Presentation of Results for the year ended 31 st March 2003 5 th June 2003 Johnson Matthey

Presentation of Results for the year ended 31st March 2003

5th June 2003

Johnson Matthey

Johnson Matthey

OverviewOverview

Operating profit up 6% to £205.7 million

Catalysts performs well led by good growth in ECT

Acquisition of Synetix

Strong growth in Pharmaceutical Materials

PBT up 3% at £192.5 million

Johnson Matthey

Summary ResultsSummary Results2003 2002

£m £m %

Turnover 4,324 4,830 -10Sales excluding 1,159 1,093 +6precious metals

Operating profit* 205.7 193.3 +6 Interest (13.2) (6.1) Profit before tax* 192.5 187.2 +3

Exceptional items (2.7) (23.7) Goodwill amortisation (13.7) (6.8)

EPS* 62.6p 60.4p +4Dividend 25.5p 24.6p +4

* Before exceptional items and goodwill amortisation

2003 2002

£m £m %

Catalysts 104.4 94.7 +10

Precious Metals 50.1 55.9 -10

Colours & Coatings 28.5 25.5 +12

Pharmaceutical Materials 36.9 31.3 +18

Corporate (14.2) (13.6)

Discontinued - (0.5)

205.7 193.3 +6

2003 at 2002

exchange rates

£m %

111.7 +18

51.2 -8

28.2 +11

38.8 +24

(14.2)

-

215.7 +12

Operating ProfitOperating Profit

ROS

2003 2002

% %

16.0 15.9

38.0 39.1

11.3 10.2

30.3 30.9

n/m n/m

17.7 17.7

Sales excl. PM’s

2003 2002 Growth

£m £m %

Catalysts 652 597 +9

Precious Metals 132 143 -8

Colours & Coatings 253 251 +1

Pharmaceutical Materials 122 101 +20

Discontinued - 1

1,159 1,093 +6

Return on SalesReturn on Sales Excluding Precious Metals

2002£193.3m

2003£205.7m

Europe

Rest of World

Asia

North America

Geographical SplitGeographical SplitOperating Profit

InterestInterest

2003 2002

£m £m

Financial (12.0) (2.6)

Gold & silver leases (1.2) (3.5)

(13.2) (6.1)

Interest Cover 15.6x 31.7x

Exceptional Items Exceptional Items 2003

£m

Synetix integration (6.5)

Sale of unhedged palladium 5.1

Rationalisation of Australia (1.4)

Other rationalisation costs (4.8)

Formation of AGR Matthey (6.0)

Anglo Platinum stake in Fuel Cells 10.9

Total (2.7)

Taxation thereon 2.0

Impact on earnings (0.7)

Taxation Taxation

2003 2002

£m £m

Underlying tax 57.2 56.0

Tax on exceptionals (2.0) (5.8)

Tax on goodwill amortisation (0.7) -

54.5 50.2

Underlying tax rate 29.7% 29.9%

Return on InvestmentReturn on Investment2003 2002£m £m

Operating profit 206 193

Average assets:Equity and minorities 862 814 Cumulative goodwill w/o 43 46 Net borrowings 281 10 Total investment 1,186 870

Pre-tax ROA 17.3% 22.2%

Return on invested capital 12.2% 15.6% WACC 8% 9%

Pro forma Current Adjustments

FRS17

£m £m £m

Catalysts 104.4 (9.1) 95.3

Precious Metals 50.1 (2.1) 48.0

Colours & Coatings 28.5 (3.2) 25.3

Pharmaceutical Materials 36.9 (0.2) 36.7

Corporate (14.2) (1.9) (16.1)

205.7 (16.5) 189.2

Net interest (13.2) - (13.2)

Net return on pension - 13.9 13.9

192.5 (2.6) 189.9

Estimated net return on pension 2003/04 £6.7m

Impact of FRS17 on ProfitImpact of FRS17 on Profit2002/032002/03

Free Cash FlowFree Cash Flow

2003 2002

£m £m

Operating profit 184 169

Depreciation and amortisation 68 55

Working capital / other (22) -

Cash flow from operations 230 224

Interest / tax / dividends (110) (113)

Capex (125) (131)

Free cash flow (5) (20)

Net Cash FlowNet Cash Flow

2003 2002£m £m

Free cash flow (5) (20)Acquisitions / disposals (249) (145) Shares issued / (bought) 3 (44) Net cash flow (251) (209) Debt acquired with subs. - (47)Loan notes issued (7) (41)Finance leases - (4)Exchange 14 2 Movement in debt (244) (299)

CapitalCapital

Mar 03 Mar 02£m £m

Net debt 402 159

Shareholders’ funds 896 814

Minority interests 11 4

Capital employed 1,309 977

Gearing 44% 19%(debt / equity + minorities)

Johnson Matthey

Catalysts DivisionCatalysts Division

Catalysts DivisionCatalysts Division Good growth led by autocatalysts Synetix performing well

1,083

1,303104.4

94.7

0

200

400

600

800

1,000

1,200

1,400

2002 2003 2002 2003

£m

0

20

40

60

80

100

120 -17% +10%

£m

Sales Operating Profit

Environmental Catalysts and Environmental Catalysts and TechnologiesTechnologies

Global car sales 1% up in our fiscal year Our volumes flat on last year

World Car Sales

0

10

20

30

40

50

60

1998/99 1999/00 2000/01 2001/02 2002/03

millions

Asia / ROWUSAW Europe


NOx Emission Standards (gram/mile)

0

0.25

0.5

0.75

1992 1997 2002 2007

California US Federal Japan Europe China (cities)

CurrentStandards

Data interpolated where standards progressively change

China plant operating profitably

Expansion in South Africa and Malaysia

GM business in Europe

Big increase in heavy duty diesel sales


Good sales of pgm catalysts

PGM refining impacted by lower metal prices

Strong growth in Research Chemicals

Synetix now fully integrated into PCT

Process Catalysts and Process Catalysts and TechnologiesTechnologies

Ammonia (#2) 22% shareFood for the world

Hydrogen (#2) 35% share Upgrading the refinery

Oleochemicals (#2) 30% shareSpeciality and natural

Inks (#1) 50% shareFor premier packaging

Edible Oils (#1) 40% share Margarine, mayonnaise, chocolateMethanol (#1) 50% shareFuel of the future

Alcohols (#2) 25% shareAsian growth market

A Leading Position in Each A Leading Position in Each SectorSector

Fuel CellsFuel Cells

Fuel CellsFuel Cells

Phased expansion of Swindon MEA plant progressing to plan

Johnson Matthey selected as MEA supply partner by industry leaders

Growing number of fuel cell collaborations and demonstrations

Fuel Cell CarsFuel Cell Cars

Madrid Demonstration BusMadrid Demonstration Bus

Precious MetalsPrecious Metals

Weak palladium and rhodium prices Sales and profits below last year


3,1672,857

55.9

50.1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2002 2003 2002 2003

£m

0

10

20

30

40

50

60 -10% -10%

£m


Platinum and Palladium PricesPlatinum and Palladium Prices

0

200

400

600

800

1,000

1,200

March2000

March2001

March2002

March2003

Platinum Palladium

US$

Outlook for platinum remains robust

Noble Metals continues to perform well

Difficult trading conditions in Gold & Silver


Colours & CoatingsColours & Coatings

Good profit growth, margins up Rationalisation successfully completed


253 256 25.5

28.5

0

50

100

150

200

250

300

2002 2003 2002 2003

£m

0

5

10

15

20

25

30 +1% +12%

£m


Good growth in Glass

New frit capacity in Spain and Brazil

Speciality Coatings benefits from cost reduction

Cash generator


Pharmaceutical MaterialsPharmaceutical Materials

Sales and profits well ahead Good results in all three businesses


106

128

31.3

36.9

0

20

40

60

80

100

120

140

2002 2003 2002 2003

£m

0

5

10

15

20

25

30

35

40 +21% +18%

£m


Good results from new products

Poppy straw extraction

Expansion at Pharm-Eco

Cascade Biochem


0

5

10

15

20

25

30

Pre-Clinical Phase I Phase II Phase III Generic

Nov 02 19 13 3 9 24

Mar 03 15 14 3 11 27

Pharmaceutical MaterialsPharmaceutical MaterialsNew Product Pipeline


Macfarlan Smith sales into US

Development agreement for Cascade products

Manufacture of morphine & codeine in US

Manufacture of prostaglandin intermediates

OutlookOutlook

Good growth in operating profit

Increased interest charge

Future growth initiatives

Johnson Matthey

Presentation of Results for the year ended 31 st March 2003 5 th June 2003 Johnson Matthey

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Transcript of Presentation of Results for the year ended 31 st March 2003 5 th June 2003 Johnson Matthey