Cells

    Fuel Cells 

  27. Slide 27: Fuel Cells

    Fuel Cells  Fuel Cells business making encouraging progress  Increased sales to automotive sector  £3.2 million grant from UK Government for MEA development  Net expense down 12% 

  28. Slide 28: Precious Metals

    — Ty =e Metals. ita, _é: :

  29. Slide 29: Precious Metals

    Precious Metals  Subdued trading conditions for most of year  Market conditions improving £m £m +3% -8% 3,500 60 2,956 3,000 2,857 48.0 1 50 44.2 2,500 40 2,000 30 1,500 20 1,000 500 10 0 0 2003 2004 2003 2004 Sales Operating Profit 1 = Restated for FRS 17 

  30. Slide 30: Platinum and Palladium Prices

    Platinum and Palladium Prices US$ 1,000 800 600 400 200 0 March March March March 2001 2002 2003 2004 Platinum Palladium 

  31. Slide 31: Precious Metals

    Precious Metals  Trading conditions improving  Good growth in fabricated pgm products  Weak demand for primary gold refining 

  32. Slide 32: Colours & Coatings

    Colours & Coatings

  33. Slide 33: Colours & Coatings

    Colours & Coatings  Profits and margins up £m £m -1% +6% 300 30 256 1 26.7 254 25.3 250 25 200 20 150 15 100 10 50 5 0 0 2003 2004 2003 2004 Sales Operating Profit 1 = Restated for FRS 17

  34. Slide 34: Colours & Coatings

    Colours & Coatings  Glass performs well  Tile market impacted by strong euro, now improving  Speciality Coatings benefits from lower costs

  35. Slide 35: Pharmaceutical Materials

    Pharmaceutical Materials 

  36. Slide 36: Pharmaceutical Materials

    Pharmaceutical Materials  Strong growth in profits  Good results at West Deptford and Macfarlan Smith £m £m +9% +15% 150 140 50 128 42.3 120 36.7 1 40 90 30 60 20 30 10 0 0 2003 2004 2003 2004 Sales Operating Profit 1 = Restated for FRS 17 

  37. Slide 37: Pharmaceutical Materials

    Pharmaceutical Materials  Expanded range of platinum drugs  Growth in specialist opiates  Recovery in demand at Pharm-Eco  Development of prostaglandins 

  38. Slide 38: Pharmaceutical Materials

    Pharmaceutical Materials  Carboplatin patent to expire in 2004  New opiates facility at West Deptford commissioned  New production capacity for specialist products at Macfarlan Smith  New product pipeline increased to over 80. Several new products introduced in year 

  39. Slide 39: Outlook

    Outlook  Markets improving  Further growth from Catalysts and Pharmaceutical Materials  Currency effect – impact of weak US dollar 

  40. Slide 40: Longer Term Growth

    Longer Term Growth  Heavy duty diesel catalysts  Growth in opiates and prostaglandins  Gas to liquids catalysts  Fuel Cells 

  41. Slide 41: Johnson Matthey

     Johnson Matthey

Johnson Matthey — FY2004 Earnings Presentation on 6ix