E Johnson Matthey. Presentation of Results for the half year ended 30 th September nd November 2006

Transcription

1 Johnson Matthey Presentation of Results for the half year ended 30 th September nd November 2006

2 Cautionary Statement This presentation contains forward looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which Johnson Matthey operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated.

3 Johnson Matthey Introduction Neil Carson Chief xecutive

4 Business Developments Strong first half Focus on delivery of organic growth Increase in sales of diesel catalysts this year CSFs HDD nvironmental concerns and energy prices drive long term growth Major investment in capex and working capital. ROA is key performance measure

5 Johnson Matthey Financial Review John Sheldrick Group Finance Director

6 Summary Results 1H 1H % m m change Revenue 3,012 2, Sales excluding precious metals Operating profit Profit before tax Total earnings per share 38.3p 35.2p +9 Dividend per share 9.9p 9.1p +9

7 Operating Profit 1H 1H m m % Catalysts Precious Metal Products Pharmaceutical Materials Ceramics Corporate (8.4) (8.3) Operating profit H 2006 at 1H 2005 exchange rates* m % (8.4) * excluding South African rand

8 2.0 $/ xchange Rates 1.9 Average $1.855/ Average $1.820/ 1.8 Average $1.750/ March 2005 September 2005 March 2006 September 2006

9 Return on Sales xcluding Precious Metals Sales excl. PM s 1H 1H Growth m m % Catalysts Precious Metal Products Pharmaceutical Materials Ceramics Group H 2006 % ROS 1H 2005 %

10 Substrate Costs Autocatalyst 3-10 CSF HDD Flow through 60 Filter system 300

11 Interest 1H 2006 m 1H 2005 m Interest payable (17.2) (15.7) Interest receivable (12.2) (7.7)

12 Net Cash Flow 1H 1H m m Operating profit Depreciation and amortisation Tax paid (41.9) 6.4 Working capital / other (71.5) (27.6) Cash flow from operations Interest / dividends (59.1) (48.5) Net capital investment (55.9) (46.5) Acquisitions / disposals (7.5) (1.1) Shares (bought) / issued (12.2) (11.9) Net cash flow (83.8) 18.5

13 Capital Sep 06 Mar 06 m m Net debt quity 1, Capital employed 1,520 1,457 Gearing 46% 39% (net debt / equity)

14 Johnson Matthey Operating Review Neil Carson Chief xecutive

15 Profits up 9% Catalysts Division Both CT and PCT achieve good growth m 1,100 1, Growth at actual exchange rates +48% +9% m H 1H 1H 1H 2005/ / / /07 Sales Operating Profit

16 Light Vehicle Sales and Production North America urope Asia Global Half year to 30 th September 2006 millions 2005 millions change % Sales % Production % Sales % Production % Sales % Production % Sales Production % Source: Global Insight

17 nvironmental Catalysts and Technologies Good top line growth Significant increase in sales of CSFs in urope Further weakness in North American market Good growth in Asia Overall strong growth in urope and Asia more than offsets weakness in North America

18 nvironmental Catalysts and Technologies Developments in Diesel Business arly adoption of 2010 regulations in urope drives growth in CSFs New sales of diesel catalysts for pick-up trucks in US this year HDD sales now starting to grow in urope. Will start in US in January Significant pre-buying of trucks in 2006

19 nvironmental Catalysts and Technologies HDD on-road regulation development PM (g/kw-hr) Japan 2003 US /4 U III Japan 2009 US 2010 Japan 2005 U V U IV US NOx (g/kw-hr) New Models All Models urope uro 4 01-Oct Oct-06 uro 5 01-Oct Oct-09 United States US Jan Jan-07 US Jan Jan-10 Japan Short Term t 01-Oct Oct-03 12t + 01-Oct Oct-04 New Long Term 2.5t+ 01-Oct Oct-05 Japan Diesel t+ 31-Dec Dec-09 China Beijing - uro 4 Rest of country - uro 4 India Major cities 2010 (or earlier?) South Korea uro 4 01-Jan Jan-08 Brazil uro

20 nvironmental Catalysts and xtension to CSF facility in Royston Completion of HDD plant in US Further investment in Japan New factories in South Korea and Russian Federation Technologies Investment

21 Process Catalysts and Technologies Good growth in sales and operating profits AMOG business well ahead. Sales of syngas catalysts strong, particularly for methanol production Good growth in sponge nickel catalysts Increasing sales of catalysts for fine chemicals and pharmaceuticals Good contribution from DPT

22 Process Catalysts and Developments Increasing activity in hydrocarbons to products technologies Low carbon initiatives should benefit future growth Research Chemicals benefits from new joint venture in China Technologies

23 Fuel Cells Increased interest in Direct Methanol Fuel Cells (DMFC) Growing sales of MAs for portable DMFC applications in urope Continuing to work on consumer electronics applications particularly in Asia

24 Precious Metal Products Profits up 22% Both marketing and manufacturing businesses performed well 2,000 1,750 1,500 1,250 1, m 0 1,460 Growth at actual exchange rates m +27% +22% 1, H 1H 1H 1H 2005/ / / /07 Sales Operating Profit

25 1,400 1,200 Platinum and Palladium Prices US$/oz 1, March 2005 September 2005 March 2006 September 2006 Platinum Palladium

26 US$/oz Rhodium Price 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, March 2005 September 2005 March 2006 September 2006 Rhodium

27 Precious Metal Products Strong growth in marketing and distribution business Good growth in pgm fabrication business, particularly in US Pgm refining demand strong. Focus on high grade materials Colour Technologies continues to perform well

28 Pharmaceutical Materials Profits up 5% Recovery in US businesses m 58 Growth at actual exchange rates H 1H 1H 1H 2005/ / / /07 Sales +13% +5% m Operating Profit

29 Pharmaceutical Materials US Operations Good growth in platinum anticancer compounds ncouraging clinical trial results for Satraplatin Second half to benefit from sales of Adderall Barr s generic Adderall XR product to be launched in April 2009

30 Pharmaceutical Materials urope Profits slightly ahead of last year Sales of bulk opiates below first half of last year but expected to recover in second half Small acquisition of UK poppy growing operation

31 Sales unchanged Profits down 6% Ceramics m Growth at actual exchange rates -6% m H 1H 1H 1H 2005/ / / /07 Sales Operating Profit 0

32 Ceramics Margins slightly down but remain good Impact of increased energy costs Investment in new capacity in India Continued strong cash generation

33 Outlook Catalysts Continued strong demand for light duty diesel products in urope Further growth in Asia HDD legislation now in force in urope and to start in US in January 2007 Pre-buying of trucks in 2006 will impact vehicle sales in 2007 however JM will still see good growth We expect CT to achieve double digit growth in sales and profits this year Further growth in PCT driven by high oil price and strong order book at DPT

34 Outlook Other Divisions Strong pgm prices and good demand will benefit Precious Metal Products Recovery in Pharmaceutical Materials expected to continue with further growth in the US Ceramics Division s performance in second half likely to be below last year. Continued good cash generation

35 Outlook Group Summary Overall, we expect to achieve further good growth in sales and profits in the second half Compared with the second half of last year exchange translation likely to be negative Despite adverse exchange translation earnings growth should be slightly stronger in the second half

36 Johnson Matthey