Presentation of Results for the half year ended 30th September 2001
29th November 2001
Johnson MattheyJohnson Matthey
Johnson Matthey
OverviewOverview
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
Johnson Matthey
Summary ResultsSummary Results1H 1H
2001 2000£m £m %
Turnover 2,647 2,852 -7
Operating Profit 94.4 82.7 +14Interest (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 +7Dividend 7.5p 7.0p +7
* Excluding exceptionals & goodwill amortisation
Operating ProfitOperating Profit
1H 1H 2001 2000£m £m %
Catalysts & Chemicals 45.1 37.4 +21Precious Metals 29.3 27.3 +7 Colours & Coatings 14.5 15.5 -6 Pharmaceutical Materials 13.1 8.8 +49Corporate (7.1) (6.3)Discontinued (0.5) -
94.4 82.7 +14
Excluding acquisitions 90.8 82.7 +10& disposals
1H2000
£82.7m
37%
48%
7%8%
1H2001
£94.4m
43%
40%
10%
Europe
Rest of the World
Asia
North America
Geographical SplitGeographical SplitOperating Profit
7%
InterestInterest
1H 1H
2001 2000
£m £m
Financial (0.4) 3.7
Gold & Silver leases (1.8) (0.4)
(2.2) 3.3
Exceptional ItemsExceptional Items
1H
2001
£m
Sale of unhedged palladium 7.2
Sale of French print business (5.5)
Other (0.1)
1.6
Taxation 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%
Free Cash FlowFree 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 operations 114.4 77.1
Interest / tax / dividends (55.3) (42.7)
Capex (67.2) (39.6)
Free cash flow (8.1) (5.2)
Net Cash FlowNet Cash Flow
1H 1H2001 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)
CapitalCapital
Sep 01 Mar 01
£m £m
Net debt / (cash) 108 (140)
Equity and minorities 803 812
Capital employed 911 672
Gearing 13% n/m
Divisional PerformanceDivisional Performance
Sales Profits
1H 1H 2001 2001
£m % £m %
Catalysts & Chemicals 746 +20 45.1 +21Precious Metals 1,729 -17 29.3 +7Colours & Coatings 130 +4 14.5 -6Pharmaceutical Materials 41 +157 13.1 +49
Key IssuesKey Issues
Autocatalysts and car sales
Precious metals prices
Pharmaceutical Materials Division
Fuel cells
AutocatalystsAutocatalysts Global car sales down 2-3% Profits up following new factory at Royston
AutocatalystsAutocatalysts
New generation products help customers save costs
Market share growth in Europe
Investment in new production technology continues
US Light Duty Vehicle SalesUS 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 0
200
400
600
800
1000
1200
1400
1600
1800
2000
'000 Vehicles Monthly Actual Half Yearly Average
Source: Automotive News
0
200
400
600
800
1,000
1,200
Platinum Palladium
Sep99 Mar00 Sep00 Mar01 Sep01
US $/oz
Platinum & Palladium PricesPlatinum & Palladium Prices
PlatinumPlatinum
Platinum most important metal to JM
Robust fundamentals
Autocatalyst
Jewellery in China
European Demand for Platinum European Demand for Platinum in Autocatalysts 1997 - 2001in Autocatalysts 1997 - 2001
0
200
400
600
800
1,000
1997 1998 1999 2000 2001
GasolineDiesel
'000 oz
Demand for PlatinumDemand for Platinumin Jewellery 1997 - 2001in Jewellery 1997 - 2001
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1997 1998 1999 2000 2001
China
Europe
N. America
Japan
million oz
Pharmaceutical MaterialsPharmaceutical Materials
Contract research Small scale synthesis
Controlled substances Extraction technology
West Deptford Pharm-EcoMacfarlan Smith
(Meconic)
Platinum anti-cancer Controlled substances
Pharmaceutical Materials Pharmaceutical Materials Key FeaturesKey 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
PrePre-c-clinicallinical Phase IPhase I Phase IIPhase II Phase IIIPhase IIIPatentPatent
ProtectedProtected GenericGeneric
ApprovalApproval
Pharm-EcoPharm-Eco
Pharmaceutical MaterialsPharmaceutical MaterialsNew ProductsNew Products
WestWest Deptford (US)Deptford (US)
Macfarlan Smith Macfarlan Smith (UK)(UK)
New products in development
12 4 3 10 14
Pharmaceutical MaterialsPharmaceutical MaterialsProfit Growth OpportunitiesProfit Growth Opportunities
Market growth
Specialist opiates
Cross–selling
Share R&D, manufacturing processes
Fuel CellsFuel 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
New Fuel Cell Products for 2002New 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. )
MEA Factory at SwindonMEA Factory at Swindon
MEA Factory at SwindonMEA Factory at Swindon
OutlookOutlook
Some impact of US slowdown and lower pgm prices
Continued growth in Catalysts & Chemicals despite weaker markets
Good prospects in Pharmaceutical Materials
Johnson Matthey