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For Release at
Preliminary
Results for the year ended
Strong performance and encouraging future prospects
Summary Results
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Year to 31st March
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%
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2007 |
2006 |
change |
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Revenue Sales excluding precious metals Profit before tax Total earnings per share |
£6,152m £1,454m £226.5m 96.9p |
£4,574m £1,159m £191.5m 70.8p |
+34 +25 +18 +37 |
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Before one-off items
(including discontinued operations’ results):
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Profit before tax Earnings per share Dividend per share |
£242.6m 81.2p 33.6p |
£219.8m 72.7p 30.1p |
+10 +12 +12 |
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·
Sales excluding precious metals up 25% at £1,454 million
·
Profit before tax and one-off items, including discontinued
operations’ results, up 10% to £242.6 million
·
Ceramics Division sold for £143.9 million on
·
Total earnings per share up 37% to 96.9 pence. Before one-off items (which comprise the
profit on sale of Ceramics Division and impairment costs in 2005/06) earnings
per share up 12% to 81.2 pence
·
Dividend up 12% to 33.6 pence in line with earnings growth
|
£m |
Year to 31st March 2007 2006 |
% change |
2007 at
2006 exchange
rates |
% change |
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Catalysts Precious
Metal Products Pharmaceutical
Materials Corporate |
148.8 85.3 35.5 (17.2) |
134.2 62.2 33.8 (16.8) |
+11 +37 +5 |
152.7 87.1 36.2 (17.2) |
+14 +40 +7 |
|
Operating Profit |
252.4 |
213.4 |
+18 |
258.8 |
+21 |
·
Operating profit for the continuing businesses, before one-off
items, up 18% to £252.4 million, despite adverse exchange translation of £6.4
million
·
Catalysts up 11%.
Environmental Catalysts and Technologies’ (ECT’s) sales were well ahead
of last year with good growth in autocatalyst sales in Asia, increased sales of
catalysed soot filters (CSFs) in Europe and the emergence of the new market for
heavy duty diesel (HDD) catalysts in both Europe and North America. Process Catalysts and Technologies (PCT) also
achieved good growth with strong sales of methanol catalysts and a good
contribution from Davy Process Technology
·
Precious Metal Products up 37% benefiting from buoyant trading
conditions for platinum group metals, particularly in the second half of the
year, and good growth in its manufacturing businesses
·
Pharmaceutical Materials up 5% with a recovery in its
Business Prospects
·
ECT should generate good growth in sales and profits in
2007/08 with a full year of HDD catalyst sales, continued growth in CSFs and
further expansion in
·
Prospects for PCT are also very encouraging, driven by the
high oil price and the need to make more efficient use of hydrocarbon feedstocks. In
2007/08 we will be investing in additional capacity in
·
Outlook for platinum group metals demand remains good. However, following the very strong
performance in 2006/07 we expect Precious Metal Products Division to achieve
more modest growth in 2007/08
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Pharmaceutical Materials is expected to perform well in
2007/08 with steady growth across the division
·
Following the sale of Ceramics Division the group’s gearing
(debt / equity) has fallen to 34% at
Commenting on the results, Neil
Carson, Chief Executive of Johnson Matthey said:
“Johnson Matthey performed very well last
year. Sales excluding precious metals increased
by 25% and underlying earnings per share were up 12%. We continue to invest in R&D and in new
plants around the world to meet the increasing demand for our high technology
products. Prospects for all our
businesses remain very encouraging, particularly in catalysts where global
concerns about pollution and climate change will continue to drive current and
future sales of our autocatalyst and process catalyst products.”
Enquiries:
|
Ian Godwin |
Director, IR and Corporate Communications |
020 7269 8410 |
|
John Sheldrick |
Group Finance Director |
020 7269 8408 |
|
Howard Lee |
The HeadLand Consultancy |
020 7367 5225 |
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Laura Hickman |
The HeadLand Consultancy |
020 7367 5227 |
www.matthey.com
Report to Shareholders
Johnson Matthey
achieved very good results in 2006/07 with sales, profit before tax and earnings
per share all well ahead of last year. Catalysts
Division and Precious Metal Products Division both achieved double digit growth
in sales and operating profit despite adverse exchange translation. Sales were boosted by the significant rise in
the prices of platinum group metals. Demand
for catalysts was also very strong with expanding sales of catalysed soot
filters for light duty diesel vehicles, the emergence of a new market for heavy
duty diesel catalysts to original equipment manufacturers and increased sales
of process catalysts.
We sold our
Ceramics Division on
Revenue increased by 34% to £6,152
million. Precious metal prices grew
strongly over the year which boosted sales in both Catalysts Division and
Precious Metal Products Division. Sales
excluding the value of precious metals rose by 25% reflecting good underlying volume
growth and increased non precious metal material costs, some of which are a
pass through for Johnson Matthey.
Operating profit
before one-off items increased by 18% to £252.4 million, despite adverse
exchange translation of £6.4 million. There were no one-off items in operating
profit in 2006/07 whereas in 2005/06 a £6.0 million impairment charge was
included. After one-off items growth in operating profit was 22%.
The group’s interest charge rose by
£11.1 million as a result of higher average borrowings and higher interest rates. Profit before tax and one-off items for the
continuing businesses rose by 15% to £226.5 million. After one-off items the rise was 18%. If the
operating results for discontinued operations are included in the total, profit
before tax was £242.6 million which was 10% up on last year’s reported profit
before tax and one-off items of £219.8 million.
Total earnings per share, including
the profit on disposal of Ceramics, rose by 37% to 96.9 pence. Earnings per share before one-off items (profit
on sale of Ceramics Division and last year’s impairment charge) were 12% up at
81.2 pence.
The board is recommending to
shareholders a final dividend of 23.7 pence, making a total dividend for the
year of 33.6 pence, an increase of 12%, which is in line with the growth in earnings
per share before one-off items.
Catalysts Division’s sales rose by 48%
to £2,193 million, partly as a result of significantly higher prices for
platinum, palladium and rhodium.
Excluding the value of precious metals, sales rose by 32% to £1,036
million. This increase was driven by
good volume growth and the impact of higher material costs, such as the costs
of substrates for catalysed soot filters, which are a pass through for Johnson
Matthey.
The
division’s operating profit increased by 11% to £148.8 million, with both
Environmental Catalysts and Technologies and Process Catalysts and Technologies
performing well. The results were
adversely affected by exchange translation.
At last year’s rates sales excluding precious metals would have
increased by 35% and operating profit would be 14% up.
Environmental Catalysts and Technologies (ECT) was well ahead of last year with good growth in
In Johnson
Matthey’s financial year to 31st March 2007 global light duty
vehicle sales increased by 2.8% to 66.3 million. Car production rose by 3.1% with a small
overall increase in inventories. Most of
the growth in production again came in
Estimated Light Vehicle Sales and Production
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Year to 31st March |
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2007 millions |
2006 millions |
change % |
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Total Global |
Sales Production Sales Production Sales Production Sales Production |
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19.3 14.9 21.3 21.1 16.4 25.4 66.3 66.9 |
19.7 15.9 20.6 20.7 15.2 23.2 64.5 64.9 |
-2.0% -6.3% +3.4% +1.9% +7.9% +9.5% +2.8% +3.1% |
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Source: Global
Insight |
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We continue to see increasing demand
from many of the leading car companies in
During the year we commenced
construction of a new autocatalyst manufacturing facility in the
Our business in
Our new plant in
The market for HDD catalysts for new
vehicles grew rapidly in the second half of the year. New emission control standards for HDD
vehicles came into force in October 2006 for all new vehicles sold in
Johnson Matthey’s sales, excluding
precious metals, of HDD catalysts to original equipment manufacturers (OEMs)
increased to £46 million in the second half of 2006/07 from £7 million in the
first half. Sales in the
Our HDD business in
On road HDD emissions legislation
will undoubtedly continue to tighten beyond 2010. In addition there is also legislation in place
in the European Union and the
Process Catalysts
and Technologies (PCT) also achieved good growth in sales and
profits in 2006/07. The Ammonia,
Methanol, Oil and Gas (AMOG) business was well ahead of last year with
continued strong demand for catalysts and purification materials for industries
where hydrogen or synthesis gas are key intermediates. Demand from methanol producers was
particularly good in 2006/07.
Davy Process Technology (DPT), which
we acquired in February 2006, had an excellent year concluding several major
contracts. The acquisition of DPT has
provided Johnson Matthey with additional opportunities to grow sales of
catalysts into new technology developments. DPT develops and licenses chemical process
technologies and is benefiting from growth in
PCT’s fine chemicals and related
catalysts businesses performed well in the year. Demand for precious metal chemicals was
strong and sales of homogeneous and Sponge NickelTM
catalysts showed good growth. Research
Chemicals benefited from a good contribution from its new joint venture in
Our Fuel Cells business achieved strong growth in sales, from a small
base, with significantly increased orders for membrane electrode assemblies for
direct methanol fuel cells (DMFCs). Most of these sales were for portable fuel
cells which are sold to European consumers.
Other sectors where fuel cells have applications, such as automotive and
local power generation, have benefited from growing interest in low carbon and
low emission technologies. The annual
cost of our Fuel Cells business fell by £0.8 million to £7.3 million.
Precious Metal Products Division’s sales increased by 29% to £3,824 million, boosted by
higher prices for platinum group metals (pgms). In sterling terms the average
price of platinum rose by 18%. Prices of the minor metals (rhodium, iridium
and ruthenium) increased dramatically. Operating
profit (before last year’s impairment costs) rose by 37% to £85.3 million. At last year’s exchange rates operating profit
would have been 40% higher. Both the
marketing and distribution business and the manufacturing businesses achieved
strong growth in the year.
The price of platinum was extremely
volatile in 2006/07. With the physical
market tightly balanced, speculative interest and the volatility in other
commodities such as oil had a significant impact on the price. Platinum peaked at a new all time high of
$1,390/oz in November and was subject to a broadly upward trend throughout the
year. The average price for the year was
$1,185/oz, a 26% increase on 2005/06 (18% in sterling terms).
Total consumption of platinum increased
once more in 2006/07, a pattern unbroken since 1992. Demand for platinum in autocatalysts increased
by 11% with much of the growth generated in
Supplies of platinum increased in
2006/07, with new mines coming on stream and the largest producer Anglo
Platinum having a good year after unexpected problems in 2005. Overall, the
platinum market was close to balance in 2006/07, which, following several years
of deficits, ensured the price remained firm.
The palladium price reached its peak
for 2006/07 in May, touching $398/oz. Supply
and demand fundamentals continued to be largely incidental as hedge funds and
institutional investors extended already substantial long positions in the
market. With their significant and
consistent support, the average price for the year was $336/oz, an increase of
47% on 2005/06.
The price of rhodium rose sharply in 2006/07, touching a peak of $6,275/oz in May. The average price doubled for a second successive year to reach $5,166/oz. Strong demand from the automotive and glass fabrication industries coupled with speculative interest left little metal to be offered i