Johnson Matthey Plc · LSE:JMAT
Johnson Matthey — Investor Presentation (May 2010)
46 slides from Johnson Matthey's investor presentation, May 17, 2010
Slide 1: 17th May 2010
17th May 2010 www.platinum.matthey.com
Slide 2: Note on the presentation format
Note on the presentation format In our new format, Johnson Matthey now report gross demand and recycling figures separately for the electrical and jewellery sectors, in the same way as we do for autocatalyst www.platinum.matthey.com
Slide 3: Platinum
Platinum www.platinum.matthey.com
Slide 4: Platinum: Key features 2009
Platinum: Key features 2009 • Platinum market in surplus by 285,000 oz • Supplies declined by just 20,000 oz, as sales of refined stocks and some new mine production offset pit closures • Gross Demand fell by about 12% • Recycling heavily down on lower autocatalyst recoveries and reduced scrap rates
Slide 5: Platinum Supply and Demand
Platinum Supply and Demand ‘000 oz 2008 2009 % change Supply 5,940 5,920 (0.3) Gross Demand 7,990 7,040 (11.9) Recycling (1,830) (1,405) (23.2) Net Demand 6,160 5,635 (8.5) Movement in stocks (220) 285 www.platinum.matthey.com
Slide 6: Platinum Supply down 0.3%
Platinum Supply down 0.3% million oz 8 5.940 5.920 • South African supplies kept 7 broadly flat at 4.53 million oz 6 5 • Russian production fell slightly to 4 785,000 oz 3 • Supplies from other regions also 2 down marginally to 605,000 oz 1 0 2008 2009 RSA Russia Other www.platinum.matthey.com
Slide 7: Gross Platinum Demand fell by 11.9%
Gross Platinum Demand fell by 11.9% million oz 7.990 8 • Total demand declined by 950,000 oz 7.040 7 to 7.040 million oz 6 • Gross autocatalyst demand slumped by 39% to 2.23 million oz 5 4 • Industrial demand declined sharply by 33.7% to 1.14 million oz 3 • Gross jewellery demand rose by 2 46.1% to
Slide 8: Platinum Demand: Gross Autocatalyst
Platinum Demand: Gross Autocatalyst million oz Changes in gross metal demand 5 by region (2009 vs 2008) : 4 3.655 3 Europe down 51% 2.230 Japan down 35% 2 N. America down 27% 1 China down 10% RoW down 14% 0 2008 2009 China Japan N. Am. Europe RoW www.platinum.matthey.com
Slide 9: Platinum Demand: Gross Jewellery
Platinum Demand: Gross Jewellery million oz 3.010 3.0 Gross demand for jewellery rose 2.060 46.1% in 2009, driven by 2.5 expansion in China 2.0 • European and Japanese demand held 1.5 relatively firm, whilst N. America suffered sharp decline 1.0 • Rest of World showed some growth due to 0.5 renewed
Slide 10: Estimated monthly demand in the Chinese jewellery market
Estimated monthly demand in the Chinese jewellery market 250 2,500 200 2,000 thousand ounces 150 1,500 US$/oz 100 1,000 50 500 0 0 Jan Fe b M ar A pr M ay Jun Jul A ug S ep O ct Nov Dec Jan Feb Mar Apr May Jun Ju l Au g Sep O ct N ov De c Jan Fe b M ar 2008 20 09 2010 www.platinum.matthey.com
Slide 11: Platinum Demand: Industrial
Platinum Demand: Industrial million oz 2.0 Industrial demand fell by 33.7% 1.72 in 2009 1.5 • Chemical industry downsizing and new plants delayed 1.14 • Petroleum refining running at low 1.0 capacity • Electrical demand hurt by downsizing 0.5 of hard disks and reduced inventories • Glass industry re
Slide 12: Platinum Demand: Investment
Platinum Demand: Investment '000 oz 700 Identifiable physical platinum 600 investment demand was 500 stronger by 18.9% in 2009 400 at 660,000 oz 300 • Japanese large bar investment 200 reverting to type 100 • Surge in ETF demand, up 0 390,000 oz for the year -100 '05 '06 '07 '08 '09 '10 • Small coin
Slide 13: Platinum Recycling
Platinum Recycling ‘000 oz 2008 2009 % change Autocatalyst (1,130) (830) (26.5) Electrical (5) (10) 100 Jewellery (695) (565) (18.7) Total Recycling (1,830) (1,405) (23.2) www.platinum.matthey.com
Slide 14: Platinum Autocatalyst Recycling
Platinum Autocatalyst Recycling • Global recovery of platinum from scrap autocatalysts fell by 26.5% in 2009 to 830,000 oz • “Cash for clunkers” schemes supported scrap recoveries, but were no match for decline in new vehicle sales • Stocks of catalysts “cleaned out” in the early half of 2008 • Reco
Slide 15: Platinum Electrical Recycling
Platinum Electrical Recycling • Not yet a significant market for platinum • Some recovery of platinum from scrap hard disks • Overall, only 10,000 oz estimated as recovered in this sector in 2009 www.platinum.matthey.com
Slide 16: Platinum Jewellery Recycling
Platinum Jewellery Recycling • Global recycling of scrap jewellery and retail stocks fell by 18.7% in 2009 to 565,000 oz • Recycling largely an Asian industry • Rate of recycling fell in China, but absolute volumes increased from 210,000 oz to 330,000 oz • Sharp decline in rate and volume of recycli
Slide 17: Platinum Jewellery Gross and Net Demand in 2009
Platinum Jewellery Gross and Net Demand in 2009 ‘000 oz Gross Recycling Net Europe 185 (5) 180 Japan 535 (230) 305 North America 135 0 135 China 2,080 (330) 1,750 Rest of World 75 0 75 Total 3,010 (565) 2,445 Net demand of 2.445 million oz represents 79% growth on 2008 www.platinum.matthey.com
Slide 18: Platinum Outlook
Platinum Outlook • Supply likely to show modest growth, but limited options for large upsides • Automotive demand showing signs of recovery in first part of 2010. Production likely to outstrip sales, and diesel share in Europe will recover • Jewellery industry unlikely to repeat record purchases see
Slide 19: Forecast Platinum Price: what we said in November 2009
Forecast Platinum Price: what we said in November 2009 $1,550 $1,280 www.platinum.matthey.com
Slide 20: Forecast Platinum Price: what we say for the next six months
Forecast Platinum Price: what we say for the next six months $2,000 $1,600 www.platinum.matthey.com
Slide 21: Palladium
Palladium www.platinum.matthey.com
Slide 22: Palladium: Key features 2009
Palladium: Key features 2009 • Palladium market in surplus of 760,000 oz in 2009, but would have been in deficit without Russian state stock sales • Global mine production of palladium fell marginally, whilst Russian state stock sales remained flat • Gross Demand fell by 6.3% • Recycling also down o
Slide 23: Palladium Supply and Demand
Palladium Supply and Demand ‘000 oz 2008 2009 % change Supply 7,310 7,100 (2.9) Gross Demand 8,290 7,770 (6.3) Recycling (1,615) (1,430) (11.5) Net Demand 6,675 6,340 (5.0) Movement in stocks 635 760 www.platinum.matthey.com
Slide 24: Palladium Supply fell by 2.9%
Palladium Supply fell by 2.9% million oz • Supply dropped by 210,000 oz 10 9 • S. African supply slipped marginally 7.31 8 7.10 by 60,000 oz to 2.37 million oz 7 6 • Russian production essentially flat at 5 2.675 million oz 4 3 • Sales of Russian state stocks 2 estimated at 960,000 oz 1 0 • N. Ameri
Slide 25: Gross Palladium Demand fell by 6.3%
Gross Palladium Demand fell by 6.3% million oz • Global demand fell by 520,000 oz to 9 8.290 8 7.770 7.77 million oz 7 • Gross autocatalyst demand 6 down 9.3% 5 4 • Gross jewellery demand declined by 3 17.3%, making way for platinum in 2 China 1 0 • Physical investment up 48.8% on 2008 2009 ETF grow
Slide 26: Palladium Demand: Gross Autocatalyst
Palladium Demand: Gross Autocatalyst million oz 5 Changes in gross metal demand 4.465 by region (2009 vs 2008) : 4.050 4 3 China up 76% Japan down 33% 2 N. America down 21% 1 Europe down 1% 0 RoW down 15% 2008 2009 China Japan N. Am. Europe RoW www.platinum.matthey.com
Slide 27: Pgm choice in European Autocatalysts
Pgm choice in European Autocatalysts Gasoline percentage of pgm used (Pt/Pd) 100 % 75 50 25 0 06 07 08 09 20 20 20 20 Palladium Platinum www.platinum.matthey.com
Slide 28: Pgm choice in European Autocatalysts
Pgm choice in European 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 06 07 08 09 06 07 08 09 20 20 20 20 20 20 20 20 Palladium Platinum Palladium Platinum www.platinum.matthey.com
Slide 29: Palladium Demand: Gross Jewellery
Palladium Demand: Gross Jewellery million oz 1.5 Gross demand for jewellery fell 17.3% in 2009 due to stagnation 0.985 1.0 of Chinese market 0.815 • European demand showed growth on back of UK hallmark 0.5 • Japan slightly up in line with platinum (as alloying element) 0.0 • N. America and Rest of W
Slide 30: Palladium Demand: Industrial and Dental
Palladium Demand: Industrial and Dental million oz 3.0 Industrial and dental demand 2.5 2.420 2.280 fell by 5.8% 2.0 • Gross electrical usage declined on falling sales of electronic 1.5 components and de-stocking 1.0 • Other industrial applications, 0.5 mainly chemical industry catalysts, withstood
Slide 31: Palladium Demand: Investment
Palladium Demand: Investment '000 oz 700 600 Physical palladium investment 500 demand reached new record at 400 625,000 oz for the year 300 200 • ETF purchases up 42.7% on 100 previous year at 528,000 oz 0 2010 4m 2005 2006 2007 2008 2009 -100 • Strong demand for small coins Coins and bars ETFs www.
Slide 32: Palladium Recycling
Palladium Recycling ‘000 oz 2008 2009 % change Autocatalyst (1,140) (965) (15.4) Electrical (345) (395) 14.5 Jewellery (130) (70) (46.2) Total Recycling (1,615) (1,430) (11.5) www.platinum.matthey.com
Slide 33: Palladium Autocatalyst Recycling
Palladium Autocatalyst Recycling • Global recovery of palladium from scrap autocatalysts fell by 15.4% in 2009 to 965,000 oz • European incentive schemes “distorted” the market in favour of higher loaded palladium catalysts • Recoveries in 2009 still reflected lower car sales and lack of stock scrap
Slide 34: Palladium Electrical Recycling
Palladium Electrical Recycling • Recovery of palladium from scrap computers and consumer electronic devices rises strongly in 2009 to 395,000 oz • Higher gold and other metals prices encourage recycling • Increasing evidence of recycling activities in China www.platinum.matthey.com
Slide 35: Palladium Jewellery Recycling
Palladium Jewellery Recycling • Global recycling of scrap jewellery and retail stocks falls sharply by 46% in 2009 to 70,000 oz • Recycling again largely an Asian phenomenon • Chinese volumes well down. Nearly all old Pd950 retail stock already recycled, and little consumer exchange of palladium jew
Slide 36: Palladium Jewellery Gross and Net Demand in 2009
Palladium Jewellery Gross and Net Demand in 2009 ‘000 oz Gross Recycling Net Europe 50 0 50 Japan 120 (20) 100 North America 60 0 60 China 560 (50) 510 Rest of World 25 0 25 Total 815 (70) 745 Net demand of 745,000 oz represents a 12.9% fall on 2008 www.platinum.matthey.com
Slide 37: Palladium Outlook
Palladium Outlook • Mining supply growth expected to be modest, and Russian State stock sales likely to be flat • Gross automotive demand recovering, led by continued growth in China • Jewellery outlook remains unclear • Stronger industrial performance due to increased demand for automotive electron
Slide 38: Forecast Palladium Price: what we said in November 2009
Forecast Palladium Price: what we said in November 2009 $390 $290 www.platinum.matthey.com
Slide 39: Forecast Palladium Price: what we say for the next six months
Forecast Palladium Price: what we say for the next six months $700 $475 www.platinum.matthey.com
Slide 40: Rhodium
Rhodium www.platinum.matthey.com
Slide 41: Rhodium: Key features 2009
Rhodium: Key features 2009 • Rhodium market in surplus by 241,000 oz • Although mine production was essentially flat overall, changes in refined metal stocks and pipelines raised supply by 10.8% to 770,000 oz • Gross demand fell by 20.2% • Recycling of autocatalysts declined in line with other pgm w
Slide 42: Rhodium Supply and Demand
Rhodium Supply and Demand ‘000 oz 2008 2009 % Change Supply 695 770 10.8 Gross Demand 897 716 (20.2) Recycling (227) (187) (17.6) Net Demand 670 529 (21.0) Movement in stocks 25 241 www.platinum.matthey.com
Slide 43: Rhodium Supply grew by 10.8%
Rhodium Supply grew by 10.8% '000 oz 1,000 • South African supply grew from 770 574,000 to 663,000 oz, although 800 695 underlying production was flat 600 • Mine production in Russia was also 400 flat, but no state stock sales in 2009 reduced the total supply to 70,000 oz 200 • Elsewhere, fall in N.
Slide 44: Gross Rhodium Demand declined 20.2%
Gross Rhodium Demand declined 20.2% '000 oz 1,000 897 • Gross autocatalyst demand fell from 800 716 768,000 oz to 619,000 oz 600 • Glass demand slumped from 34,000 oz to 19,000 oz 400 • Other demand, largely chemical 200 catalysts, fell 18% to 78,000 oz 0 2008 2009 Auto Glass Other www.platinum.matt
Slide 45: Rhodium Outlook
Rhodium Outlook • Supply likely to remain broadly flat in the absence of any significant stock movements • Automotive demand recovery in line with other pgm • Glass industry demand to recover sharply with new LCD glass capacity in China and Rest of World region • Market expected to move closer to ba
Slide 46: 17th May 2010
17th May 2010 www.platinum.matthey.com