Trading in line on a constant currency basis, full year outlook confirmed

17 Nov 2016


  • First half sales1 up 5% and underlying PBT2 up 5%
  • Performance of the group at constant rates on-track and in line with our previous expectations
  • Continuing businesses3 at constant rates4: sales down 1% and underlying PBT down 3%
  • Full year outlook for continuing businesses at constant rates unchanged – expect performance to be slightly ahead of last year
  • Interim dividend up 5% to 20.5 pence, reflecting confidence in group's medium term prospects
  • At 30th September 2016 rates, ~£65 million translational benefit to full year underlying operating profit

H1 2016/17
H1 on H1 % change
H1 on H1 % change
continuing businesses, constant rates 3,4
Revenue £5,625m -2% -6%
Sales excluding precious metals (sales) 1 £1,676m +5% -1%
Profit before tax (PBT) £210.0m -36%
Underlying PBT 2 £219.6m +5% -3%
Earnings per share (EPS) 92.7p -33%
Underlying EPS 96.4p +12%
Interim dividend per share 20.5p +5%
Lost time injury and illness rate 5 0.43 -4%

Commenting on the results, Robert MacLeod, Chief Executive of Johnson Matthey said:

"Johnson Matthey had a solid first half, supported by favourable exchange rates, and our health and safety performance improved. Trading for the group during the period was in line with our expectations in our continuing businesses on a constant currency basis. We have increased our interim dividend by 5% reflecting our confidence in the medium term.

I am pleased with the performance of Emission Control Technologies (ECT), where strong growth in Europe and Asia offset the expected cyclical weakness in North America. New Businesses made good progress and Process Technologies has maintained its strong position in tough markets. In Fine Chemicals, first half performance was held back by an unfavourable product mix in our Active Pharmaceutical Ingredient (API) Manufacturing business.

Our guidance for the full year remains unchanged for our continuing businesses on a constant currency basis; that we expect the group's performance to be slightly ahead of last year. In addition, the group will benefit from favourable exchange rates if current rates are maintained.

Johnson Matthey remains well positioned in growth markets. Through continued investment in R&D, our infrastructure and our people, we will continue to deliver both long term growth for shareholders and sustainable technologies that make the world around us cleaner and healthier."

Divisional summary

As the weakening of sterling versus other major currencies in the first half had a material impact on the reported performance of the business, we have focused commentary on performance at constant rates. Unless otherwise stated, commentary refers to performance at constant rates.

Emission Control Technologies
Strong performance in Europe and Asia offset by expected weakness in North America

  • Outperformance across Europe with Light Duty benefiting from increased focus on emissions and Heavy Duty Diesel (HDD) benefiting from strong vehicle production levels and improved product mix
  • Strong growth in Asia supported by high vehicle production in China and good progress on HDD
  • Tough trading in North America, principally from lower large (Class 8) truck production
  • Expect ECT to continue to perform well, with continued strength in Europe and Asia and stabilising HDD catalyst sales in North America

Process Technologies
Maintained strong position in challenging market

  • Sales lower in tough market conditions: no new licences and customers lengthening catalyst replacement cycles
  • Return on sales boosted by actions taken last year to reduce cost base
  • Business remains well placed for future recovery in our end markets
  • Stronger second half expected with a robust order book and continued benefit of cost savings

Precious Metal Products
Performance stabilised

  • Steady performance in Manufacturing, subdued market in pgm recycling
  • Expect steady performance to continue in the second half

Fine Chemicals
Stronger second half expected

  • Sales growth with increased demand for APIs
  • Operating profit performance adversely impacted by product mix
  • Performance in second half expected to be well ahead of the first, supported by an improved mix and our customers' new product approvals

New Businesses
Continued progress, particularly in Battery Technologies

  • Strong sales growth for battery materials and good progress in broadening our technology portfolio into nickel rich battery materials
  • Investment of £30 million approved to increase lithium iron phosphate (LFP) capacity by 50%
  • Expect performance in the second half to improve on the first half as we move to break even in 2017/18

The results in detail

Full results are available to download from our Results Centre.


Sally Jones, Director, Investor Relations and Corporate Communications
+44 20 7269 8407

Simon McGough, Head of Investor Relations
+44 20 7269 8235

Tom Hill, Investor Relations Analyst
+44 20 7269 8439

David Allchurch, Tulchan Communications
+44 20 7353 4200


  1. Sales excluding precious metals have been adjusted to include certain non-pass through precious metal items.
  2. Underlying is before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses, significant tax rate changes and, where relevant, related tax effects. For reconciliation see note 4 on page 22 in the full release, available from our Results Centre. For definitions and reconciliations of other non-GAAP measures see page 26 of the full release.
  3. 2015/16 adjusted to exclude contribution of Research Chemicals business.
  4. At constant rates (if H1 2015/16 results are converted at average exchange rates for H1 2016/17). Number of lost workday cases per 200,000 hours worked in a rolling year.