Catalysing

the net zero

transition

Annual Report and Accounts 2023

Our approach to reporting

We believe in being as transparent as possible in our reporting on sustainability

performance and strive to make public all the information our stakeholders require

through adopting the most well respected independent reporting standards and

ratings services.

This report has been prepared in accordance with the Global Reporting Initiative (GRI)

Standards 2021 and also aligns with the Sustainability Accounting Standards Board

(SASB) chemical sector reporting requirements (version 2018-10). Our Task Force

onClimate-related Financial Disclosures (TCFD) report is included on pages 45-52

and complies fully with the TCFD disclosure recommendations. The numbers included

in this section cover the entire Johnson Matthey group.

ERM Certification and Verification Services Limited (ERM CVS) were engaged

toprovide limited assurance of selected information as presented on page 228.

Pleasesee ERM CVS' full assurance statement on pages 229-230 for more details.

Find more information online

Sustainability Performance Databook: matthey.com/sustainability-databook

GRI Content Index: matthey.com/gri-content-index

SASB Index: matthey.com/sasb-index

PAI Statement: matthey.com/pai-statement

TCFD Compliance Table: matthey.com/tcfd-compliance-table

Assurance Statement: matthey.com/assurance-statement

Our products and services are where we believe we can have most positive impact

onsociety and we have aligned our strategy with four of the UN SDGs

Cautionary statement

The strategic report and certain other sections of this annual report contain forward

looking statements that are subject to risk factors associated with, among other

things, the economic and business circumstances occurring from time to time in the

countries and sectors in which the group 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.

We are Johnson Matthey

Watch: our latest company film, describing JM in two minutes

matthey.com/corporate-video

www.matthey.com

Catalytic converters: fighting pollution

for50years and beyond

Sustainable aviation fuel: ready for take off

PGMs: a circular solution for a net zero future

Hydrogen: ramping up to reach net zero

Strategic report 01

Our business at a glance 02

Key performance indicators 03

Our purpose 04

Chair’s statement 05

The drivers of our changing world 06

Our business model 08

Chief Executive Officer’s statement 10

Our strategy 12

Clean Air 14

Platinum Group Metal Services 16

Catalyst Technologies 18

Hydrogen Technologies 20

Sustainability 22

Task Force on Climate-related Financial Disclosures 45

Chief Financial Officer’s review 53

Financial performance review 55

Risk report 62

Going concern and viability 70

Non-financial and sustainability information statement 71

Section 172 statement 72

Icons within this report

Content available online

Key performance indicator

Principal risk

Click this link to see our glossary: matthey.com/ARA-glossary

Governance 73

Chair’s introduction 74

Board at a glance 75

Board of Directors 76

Our governance structure 78

Corporate governance report 80

Board activities 82

Stakeholder engagement 84

Board and committee effectiveness 87

Societal Value Committee report 88

Nomination Committee report 90

Audit Committee report 94

Remuneration Committee report 103

Directors’ report 128

Responsibilities of directors 132

Independent auditors’ report to the members of Johnson Matthey Plc 133

Financial statements 144

Other information 222

Cover image: Fanesa Fernandes, Production Operator, checks a hydrogen fuel cell

component at our Hydrogen Technologies site in Swindon

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Our business at a glance

Our businesses

Read more on pages 14-21

A global footprint

Clean Air

Designs and manufactures emission control catalysts to reduce harmful pollutants ,

e.g. NOx, from vehicle exhausts and a range of stationary sources.

Platinum Group Metal Services (PGMS)

Metals management: supporting customers with short and long term metal planning

through leading market research and price risk management.

PGM (platinum group metals) applications: processing metal into more complex, value

added products for a vast array of uses. This includes providing PGM-based products for all

ourother businesses.

Refining: recycling used PGMs including spent auto-catalysts and taking mined PGMs

to purity.

Catalyst Technologies

Designs and licences process technology and designs and manufactures catalysts for a wide

range of processes used in the energy and chemicals industries to create products used

intransportation fuels, fertilisers, wood products, paints, coatings and polymers.

Hydrogen Technologies

Designs and manufactures the key performance-defining components (catalyst-coated

membranes) used at the heart of fuel cells and electrolysers.

In addition, we have three Value Businesses that are not within the core portfolio:

Battery Systems, Medical Components and Diagnostic Services.

North America

29% of Group sales

17% of employees

Europe

42% of Group sales

55% of employees

Rest of Asia

13% of Group sales

11% of employees

China

10% of Group sales

8% of employees

Rest of World

6% of Group sales 9% of employees

Supported by our values

We are a truly purpose-driven organisation – and our values provide the foundation for

everything we do.

12,600 employees worldwide

Protecting people and the planet

Acting with integrity Innovating and improving

Working together Owning what we do

Revenue split (%)

Platinum Group Metal ServicesClean Air Catalyst Technologies

Value Businesses

4%49%44%

42%

49%

2023

2022

Hydrogen Technologies represents less than 1% of total revenue

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Key performance indicators

Financial performance

Revenue

£14,933m

2021/22: £16,025m

Underlying operating profit

£465m

2021/22: £553m

Sales

(excluding precious metals)

£4,201m

2021/22: £3,778m

Operating profit

£406m

2021/22: £255m

Sales contributing toour

four priority UN SDGs

82.0%

2021/22: 83.8%

Total Scope 3 (Category 1)

Purchased Goods and Services

GHG emissions

2,495,475 tCO

2021/22: 2,978,197 tCO

Recycled PGM content in

JM’s manufactured products

69%

2021/22: 70%

D&I – female representation

across all management levels

28%

2021/22: 27%

R&D spend contributing

toour four prioritySDGs

89.5%

2021/22: 88.1%

GHG emissions avoided from

our technologies (compared

toconventional offerings)

848,643 tCO

2021/22: 470,706 tCO

Total Recordable Injury and

Illness Rate(TRIIR) employees

+ contractors

0.47

2021/22: 0.59

Total Scope 1 and 2 GHG

emissions (market-based)

363,686 tCO

2021/22: 410,110 tCO

Sustainability performance

For more information on our ESG ratings please see page 23 For more information on our sustainability targets please see page 24

(Loss)/earnings per share

150.9p

2021/22: (52.6)p

Ordinary dividend pershare

77.0p

2021/22: 77.0p

Clean Air cash flow

£638m

2021/22: £772m

Underlying earnings pershare

178.6p

2021/22: 213.2p

1. Non-GAAP measures are defined and reconciled in note 34 of the financial statements, refer to pages 206 - 209

2. Prior year rebaselined to remove divested businesses, please see page 222 for more information

3. Prior year restated due to calculation refinement, please see page 222 for more information

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Catalysing the

net zero transition

As a global society we face big challenges. Many of the

world’s leading energy, chemicals and automotive

companies depend on Johnson Matthey’s technology and

expertise to decarbonise, reduce harmful emissions and

improve their sustainability.

Our purpose is to catalyse the net zero transition for our

customers, and our strategy is derived from this purpose.

In this report we explain some of the ways our solutions

are already helping our customers meet their ambitions,

and how we will create value for them and wider society

over the coming years. Even while we reduce our own

operational footprint to achieve net zero by 2040.

We know it’s not enough to be purpose-led: we also need

to be performance-driven. If we are to enable this

transformation for our customers, we must transform too.

Patrick Thomas

Chair

Liam Condon

Chief Executive Officer

Our purpose

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It’s a great privilege to be Chair of Johnson Matthey,

a company with a rich history, world-class scientific skills

and incredibly talented people. Over the last year, the

Board has enjoyed working with Liam and his refreshed

leadership team as they have injected pace and

commercial thinking into the company’s new strategy.

In May 2022, we launched a transformation programme to strengthen our commercial focus,

ensuring that we concentrate on the technologies and markets where we have the greatest

strength and competitive advantage.

This isn’t an overnight fix, but it is already starting to deliver. By creating a more focused

portfolio with four business areas, we are driving value creation, taking a much more

customer-centric approach in order to seize opportunities with a simplified operating model

to drive execution. The Board’s challenge was how to measure and track progress, and I am

pleased that we are seeing strong performance, delivering against strategic milestones.

Thereis more information on this on page 13.

We are transforming our business at a time when our markets are coming at us faster than

ever before. For example, the pace of decarbonisation activities in China have accelerated as

it becomes the world’s biggest fuel cell market. The EU has adopted a climate law enshrining

its new climate targets of at least a 55% reduction in greenhouse gas (GHG) emissions

by2030 compared to 1990 levels. And in the US, it is a completely changed regulatory

landscape. There has been a lot of noise about the Inflation Reduction Act – it’s quite simply

aglobal game-changer, offering $369 billion in subsidies.

We will always follow the markets and our customer demand – in the examples above,

wearedeveloping partnerships, winning business and helping customers catalyse the net

zero transition. I am confident that this will continue to grow over the coming years.

Shareholder engagement

This year, I have spent a significant amount of time talking to our shareholders about the

direction of travel. I am pleased that they support our vision, and we are aligned on our

strategic focus on the right growth markets.

In addition, we engaged Rothschilds to undertake an independent perception study with

investors. The purpose was to understand investors’ perceptions of, and market sentiment

towards JM. The study included in-depth discussions with investors representing 33% of JM’s

issued share capital and some of our core analysts. Covering strategy, business streams,

management, valuation and environmental, social and governance (ESG), the study has been

hugely useful for the Board and showed that we are on track and delivering in the right areas.

The study also highlighted the needs of different shareholders, with long-term shareholders

focusing on our growth businesses and the future prospects of our Hydrogen Technologies

and Catalyst Technologies businesses, while others are looking more for shorter-term

performance including the ongoing success of Clean Air. But overall, the main message

isthat we have the building blocks in place to reinvigorate the investment case, underpinned

by strong synergies between our businesses. I am confident that over the coming months,

wewill be able to show further strong evidence of delivery against our strategic milestones.

We really do understand the need to prove we can maximise shareholder value in the Clean

Air business, including plans for site rationalisation. We are working on other efficiencies,

tidying the portfolio and delivering cost efficiencies. I am sure that we have the right strategy

in place to maximise shareholder value in both the short and long term.

Board focus and changes

I believe that the role of the Board is twofold: to constructively challenge, and encourage and

support. The effectiveness of this approach could be viewed in how we navigated some of the

challenges this year, including the war in Ukraine, the energy crisis and inflationary pressures.

Chris Mottershead will be retiring from the Board in January 2024, and I would like to thank

him for all his hard work and dedication over the last eight years. With Chris’s departure, John

O’Higgins will take over the role as Chair of the Remuneration Committee.

I am very pleased that in July, Barbara Jeremiah will be joining the board as Senior

Independent Director. Barbara brings strong leadership, deep understanding of metals, and

has extensive experience in North American markets which will be important for JM as the

group evolves.

Finally, I would like to take this opportunity to express my thanks to colleagues across the

business who are at the heart of our strategy. It is because of their tireless work that JM is

transforming into a company that is fit for the future and enabling our customers to catalyse

the net zero transition.

Patrick Thomas

Chair

Chair’s statement

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The drivers

of our changing

world

Throughout the world, 2022/23 was marked by

volatility. But underneath the spikes in energy prices,

inflation, conflict and extreme weather, there is

a deeper shift happening towards creating more

sustainable ways of living. The transition to net zero

requires a range of technological innovations. From

hydrogen fuel cells to sustainable chemical feedstocks,

from new sustainable fuels to advanced emission

control solutions with circularity embedded – all have

an important part to play in transforming energy,

mobility and industrial systems.

Johnson Matthey is not simply reacting to a changing

world; we are actively contributing to catalysing the net

zero transition, providing solutions for our customers

that will have a positive impact.

Our Materiality Statement

Johnson Matthey’s sustainability framework and targets cover all ESG topics considered

important by our stakeholders. But we have also gone further to set targets on issues such

as human rights, community impact and recycling which are not typically seen in the

chemicals industry.

You can read more about our Materiality Statement on page 23

Decarbonising modern life

It’s time for the world to move beyond fossil fuels and harness the power of more sustainable

low carbon fuels, chemicals and industrial processes.

Sustainable fuels

Outlook

Many countries are setting transport

targets for sustainable fuels or to phase out

internal combustion engines. JM’s

technology helps create low carbon

options such as renewable (green) or low

carbon (blue) hydrogen and fuel cell

technology, as well as developing entirely

new types of fuel from alternative

feedstocks, such as waste.

Opportunities and challenges

The demand for sustainable fuels is

expected to grow significantly over the

next 20 years. But a lot of work is still

needed to find low carbon solutions for

the aviation, maritime and heavy duty

vehicle sectors in particular.

What we are doing

Our methanol process and catalyst

technology used in Chile’s Haru Oni project

converts CO

captured from the air to

produce 550 million litres of e-fuels

annually, enough for approximately

220,000 gasoline vehicles. Our Fischer

Tropsch (FT) CANS™ technology (co-

developed with bp) and HyCOgen™, which

also use CO

and green hydrogen, were

selected by Aramco and Repsol for one of

the earliest synthetic fuel plants, in Spain.

We continue our research into using

alternative feedstocks for aviation and other

fuels, innovating to maintain technology

leadership in these emerging markets.

Sustainable chemicals

Outlook

Demand for primary chemicals is expected

to grow by 25% by 2030. The industry

currently accounts for 18% of the world’s

emissions. Increasingly, customers are

looking to combine alternative,

sustainable feedstocks with catalyst

technologies that can turn them into

useful products.

Opportunities and challenges

There are two pillars of decarbonisation

forthe chemical industry. The first pillar

iscarbon reduction through process

optimisation and adding carbon capture

and storage technology to current

processes. The second is carbon

replacement, using more sustainable

feedstocks. We have been turning

traditional feedstocks into synthesis gas

(syngas) for decades. Syngas, a mix of

carbon monoxide, carbon dioxide and

hydrogen, is essential in enabling the

decarbonisation of chemical processes,

since it can also be made from alternative,

more sustainable feedstocks.

What we are doing

For both pillars of decarbonisation,

wehave developed leading process

technologies. For example, under the

CLEANPACE brand, we can retrofit existing

assets, enabling the reduction of carbon

emissions from those processes

by up to 95%.

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Johnson Matthey | Annual Report and Accounts 2023

Creating a circular

economy

Cleaner air, healthier

people

An evolving regulatory

landscape

Geopolitical and

economic volatility

Outlook

If global consumption levels continue to

grow at the current pace, there will simply

not be enough natural resources to go

around. So we need to put the right

processes in place and embed circularity

into how we source and use materials.

Opportunities and challenges

We are already the world’s largest PGM

recycler by volume. The amount of CO

for

an ounce of recycled PGM is 30-50 times

lower than newly mined PGM. We can

reduce the carbon footprint of our

products but also our customers’ too in

automotive, industrial, chemical and life

sciences applications. We are applying our

longstanding recycling expertise to

emerging technologies, including fuel cell

and electrolyser stacks to enable circularity

in the hydrogeneconomy.

What we are doing

We understand the full life cycle of the

PGMs in our products and continue to

work with our partners to enable greater

recycling and refining at the end of their

life. We are investing in our global refining

capabilities so that we are better

positioned to deal with the increasing

volume and range of materials we will

need to recycle in the future. And in our

innovation and R&D processes, we take

”design for recycling” into account right

from the start.

Outlook

Air pollution kills millions of people every

year and the majority of the world’s

population are continually exposed to poor

air quality. With increasing urbanisation,

this problem looks set to intensify unless

significant action is taken to reduce

harmful emissions.

Opportunities and challenges

We know that transitioning the world’s

transport systems to net zero is a long

andcomplex process. While alternative

powertrains, such as fuel cell and battery

electric, continue to develop, automotive

catalysts will be needed in engines using

drop-in sustainable fuels. We need to be

doing all we can to ensure the vehicles

onour roads now are as clean as possible.

What we are doing

Today, one in three cars worldwide carries

JM’s emission control technology. And we

continue to invest and innovate to ensure

that our technologies help customers meet

the higher standards demanded by new

legislations. We are investing in our plants

throughout the world, and continue to

innovate to further optimise performance

of gasoline and diesel autocatalysts, as well

as how best to control emissions from

alternative fuel sources in the future.

Outlook

All over the world, governments are

bringing in legislation to incentivise

investments in sustainable technology

andbusiness practices. For example,

2022sawthe introduction of the Inflation

Reduction Act (IRA) in the US and the

Green Deal Industrial Plan in Europe.

These sit alongside a growing body

ofnational legislation and targets to reach

net zero by2050.

Opportunities and challenges

The market is moving in our direction

faster than expected. Across the energy,

chemicals and transport sectors, the

transition being driven by these new

requirements is likely to involve a mosaic

of different technologies and solutions.

Inaddition, governments are increasingly

focused on security of supply for critical

minerals, including PGMs, which is aligned

to our recycling strategies.

What we are doing

We work alongside our partners and peers

to create a unified voice to help influence

policy in a way that accelerates the energy

transition. For example, we are working

closely with the Association for Emissions

Control by Catalyst (AECC) and parties

across the industry to ensure that the

European Commission enables a swift

adoption of the ambitious Euro

7emissionstandards.

Outlook

Global GDP is predicted to slow in

2023/24, with some countries potentially

entering recession. Inflationary pressures,

supply chain challenges as well as the

ongoing impact of the conflict in Ukraine

might affect activity.

Opportunities and challenges

While Johnson Matthey continues to deal

with economic headwinds, the

macroeconomic picture demonstrates

more than ever the importance of

accelerating the energy transition. This

hassharpened our focus, enabling us to

belaser-clear on our strengths, and make

progress towards our 2030 goals.

What we are doing

Our transformation and commitment to

catalysing the net zero transition for our

customers enables us to take full

advantage of the opportunities we see

being created in a more volatile and

complex world. We have also adapted

asnecessary. In 2022, we ceased all new

opportunities in Russia, closed our Moscow

office and evaluated all other activities

ona case by case basis. Our business

unitsalso made significant progress

inrecovering inflation costs

throughout2022/23.

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Johnson Matthey | Annual Report and Accounts 2023

The drivers of our changing world continued

Our business model

Addressing three markets… We deliver through our four businesses…

Chemicals

Process and catalyst technologies that

enable the production of chemicals,

helping customers lower their carbon

andenvironmental footprint.

Energy

Designing technologies for a range

ofsustainable energy sources, including

hydrogen, sustainable aviation fuel,

methanol and ammonia.

Automotive

Emission control systems that reduce

and other particulates that harm

people and the environment.

Clean

Air

Leading in autocatalyst

markets

See page 14-15 for where

ourcatalysts are being used

Catalyst

Technologies

#1 in syngas-based

chemicals and fuels

technology

See page 18-19 for

howwe are leading

intoday’s markets

Hydrogen

Technologies

Market leader in

performance

components for fuel

cells and electrolysers

See more on page 20-21

onhow we are developing

the Hydrogen economy

c. 80%

PGMs used in our products are internally refined

Platinum Group Metal Services

#1 global PGM refiner

See page 16-17 on the PGM ecosystem

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By leveraging synergies and competitive advantages… To create value for stakeholders.

Expertise in metal chemistry

Everything we do across our four businesses is underpinned by our leadership

in complex metal chemistry, catalysis and process engineering.

Mutual customers and partners

As our customers transition to net zero, we provide a fully integrated and

comprehensive offering through collaboration across our business units.

Shared technology and capabilities

We have more than 1,600 scientists and engineers and common

technology capabilities across all our businesses – with more than

4,000 patents granted and around 2,000 applications pending.

Foundational PGM ecosystem

We have deep insights into PGM markets through our

PreciousMetal Management team and our refining operations.

Around80% of the PGMs we use are sourced internally from

ourrefineries. This shared resource creates a resilient supply,

lower exposure to price risk and efficient working capital.

Security of supply

Our customers count on us for a reliable supply of PGMs and recycling

services – around 50% of our Clean Air customers ask us to source their

PGMs. This is because we are a metal hub for PGMs, underpinned by our

status as the leading recycler of PGMs.

A comprehensive sustainability offering

Every part of our business is committed to helping our customers adapt

processes and products to reach the sustainability goals our society and planet

are depending on.

Customers and strategic partners

Our customers gave us an average rating

of 8.3 out of 10 in our annual customer

satisfaction surveys. This is ahead of the

industry average of 7.8. They highlight

thedepth of relationships and our

technical capabilities.

8.3

out of 10

Society

Our catalytic converters have been helping

to improve air quality since 1974. 92,000

additional tonnes of NO

were removed

from tailpipes in 2022/23.

762

Premature deaths prevented

Investors

Our performance-driven culture and

play-to-win strategy create sustainable

value for investors looking to support

thenet zero transition.

77.0p

Dividend maintained at the same level

Communities

We work with a range of partners on

charitable giving and employee

volunteering schemes.

2,063

volunteering days in 2022/23

Employees

Our teams are building a more sustainable

future every day – and we ensure they

aresafe, supported and able to create

rewarding careers at Johnson Matthey.

12,600

employees as of 31

March 2023

Suppliers

We partner with our suppliers to embed

the highest standards to deliver for

ourcustomers.

38%

supplier spend (excl pgms) has EcoVadis

medal for good ESG performance

Our business model continued

For more information on our s172 statement please see page 72

For more information on our Board’s engagement please see page 84

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Chief Executive Officer’s statement

This time last year I was very new to Johnson Matthey, and

I wrote in the 2022 Annual Report how energised I was by

JM’s purpose and the way our people use their expertise to

help catalyse the net zero transition. In the past year I have

been immensely privileged to visit many of our sites around

the world and see for myself the extraordinary science,

refining and manufacturing capabilities that have been

the bedrock of our company for over 200 years.

Equally importantly, I have personally visited many of our key customers and have been

encouraged by their feedback, but also motivated to ensure JM continues to transform

tomeet the needs of our customers and continue to lead in our chosen markets.

Despite the global macro-economic challenges, I’m proud that Johnson Matthey has made

good progress in delivering on our strategy and our milestones, with results in line with

market expectations. There is more detail on the strategy on pages 12-13, but I am pleased

that several regulatory tailwinds for renewable energy and decarbonisation mean that our

chosen growth markets are going to be even bigger and are coming at us faster than

originally anticipated.

Winning in our markets

In our strategy refresh in May 2022, we outlined how we would focus only on the markets

where we can win, serving our customers through our four core businesses: Clean Air, PGMS,

CT and HT. We said we would divest businesses that are not within the core portfolio and this

is well on track, with the divestment of Piezo Products and Diagnostic Services.

Our core businesses have done very well in securing new customer commitments. Clean Air

secured a number of important Euro 7 targeted customer wins, including all of Mercedes

Benz’s light duty diesel business in Europe.

CT business achieved its commercial milestones and signed several significant licences,

including H

H Saltend, one of the UK’s largest low carbon (blue) hydrogen projects. In

addition, our FT CANS™ technology has been selected by Strategic Biofuels for their Louisana

project which aims to produce the world’s lowest carbon footprint liquid fuel.

HT secured a transformational strategic partnership with Plug Power, including a co-

investment in what is expected to be the largest (5GW scaling to 10GW over time) catalyst

coated membrane (CCM) manufacturing facility in the world.

In our PGMS refining business we have won new contracts with a large miner, and increased

our market share with some key recyclers. We have also won new contracts across our

products business, most notably with our pharmaceutical and agro-chemical customers.

Financial performance in 2022/23

Our financial performance for the year was in line with market expectations, albeit below the

prior year. The three main factors driving performance were lower precious metal prices

(c.£55 million impact), cost inflation (particularly energy, raw materials and labour) and

weak automotive and truck end markets which continued to be impacted by supply chain

disruption. We experienced c.£150 million cost inflation, of which c.£95 million was

recovered from customers in the year. As we sharpened our commercial focus and took

action to increase efficiency, the recovery rate improved through the year as expected. I am

pleased to confirm the total ordinary dividend will be 77.0 pence per share, maintained at the

same level as last year.

Focus, simplify, execute

Over the year, we have achieved significant commercial progress and now have in place an

internal commercial council to drive further progress across the company and create value for

both our customers and JM. We have introduced customer-centricity training for all our

leaders to put the voice of the customer front and centre, and improved our customer survey

and feedback process. We have invested in our sales teams and have built coordinated key

global account teams to enable better synergies across JM.

Our manufacturing and refining expansion activities are on track, particularly for PGMS

andHT, as we made significant investments to not only increase capacity but create

world-class assets. This is really important as we are expecting strong growth for our

businesses thatcatalyse the net zero transition, combined with higher recycling demand

aswe shift to amore circular economy. We have also invested significantly in our capital

project planning and engineering capabilities, which were identified last year as key enablers

to help drive ourstrategy.

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Detailed results

commentary online

matthey.com/fy-22-23

Last year, I also outlined how we would simplify to become more cost-efficient and less

bureaucratic. We have accelerated our efforts to streamline our corporate cost base and real

estate footprint. We are also simplifying our business processes, which includes a new finance

shared service centre in Kuala Lumpur to service all our regions in a much more standardised

and efficient manner. This all gives me confidence that we’re building a stronger, more resilient

business, fit for the future.

Solid foundations for 2023/24

The global macro-economic situation remains challenging with continued high inflation,

intermittent supply chain disruption and fluctuating metals pricing. But since we launched

the new strategy, our growth markets have been accelerating towards us at a much faster

pace than we anticipated even a year ago. This has been driven by energy-related challenges

and subsequent regulatory changes, the most significant being the IRA in the US.

By incentivising the production of low carbon production technologies, the IRA has drawn

massive investment to the US and created a knock-on effect on green policy-making

worldwide. In Europe, the EU has published the Green Deal Industrial Plan, the Net Zero Act

and the Critical Raw Materials Act while the UK announced £20 billion of support for CCUS.

This is a pivotal moment for clean energy, and we are more than ready to seize the opportunity.

Our customers tell us we have some of the best, and often the very best, technology available for

their needs, and we continue to invest strongly in R&D to support our growth.

Growing responsibly

As we deliver against our strategy, it’s important we do so responsibly. We have made good

progress against our sustainability targets, and significantly increased our climate ambition to

ensure we are fully aligned with the 1.5 degree pathway to net zero. This year we were awarded

the EcoVadis platinum rating, putting us in the top one percentile of 90,000 companies.

Thisisgreat recognition of our commitments and the progress we’re making so far.

Our people are at the heart of our plans. We recognised that employees were not immune

tothe cost-of-living crisis, so as a responsible employer we took steps to play our part. This

included awarding pay increases, giving temporary supplementary allowances and providing

support through Assist, giving our employees access to a team of highly trained and qualified

professionals on a variety of financial well-being topics.

We are disappointed that our employee engagement scores did not improve this year,

although this is perhaps to be expected given the degree of transformation the company

isgoing through. We have increased the training and support to leadership teams to help

them build engagement, and we have revamped our performance management, reward

andrecognition schemes.

We continue to make safety our top priority, and improved safety leadership across all levels

in the company. This has resulted in better occupational and process safety performance

compared to last year.

During the year we welcomed three new members to our Group Leadership Team (GLT):

Anne Chassagnette joined in May as our first Chief Sustainability Officer, and in July we

welcomed Anish Taneja as CEO for Clean Air and Mark Wilson as CEO for Hydrogen Technologies.

Ron Gerrard, Chief EHS and Operations Officer retired in February, and I am very grateful

tohim for his service to JM. Ron’s role was not replaced on the GLT, with his responsibilities

divided among the existing members.

In summary, the refreshed strategy; more focused businesses where we play to win; a strong

focus on efficiency and important investments for the future have created a strong foundation

for sustainable growth. We are enhancing our competitiveness and I’m confident that our

strategy will create significant value in the coming years.

I would like to thank the Board for its strong support over the last year, and I would especially

like to thank all our employees for their hard work, passion and commitment to make our

strategy a success.

Liam Condon

Chief Executive Officer

“We are building a stronger,

more resilient business,

fit for the future”

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Chief Executive Officer’s statement continued

Our strategy

We are playing to win in exciting growth markets where our core competencies

and technology portfolio can have maximum impact.

Disciplined capital allocation

From 2022/23 to 2024/25, we expect to spend £1.1 billion on capital expenditure.

Thisisfocused on the core activities where we have the right to win and need to invest

todrive growth – our PGM refineries, CT and HT.

We are maintaining a strong balance sheet and allocating capital in a disciplined way.

Thismeans investing for growth and attractive returns, ensuring a reliable dividend and

returning excess cash to shareholders.

Simplify

Over the past 12 months, we have made progress to develop our people, enhance

customer focus and simplify processes and organisational structure.

Focus

We launched our revised strategy last year, focusing our portfolio on our core

competencies in metal chemistry, catalysis and process technology and divesting

Value Businesses. Our goal is to achieve a top three position in all our markets.

Our business structure supports this by allowing us to maximise synergies across

our four business units.

Somenotable achievements include:

• Launch of the JM Production System

(JMPS), a common methodology and

framework for driving continuous

improvement in manufacturing, built

around Clean Air’s automotive know-

how

• Reduction of global policies by 75% so

they are now shorter, simpler and more

focused

• Deployment of Workday as a single

platform for managing employee and

organisational data

• Eliminating 170 management roles,

enabling investment in new capabilities

and growth business.

• Launch of a new finance shared service

centre in Kuala Lumpur serving all

regions

• Started to rationalise our sites, which is

already delivering reductions in business

rates, procurement and facilities

management costs.

In total, these actions realised

c.£45 million in new transformation

savings in-year relative to 2021/22 actuals.

In the coming year, the drive to simplify

and improve business processes will

further accelerate. It will do so through our

wide-ranging transformation programme

that is fundamentally upgrading JM’s

business processes and operating model.

This includes actions to:

• Accelerate consolidation of the Clean Air

manufacturing footprint, focusing

production on the highest productivity

lines in North Macedonia, Poland,

the US, China and India

• Deploy a common procurement

management platform, driving spend to

fewer strategic suppliers and increasing

competitive sourcing on all commodities

• Transition delivery of major capital

projects to a global team with enhanced

capabilities in project, contract and

partner management

• Implement a strengthened approach

toperformance management

andfeedback

• Deliver more than c. £65 million

intransformation and procurement

savings in 2023/24.

Leading in

autocatalyst

markets

#1 in syngas-

based chemicals

and fuels

technology

Market leader in

performance

components for

hydrogen fuel cells

and electrolysers

#1 global PGM refiner

Our strategic priorities

Johnson Matthey | Annual Report and Accounts 2023

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Strategic milestones End of

2022/23

End of

2023/24

Progress in 2022/23 Status

Customers

Win at least 2 large scale strategic partnerships

in Hydrogen Technologies

• Partnerships announced with Plug Power and Hystar

Win targeted Euro 7 business and deliver

on£4 billion+ trajectory for Clean Air

• Firmly on track to win on targeted Euro 7 business AND

deliver £4 billion+ cash

Win >10 additional large scale projects

• Won five additional large scale projects to date

Investments

Expand PGM Services refining capacity in China

• PGM Services refining capability in China is complete

and ramping up

Complete construction of Hydrogen Technologies

CCM plant in UK

• New CCM plant in UK is on time and on budget

Targeted capacity expansion (fuel cells catalyst,

formaldehyde catalyst)

• On track

Complete divestment of Value Businesses • Divestment of Piezo Products, Diagnostic Services

People

Achieve >70% employee engagement score

• Employee engagement score has not improved in 2022/23

due to transformation programme

Sustainability

Achieve c. 10% reduction in Scope 1+2 GHG

emissions against 2019/20 baseline

• Achieved 13% reduction in Scope 1 + 2 GHG emissions

Help customers reduce GHG emissions by >1mt

p.a. through use of our products

• Reduced customers’ GHG emissions by 850,000 p.a.

through use of our products

Execute

Our strategy is underpinned by

amaturing performance culture.

By combining science and purpose

with a more commercial mindset,

we are driving stronger execution,

unlocking near-term cost opportunities

and positioning ourselves for

long-term growth.

We have committed to reaching

10 strategic milestones by the end of

2023/24 that evidence the execution

of our strategy. Focused on customers,

investments, people and sustainability,

ourstrong progress across these

milestones highlights the success of

ourperformance culture.

1. Includes Catalyst Technologies and Hydrogen Technologies projects

2. To expand total capacity from 2GW to 5GW

3. New methodology for measuring employee engagement (Workday Peakon) now in place

Baseline score of 6.9 achieved in 2022/23, with new target of 7.2 by 2024/25

Key

On track

Requires focus

Group Commercial Council

We created a commercial council

to strengthen our commercial

capabilities and cross-JM synergies,

with a strong focus on value

creation. The council is harnessing

the power of all our businesses

bytaking an integrated oneJM

approach to our customers,

maximising our current

partnerships and building new

profitable business.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Our strategy continued

Clean Air

Improving air quality, transforming mobility

Our catalytic converters have been helping

improve air quality since 1974. Today, our

products are installed in around one-third of

all new cars on the road, as well as a significant

number of trucks and buses around the world. They

actively deliver cleaner air to billions of people globally.

Climate change and a growing body of air quality

regulations are pushing the automotive

industry to build cleaner engines and deliver

new powertrain options. With our decades

of experience in the industry and long

history of innovation, we aim to be

the lasting partner for our customers,

playing a significant role in the

transformation of mobility.

Positioning ourselves to win big

Our leading role in auto-catalysts is underpinned by deep expertise in complex PGM

chemistry and catalysis, distinctive technology, longstanding relationships and a global

state-of-the-art production footprint. As the auto industry goes through unprecedented

change, transitioning towards zero-emission vehicles, clean and efficient internal combustion

engine vehicles have a big role to play for decades to come. We aim to be the lasting partner

that our customers can rely on at each step of their journey towards sustainable mobility.

Customer facing and market-focused

The global regulatory landscape will continue to be favourable to our business. Our best-

in-class technology is ready to help our customers meet more challenging regulations that

improve air quality and ultimately save lives. Our use of modelling is increasing the speed

andaccuracy of our product and system designs – helping to create more value for existing

customers and win new ones.

Our catalysts enable our customers’ flexibility in fuel choice – from traditional diesel

orgasoline, to hydrogen, to e-fuels. Our catalysts also reduce emissions from marine and

stationary sources, for example, in data centres. These are markets that will continue to grow

over the next decade.

92k

additional tonnes of

removed from

tailpipes in 2022/23

We play a leading role in heavy

duty diesel technology

Around 1 out of 3 new cars on

the road use our catalysts

Our marine catalysts reduce

100k tonnes of NO

annually

Our industrial catalysts reduce

11k tonnes of NO

annually

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Synergy in action

The energy transition will require a mosaic of different technologies and processes.

This is why it’s vital our Clean Air customers are aware of the full offer from Johnson

Matthey so our new sales approach will provide customers with a much more

comprehensive and holistic service. For example, we may be in discussion with a

customer about emissions control and find that their hydrogen division needs support

in optimising existing infrastructure to support deployment at scale going forward.

This is something our Hydrogen Technologies team can support. We know how these

customers operate, and we can help them transition as the powertrain evolves.

Our performance in 2022/23

In Clean Air, we are focused on our target of generating at least £4 billion of cash to 2030/31,

which is underpinned by tightening emission control legislation, business wins,

manufacturing footprint consolidation and other fixed cost reductions. In 2022/23 we

generated around £600 million of cash, taking our cumulative cash generation over two

years to £1.4 billion. However, underlying operating profit declined 28% to £230 million and

margins decreased to 8.7%. This largely reflected cost inflation, product mix, lower volumes,

and the transactional impact of exchange rates. We saw an improvement in margins during

the year due to an acceleration in our pricing, and we are expecting strong growth in

operating performance in 2023/24.

We continued to build our commercial muscle, improving our inflation recovery rate with the

majority of the recovery in the second half of the year, while also winning our targeted business

linked to Euro 7 and equivalent legislation globally. During the year we won all of Mercedes

Benz’s light duty diesel business in Europe, and the global contracts covering light duty gasoline

and diesel with a leading automotive OEM. As further evidence of our stronger commercial

muscle, these wins were achieved whilst negotiating inflationary cost increases and improving

our customer satisfaction score by five points. Consequently, we are outperforming the rate of

business wins required to achieve our cash generation target of at least £4 billion by 2030/31.

Supply chain disruption, semiconductor shortages and the ongoing consequences of the global

pandemic all affected our customers, creating additional challenges around variability and

predictability of demand. Our logistics partners also experienced continued pressure around

capacity, cost and lead times. We worked hard to support our entire value chain – and our

efforts led to us winning several customer awards, including the 2022 General Motors Overdrive

Award for Relationship.

We are optimising our manufacturing footprint to not only drive efficiencies but strengthen

ourdevelopment, manufacturing and delivery processes. Our optimised footprint will be more

agile and flexible, allowing us to respond quickly to market changes.

In China, we have adapted our commercial and technology structure to have more of a local

focus. This improved our chances of successful delivery to the local market and provides even

more growth potential for the region moving forward.

Continuing to win big with some of the

world’s largest companies

All over the world, governments are

introducing increasingly stringent

airquality and pollution legislation.

Thiscreates a big opportunity for Clean

Air, and the last year has seen us continue

to win new business and strengthen

existing relationships.

In an increasingly challenging and

competitive market environment, our

investment in our sales capabilities and

new focus on value and pricing, led by the

commercial council, is generating positive

results. To deliver £4 billion cash by

2030/31, we will need to continue to build

on the momentum generated this year.

Among our big wins in 2022/23 were:

• Breaking the record for the largest

business deal in JM’s history with a new

£1.2 billion deal with a leading

automotive company

• Securing a 10-year deal worth

£450 million with a world-famous

automotive brand’s three European

platforms

• Awarded the entire Euro 7 light duty

diesel business of one of our long-

standing automotive clients

• Securing £50 million and £180 million

deals with two of India’s largest

commercial vehicle manufacturers.

Watch: fighting pollution

for 50 years and beyond: matthey.com/

clean-air-50-years

Johnson Matthey | Annual Report and Accounts 2023

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Clean Air continued

Platinum Group Metal Services

The industry-leading, growth-focused

bedrock of Johnson Matthey

We apply our deep expertise and long history

in platinum group metals (PGMs) to provide

solutions to the complex challenges our customers

face. Our chemistry facilitates the transition to

net zero, delivering products to our customers across the

chemical, energy and transport industries and beyond.

We are the largest refiner of secondary PGMs (by volume)

and account for circa 20% of all global PGMs refined

(primary and secondary). This makes us a vital cog in the

global economy and a partner of choice for customers who

want an end-to-end service for PGMs. Our expertise in

PGM catalysis and performance underpins much of the

innovation across Johnson Matthey, drives synergies

across our business and strengthens our global position

in our key markets.

Leaders in circularity

Circularity of PGMs is an essential part of the net zero transition. With limited quantities

ofthese critical minerals available, recycling plays a crucial role in securing the metal needed

to supply existing and future demand. Recycled metal also significantly reduces waste and

energy usage compared to primary mining, minimising the environmental impact of global

PGM value chains.

c. 80%

of PGMs used in JM products are internally refined

Components and

materials

End of life

products

Refining

Recovery of PGMs

Spent products from

automotive and industrial

uses

The PGM ecosystem

We optimise the use of these critical materials, sourcing, fabricating and recycling them to

enable their circular use.

Efficient metal separation

Full seven metal separation

Refining to commercial grade purity

Full refining

cycle with metal

management options

and ongoing

technical support

Manufacture of value

added applications

PGM supply and

management

up to 95%

lower carbon footprint of PGMs from secondary refined metals compared to primary

1. IPA website link https://ipa-news.de/index/sustainability/

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Our performance in 2022/23

As with businesses across the globe, adverse macro-economic trends are impacting our

performance. Underlying operating profit declined 21% mainly impacted by lower average

PGM prices (c.£55 million impact*) and reduced refinery volumes. Cost inflation was more

than offset by efficiency benefits, as well as higher pricing across both our refining and

products businesses.

We continued to invest in the long term future of our refineries, updating our assets so that

we are fully positioned to capture the opportunities in the coming decades. In China, we have

expanded our capabilities and now provide a full refinery offering, consolidating our position

as a global leader in PGMs.

Globally we continue to make progress towards an integrated closed loop solution for CCM

recycling for Hydrogen Technologies. This will allow us to once again be a leading innovator

in making circularity a reality in our markets, and in doing so, we will add to our value

proposition to Hydrogen Technologies customers.

Throughout 2022/23 we consulted with a range of government agencies around the world

onmatters relating to critical material supply, circularity and the transition to net zero. Our

expertise is actively helping to drive forward the global green economy through contributing

to policy development and technological progress.

Positioning ourselves for long-term success

In the longer term, we see significant opportunities for PGMS. Platinum and iridium in

particular are growth areas given they are critical enablers of the hydrogen economy. We also

see new opportunities for palladium in industrial applications, including sustainable aviation

fuels. We have world-leading expertise in securing a sustainable supply, through responsible

sourcing and recycling. In addition, our ability to provide low carbon refined metals will

beincreasingly important to our customers and society over time.

PGMS is also a critical enabler for our other core businesses. We offer them an integrated

ecosystem with expert knowledge of the PGM markets, responsible and sustainable metal

sourcing, value added PGM catalysts and solutions for end-of-life recycling of their products.

Our R&D priorities include a closed loop solution for CCMs used in fuel cells and electrolysers,

recovering the PGMs and ionomers, making it more sustainable and cost-effective for

ourcustomers.

* £55 million adverse impact represents a gross PGM price impact before any foreign exchange movement

Synergy in action

We’ve advised, supplied and facilitated recycling for big OEMs in the automotive industry for

the last 30-40 years, working closely with the Clean Air business. We have created a model

that enables us to work in partnership with our customers, offering a full range of services.

This is a blueprint that we will leverage as the CT and HT businesses continue to grow.

Efficiency, performance and circularity

in our products

PGMs are essential to the processes and

technologies that enhance our daily lives,

but it’s not always obvious where they’re

used. One example is pharmaceutical

manufacturing. PGM catalysts and

biocatalysts are used across a vast range

ofdrug synthesis processes to enable

complex chemical structures to be formed.

They also help reduce the overall number

of process steps in the synthesis, along

with waste.

We work with our pharmaceutical

customers to develop tailored solutions

and optimise catalyst performance for

awide range of drug synthesis steps.

Thisincludes reducing the metal loadings

through catalyst thrifting. Using less metal

not only lowers costs, but can also reduce

the CO₂ footprint of production processes.

Our unique end-to-end offering means

that while we source PGMs and use them

to create products for specialist

applications, we also maximise their value

by recovering and refining them. For our

pharmaceutical customers, this happens

ina closed loop, giving them a sustainable

supply of PGMs.

If you’ve bought or been prescribed

medication, you may well have benefitted

from our expertise in PGMs and catalysis.

Watch: a circular solution

for a net zero future: matthey.com/circular-

solution-for-net-zero

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Platinum Group Metal Services continued

Catalyst Technologies

Enabling the chemicals and fuels

industries to operate efficiently and

transition to net zero

Our Catalyst Technologies business focuses on

our core expertise in process technology and

catalysis. Our products enable our customers

to create the chemicals and fuels of today and

the future which positively impact the everyday

lives of millions of people.

We have worked for decades in partnership with our customers to improve the efficiency

andsustainability of their processes, but there is more we can do to reduce the environmental

impact of these chemicals and fuels across their full lifecycle. So we are developing robust

solutions with our customers that reduce their process emissions today while enabling them

to replace fossil-based feedstocks with more sustainable options.

Sharpening our commercial focus in a changing world

Catalyst Technologies has segment-leading positions in methanol, formaldehyde, and

hydrogen – all technologies that build on our core strengths in syngas production, purification

and conversion.

We’ve adapted our approach to our customers to make sure that we are creating value for

both them and us in a high inflationary and energy cost environment.

We are also driving awareness among current and new customers to the many ways Johnson

Matthey as a whole can partner with them as their industries evolve.

Our expertise underpins our suite of decarbonisation technologies, led by our low carbon

(blue) hydrogen and our sustainable fuels offering. We are well placed to capture the sizeable

opportunity presented by valorising non-fossil feedstocks like biomass, renewable (green)

hydrogen and captured CO

over the coming decades. But we can also help customers with

existing assets to minimise their environmental footprint as regulations tighten and carbon

taxes increase.

In line with our new strategy, we are transforming how we work so that we can take

full advantage of the opportunities generated by the chemical industry’s decarbonisation

journey and positioning our technologies to lie at the heart of the energy transition.

How Catalyst Technologies helps our customers

• World-class catalysts and chemicalprocesses – to get the most of their assets; increasing

efficiency, maximising output, reducing both operational and capital expenditure

• Carbon management – helping current asset owners reduce their environmental footprint

and mitigate future financial impacts

• Low carbon newenergy – helping customers catalyse their plans for the energy transition

with technologies that can be deployed at scale now.

Synergy in action

We are ensuring that all our customers are aware of the benefits brought by the shared

technology, insight and ecosystem across Johnson Matthey.

We all know that transportation needs to decarbonise. However, there is no one technology

that meets the needs of every market. But we can provide a range of solutions, whether it’s

hydrogen fuel cells, drop-in liquid hydrocarbon fuels, or emission control solutions for engines

running on sustainable fuels. Our Bioforming™ technology, co-developed with Virent,

produces sustainable gasoline and aviation fuel, and in January, Emirates operated a

milestone demonstration flight, using fuel produced by our process blended to create 100%

sustainable aviation fuel (SAF) in one of the engines of a Boeing 777-300ER. This is only

made possible by JM’s deep understanding of PGM chemistry and circularity, leveraging skills

in PGMS. It’s why JM is better together.

Another synergy is in hydrogen, covering both production and use. From reducing the carbon

intensity of current customers’ assets to producing components for green hydrogen that can

be used in e-fuels and chemicals, we’re ready to support our customers wherever they are

inthe journey.

Industrial and consumer Fuels

Methanol

Including paints,

coatings and

polymers

global segment

position

Formaldehyde

Including wood

products

global segment

position

Ammonia

Including fertilizers

Top 3

global segment

position

Transportation fuels Natural gas

Natural gas

purification

global segment

position

Refining

additives

Top 2

global segment

position

Leading in today’s markets

Refinery

Hydrogen

global segment

position

In the submarket segments in which we operate

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Reputation. Innovation. Commercialisation at scale

Ourreputation in process technology, coupled with our deep knowledge of metal chemistry

and catalysis, is generating value today for our customers. And a growing part of our business

will be to innovate and deliver the technologies at scale to address tomorrow’s challenges.

Building strong partnerships, both commercially and technically, is key to success in the move

to a net zero world. A great example of this is our work with Honeywell UOP to integrate leading

carbon capture technology into our syngas decarbonisation technologies. In the case of our

LCH™ technology, this collaboration creates a solution that delivers a 99% CO

capture rate that

is ready to be deployed today.

Many of the critical innovations inside our emerging syngas offers, such as our HyCOgen™

reverse water gas shift and ammonia cracking licences, have their basis in technologies with

proven real-world operation over decades in other markets. So our customers can be confident

we can help them decarbonise successfully. For example, the H

H Saltend project in the UK will

use JM’s LCH™ technology in its 600MW low carbon hydrogen production plant with carbon

capture. This is just one of several leading-edge decarbonisation projects in Europe and North

America that show the value we bring to partnerships.

Our performance in 2022/23

Like the rest of the business, Catalyst Technologies continued to deal with economic

headwinds in 2022/23. Underlying operating profit of £51 million was in line with the prior

year. Margins declined to 9.1%; however we saw good improvement from the first to the

second half of the year. Higher pricing, improved product mix and the benefits of our

transformation programme offset significant cost inflation and the loss of business in Russia.

Despite these challenges, sales during the period were up 17%, with strong growth in

licensing and growth in first fills and refills reflecting higher pricing and positive mix. We

continued to deliver on our commercial and strategic goals. Our sharper commercial focus

has resulted in us winning 12 new licences. We are also making good progress towards CT

and HT’s 2023/24 goal of winning more than ten additional large-scale projects, with five

added to our portfolio. Our continued investment in our business is exemplified by the

formaldehyde catalyst capacity expansion in our facility in Perstorp, Sweden. This is

progressing well and is on track to be fully operational in early 2024/25, increasing the site’s

capacity by around 50%.

We will focus on further strengthening the value creation from our core catalyst businesses and

leveraging our strong customer satisfaction scores. Internally, we will maintain the momentum

we created in 2022/23 around simplifying our operations, creating clearer accountability and

setting performance targets that deliver value today and growth for the future.

Our R&D teams continue to innovate on the catalysts, reactors and process concepts that

together enable technology leadership in low carbon (blue) hydrogen and sustainable

aviation fuels as well as ammonia cracking and other e-fuels. We are creating cost-effective

solutions with low carbon intensity tailored to the feedstocks of the future. We are also

investing in sustainable catalyst manufacturing technologies across the portfolio.

Catalyst Technologies continued

Pioneering the use of household waste

as a feedstock with Fulcrum Sierra

Along with international energy company

bp, we are enabling the world’s first

commercial-scale plant to use household

rubbish as a feedstock for the production

of synthetic crude oil. Using our FT CANS™

technology, the Fulcrum Sierra Biofuels

Plant in Reno, Nevada, is expected to

produce around 11 million gallons of

product annually from 175,000 tonnes

oflandfill waste that can be refined into

renewable, low carbon transportation fuel.

JM and bp have worked with waste-to-

fuels developer Fulcrum to use FT CANS

technology since 2018.

This project lays important foundations

forthe transition to a less carbon-intensive

economy. In order to reach its climate

goals of achieving net zero by 2050,

theaviation industry needs reliable and

scalable sources of alternative fuels. Using

waste as feedstock will also help to reduce

both the amount of waste sent to landfill

and the methane produced through

biodegradation.

Watch: ready for take off: matthey.com/

ready-for-take-off

Johnson Matthey | Annual Report and Accounts 2023

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Hydrogen Technologies

Providing critical components for the

emerging hydrogen economy

Renewable (green) hydrogen has the potential

to transform energy systems. As a fuel, it creates

no carbon emissions, and if the electricity used

to produce it comes from renewable sources, the

environmental benefits are tremendous. Global

investment, innovation and demand for green

hydrogen solutions is growing rapidly. To make

the hydrogen economy viable, businesses need two

processes: a way to use renewable electricity to split water

into hydrogen and oxygen, and fuel cells to turn that

hydrogen back into electricity when and where it is

needed. Our specialist catalyst coated membranes (CCMs)

are essential to both of these processes.

Customer-led growth

Johnson Matthey has been active in hydrogen in fuel cells for over 20 years, and our Hydrogen

Technologies business is playing to win in the hydrogen market. In order to fully capitalise on

this fast growth market, we need to be able to move quickly, scale effectively and efficiently

manage the risks inherent in doing so. As the market becomes increasingly crowded, being

able to demonstrate the competitiveness of our offer and the scale of our capabilities will be

hugely important.

Partnerships and strategic relationships with customers are critical to our goal of becoming

amarket leader. We aim to partner with the expected winners in the markets for fuel

cellsand electrolysis, and to do this we have put customer-led growth at the heart of our

commercial strategy. We look to partner with strategic customers early in their development

cycle. These are partners that we believe have the capabilities to win in their markets.

Ourpartnership with Plug Power is proof that this approach is working.

Raw materials

Components

Stack assembly and

systems integration

Application

Fuel cells

Electric current

Air

Water

Hydrogen

Catalyst

coated

membrane

(CCM)

Membrane

electrode

assembly

(MEA)

Hydrogen

Electric current

Water

Oxygen

Electrolyser

End-user markets

Precious metal recycling

Focused on delivering performance-defining components for the hydrogen economy

Johnson Matthey | Annual Report and Accounts 2023

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Accelerating the hydrogen economy

with Plug Power

Synergy in action

Businesses across the global economy are looking at hydrogen as a way of decarbonising.

Wework to leverage existing relationships with Clean Air customers to provide a range

ofsustainability technologies to the automotive industry. Many of Catalyst Technologies’

customers are also exploring hydrogen as a cleaner fuel alternative to hydrocarbons.

Theyface a choice between blue hydrogen and carbon capture or powering themselves

withgreen hydrogen. We can then complete the end-to-end value chain through our

PGMScapabilities, from sourcing to end-of-life recycling. Whatever our customers choose,

Johnson Matthey is there to support them.

In early 2023, we announced a new,

long-term partnership with Plug Power,

aglobal leader in the hydrogen value

chain. As the company’s strategic partner,

we will provide the catalysts, membranes

and catalyst coated membranes

Plugneeds to reach its revenue target

ofUS$20 billion by 2030.

Not only are we bringing our catalysis

expertise, precious metal supply security

and unique recycling capabilities to the

table, but we are also co-investing in what

will likely be the largest CCM manufacturing

facility in the world – expected to begin

production in the US in 2025.

The partnership is a game-changer for

thehydrogen economy. Plug Power is a

leading player in building an end-to-end

green hydrogen ecosystem, helping

companies like Amazon and BMW

decarbonise. Its decision to partner with

usis not only a demonstration of our

expertise in CCMs – but proof that our

manufacturing capabilities have the

potential to bring new scale and volume

tothe emerging hydrogen economy.

An essential part of the transition to net zero

Achieving net zero requires a range of technologies. Fuel cells using hydrogen provide an

alternative to diesel, without the associated emissions. We believe the market for hydrogen-

powered heavy duty trucks and stationary systems will see significant growth towards 2030.

The predicted rapid market growth and demand are coming at us faster than ever before,

partlydue to significant regulatory changes to support commercial scale projects for production

and infrastructure – such as the Inflation Reduction Act in the US and the UK’s Automotive

Transition Fund. The convergence of these market changes shines a spotlight on our

technologies, builds rapid growth and moves the dial on the transition to net zero.

Our performance in 2022/23

We made major progress towards all of our strategic goals this year. Our sales have doubled

over the course of 2022/23, and we achieved our goals of expanding our customer base,

announcing long-term strategic partnerships with Plug Power and Hystar. We are seeing

atrend of businesses that have previously tried to manufacture CCMs by themselves talking

tous about working together in the future. Demand from existing customers is increasing too.

The underlying operating loss of £45 million primarily reflects increased investment into

product development and building capability as we scale the business to meet customer

demand, partly offset by higher volumes.

Although we faced the same inflationary pressures as the rest of Johnson Matthey in 2022/23,

our business was less impacted by volatility and economic headwinds. This is due to us

operating in a rapidly growing market that has benefited from regulatory support.

We have three main priorities for 2023/24. One, to continue focusing on commercial

performance and developing new and existing partnerships; two, increasing our production

capacity, with our major site in Royston completing construction, as well as projects starting

in the US and China. Finally, we continue to invest in the next generation of our technology,

both on our own and alongside our partners. Our R&D will focus on continuing to improve

product efficiencies, including reducing utilisation of precious metals such as iridium within

electrolysis CCM as well as optimising activity of platinum catalysts in fuel cells.

Watch: ramping up to reach net zero:

matthey.com/hydrogen-for-net-zero

Johnson Matthey | Annual Report and Accounts 2023

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Hydrogen Technologies continued

Sustainability

Embedding sustainability into everything we do

We are a global leader in sustainable technologies. Through inspiring science and

continued innovation, we are catalysing the net zero transition for millions of people

every day. Our skills andtechnologies are important today as businesses and communities

adapt to the challenges of climate change. But advancing sustainability isn’t just about

our portfolio of technologies, it’salso about our own operations, how we work together

and hold ourselves accountable for our impacts on society.

OurSocietal Value Committee (SVC), which is made up of the full board, met four times this

year to review progress in delivering on our sustainability commitments see page 88.

Our Sustainability Council, which is made up of our Group Leadership Team (GLT), met four

times this year to decide the direction of our sustainability strategy and monitor progress.

Oursenior leaders and directors are incentivised to deliver on our sustainability ambitions

through sustainability objectives included in our long-term Performance Share Plan (PSP)

– see page 122 for details.

SDG 3 – Good health and wellbeing

SDG 7 – Affordable and clean energy

SDG 12 – Responsible consumption and production

SDG 13 – Climate action

Not assigned to priority SDGs

69%

18%

63%

14%

11%

• Emission control technologies that reduce harmful oxides of nitrogen (NO

)

and particulates from vehicle tailpipes and stationary engines

• Purification technologies that reduce harmful contaminants, such as mercury,

from industrial processes

• Refinery additives to mitigate NO

and oxides of sulphur (SO

) emissions

• Catalysts used to make pharmaceutical ingredients

• Renewable (green) hydrogen technologies that will support the drive to zero

carbon hydrogen production using renewable energy and electrolysis

• Low-carbon (blue) hydrogen technologies that are available today to help

make low-carbon hydrogen at scale

• Technologies that turn high sources of carbon, such as household waste,

into sustainable aviation fuels

• Fuel cell components for low-carbon transportation and distributed power units

• Nitrous oxide (N

O) abatement systems

• PGM recycling to recover and reuse scarce resources

• Chloride guards to prevent corrosion

• PURACARE

services to reduce maintenance lifetime and end-of-life recovery

• CAT-AID

products to extend catalyst life

Our products and services are where we believe we can have most positive impact on society and we have aligned our

strategy with four of the UN SDGs.

89.5% R&D

spend

contributing

to priority

UN SDGs

82.0% sales

from products

contributing

to priority

UN SDGs

We track our sales and investment in R&D against these global priorities.

Johnson Matthey | Annual Report and Accounts 2023

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Catalysing

the net zero

transition

Leading ESG ratings

A new focus on our

core material topics

This year, the whole of Johnson Matthey has

been making changes to become a more

customer-facing, commercially minded

andagile business with the strategy simplify,

focus, execute.

To support this, in partnership with an

independent third-party, we refreshed our

materiality assessment to ensure that our

sustainability strategy, goals and targets

arefocused both on our biggest impacts

onsociety and those areas of most

importance to our stakeholders. We

benchmarked our existing strategy against

industry ESG standards, legislation

requirements and sector peers. As a result,

wereorganised our existing sustainability

goals and targets for 2030 under new themes

to better articulate the most material benefits

that we believe we can bring to society.

Weincreased the ambition in our climate-

related 2030 targets to focus and align them

better with our company purpose.

See page 222 for our list of material topics as

approved in the SVC meeting in September 2022

AAA rated

top percentile

top six European

chemical

companies

top

percentile

Medium risk

(22.8) 13

percentile, where

is top, in

Chemicals sector

‘B’ Climate

rated

’B’ Water rated

Platinum rated

(top1%)

/ 4000 3

/ 54

Protecting

the climate

Drive lower global greenhouse

gas (GHG) emissions

Achieve net zero by 2040

Protecting nature

and advancing the

circular economy

Conserve scarce resources

Minimise our environmental

footprint

Promoting a safe, diverse and equitable society

Keep people safe

Create a diverse, inclusive and engaged company

Uphold human rights

Invest in our local communities

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Goals Key performance indicators (KPIs) 2030 target 2022/23 performance Progress towards 2030 target

from baseline

0% 100%

Planet: Protecting the climate

Our goal: Drive lower global greenhouse

gas (GHG) emissions

1. GHG emissions avoided per year using technologies enabled by

JM’s products and solutions, compared to conventional offerings

50 million

tonnes CO

0.85 million

tonnes CO

Our goal: Achieve net zero by 2040 2. Reduction in Scope 1 and Scope 2 GHG emissions 42% 13% reduction against baseline

31%

3. Reduction in Scope 3 GHG emissions from purchased goods and

services

42% 27% reduction against baseline

65%

Planet: Protecting nature and advancing the circular economy

Our goal: Conserve scarce resources 4. Recycled PGM content in JM’s manufactured products 75% 69%

-18%

Our goal: Minimise our environmental

footprint

5. Reduction in total hazardous waste 50% 1% reduction against baseline

6. Reduction in net water usage 25% 5% reduction against baseline

21%

People: Promoting a safe, diverse and equitable society

Our goal: Keep people safe 7. Total recordable injury and illness rate (TRIIR) for employees and

contractors

<0.25 0.47

59%

8. ICCA process safety event severity rate (PSESR) 0.4 1.0

21%

Our goal: Create a diverse, inclusive

and engaged company

9. Employee engagement score >8.0 6.9 new methodology this year

10. Female representation across all management levels 40% 28%

-19%

Our goal: Uphold human rights % supplier spend assessed for human rights risk and remedial plans

in place where high risks identified

– 22% no target set for 2030

Our goal: Invest in our local communities Number of days of volunteering in our local communities

by our employees

– 2,063 days no target set for 2030

Our sustainability targets for 2030 are ambitious, but they build off the incredible impact our

products and services already have. Our growing business of coated membranes is enabling

the next generation of low carbon hydrogen technology, and our catalysts reduce pollution

and help the global chemical industry de-fossilise. All this is underpinned by our circular PGM

economy that helps reduce waste and make the most of scarce resources. Fordecades our

expertise in metal chemistry has helped to solve the complex challenges ofair pollution, and

now our technologies are accelerating the transition to net zero.

This year we have decided to scale up our ambition and announce tougher GHG reduction

targets for 2030 which will firmly put us on Science Based Targets initiative’s (SBTi)1.5°C

trajectory and place us among the leading group of global businesses aiming for a rise of

nomore than 1.5°C. Wehave submitted them to SBTi for validation, as part of our Net Zero

Standard application.

ERM Certification and Verification Services have provide limited assurance to ISAE3000

standard of selected KPIs with 2030 targets. Please see pages 228-230 for more details.

Our sustainability targets for 2030

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Our goal: Drive lower global greenhouse gas

(GHG) emissions

Sales of our fuel cell components already help our customers avoid GHG emissions every

year and are on track to achieve our milestone of 1 million tonnes saved by end of 2023/24.

This currently only represents 1.1% of our sales (excl platinum group metals, PGM), but we

want to amplify our impact considerably over the next decade. Our capabilities, experience

and scale put us in a great position to play to win in additional emerging markets, such as

clean hydrogen and sustainable fuels.

Last year we set ourselves the target that Johnson Matthey technologies would contribute

towards avoiding 50 million tonnes of GHGs entering the atmosphere per year by 2030,

compared to conventional technologies in 2020. This is equivalent to avoiding the

emissions from half of UK transport

. During the year we have signed significant

partnerships, and our major partnership with Plug Power will enable the manufacturing of

significant volumes of catalyst-coated membranes for hydrogen production and fuel cells in

the US and accelerate progress towards our 2030 target.

Catalysing

the net zero

transition

Planet: Protecting the climate

2030 target 2021/22 2022/23 % change

against

prior year

Our goal: Drive lower global greenhouse gas (GHG) emissions

50 million tonnes

of GHG

emissions avoided per year using

technologies enabled by JM’s products

and solutions, compared to

conventional offerings

0.49 million

tonnes CO

0.85 million

tonnes CO

+74%

Our goal: Achieve net zero by 2040

42%

Reduction in Scope 1

and Scope 2 GHG emissions

410,110

tonnes CO

363,686

tonnes CO

-11%

42% Reduction in Scope 3 GHG

emissions from purchased goods and

services

2,978,197

tonnes CO

2,495,475

tonnes CO

-16%

Our company purpose

is to catalyse the net zero

transition because we believe

this represents the biggest

benefit we can bring to

society. This mainly comes

through sales of our products

and services, which when

used by our customers, will

bring about millions of tonnes

of GHG avoided. We are also committed to net zero by

2040 for our operations.

You can read more about how climate change is bringing opportunity and risks to our business

in our TCFD report on pages 45-52

50 million tonnes of GHG emissions avoided

per year by our

customers using our products by 2030

Energy

Sustainable fuels for

aviation and marine use

Low-carbon (blue)

hydrogen technology

Renewable (green)

hydrogen technology

(electrolysers)

Fuel cell components for

distributed power

generation

Automotive

Fuel cell components

for hydrogen powered

vehicles

Chemicals

Solutions to decarbonise

chemical products, like

ammonia, methanol or

formaldehyde

Solutions to decarbonise

chemical and industrial

processes

1. Rebaselined to remove divested businesses, please see page 222 for more information

2. https://www.gov.uk/government/statistics/provisional-uk-greenhouse-gas-emissions-national-statistics-2021

3. Using technologies enabled by our products and solutions: avoided emissions compared to conventional technologies in 2020

SASB Resource efficiency indicator: We have also identified our revenues that align with the SASB

Chemicals Sustainability Accounting Standard’s definition of products that, when used, improve

energy efficiency, eliminate or reduce GHG emissions, reduce raw materials consumption, lower

water consumption and / or increase product life. In 2022/23, those sales were £1.01 billion (with

sales excl. precious metals as £4.2bn) compared with £812 million in 2021/22.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Our goal: Achieve net zero by 2040

We have updated our net zero roadmap for Scope 1 and 2 GHG emissions in line with our more ambitious 2030 target, putting it firmly on the 1.5°C pathway to net zero. We have also submitted

our 2040 goal as our long-term net zero target for approval by Science-based targets Initiative (SBTi) under their Net Zero Standard. During the year, each of our businesses has developed a

detailed roadmap for improving energy efficiency, switching to lower-carbon forms of energy and reducing the emissions our chemical processes generate. These roadmaps are used for making

business investment decisions and monitoring progress to our targets.

Principles for net zero

Baseline Target:

60% renewable electricity

Target:

-42% GHGs

Target:

-100% GHGs

2020 2030 20402025

Grow manufacturing footprint for Hydrogen Technologies and other new businesses in line with our net zero commitment

Net zero growth

Underpinning work Delivery

Net zero roadmap for Scope 1 and 2 GHG emissions

Planet: Protecting the climate continued

% reductions indicative only against a 2020 baseline

Natural gas

replacement

Assess equipment-level gas usage

and suitability for conversion to

sustainable fuel sources

Develop natural gas replacement roadmap

• Overlay green energy developments and

asset replacement / upgrade plans

Phase out use of other fossil fuels in India and CA test facilities

Natural gas replacement projects

• Capex – electrification of lower-grade heat ovens at high-usage sites

• Conversion to biomethane / hydrogen or add carbon capture technology

-10%

-20%

Abate process

GHG emissions

Carbon capture and storage (CCS) ‘discovery’ work

• CO

emissions data profiling on key sites

• Partner to establish appropriate CCS solutions at strategic locations

• Investigate opportunities to switch to alternative process chemistry

process emissions

• Eliminate through process chemistry change or capture

O abatement

technical studies

O process emissions

abatement projects

-5%

-10%

Renewable

electricity

Switch to renewable electricity

in the US, Europe, India

and China

Renewable electricity sourcing

in remaining locations

Switch to low-carbon fuel or switch off

gas-fired combined heat and power plant (CHP) generators

Renewable electricity sourcing in remaining locations

-20%

-5%

Energy

efficiency

Pilot SMART metering at key sites ISO 50001 accreditation

at top energy-using sites

Energy efficiency improvements through continuous improvement

and equipment upgrades

Footprint rationalisation to scale down old and less efficient assets

Energy efficiency improvements continued

• Continuous improvement optimisation and equipmentupgrades

-7%

-10%

-8%

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Our progress in 2022/23

This year we saw a 11.3% fall in our Scope 1 and 2 GHG emissions from last year, as well as a

8.1% drop in our total Scope 1 and 2 carbon intensity as we began to deliver on our roadmap

to net zero by 2040. We have principally achieved this through energy efficiency and

renewable electricity procurement, although we did also have an overall drop in production

output due to COVID-related disruptions to the automotive industry in China.

Overall our GHG emissions from Scope 3 purchased goods and services decreased by 16%

in2022/23 compared to the previous year, and we reached our previous target for 2030

seven years early. This was achieved through a combination of reduced procurement of

primary PGM and through the decarbonisation efforts of our supply chain partners in the

PGM mining sector.

Non-renewable, grid-supplied electricity

Certified renewable electricity from the grid

Renewable electricity generated locally

Natural gas used on site

Other fossil fuels used on site

Non-renewable steam procured

Fuel used on public roads by JM vehicles

on company business

21.8%

16.2%

0.6%

52.2%

5.8%

3.0%

0.4%

Energy mix

Total: 1,185,612 MWh

Planet: Protecting the climate continued

Energy efficiency and security

To ensure we drive energy efficiency in our operations, and underpin our net zero strategy,

thisyear we worked with a third-party provider to create an energy management framework for

the whole business in line with ISO 50001. Training relating to this was provided through global

sessions along with focused training to our most energy-intensive sites. Four sites already have

ISO 50001 and we have completed our gap analysis for another 16 of our largest sites.

Implementation of recommendations has already started, and will continue in the year ahead.

For example, at our largest energy-using site, through process and control improvements on

two of their larger assets, we were able to demonstrate savings of approximately 2% of the site’s

total fuel consumption. At our UK refinery, we are carrying out feasibility and heat studies to

look at how they can recover more energy. Three of our largest manufacturing sites also make

electricity using combined heat and power plants (CHPs) to optimise our energy efficiency.

Although these run off natural gas, our CHPs generated 26,974 MWh (5.6% of ourtotal)

electricity this year minimising our energy demand.

We established a Winter Energy Taskforce to focus and co-ordinate our efforts to mitigate

therisk to our operation from headwinds in the energy markets created by the Ukraine war.

Weminimised energy cost rises to 82%. We continue to focus on measures to improve our

resilience at key locations, including beginning negotiations on direct supply of electricity

through power purchase agreements (PPA).

Renewable energy

This year 41% of our electricity consumption came from certified renewable sources, compared

to 32% in 2021/22. We remain on track to achieve our target of purchasing 60% of our

electricity from certified renewable sources by 2025.

Over the past year we assessed additional renewable energy procurement opportunities and the

inherent risks, challenges, gaps or legal changes that may occur along our journey to net zero.

Currently we are using green tariffs to ensure renewable electricity consumption in Europe and

the US, and going forward we will focus on Power and Renewable Gas Purchase Agreements

inthese regions and others where this procurement scheme is available.

In regions like India and China we will continue to purchase recognised Energy Attribute

Certificates in the short term. We have also deployed some on-site generation as part of the

current energy portfolio in sites in India.

Scope 1

Scope 2

Scope 3 – Purchased goods and services

Scope 3 – All other categories

7.1%

3.9%

75.4%

13.6

Total greenhouse gas emissions

Total: 3.3million tonnes CO

For more information on our calculation methodology

please see our Basis of reporting on pages 222-227

Increasing our energy efficiency with no additional investment

We are always exploring ways to improve our energy efficiency. Our Clean Air site in Poland

demonstrates the kind of positive results that can be achieved through innovative thinking

and process optimisation. Through adding new logic controls to our existing systems, we

have enabled waste heat recirculation from downstream zones of the ovens to upstream

zones. We expect this improvement to reduce annual fuel usage on our site by about 10%

without the need for any additional capital investment. We are replicating this low-cost

improvement across other Clean Air sites globally, with similar savings expected.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Scope 1 and 2 greenhouse gas (GHG) footprint and energy efficiency

2022/23 2021/22

Global UK only Global (excl UK) Global UK only Global (excl UK) % change (global)

Total Scope 1 GHG emissions (tonnes CO

e) 233,300 100,461 132,839 239,862 103,534 136,328 -2.7%

Total Scope 2 GHG emissions (market-based) (tonnes CO

e) 130,386 1,024 129,362 170,248 1,265 168,983 -23.4%

Total Scope 2 GHG emissions (location-based) (tonnes CO

e) 204,848 21,696 183,152 225,712 24,942 200,770 -9.2%

Total Scope 1 and 2 GHG emissions (market-based) (tonnes CO

e) 363,686 101,485 262,201 410,110 104,799 305,311 -11.3%

Total Scope 1 and 2 GHG emissions (location-based) (tonnes CO

e) 438,148 122,157 315,991 465,574 128,475 337,099 -5.9%

Total Scope 1 and 2 carbon intensity (market-based) (tonnes CO

e/tonne sales) 3.4 22.3 2.5 3.7 19.9 2.9 -8.1%

2022/23 2021/22

Global UK only Global (excl UK) Global UK only Global (excl UK) % change (global)

Total energy consumption (MWh)

1,185,612 337,488 848,124 1,241,806 373,347 868,458 -4.5%

Total energy efficiency (MWh/tonne)

11.0 74.2 8.2 11.3 70.7 8.3 -3.0%

Scope 3 GHG emissions by category

(tonnes CO

Category Category number 2022/23 2021/22

2020/21

2019/20

Purchased goods and services 1 2,495,475 2,978,197 2,812,518 3,433,660

Capital goods 2 177,329 163,641 242,456 367,141

Fuel and energy-related activities 3 41,018 43,505 36,695 38,199

Upstream transportation and distribution 4 81,999 158,625 94,348 97,424

Waste generated in operations 5 4,004 5,220 4,549 3,439

Business travel 6 5,077 1,336 67 9,202

Employee commuting 7 13,627 13,517 25,763 25,763

Upstream leased assets 8 523 698 602 5,094

Use of sold products 11 0 0 0 0

Investments 15 125,196 118,356 119,005 129,337

Total 2,944,248 3,483,095 3,336,003 4,109,259

Four-year performance table 2022/23 2021/22

2020/21

2019/20

Total energy consumption (MWh)

1,185,612 1,241,806 1,168,338 1,202,121

Total energy efficiency (MWh/tonne)

11.0 11.3 11.0 10.6

Total Scope 1 and 2 GHG emissions (market-based) (tonnes CO

e) 363,686 410,110 409,584 417,818

Total Scope 1 and 2 carbon intensity (market based) (tonnes CO

e/tonne sales) 3.4 3.7 3.9 3.7

Total Scope 3 GHG emissions (tonnes CO

e) 2,944,248 3,483,095 3,336,003 4,109,259

1. Rebaselined to remove divested businesses, please see page 222 for more information

2. Energy consumption is reported here in MWh, which is equal to 1,000kWh. Total global energy consumption for 2022/23 is 1,185,612,237kWh

3. This is the total energy used by the business divided by amount of materials sold to customers

For more information on our calculation methodology please see our Basis of reporting on pages 222-227

Planet: Protecting the climate continued

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Johnson Matthey is

committed to minimising our

environmental footprint and

conserving scarce mineral

resources through our

manufacturing choices.

In advance of COP15, in Dec

2022 we signed the ”Business

Pledge for Nature” and the

Terra Carta Charter, which

guides organisations in how to put nature, people and

planet at the heart of value creation.

Planet: Protecting nature and advancing the circular economy

2030 target 2021/22 2022/23 % change

against prior

year

Our goal: Conserve scarce resources

75%

of recycled PGMs content in

JM’s manufactured products

70%

69% -1%

Our goal: Minimise our environmental footprint

50%

Reduction in total

hazardouswaste

47,791

tonnes

41,860

tonnes

-12%

25% Reduction in net water usage

1,833 ML

1,752 ML -4%

Catalysing

the net zero

transition

Our goal: Conserve scarce resources

We helped create one of the world’s first circular economies – and our increasing use

ofsecondary, or recycled, PGMs is helping to significantly reduce the emissions and

environmental impact associated with mining these vital materials. Please see page 226

for a definition of secondary PGMs.

We can also apply our longstanding recycling expertise to emerging technologies that utilise

PGMs, like fuel cells and electrolyser stacks. We are upgrading our infrastructure to allow us to

recover and refine the PGMs used in these technologies to a very high purity in the same way

we do today with production scrap. This will allow us to create an endless loop of PGMs availability.

Our performance in 2022/23

Our ability to meet our target of 75% of our products using secondary PGMs depends on

working with our customers and market research team to understand both supply and

demand as well as the total volume of secondary PGMs available through our refining circuits

and the broader PGMs market. Our focus is on closing the PGMs loop to meet our customers’

evolving sustainability demands. But we acknowledge that primary, or new, supply is still

critical to maintain market balances and will play an important role in the transition to net

zero. Customer demand will help to drive this balance. We are perfecting our secondary

offering to customers and working with both internal and external subject matter experts

tocertify our methodology.

Our performance in this area this year was impacted by the economic headwinds faced

bytheglobal economy, more specifically in the auto market supply chain. Secondary scrap

availability and a large share of the PGMs products that are manufactured depend on the

health of the global automotive market. 2022 presented many challenges to both sides

ofthesecondary metal equation, as global auto sales struggled to maintain post-pandemic

momentum. This eventually led to a downturn in automotive scrap being sent back through

PGMs recycling channels, but also impacted demand for fresh PGMs products. Despite these

challenges, we have been able to manage our metal intake portfolio to remain on track

tomeet our 2030 target.

1. Restated due to calculation refinement, please see page 222 for more information

2. Total hazardous waste produced and sent off site for treatment by a third party

3. Rebaselined to remove divested businesses, please see page 222 for more information

4. Net freshwater consumption

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Our goal: Minimising our environmental footprint

Our operations span the globe – with 45 major manufacturing sites in over 30 countries

supporting our customers in a huge number of ways. We are committed to protecting

the ecosystems around our plants and minimising all our potentially harmful interactions.

The Societal Value Committee is responsible for our overall approach to environmental

performance.

Our global environmental, health and safety (EHS) policies, processes and management

system help us maintain a high level of environmental performance. All our sites are

assessed against these standards by our centralised EHS audit team at least once every

three years. 89% of our manufacturing sites use environmental management systems

that are certified as meeting ISO 14001 standard, as of 31

March 2023.

We measure progress against our environmental KPIs monthly and use the data to improve

performance.

Minimising waste: reduce, reuse, recycle

We are committed to minimising waste generation and recycling as much as possible.

Our operations create waste, which is always treated in line with local regulations.

But beyond that we are committed to disposing of it responsibly. We work with specialist

treatment companies to ensure this waste is managed safely.

We are always looking for ways to improve. For example this year:

• At our UK refinery, improvements in process operations allowed flue dusts to be reworked

into furnaces which eliminated a waste stream. There were general reductions in waste

from improving production processes so that less off-specification material was produced.

• At our Smithfield site in the US we upgraded our NO

abatement system. This reduced

ouremissions and hazardous waste on site and helped us towards our 2030 target.

• Working with our third-party waste provider in the UK, we also increased the proportion

ofwaste streams being recycled by 5%.

We continue to recycle the majority of our production waste containing PGMs in our

ownrefineries.

Our most significant progress towards our 2030 target on hazardous waste reduction

comes this year with the ongoing investment in our new Third Century PGM refinery

inRoyston. This is due to be operational later in the decade.

Using water responsibly

Climate change and population growth are bringing ever greater stress to availability

offreshwater supplies globally. 2022 saw us launch our first global water policy to help

sitesadopt effective water management plans, improve measurement and reduce water

consumption, driving us towards our 2030 water target.

To understand where we need to act most quickly for most benefit, we used the World

Resource Institute’s (WRI) Water Risk Atlas tool to analyse usage at our sites. The tool

identified 12 manufacturing facilities, which are located in regions with a high or extremely

high baseline water stress level. This means that they are at higher risk of declining water

availability or increased cost in the future due to drought or groundwater table decline.

The12 manufacturing facilities accounted for 399,174m

(23%) of our net fresh water

consumption in 2022/23.

We discharged 1.36 million m

wastewater during the year, 96% to municipal treatment

plants and the remainder back to its original freshwater source after treatment. We treated

1.05 million m

of waste water on-site, of which we recycled 23% back into our

manufacturing processes instead of discharging.

We seek to minimise the chemical burden in our wastewater discharged. 1.36 million m

was discharged from our sites with an average chemical oxygen demand (COD) of 242 mg/L.

Reducing emissions to air

Some of our operations produce other air emissions as by-products of chemical reactions,

including nitrogen oxides (NO

), sulphur oxides (SO

) and volatile organic compounds

(VOCs). All our permitted sites monitor these emissions to ensure they comply with

localregulations.

This year we saw a decrease in our year-on-year NO

emissions, despite increasing our

coverage of reporting. We fitted an enhanced NO

abatement at our Smithfield site, US to

help reduce them even further in future. We also continued to improve our methodologies

around measuring and reporting the emissions we produce globally in a standardised way.

We have reviewed the new UK BAT waste gas for chemicals (UKWGC) and are making

preparations to ensure we will be in compliance with the stricter emissions to air limits ahead

of the significant change in emissions legislation in the UK in 2027.

We don’t produce ozone-depleting substances (ODS) through our operations, however,

anysmall leaks of refrigerant gases are reported in our Scope 1 GHG emissions.

Planet: Protecting nature and advancing the circular economy continued

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Water consumption

2022/23 2021/22

2020/21

2019/20

Net freshwater consumption (000’s m

) 1,752 1,833 1,711 1,849

Total wastewater discharged (000’s m

) 1,356 1,400 1,506 1,394

Average direct Chemical Oxygen

Demand of wastewater (COD)(mg/L) 242 220 112 104

Types of waste produced and sent off site for treatment by a third party

Type of waste (tonnes) 2022/23 2021/22

2020/21

2019/20

Liquid hazardous waste 38,520 45,151 41,025 40,017

Solid hazardous waste 3,340 2,640 2,622 2,469

Liquid non-hazardous waste 7,059 8,560 7,013 7,815

Solid non-hazardous waste 13,967 15,290 11,538 13,630

Total hazardous waste sent off site

for treatment 41,860 47,791 43,647 42,486

Total waste sent off site 62,885 71,641 62,198 63,931

Methods of waste treatment applied by our third party providers

Type of treatment (tonnes) 2022/23 2021/22

2020/21

2019/20

Off site reuse 1,057 1,020 1,031 720

Off site recycling 36,873 38,277 23,390 19,452

Off site incineration with energy recovery 1,075 2,041 1,023 1,698

Incineration or other off site treatment 19,533 26,161 33,579 38,976

Total waste disposed off site to landfill 4,347 4,142 3,175 3,086

Total waste sent off site 62,885 71,641 62,198 63,931

Emissions to air

Type of emissions (tonnes) 2022/23 2021/22

2020/21

2019/20

Nitrogen oxides (NO

) emissions to air 336 358 338 320

Sulphur oxides (SO

) emissions to air 31 73 42 16

Volatile organic chemicals (VOCs)

emissions to air 42 50 39 47

Coverage for NO

reporting 86% 85% 85% 82%

Coverage for SO

reporting 36% 34% 36% 32%

Coverage for VOCs reporting 57% 56% 54% 53%

Using algae to clean up plant wastewater

at our Taloja site

Our catalyst manufacturing site in

Taloja, India, is using the power of algae

to clean up the waste water created

asaby-product ofour processes.

Theimpact of this innovative approach

could have wide-reaching effects

onthechemicalsindustry.

The wastewater created by the plant is

fed into six algae ponds. Using the sun’s

energy, the microalgae convert the

waste discharge into oxygen and

renewable biomass. This biomass can

then be used for fuel and fertilisers,

andthe richly oxygenated water is a

boost forlocal aquatic life.

The project has been a huge success.

Weno longer need to outsource

ourwastewater treatment – saving us

hundreds of thousands of pounds so far.

The process offers uninterrupted

performance, with no freshwater

consumption, and the end results help

support the local environment. That’s

why the project was awarded an internal

Johnson Matthey award in 2022.

Planet: Protecting nature and advancing the circular economy continued

1. Rebaselined to remove divested businesses, please see page 222 for more information

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Management of hazardous chemicals

The nature of the complex chemistry in our products and manufacturing means that we

sometimes have to use chemicals that are potentially hazardous to the environment.

Productstewardship is a crucial part of our approach to minimising our environmental impact.

By delivering product insight and assured regulatory compliance, we can better manage

thesustainability of our portfolio.

Our efforts to improve our environmental and human health performance are recognised

through our rating 3

out of 54 chemical companies in the 2022 Chemscore report. They

alsoget us a seat at the table with policy makers, regulators and industry bodies. This global

engagement is allowing us to share our expertise around catalysis, product stewardship,

PGMsupply and sustainable technologies and contribute to the important discussion about

what net zero looks like in practice. It also helps us maintain high standards and adapt

tocontinually evolving regulation in our markets. In the UK we are working with the

government, directly and through the Chemicals Industry Association (CIA), on potential

revisions to the UK’s Registration, Evaluation, Authorisation and Restriction of Chemicals

(UKREACH) regulation. We also work with a range of EU industry consortia such as

EuropeanChemical Industry Council (Cefic), Eurometaux and European Precious Metals

Federation (EPMF).

Product life cycle analysis

Product life cycle analysis (LCA) is an

important way in which we can

demonstrate how the environmental

benefits of our products outweigh the

impact of making them in the first place.

We are committed to making cradle-to-

gate LCAs of our products available to

our customers on request.

We also contribute to the International

Platinum Group Metals Association

(IPA)'s publicly available industry

standard LCA for the five platinum group

metals – Pt, Pd, Rh, Ir and Ru – which is

updated annually to ISO 14001

standards.

Visit the IPA website for more

information: ipa-news.de

Planet: Protecting nature and advancing the circular economy continued

Finding safer alternatives and reducing risk

Our product stewardship reporting programme helps us track product performance every

year. This year, we found no reports of significant health effects from the use of our products,

and we continue to comply with all health and safety, labelling and marketing regulations,

and voluntary codes. We engage with customers to promote understanding of the hazards of

our products, and our New Product Introduction (NPI) framework requires teams to consider

ways to reduce hazardous raw material use.

Alongside the broader transformation of Johnson Matthey, we are also upgrading our

processes around product stewardship. We have initiated work to roll out a company-wide

inventory and information management platform. This will allow us to better track chemicals

through our manufacturing processes and understand the impacts of changing regulation or

new hazard information faster, which would allow us to identify safer and / or more

sustainable material choices.

Per- and polyfluoroalkyl substances (PFAS)

Per- and polyfluoroalkyl substances (PFAS) are a very broad group of 9,000+ chemicals,

including fluoropolymers, that are widely used in industrial and consumer applications due

totheir unique thermal and chemical stability. They are under significant scientific and

regulatory scrutiny because some PFAS are persistent and mobile in the environment and are

associated with certain potential adverse health effects. Chemical manufacturing processes,

including some in JM, often rely on parts, such as process piping and seals that contain these

fluoropolymers. Some fluoropolymers are also, currently, essential to the proper functioning

of certain electrolysers and fuel cells technologies. In JM, we are aware of the increasing levels

of concern over potential risks posed by a subset of PFAS and are committed to reducing our

uses, developing alternatives, fully understanding and limiting impacts on human health and

the environment from PFAS in our operations and products. We are also working directly with

suppliers, customers, peers, business associations, NGOs and regulators to ensure responsible

use and proportionate regulations of PFAS.

Working with genetically engineered microorganisms

Genetically engineered microorganisms in our biocatalysts (enzymes) represent just 0.01% of

our sales. None of our products contain live organisms at the point of supply to our customers.

Biocatalysts are important chemical intermediates in our manufacturing because they can

help us make more of a desired chemical product with fewer undesirable by-products.

Waste

treatment

Supplier

operations

Raw materials and extraction

operations

Customer

Wholesale

Consumer

End of life /

recycling

Upstream

Downstream

Recycling / circularity

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

People: Promoting a safe, diverse and equitable society

Our goal: Keep people safe

Our ability to catalyse the net zero transition depends on the safe operation of our manufacturing

sites. The processes and policies we put in place are one part of our approach, but we are also

improving our insight and the tools we provide our people so that they can contribute to our safety

culture every day. We have complex chemical processes that often involve heavy machinery and

hazardous chemicals. As part of our focus on simplification, we continued embedding the new digital

tools we introduced in 2021/22. These are streamlining existing processes and enabling a more

data-led approach. To reduce our ergonomic injuries we are using a video tool to highlight

ergonomic stress points while carrying out activities and then taking necessary actions to reduce

these stress points. Rather than wait for an incident to occur, we are able to proactively spot potential

issues and take preventative action. A new central industrial hygiene reporting database is due to go

live in the first half of 2023/24.

The Take 5 programme was launched in 2021/22 to help make sure everyone acts in a responsible

and safe way at all times. It reminds people to take some time before starting a new activity to make

sure they are working in a safe and secure environment. This simple action helps reduce incidents

and drive continued improvements in our processes. This year saw the further embedding of this

programme. During Q4, we tend to see an increase in the number of incidents across all sites. To

help address this we created a toolkit with a range of discussion guides and materials for safety

briefings and safety moments focused on ‘Make Time to TAKE 5’, so that everyone can discuss what

we can do to mitigate risks. This resulted in over a 50% reduction in recordable incidences compared

to final quarter 2021/22. We further improved our safety performance through engagement and

safety leadership by launching our first global safety day and additional regional EHS conferences

with the main topic being safety leadership – further details below.

Our strategy focuses on

the core strengths that allow

us to play to win in the

markets we operate in. We

rely on our 12,600+ talented

and passionate employees to

drive our purpose. Ensuring

that they are fulfilled in their

careers, work safely and

return home well to their

families each day is our

number one priority.

2030 target 2021/22 2022/23 % change against

prior year

Our goal: Keep people safe

<0.25

Total recordable injury and

illness rate (TRIIR) for employees and

contractors

0.59 0.47 -20%

0.4 ICCA process safety event severity

rate (PSESR)

1.32

1.02 -23%

Our goal: Create a diverse, inclusive and engaged company

Employee engagement score

Not

measured

6.9 —

>40% Female representation across

all management levels

27% 28% +1%

Our goal: Uphold human rights

% supplier spend assessed for human

rights risk and remedial plans in

place where high risks identified

- 22% -

Our goal: Invest in our local communities

Increase volunteering leave (days) 1,322 2,063 +56%

1. Restated value based on improved reporting of historical process safety events.

0.47

0.59

0.55

0.79

0.97

2022/23

2021/22

2020/21

2019/20

2018/19

TRIIR

(Employees and

contractors)

Catalysing

the net zero

transition

Our occupational health and

safety performance

Lost time injury and illness rate (LTIIR) reduced from 0.30 last

year to 0.24. We saw a 20% improvement in our all personnel

(employees and contractors) TRIIR from the previous year.

This is a demonstration of the effectiveness of our Take 5

programme and the impact of having our first Global Safety

Day, as well as additional local campaigns at site level which

have focused on site-specific safety issues. We have had

nofatalities since 2015.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Global Safety Day

As part of the new strategy introduced

by our CEO in last year’s report, just like

the rest of our business, 2022/23 saw all

our line managers and our EHS team

examine our approach to ensuring the

safety of our people.

Our first annual Global Safety Day was a

huge success – helping to bring our

organisational transformation to life by

providing site managers with resources

and insights into overcoming common

barriers to workplace safety. Dedicating

a specific day to safety across the whole

organisation helped focus everyone’s

minds on the importance of safety in

everything we do and create an

opportunity to celebrate our

performance and efforts taken in

support of safety.

The event was attended by all

employees, who took part in activities

and talks around the central theme of

how to have effective safety

conversations. The global event was

bolstered by two regional EHS

conferences which were attended by site

managers and other key functional

people with the main theme around

safety leadership.

Stronger audits. Stronger oversight

This year saw a return to full on-site auditing as COVID-related restrictions relaxed globally.

A total of 17 corporate audits were undertaken during 2022/23. These included four

Process Safety-specific audits. All of our high hazard facilities have now been subject to

aformal corporate environmental, health and safety (EHS) audit within the last three years

and a process safety audit within the last five years.

An independent review and audit of the JM Process Safety Management System, sponsored

by the JM Board, has been timetabled for 2023/24 in order to assess the prioritisation

of programme implementation and major risk management. The review comprises a review

of the corporate process safety systems against industry best practices plus more focused

engagements at selected JM sites to audit implementation and progress on recommendations

to address the major process safety risks.

People: Promoting a safe, diverse and equitable society continued

Our process safety performance

Our International Council of Chemicals Association (ICCA) process safety event severity rate

(PSESR) has decreased by 23% from 1.32

last year to 1.02 PSESR per 200,000 hours worked.

There were nine Tier 1 process safety events this year, compared to 11 the previous year. See

Basis of reporting on page 227 for a definition of a Tier 1 process safety event.

We continue to embed process safety training across JM. In the last 3 years safety training has

been completed by over 2,870 operations-based staff, which is c. 90% of employees who

have been identified as needing process safety training. We have also completed individual

process safety competency assessments for 305 managers and engineers in process safety-

critical roles at facilities rated as ‘high hazard’. All roles that have been identified in this

category, for our high hazard sites, have now been trained.

Despite these improvements, a significant explosion occurred at one of our US sites

inJuly2022. Thankfully the incident resulted in no injuries, but we did receive a citation

fromthe regulator and the site’s performance remains impacted. Our investigation and

rootcause analysis highlighted several areas that could be improved – and we continue

toimplement those changes.

1. Restated value based on improved reporting of historical process safety events.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Our goal: Create a diverse, inclusive and engaged company

As a global company, it is essential that our organisation is reflective of the communities

welive and work in as well as a place where people are safe, thriving and building rewarding,

long-term careers. Ensuring we have a high-performance culture is critical to the execution

ofour new strategy. We are creating a more market-focused, agile and less bureaucratic

Johnson Matthey – one where our people can be truly customer focused and thrive in their

roles. Like our peers, as well as businesses across the global economy, the labour market

weoperate within remained competitive in 2022/23. This makes attracting the best talent

aswell as supporting, engaging and developing the people we have hugely important.

Building an engaged, high-performance culture

Immediately after the launch of our refreshed strategy this year, we initiated town halls and

team sessions at all levels in the organisation with the purpose of fully communicating the

overall strategy and our three core play to win behaviours:

People: Promoting a safe, diverse and equitable society continued

Take accountability Keep it simple Drive results

To accentuate these behaviours we initiated a leader-led culture change programme focused

onupskilling people managers and leaders in key areas such as giving feedback to drive

performance, and we started work on a new approach to performance management that

focuses on the outcomes and results we want to achieve.

An engaged, passionate workforce is the fuel for our transformation. It underpins our whole

play to win philosophy and drives us forward in our purpose of catalysing the net zero transition,

becoming more customer-focused and unlocking the full value of our operations. We recognise

that an important vehicle to driving engagement is all people managers having the ability to

regularly track status, progression and provide input for areas of focus relevant to their teams.

To this end, we have adopted ‘WorkDay Peakon’, a globally recognised tool for our regular

employee engagement surveys. Further we have decided to increase the frequency of the full

survey to annual, and to conduct regular pulse surveys to keep on top of any issues.

Our first full Workday Peakon survey was conducted in March 2023 and we achieved a score

of6.9. The methodology used by Workday Peakon is not directly comparable with the tool we

used previously and thus we have not compared the results with past engagement surveys at JM.

However, we do recognise that 6.9 places us below the industry average of Workday Peakon

users. Whilst this is not where we want to be, this is not surprising given the pace and depth

oftransformation we are currently undergoing. We have set ourselves targets of 7.2 by end of

2024/25 and a score of greater than 8 by 2030, to move us into an industry leadership position.

We also recognise that engagement is primarily built in the day-to-day interactions with

colleagues, which is why many engagement initiatives have also been run locally at sites and

inoffices. The initiatives take many shapes and forms and adapt to the local opportunities.

To accelerate our work on building engagement in the coming year, we will be increasing

ourtraining and support to help managers build engagement across their teams, as well

ascontinuing to examine our employee proposition and culture and making improvements.

A step change in leadership skills and critical capabilities

Winning requires us to build critical capabilities, ensure we retain experienced colleagues in JM

today and provide them with opportunities to develop and progress. We have looked to build

the leadership capabilities of the organisation this year. We put in place processes to build

amore robust and diverse leadership pipeline.

A big success this year were the leadership masterclasses in which 135 of our senior leaders

participated. These brought our new strategy to life and drove our culture transformation

forward. The workshops focused on the behavioural change that underpins transformation

–storytelling, coaching for performance, accountability and setting objectives. Another 1,663

employees participated in one or more of our general business skill courses.

We have 53 graduates in our two-year graduate programmes, who we continue to develop to

become the leaders of the future as they complete eight-month rotations around the company.

We have also focused on building our commercial muscle, through the creation of the Group

Commercial Council, which aims to make the voice of the customer front and centre across JM.

With the deployment of our play to win strategy, our whole leadership population will be

receiving commercial training in the coming year.

In order to win, we must operate efficiently and make the most of our investments for the

future. We know from feedback through our benchmarking that our current organisation needs

to change to deliver our new strategy. During the year we worked to transform the operating

models for our enabling functions, putting in place new organisations for engineering and

capital projects. More work is being progressed to sharpen further and reduce costs more

quickly in 2023/24.

Building engagement takes time. Activities we initiated this year to start this journey include:

• We re-clarified our expectations of people managers and their role in engaging and

developing their people. We have developed a programme of work to educate and train all

our managers and equip them to motivate and develop their people

• We have reviewed our approach to major elements of our reward and incentives programmes

to drive and recognise high-performance outcomes and are implementing the changes for

2023/24

• We introduced Workday as a global platform for our people data, giving managers valuable

insight into how we can increase retention and streamline processes around activities such as

succession planning

• We rolled out our digital platform Say Thanks to the whole of JM where colleagues can

express their appreciation of support or contribution from another colleague. In the first six

months 18,739 recognitions were provided through the portal

• We refreshed our annual JM Awards, a global competition to allow individuals and teams to

be recognised, to be aligned to our new play to win behaviours. Over 190 nominations were

received, showcasing many fantastic achievements of our employees globally.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

At the core of work to promote DI&B is the work of our Employee Resource Groups (ERGs).

Aswell as giving our people spaces to connect and share experiences, they directly feed into

our culture development activities. We now have nine ERGs, following the launch of our

Hispanic/Latinx Organisation for Leadership and Advancement (HOLA). Throughout the year,

theyorganised webinars on topics such as LGBT+ paths to parenting, menopause and

neurodiversity. Pride in JM and the Black Employee Network continued to lead our reverse

mentoringefforts this year. These pairings give our leaders the chance to be mentored

byjunior colleagues on their lived experiences in the company.

Disability inclusion

Our work on advancing disability inclusion is informed by the DiversAbility ERG. With Liam

joining as CEO, we updated and re-signed our commitment to the Valuable 500. We also

joined the Business Disability Forum, a leading business membership organisation in disability

inclusion. Our first site accessibility audit was completed, and actions taken to improve the

accessibility for employees and visitors at our headquarters, and largest manufacturing site,

inRoyston, UK. An accessibility audit has since been completed at Clitheroe, UK, and plans

are being developed to roll out the audits across our other sites.

Our new DI&B policy commits us to:

• Giving full and fair consideration to applications for employment by disabled persons,

having regard to particular aptitude and abilities

• Continuing the employment of and arranging appropriate training for employees who have

become disabled during employment

• Training, career development and promotion of disabled persons.

Promoting ethnic diversity

We have three ERGs that are helping us to advance ethnic minority groups in different

geographies: Asian Network, Black Employee Network (BEN), Hispanic / Latinx Organisation

for Leadership and Advancement (HOLA).

To support the development of our Black, Asian and ethnic minority employees, we continued

to participate in the Black British Business Awards talent acceleration programme in the UK.

In the US, we ran another cycle of the management accelerator programme with McKinsey

&Company – this time with participants on all three, Black, Hispanic / Latinx, and Asian

programmes.

The additional focus for next year is on upskilling hiring managers to ensure a fully inclusive

hiring process.

In 2022, we partnered with the Association for Black Engineers and the Royal Academy

ofEngineering on its annual Graduate Engineering Engagement Programme, which aims to

improve the transition of engineering graduates from diverse backgrounds into engineering

employment. Members of our team supported the mentoring programme, skills and

competency workshops, and networking sessions, reaching over 200 diverse candidates.

We also partnered with the Royal Society of Chemistry for its Broadening Horizons in the

Chemical Sciences programme, a new three-year pilot to support chemistry students and

graduates from Black and minority ethnic backgrounds to pursue careers in chemistry.

InSeptember 2022, we joined nine other partners in hosting a taster event to showcase the breadth

of careers in the chemical sciences and are now working on visits to our sites across the UK.

People: Promoting a safe, diverse and equitable society continued

1. All employees whether they are a people manager or not at a minimum pay grade

Our Global Diversity, Inclusion and Belonging Policy

Johnson Matthey recruits, trains and develops employees who are best suited to the

requirements of the job, regardless of gender, ethnic origin, age, religion or belief,

marriage or civil partnership, pregnancy or maternity, sexual orientation, gender

identity or disability.

Balancing gender representation

Our female representation at all management levels

is 28%, a slight improvement on last

year, and a step forward towards our target of 40% by 2030, with a milestone of 31% in 2025.

Embedding diversity data into the application process is driving insights on where to attract

diverse candidates.

Alongside our Talent Acquisition (TA) team, our DI&B team has built partnerships with

organisations like the Society of Women in Engineering to ensure we can source and attract

the best talent from a range of diverse backgrounds in the market.

To support our LGBTQ+ colleagues, we published a Transitioning at Work guidance

document. It is essential that our trans colleagues can be themselves at work and that we

support them, their manager and HR colleagues.

Advancing diversity, inclusion and belonging

Innovation requires diversity of thought, background and representation as well as a culture

of inclusion and belonging. Our success depends on people feeling that they can speak up,

talk about ideas, challenge norms and create more value for our customers.

This year we replaced our Equal Opportunities Policy with a Global Diversity, Inclusion

&Belonging (DI&B) Policy.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

People: Promoting a safe, diverse and equitable society continued

Fair pay

Ensuring our employees are paid fairly for their work also forms part of our core value to

protect people and the planet. In the UK, we are an accredited Living Wage Employer and

weare exploring to what extent we can apply a living wage policy globally.

We recognise that employees are facing a cost-of-living crisis, and in our most recent pay

reviews we increased our pay budgets to recognise this. For non-unionised employees our

global salary budget was split for management and non-management roles with non-

management roles receiving a higher budget. In addition to their pay increase, employees

who fell below the average JM wage in a country where price inflation was abnormally high

were given a temporary supplementary allowance. For example, in the UK the non-

management budget was 4.5% and the management budget was 3.75%. In the UK, this

equated to £50 per month until 31

March 2023 for employees earning £40,000 or less

(on a full-time basis). The lowest salary agreement made with our UK unions was a 4.5%

salary increase and a £600 lump sum, among other local arrangements

In addition to our employees’ pay, we have provided support through Assist, which provides

JM employees and dependants with access to a team of highly trained and qualified

professionals on a variety of financial well-being topics such as debt management, mortgages

and loans; in addition to broader mental, physical and social well-being topics. Our temporary

employees received the same benefits as our permanent employees.

Freedom of association

We respect and promote the rights of people to freedom of association. In 2022/23 a quarter

of our people globally were covered by collective bargaining agreements and / or represented

by trade unions.

We work collaboratively with 23 trade unions across our sites, focusing on a range of topics,

such as health & safety, well-being, business change needs, employee training and improving

the way we work at our local sites. Cost-of-living was a significant part of our union

negotiations this year and, for those negotiations that have already concluded, we have

agreed larger wage increases than normal and an additional special cost of living lump sum.

We also support engagement at regional and national levels where needed.

2022/23 Union representation % represented

Average number of

employees

represented

Total average

number of

employees

UK 21%

Rest of Europe 24% 668 2,734

North America 17% 397 2,271

Asia 27% 660 2,442

Rest of World 52% 545 1,057

Workforce globally 25% 3,163 12,666

We issue a gender pay gap report in accordance with UK law. In 2022/23 our UK gender pay

gap was 5.6% which puts us ahead of the national average of 14.9%.

View our Gender Pay Gap Report: matthey.com/gender-pay-gap

Parental Leave

We recognise the significance to our employees of starting and supporting a growing family.

Fully encouraging, facilitating and supporting employees to take parental leave is a

fundamental part of our employee value proposition. To support employees, we maintain

aGlobal Parental Leave Standard. This standard provides a global minimum standard of

16weeks fully paid leave for new parents (including adoptive parents) who are regarded

asthe primary caregiver.

1. Including Health

2. Within JM our senior managers are defined as direct reports of the GLT. The UK Corporate Governance Code 2018 requires companies to

disclose the gender balance of senior management, which is defined in the Code as a company's executive committee and the Company

Secretary, the statistics for this are included in the GLT row above. Some individuals are included in more than one category.

Gender diversity statistics

(as at 31

March 2023)

% Female Female Male Total

Board 33% 3 6 9

Group leadership team (GLT) 25% 3 9 12

Subsidiary directors 13% 13 86 99

Senior managers

37% 31 52 83

All management levels 28% 478 1,223 1,701

New recruits 33% 748 1,496 2,244

All employees 30% 3,773 8,865 12,638

Key workforce statistics

2022/23 2021/22 2020/21

12-month average headcount 12,666 13,497 13,546

Voluntary leavers turnover rate 12.2% 11.6% 8.2%

Involuntary leavers turnover rate 10.9% 3.8% 7.5%

Total leavers turnover rate 23.1% 15.4% 15.7%

Please see Sustainability Performance Databook for more information on employee by region,

ageand gender

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Our goal: Upholding human rights and high ethical

standards

We support the principles of the Universal Declaration of Human Rights and the International

Labour Organisation (ILO) Core Conventions. We are aligned with key frameworks that define

human rights principles for businesses, including UN Guiding Principles on Business and

Human Rights and the Organisation for Economic Co-operation and Development (OECD)

Guidelines for Multinational Enterprises.

Modern Slavery Statement

We are committed to ensuring no modern slavery exists in our business and to

identify, mitigate and remediate any issues we find in our value chain. We publish our

Modern Slavery Statement annually to demonstrate our progress.

Full statement: matthey.com/modern-slavery

Ensuring high ethical standards

We are playing to win in the right way – which means holding ourselves to the highest ethical

standards in everything we do. This year, we focused on supporting a culture which goes

beyond technical legal compliance to include every employee taking accountability for

behaving ethically and making good decisions in our everyday work.

Our ethical culture is led from the top by our Board and GLT. An example of this was our

annual Ethics Week, where our CEO shared a personal example of how he handled an ethical

dilemma during his career. It was a powerful demonstration of his commitment to doing

theright thing, even in challenging circumstances. Where instances of serious misconduct

are revealed, our Board strongly supports exiting those individuals from our organisation

– no matter their level of seniority or the short-term disruption it might cause.

More than 50 sites took part in our annual Ethics Week celebrations. This year the theme

wascollaboration between senior leaders, site managers and Ethics Ambassadors to generate

People: Promoting a safe, diverse and equitable society continued

We are a signatory to the UN Global Compact

and remain committed to its principles and aims.

As part of our membership, this year we took part in

the UN’s Business & Human Rights Accelerator training

programme to build upon our internal knowledge.

We published our first UNGP Annual report to

“Comprehensive” standard in December 2022

UNGP Annual Report: matthey.com/UNGP-progress

We have the potential to positively impact billions of lives around the world. The benefits of

Johnson Matthey should not only be felt by our customers, but by everyone that comes into

contact with our business.

This year we published our first standalone human rights policy. It highlights a core group

ofrights which we believe we impact the most as an organisation and that we have the

potential to positively address. It has been reviewed by external specialists to ensure that it

meets best practice principles and has been signed off by the Board.

View our Human Rights Policy: matthey.com/human-rights-policy

Our approach to human rights considers our entire value chain – including our own

operations, suppliers and customers. We have set ourselves an ambitious commitment to

assess all of our value chain partners for human rights risks by 2030. To make that happen,

we developed a tailored human rights risk assessment framework in 2021/22 in partnership

with KPMG and which we have begun to roll out across our own operations and supply

chainthis year.

For our own operations

This process identified five high-risk countries where we have operating sites. After applying

our assessment to several sites in these countries, we are in the process of raising concerns

with local teams and putting remedial actions in place where required.

For our suppliers

We identified 100 key suppliers that accounted for 22% of our annual procurement spend

(excluding PGMs). These suppliers were assessed using our human rights risk framework and

those identified as higher risk went through enhanced due diligence using third party

services. Where required, mitigations and remedial actions have been put in place and

continued monitoring has been implemented. Key issues identified with higher-risk suppliers

have been escalated to our human rights steering group, consisting of relevant senior leaders.

Human rights awareness formed part of our annual Code of Ethics training offered to all eligible

employees. Additional, targeted awareness and training sessions on human rights and conflict

minerals were made available to our relevant staff throughout the year.

Our independent Speak Up helpline is available for anyone wishing to raise a human

rightsconcern.

See page 42 for more information on our Speak Up culture

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Our industry-leading ethical culture heatmap

This year we continued to embed the ethical culture heatmap tool we launched

in2021/22. It is enhancing the ways we can feed ethics and compliance data back

tothe business and giving us valuable oversight over our operations.

The heatmap focuses on essential ethical culture indicators. Our leaders can see how

each of our larger facilities is currently performing and address weaker metrics,

suggestive of potential ethical culture issues, more proactively.

The heatmap has been recognised by the wider business community. The Institute

ofBusiness Ethics used it as an example of what good looks like in a recent report

onethical culture.

Supporting our suppliers to improve their

ESG performance

We have been supporting one of our

strategic suppliers, who is located in a

higher risk region, and did not have any

previous engagement with EcoVadis or

other sustainability ratings agencies. As

part of our supplier partnering

programme, the supplier decided to join

EcoVadis at their own cost and

completed the assessment. The outcome

was a score two points lower than the

industry average. We are now supporting

the supplier in the development of their

policies and processes with an aim to

significantly increase their score and

achieve an EcoVadis silver medal. We

have quarterly reviews with the supplier

to monitor their progress. This is a

demonstration of how we can partner

with suppliers to improve sustainability

and drive improvements in our wider

value chain.

People: Promoting a safe, diverse and equitable society continued

real-life conversations about what doing the right thing means for employees in their roles.

Inaddition to Ethics Week, we launched monthly communications to highlight the

importance of ethics and integrity in our everyday work.

In line with our strategy we refreshed our annual Code of Ethics training to focus on our

values, ethical decision making and scenarios that are applicable to all employees. It has been

offered to 11,100 employees

and contractors during the year and 87% have completed it.

We received positive feedback from our employees.

We also run targeted training courses for our relevant managers and externally facing

employees in competition law and our anti-bribery and corruption policies.

Responsible sourcing

We are a multinational company with a global, multi-tiered supply chain. We rely on

oursuppliers to provide raw materials as well as goods and services ranging from equipment

toutilities and transport. Every year we work with thousands of suppliers and in 2022/23

wespent £3 billion with them (excl PGMs). We increased the ways we support our

suppliersglobally.

As a values-driven organisation, we work closely with our value chain to uphold human rights

and maintain the highest standards in procurement.

Our Supplier Code of Conduct sets out our expectations, and is embedded into our New

Supplier Selection Process. All new suppliers complete a self-assessment as part of our

on-boarding process. Our most important existing suppliers are assessed annually against

ourSupplier Code of Conduct using the services of sustainability rating provider EcoVadis.

During this year, suppliers accounting for 48% spend (excluding PGMs) in our portfolio have

been assessed through EcoVadis, and we plan to increase this further in the coming year.

In addition to that, we started to monitor specific KPIs in EcoVadis that help us to better

understand our supplier’s performance in human rights and health and safety as well as their

journey to net zero. To help our suppliers improve their own sustainability performance,

wehave embedded sustainability metrics into our supplier partnership programme.

Supplier Code of Conduct: matthey.com/supplier-code

EcoVadis KPIs

% procurement

spend

2022/23

% procurement

spend

2021/22

Suppliers who have current EcoVadis medal 38% 25%

Suppliers who have a good score with EcoVadis but no

medal due to adverse media in the past three years 3% 1.5%

Suppliers with current EcoVadis rating below medal-

achieving level 7% 0.2%

Suppliers without an active EcoVadis rating, have declined

to share their rating or we have not yet requested it 52% 73%

Areas of concern where risks were identified by low scores in EcoVadis

Number of supplier

risk identified

2022/23

Number of supplier

risk identified

2021/22

Environmental 14 6

Labour and Human Rights 14 6

Ethics 13 11

Sustainable Procurement 6 1

Child Labour 0 0

1. All eligible employees are offered the Code of Ethics training, subject to local laws, union agreements, long-term leave arrangements

andstart date before the cutoff period

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

During the year we have taken big steps regarding supplier diversity. Through our partnership

with Tealbook and Minority Supplier Development UK (MSDUK), we conducted a baseline

assessment of our supplier base. We have identified that 3% of our spend with suppliers is

allocated to diverse / small business, and we identified several opportunities to improve our

sourcing practices to be more inclusive as well as enhance our internal training and adoption

of the programme. We look forward to evolving this partnership with Tealbook and MSDUK

during the coming year.

This year, we also signed an agreement with Carbon Disclosure Project (CDP) Supply Chain

toengage with 500 of our most important suppliers, throughout the next financial year,

tobetter understand their carbon footprint and net zero plans.

Conflict minerals and cobalt

We have improved oversight of our conflict minerals and cobalt portfolio of suppliers – in line

with both our Conflict Minerals & Cobalt Policy and the OECD’s Due Diligence Guidance for

Responsible Supply Chains or Minerals from Conflict-Affected and High-Risk Areas.

Current global regulation defines “conflict minerals” as tin, tantalum, tungsten and gold

(3TG). This year, we voluntarily updated our existing policy and due diligence process to

include cobalt as well. We believe this puts us in a good position for future legislation that is

expected to classify this metal as a conflict mineral in years to come. To support this, we have

provided refresher training sessions to our employees, who are involved in the collection and

verification of Conflict Minerals Reporting Templates (CMRTs) and Extended Minerals

Reporting Templates (EMRTs) of the Responsible Minerals Initiative (RMI). We are actively

engaging in conversation through our supplier partnering programmes to understand greater

detail about the content of 3TGs and cobalt supplied in products to us.

Of the 3TGs, we principally buy tungsten for use in our autocatalyst products, though we

recognise we may have small amounts of the others in finished goods and refining intakes.

For calendar year 2022, we identified 79 suppliers providing 3TGs and cobalt going into our

products. All have provided us with due diligence industry standard reporting templates. Out

of the responses, seven of these suppliers did not fully meet our policy expectations (two for

3TG, three for cobalt and two for both 3TG and cobalt). Where non-compliance with our

policy has been identified, we are working with suppliers to remediate this.

Platinum group metals

Along with our customers, we work with industry associations like the International Platinum Group

Metals Association (IPA) to ensure we source our PGMs in an ethical way. We are pleased to support

members’ adoption of the Initiative for Responsible Mining Assurance (IRMA) responsible mining

standard. We recognise it is a significant undertaking to achieve full IRMA certification for mining

operations and continue to support our suppliers on this journey.

More on the IRMA responsible mining standard: matthey.com/IRMA

Our own UK and US refineries are on the London Platinum and Palladium Market’s (LPPM)

‘Good Delivery’ lists for platinum and palladium and are subject to its Responsible Platinum

and Palladium Guidance (RPPG). This standard requires us to demonstrate that we have high

ethical standards and traceability of metal in our supply chains. We are third-party audited,

byRCS Global, annually to confirm our ongoing compliance.

Annual LLP compliance: matthey.com/LPP-compliance

Forestry products

After identifying the presence of palm oil in our supply chain, we moved to ensure we only

purchase palm oil from sustainable sources, as set out in our Supplier Code of Conduct. We

are now certified members of the Roundtable on Sustainable Palm Oil (RSPO) and expect to

be audited against the RSPO Supply Chain Certification Standard by an accredited certification

body in the next financial year.

Doing business in higher-risk jurisdictions

In 2022, we ceased all new commercial sales activity in Russia and closed our Moscow office.

During 2022/23, we also put our production facility in Krasnoyarsk in dormant status.

We source a number of raw materials critical to our products from China, including PGMs,

rare earth metals and zeolites. During the year we conducted due diligence on Tier 1 raw

material suppliers with a presence in China. No major concerns have been identified. We

continue the process of reviewing the detailed due diligence and will implement mitigations

or put remedial actions in place, as required.

People: Promoting a safe, diverse and equitable society continued

Primary PGMs

Secondary PGMs

Rare earth materials

Zeolites

Ceramic substrates

Where we source strategic raw materials

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

People: Promoting a safe, diverse and equitable society continued

Background

A Speak Up alleged the

most senior manager

at one of JM’s sites tried

to retaliate against an

employee.

Findings

Upon investigation, a

series of serious

misconduct was

proven, including

threats of retaliation,

financial irregularities,

systemic bullying, and

labour rights violations.

Outcome

We separated with the

manager and

remedial measures

were put in place

regarding financial

controls and

strengthening the

ethical culture on site.

Speak Up – Retaliation by a manager

Find out more about our Speak Up process: matthey.com/speak-up

Our Speak Up culture

It is essential that our employees, customers, suppliers and other stakeholders feel they can

speak freely when they have an ethical concern. We have various channels for them to do this

including our independent Speak Up line. In 2022/23 we received 153 Speak Up reports

compared to158 in 2021/22. We see this as a positive sign that our people and other

stakeholders feel comfortable raising concerns and have faith in our process.

We analyse Speak Up metrics quarterly to identify key themes and significant trends and

share these with the Ethics Panel and relevant senior leaders. This year members of senior

management were invited to Ethics Panel meetings to address themes, trends and lessons

learned in their business to drive further business accountability.

Our Ethics Panel is chaired by our General Counsel and comprised of independent members

of the GLT and other senior leaders. It meets quarterly, oversees all Speak Ups and takes

appropriate action where necessary. The Board is updated on key Speak Up trends and the

most significant cases during Societal Value Committee meetings. See pages 80-89 for more

information.

Categories of recommendations made in Speak Up cases closed during the year are

summarised in the table opposite.

During the financial year, 14 Speak Ups relating to bribery and corruption were reported,

though in some instances multiple reports were raised about the same alleged conduct. JM

has a zero-tolerance approach to bribery and corruption, and our Ethics & Compliance team

thoroughly investigated to determine whether the allegations could be proven or whether

any recommendations should be made, as it does with all categories of Speak Ups. Even

where allegations of bribery and corruption are not proven, an assessment was made to

ensure the risk of bribery and corruption taking place in the future is properly mitigated.

During the financial year no legal cases regarding bribery and corruption were brought

against JM or its employees.

Speak Up reports 2022/23

Concern / allegation Number of cases

Bribery and corruption 14

Conflict of interest 6

Discrimination, harassment, bullying or retaliation 47

Employee rights 56

Enquiry 5

Environmental protection, product stewardship or health and safety 11

Financial crime 2

Insider trading, financial reporting and other securities violations 1

Theft or misuse of assets 6

Trade and export controls 1

Other 4

Recommendations following investigated reports in 2022/23

Recommendation (please note there could be more than one recommendation per report,

or in some cases none) Number of cases

Separation with employee 4

Verbal or written warning 3

Coaching / training 21

Communication 34

Internal review of processes 28

Update / create new standards / controls 16

Senior leadership or management actions 21

Remedy for the reporter 6

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Our goal: Investing in our communities

As a company driven by our shared purpose, we have a duty to all our stakeholders, including

our local communities. Not only do our products and services deliver significant positive

impact for society and for our customers, but we recognise the important role our people play

in communities too.

Refocusing our approach

Our reinvigorated community investment strategy builds on two core beliefs. Firstly, we

believe that science will be key in tackling many of the biggest challenges the world is facing.

That’s why we remain committed to removing the barriers that exist for young people in

accessing and staying in high-quality science, technology, engineering and mathematics

(STEM) education. We also know that building a positive legacy in the communities where

weoperate is of the highest importance to our people. So we are introducing a second strand

to our strategy: sustainable communities, which is all about our contribution to green

initiatives or other local needs.

Our volunteering and match funding efforts have had an enormous positive impact over the

many years we have been offering this support. Our new approach focuses these efforts and

resources, and aligns them behind our purpose to catalyse the net zero transition. By 2030

weaim to reach 10,000 young people, typically excluded from science, through quality

STEM-related interactions and experiences involving our employees. To get there, we’ll be

focusing on fewer, stronger, multi-year partnerships with community organisations, better

tracking and reporting on the impact of our activities, and establishing clear roadmaps for

how we will achieve our objectives.

2,063

volunteering days (+56%)

Our performance in 2022/23

A large part of our work this year has been forming our

new approach – but that doesn’t mean that there haven’t

been some great achievements too. We have been able to

react to some of the challenges people across our

communities faced in 2022/23.

The impacts of the cost-of-living crisis caused by rising inflation and energy costs have been

felt across the world. As part of our response, we donated to six organisations tackling food

poverty: The Trussell Trust, Feeding America, Stacja 6 – Fundacja, Fuel Macedonia, UNICEF

India and Action Aid. We also responded to the Turkish and Syrian earthquake disaster with

adonation to The Disaster Emergency Committee appeal and matched any employee

donations to the appeal throughout February 2023.

Our people continued to offer their time to volunteer and have a direct impact on their local

communities. This year, we recorded our strongest ever numbers of volunteering, and the

first year where volunteering activity has exceeded pre-COVID levels. We recorded 2,063 days

of volunteering overall, up 56% on the previous year, and our #JMVolunteers campaign saw

over 800 of our people come together for two focused weeks of volunteering efforts in

December 2022, across 33 sites and 14 countries.

People: Promoting a safe, diverse and equitable society continued

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

Providing shelter and support for Ukrainian refugees

Building on our support for Ukraine from

last year, over 125 Johnson Matthey

team members in Gliwice, Poland,

joined the local community to refurbish

a former school dormitory. The site can

now house up to 130 Ukrainian refugees

in a safe, community-focused space.

The team also helped to renovate a

community centre for displaced children

and turned an ice rink into a donation

redistribution centre. We donated

kitchen equipment and IKEA gave

furnishings to help the project – but

arguably the most important

contribution was the time given by our

people and other selfless volunteers.

People: Promoting a safe, diverse and equitable society continued

Community Investment summary

£’000 2022/23 2021/22 % change

Direct expenditure 594 168 254%

Indirect expenditure 479 283 69%

Total 1,073 451 138%

STEM outreach

Throughout the year we continued our focus on removing the barriers for young people

accessing quality STEM education. We have now awarded £338,000 through 19 grants as part

of our flagship Science and Me programme, building lasting local partnerships and delivering

projects including Mangorolla Community Interest Group, where we funded their ‘I’m a Scientist

Get Me Out of Here’ online STEM enrichment activity. This allowed school learners to connect to

and ask questions of a diverse range of STEM professions and engaged 2,179 learners aged

10-18 years old from schools in Detroit, US and from state schools across the UK.

Our STEM education efforts through Science and Me are on track to impact 24,000 students,

and 118 teachers by the end of this calendar year.

Moving into the next year, we will connect with local schools to widen our volunteering

efforts, boost engagement as well as tap into opportunities such as micro-volunteering, which

means offering shorter volunteering opportunities for example participating in a one-hour

STEM careers webinar.

1. For calculation methodology please see page 227

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Sustainability continued

How we engage with our external stakeholders

Business associations

Key focus of engagement on Sustainability in 2022/23

We actively participate in sustainability focused policy advocacy papers.

Active CEO engagement promoting the future of hydrogen

Promoting adoption of IRMA’s responsible mining standard and common

standards on carbon footprint of PGMs. Engaging with EU policy makers on

introduction of Euro 7 standards and the Critical Raw Materials (CRM) Act.

Active role in the Sustainability Committee, particularly focusing on position on

sustainable chemicals.

Active engagement in sustainable financing task force shaping EU’s taxonomy

and sustainable financing legislative framework.

Provided input to their information-gathering on PGMs for the CRM

Active engagement on environmental regulations promoting clean air, health

benefits and sustainable solutions in transport.

We re-joined Corporate Leaders Group in 2022 and our CEO signed their pledge

to net zero letter to UK prime minister in September.

We increased our engagement with leading organisations in the last year. Where possible, we

ensure we are aligned on sustainability priorities; when there is not full alignment we actively

participate in discussions to inform and shape policies and positions.

We joined CBI in the UK during 2022/23, but like many companies suspended our

membership in April 2023.

People: Promoting a safe, diverse and equitable society continued

Membership of global alliances

Key focus of engagement on Sustainability in 2022/23

We became a member of the World Business Council for Sustainable

Development (WBCSD) and joined their SOS1.5 project in January 2023.

We are members of UN Global Compact and we published our first UNGP Annual

report to “Comprehensive” standard in December 2022

UNGP Annual Report: matthey.com/UNGP-progress

We also joined Business & Human rights accelerator and attended UNGC Climate

Action Summit.

Having suspended our membership of the World Economic Forum,

we rejoined in 2022/23 and support their sustainability goals.

On Industry Day at COP 26 (9

November, 2021), the World Business Council for Sustainable

Development (WBCSD) and the Sustainable Markets Initiative (SMI) gathered ambitious

companies to drive growth in the demand for, and supply of, low-carbon (blue) hydrogen –

an essential part of the future net-zero energy system. Pledges were made by 28 companies

representing different sectors from mining to energy, vehicle and equipment manufacturers,

and financial services. The number of pledging companies has now increased to 35.

We were one of the original 28 pioneering companies, and the our pledge reads: “JM is

putting its science and experience at the heart of solutions that support a cost-effective

transition to a secure and environmentally sustainable energy system. By 2030, Johnson

Matthey pledges to invest c.£1billion in the research, development and deployment of clean

hydrogen technologies.”

As part of the Pledge, JM committed to provide an update annually, and we can report that

our planned investment in this area is well on track to meet the Pledge. These investments

include research, development and deployment of processes and catalysts underpinning the

production of CCS-enabled (blue) hydrogen, components for the production of renewable

electrolytic (green) hydrogen, components for hydrogen fuel cell technologies and the

optimisation of refining technologies to recycle platinum group metals from these and other

hydrogen-related applications.

Johnson Matthey | Annual Report and Accounts 2023

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Sustainability continued

Task Force on Climate-related Financial Disclosures

In this section

Introduction 45

Governance 45

Strategy 46

Risk management 51

Metrics and targets 52

Introduction

Climate change is one of the most pressing threats facing our planet today. It is affecting our

environment and poses a growing risk for people and businesses alike. We recognise that

what we do at Johnson Matthey has impacts – both positive and negative. Our products and

services help our customers to reduce greenhouse emissions and the new technologies

wearedesigning will help further accelerate the transition to a low-carbon future. But the

manufacturing and chemical processes we use have their own environmental impact,

creating greenhouse gas emissions and using water.

Our company purpose is catalysing the net zero transition. Therefore, our strategy is shaped

around the opportunities and the risks that our changing climate presents. We have set

ourselves the target of achieving net zero by 2040 with a series of challenging short-term

science-based targets (SBTs) on the 1.5

C pathway as well as an avoided GHG emissions

target for benefits to our customers for 2030 (see page 24 for a full table of targets), to

ensure we keep driving up the benefits of our products while reducing their environmental

impact.

The disclosures in this report are consistent with the TCFD recommendations.

Governance

Given the nature of our business, and how closely aligned our strategy is to a warming world,

climate-related risks and opportunities have been on the board’s agenda for many years.

Role of the Board and its committees

The Board is responsible for setting and overseeing the implementation of the group’s

strategy, including the annual budget and detailed business plans. In doing so, it considers

climate-related issues, including when approving requests for capital expenditure or new

initiatives.

As a result of our internal board effectiveness review, the responsibilities of the Board and its

committees in relation to climate-related issues and the broader sustainability agenda have

been refined and clarified during the year.

The Societal Value Committee (SVC) is a meeting of the full Johnson Matthey board that

focuses more closely on the governance of sustainability matters, including our response

toclimate change. The SVC meets four times a year, see pages 88-89 for more information

about their work in 2022/23. The SVC has been driving the development and validation

ofroadmaps to deliver on our 2030 GHG reduction targets and the integration of carbon

accounting into the company’s budgeting and capital allocation exercises, to ensure the right

resources were allocated to deliver on our objectives. Given how fast society’s response to

climate change is developing, the SVC receives papers on emerging issues related to climate

at each meeting, such as legislation and stakeholders’ expectations. During the year the

Committee has invited external experts to get an ‘outside-in’ view on climate regulation,

including Inflation Reduction Action in the US and Green Deal in Europe.

Together with the Nomination Committee, the Board ensures that, among the directors,

ithas the necessary sustainability and climate-related expertise.

For more details of our non-executive directors’ skills and experience, see pages 76-77

The Audit Committee monitors and assesses the level of assurance over TCFD and climate-

related issues and performance metrics as we continue to develop our reporting in this area.

The Audit Committee is also responsible for reviewing the effectiveness of internal control

and risk management, which includes climate-related risk.

The Remuneration Committee set two climate-related targets within the group’s Long-term

Performance Share Plan (PSP) in early 2022. Our senior leaders and directors participate

inthis PSP. This clearly reflects our intent to contribute to an acceleration of the transition

toa net zero world. The development of the sustainability roadmaps to our 2030 GHG

reduction targets were also embedded in the GLT members’ shared incentives for this year.

Role of management

The Board delegates responsibility for running the business to the Chief Executive Officer

(CEO); this includes overall responsibility for climate-related issues. The CEO is supported

bythe Chief Sustainability Officer (CSO), who chairs the Sustainability Council which is made

up of members from the GLT and the Sustainability Director who together, develop our

sustainability vision, goals and targets.

The CSO is responsible for prioritising our sustainability agenda and threading all elements

into our business, providing updates to the GLT on the steps taken to develop or implement

our sustainability strategy, including key metrics, risks, opportunities and our roadmaps to

netzero by 2040.

At a business / working level, there are work streams for advancing specific aspects of

sustainability. See our governance structure for climate-related issues for more details.

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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Coordination and transparency

between Businesses and Functions and

Sustainability team

Representation for sustainability topics

in parallel board committees – e.g.

Audit, Nomination and Remuneration

Sustainability leads by business

and function

Governance structure for climate-related issues

Strategy

Our business strategy is based on our purpose of catalysing the net zero transition for our

customers through enabling the necessary transitions in transport, energy, industry and the

circular economy. Climate change offers us many business growth opportunities through our

products and services, as well as some risks. The pace at which the world will adapt to the

impacts of climate change is uncertain. So that we properly understand and are resilient

tothese uncertainties we maintain climate-change scenarios to frame the ambiguities

in our long-term business strategy of an increasingly volatile and complex environment.

Climate scenarios for evaluating transition risks and opportunities

Our climate scenarios are used by all of our businesses as a common basis for planning,

forecasting and stress testing their strategy and assumptions on growth. These scenarios,

which project the impact of climate change on our operational and commercial performance,

are essential in informing our strategic decisions, such as how we invest in R&D and assets,

orwhich new products to develop. We also use climate scenarios to consider the resilience

tochanging weather patterns of our own operations, those of our strategic suppliers and our

core supply routes.

Our three transition scenarios represent three global temperature rise pathways.

• Rapid transition scenario (aligned to 1.5

C) – net zero achieved globally by 2050, in line

with the goal of the Paris Agreement to limit the world’s temperature rise to well below

C. This reflects swift and decisive action regarding policy interventions and

decarbonisation commitments.

• Pragmatic evolution scenario (aligned to 2

C) – net zero achieved globally by 2080, which

reflects a step-up in policy interventions and decarbonisation commitments compared with

today, but not as decisive as under the rapid transition scenario.

• Slow transition scenario (aligned to 3

C) – net zero not achieved by 2100, reflecting

aglobal lack of urgency on climate change with limited policy or legislative interventions.

We developed our climate scenarios internally, with support from an external expert,

reflecting the latest available research from the International Energy Agency (IEA). The IEA

research we used included three scenarios: the Net Zero Emissions Scenario, the Announced

Pledges Scenario, and the Stated Policies Scenario. Our methodology breaks down the

different energy sources (electricity, hydrogen, gas, coal, oil, renewables, biomass and others)

Board level

Level Committee / forum Attendees Frequency Objectives

GLT level

Business /

Working level

• Sustainability Director

• Operations and Commercial

sustainability leads

• Sustainability initiative owners

from global functions

Sustainability

work streams

• Build and agree roadmaps to targets

• Ensure delivery of roadmaps

• Discuss new and emerging topics

• Ensure customer needs on sustainability are

proactively met

Bimonthly

• Chaired by CSO

• GLT members

• Sustainability Director

Sustainability

Council

• Driving broader sustainability

• Decide on adjustments to the sustainability

programme and strategy

• Monitor sustainability targets

• Other ad hoc topics

Quarterly

• CEO – responsible overall

for climate-related issues

• CSO

• Other GLT members

GLT

• Agree and formally approve global sustainability

strategy and goals

• Monitor roadmaps and ensure resources in place

to deliver strategy and targets

Monthly (CSO updates

as required)

• Full board

• CSO

• External experts

• Formal board governance committee

on Sustainability

• Gives direction and oversight of ESG strategy,

goals, performance

4 times a year

Societal Value

Committee

Johnson Matthey | Annual Report and Accounts 2023

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Task Force on Climate-related Financial Disclosures continued

and considers forecasts for each source by demand type: transport, buildings, industry, power

and heat. We developed in-house forecasts for specific source / demand combinations close

toour areas of expertise in automotive, chemicals, hydrogen and other industries, while

ensuring that, at a macro level, we remained within IEA’s forecasts.

We update our scenarios annually to reflect changes in external drivers, incorporating

thelatest from internationally recognised sources alongside our own forecasts. Our updates

inthelast year point towards an acceleration in demand for low-carbon hydrogen.

We model scenarios up to 2100 (see chart below), but look at shorter-term horizons,

specifically 2030 and 2040, to inform our strategic and operational decisions. The table below

details the main qualitative and quantitative assumptions we used for our 2040 scenarios.

Weuse the pragmatic evolution scenario as our base case for our strategic planning.

Market Sector Metric (2040) Unit Rapid transition Pragmatic evolution Slow transition

Global Total primary energy demand Exajoules (EJ) 500-550 600-650 700-750

Renewables supply (excluding use of biomass) % of total energy supply c. 55% c. 35% c. 25%

Automotive Global sales of zero-emissions vehicles % of total automotive sales c. 90% c. 70% c. 40%

Global sales of fuel cell electric vehicles % of total automotive sales c. 20% c. 15% c. 10%

Hydrogen Global hydrogen production Mt p.a 350-400 200-250 150-200

Total anthropogenic emissions (GtCO

/yr)

Pragmatic evolutionSlow transition Rapid transition

-10

2020

2100

2060 2065 2070

2075 2080 2085 2090 2095

2050 205520452040203520302025

Climate scenarios for evaluating physical risks

Changing weather patterns as the climate warms may result in physical risks to our assets and

supply chains. We have evaluated the exposure of all our assets and those of our strategic

suppliers to these risks.

We used the Shared Socio-economic Pathways (SSPs), the latest climate change modelling

scenarios from the Intergovernmental Panel on Climate Change (IPCC). The SSPs produce

forward-looking climate data by running climate models driven by assumptions about future

global GHG emissions, together with plausible future socio-economic development metrics

(economic growth / GDP, demographics, land use and urbanisation), and incorporating the

likely implementation of adaptation and mitigation measures.

We looked at three SSPs for the locations of all our own operations and those of our strategic

suppliers. We considered four time horizons – 2020 (our baseline), 2030, 2040 and 2050

toidentify the top hazards and how they are likely to change.

Scenario Assumed temperature increase (relative to 1850-1900)

SSP 1-2.6 Best estimate of 1.7

C warming by 2041-2060, and 1.8

C by 2081-2100

SSP 2-4.5 Best estimate of 2.0

C warming by 2041-2060, and 2.7

C by 2081-2100

SSP 5-8.5 Best estimate of 2.4

C warming by 2041-2060, and 4.4

C by 2081-2100

SSP 5-8.5 is an extreme scenario that is unlikely to arise, but it is useful for stress testing.

Weuse it to test the resilience of our most important sites.

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Task Force on Climate-related Financial Disclosures continued

Through our scenario work, we identified three distinct potential climate-related impacts, which represent both risks and opportunities for our business. We have added the first climate impact risk

to our principal risks because it is of strategic importance to our business (see page 62).

We use our climate scenarios to evaluate these risks and opportunities in the short (0–3 years), medium (3–10 years) and long term (10+ years), in line with our usual business planning

timescales. We believe the pragmatic evolution climate scenario is most likely to occur, so have used it as the base case for assessing our transition impacts, and the other two scenarios to stress

test the sensitivity and resilience of our business plans.

Primary driver

ofimpact

Opportunities

(with time horizons)

Risks

(with time horizons)

Management

of impacts

Financial impacts

(aftermanagement)

KPIs to

monitor impacts

1. Changing customer demand for our products due to climate awareness

Regulation

• Tightening GHG

emissions standards

for vehicles.

• Government

incentives or

taxation for energy

production or use

based on carbon

footprint (e.g. IRA

and ETS).

• Requirements for

use of bio-based

feedstocks.

Markets

• Shifts in customer

preferences.

Opportunities for new products in the

medium and long term:

• Sales of products & services

torapidly growing low-carbon

hydrogen generation sector

• Products for hydrogen-powered

vehicles (FCEV & ICE) and

sustainable aviation fuels

• Low-carbon solutions for the

chemicals industry

• Increasing regulations and the

introduction of carbon taxes will

accelerate growth in our new

target markets – sustainable

chemicals, sustainable fuels and

clean energy (medium term)

• Sustained sales of existing products

for internal combustion engine

vehicles as tighter GHG emissions

standards (Euro 7) demand

state-of-the-art technology for

exhaust pipe catalysts (medium

term).

Without adaptation of our

portfolio, there is a

long-term risk that we may

not have a financially viable

future business model as

society transitions away

from fossilfuels.

• Ability to invest and

scale up rapidly to

manufacture new

products for new markets

(short/medium term).

• Uncertainty in the rate of

market evolution from

existing to new

technology options and

penetration of hydrogen

technologies affecting

profitability (medium/

long term).

• Reduced demand for

existing autocatalyst

products for ICE vehicles

(longterm).

We focus on managing our existing businesses

effectively, while pivoting away from fossil

fuels-based industries to ones based on clean

hydrogen, sustainable chemicals and bio-based fuels.

• We are closely monitoring the changing market

environment drivers including evolving

government policy on hydrogen, emissions

standards, carbon taxation and incentives such

asIRA.

• Updating our climate scenarios at least once a year

to inform our strategic decisions.

• For our growth businesses we are investing in new

production assets, forming long-term upstream

and downstream strategic partnerships to enable

us to play to our strengths to accelerate growth and

maintain capital expenditure in line with market

expectations e.g PlugPower & Fulcrum.

• For our maturing businesses, we have a plan to

reduce our cost base to improve efficiency and

cash flow.

• Divesting businesses not core to our growth

strategy to simplify & focus.

• We keep investing in innovation to make sure

we have products that differentiate us in all

ourmarkets.

Growth

Accelerating profit growth

coming from businesses

related to the net zero

transition.

Clean Air remains on track

todeliver our cash generation

target of at least £4 billion

by2030/31 in base case

scenario.

Investments and Costs

c. £0.4 billion of cumulative

capital expenditures

dedicated to businesses

related to the net zero

transition in 3 years

2022/23-2024/25.

Progress towards our 2030

sustainability targets for

products and services:

• Tonnes of GHGs avoided

by customers using our

products

• % Revenue and R&D and

revenues aligned with

SDG7 and SDG13

• Economic activity aligned

with EU taxonomy

regulation – climate

delegated act.

Our climate-related transition risks and opportunities

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force on Climate-related Financial Disclosures continued

Primary driver

ofimpact

Opportunities

(with time horizons)

Risks

(with time horizons)

Management

of impacts

Financial impacts

(aftermanagement)

KPIs to

monitor impacts

2. Increasing demand for low-carbon manufacturing

Markets

• Shift in customer

preferences towards

products with a

low-carbon footprint.

Regulation

• Carbon taxation

mechanisms in

countries of operation

e.g. ETS.

• Emerging rules

onrecycled content

of consumer goods

andthe need for

companies to declare

the carbon footprint

oftheirproducts.

 • Commercial advantage if

weadapt our manufacturing

plants to low-carbon

operation faster than our

competitors (short/medium

term).

• Save future carbon taxation

costs, which will reduce

operating costs and give us

price advantage as schemes

become more widespread

and expensive (short/

medium term).

• As the world’s largest

recycler of secondary PGMs,

we could benefit from

theincreased demand

forgoods with low-carbon

and/or recycled critical

rawmaterial content

(short/medium term).

Medium-term risk that we cannot transition

our operations for net zero at the correct

pace to meet customer demand of

low-carbonproducts.

• Loss of customers and failure to attract new

customers due to reputational damage if we

do not transition fast enough to cleaner

energy solutions in our operations (medium/

long term).

• Greater capital required to upgrade our

assets and site infrastructure to transition to

low-carbon manufacturing (medium term).

• Inability to access the alternative renewable

energy sources needed to reduce natural gas

use in our operations (medium/long term).

• Loss of competitive advantage due to

increased costs to us and our suppliers of

goods and logistics due to carbon taxation

on raw materials and fossil-fuel derived

energy (medium term).

• We have set challenging 2030 GHG

reduction targets in line with the 1.5⁰C

pathway and published roadmaps to

decarbonise our manufacturing operations.

• We use an internal carbon price for our

capital investment decisions and the Board

consider sustainability reviews of all

investment decisions £5million and above to

help us make the right choices for

decarbonising our operations for net zero in

thelong term.

• We review global carbon pricing trends

annually and have embedded carbon price

forecasts into our three- and ten-year

planningcycles.

• Monitor trends in customer requests for

product carbon footprint, Life-Cycle analysis

(LCA) and recycling information.

Exposure to direct

carbon taxation on our

manufacturing

operation is not forecast

to be material

in our 3 year viability

period, see page 70.

Progress towards our

2030 sustainability

targets for products

andservices:

• Scope 1, 2 and 3 GHG

emissions

• % recycled PGM

content in our

products

• Number of customer

requests for

low-carbon and

recycled content

inproducts

• Current and forecast

direct exposure

tocarbon taxation

in2030 for our

operations.

3. Increasing stakeholder expectations of corporate climate policy and performance

Reputation

• Increased concerns or

negative feedback from

stakeholders.

Legal

• Exposure to litigation.

• Developing and delivering

robust climate policy will

increase our long-term

business resilience,

attracting shareholders

andemployees aligned

withourvalues.

• Delivering our net zero

commitment and science-

based targets will help us

demonstrate sustainability

leadership, and increase our

profile with new customers

and shareholders.

• Investors, employees and wider society are

scrutinising companies’ sustainability

commitments ever more closely. Failing to

meet their expectations could damage our

reputation, losing us customers, making it

difficult to attract and retain staff, and

ultimately increasing the risk of shareholder

action (medium/long term).

• Our climate policy, net zero ambitions

andsustainability targets do not keep

upwith stakeholder expectations.

• Our plans for meeting these commitments

are not deemed sufficiently detailed

orcredible.

• We fail to meet these commitments.

We continue to monitor and manage the

expectations of our stakeholders as follows:

• SVC and Sustainability Council monitor our

governance of climate- related issues at

every meeting.

• Close monitoring of the latest case law and

developments in climate litigation.

• Developing and monitoring net zero

roadmaps to 2040.

• This year we have increased the ambition in

our Scope1,2 & 3 targets to be in line with

1.5°C pathway and SBTi Net Zero standard.

• Maintaining regular dialogue with investors.

• Market scanning and benchmarking

oftargets to ensure our climate-related

polices and commitments meet the

highestexpectations.

Reputational risk is not

easilyquantified.

How we score on

leading ESGplatforms:

• CDP Investor score

• DJSI, Sustainalytics

and MSCI

climatescores

• Progress towards

our2030

sustainability targets

for GHG emissions.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force on Climate-related Financial Disclosures continued

Our climate-related physical risks and opportunities

Changing weather patterns as the climate warms may result in physical risks to our assets and supply chains. They could damage our sites and disrupt production, leading to loss of sales and

increased costs, as well as posing risks to our employees. They could also hamper our access to strategic raw materials through supply chain disruption, either at our suppliers’ sites or in transit.

These physical risks can be grouped into two categories:

• Acute, which are extreme events such as tropical cyclones, thunderstorms, severe flooding events, droughts, heatwaves and wildfires.

• Chronic, which are gradual changes like rising sea levels that damage coastal property, or sustained changes to temperature and rainfall.

Primary driver of

impact

Opportunities

(with time horizons)

Risks

(with time horizons)

Management

of impacts

Financial impacts

(after management)

KPIs to

monitor impacts

4. Disruption to our operations resulting in damage to or loss of assets, increased costs and harm to our employees.

Physical risks

(acute and chronic).

Increased frequency,

severity and variability of

extreme weather events

and natural disasters.

Competitive advantage

by improving our business

resilience and controls

through diligent climate-

related screening of assets,

and integration with business

continuity plans

(mediumterm).

Damage to our key sites, equipment or

stock from severe weather (wind, rain

and drought) if any increased risk is not

effectively mitigated, leading to

disruption of supply to our customers

(medium term).

Insurance of our sites could become

inadequate or more expensive if a site

is at very high risk of weather-related

disruption (medium term).

Increased employee EHS incidents if

sites not adapted to increased risk of

heat wave.

Our ten most important manufacturing sites

identified as being located in areas with

increasing risk from high rainfall are

undergoing deep-dive assessments of their

resilience and implementing mitigation as

required, please see case study on page 51.

Integration of weather-related risks in business

continuity plans and follow-up action plans.

Climate change assessment considered

as part of due diligence for new investments

forgrowth.

We use the WRI tool to monitor where clean

water availability could be at risk in the

long-term, see page 46.

We regularly review the type and limit

ofinsurance available for climate risks to

ourportfolio.

High level analysis of our ten

most critical locations shows

that there is no material

financial impact from climate

change risks on the

quantifiable hazards (flood

and windstorm in the

medium term).

Proportion of physical asset

value exposed to a climate

change related high or very

high hazard levels by 2030:

Number of sites in

water-stressed areas.

Amount of water consumed

in areas or high or extremely

high baseline water stress.

5. Disruption to our supply chain (upstream and downstream) hampering our access to strategic raw materials (including metals) and products, and increasing costs.

Physical risks

(acute and chronic).

Increased frequency,

severity and variability of

extreme weather events

and natural disasters.

Engaging with our suppliers to

help them manage climate

risks to their sites could

enhance our relationships

with them and save us money

(medium term).

Increase in business resilience

through more diligent and

frequent screening of our

suppliers’ assets (e.g. through

integration with business

continuity plans)

(mediumterm)

Disruption of supply of key raw

materials risks our ability to deliver

goods on time to customers, resulting

in loss of sales and future business

and damage to our reputation

(medium term).

Insurance cover of suppliers is

inadequate, and uncertainty over

the future level of increased risk

responsibility that will be assumed by

suppliers and / or JM relating to climate

risks, or if physical risks should be

transferred (medium term, three to

tenyears).

Climate risk is integrated into our principal risk

management structure and Supplier

Partnering framework (SRM). We undertake

quarterly reviews of the risks identified,

supplier remediation plans and alignment

withcompany and category strategies.

We work with strategic suppliers to integrate

specific climate mitigating actions where high

risks are identified to improve their resilience

or we switch to alternative partners for

high-risk delivery routes (short /

mediumterm).

We ensure that the type and limit of

our suppliers’ insurance is in line with

our own risks and external obligations

(medium term).

We continue to develop a diversified supply

portfolio, with emphasis on dual sourcing

atsupplier and site levels.

No issues identified in the

lastyear.

 Number of weather-related

supply chain disruptions.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force on Climate-related Financial Disclosures continued

Risk management

All our climate-related risks are subject to our global enterprise risk management process,

which provides a systematic approach of understanding, evaluating and addressing all

identified risks (see page 62 for more information).

Identifying climate-related risks

Over the last year we continued to review and evaluate our climate-related risks against

industry best practice, peer benchmarking and risks identified by business leads and subject

matter experts as well as new and emerging risks.

We believe our climate-risks are in line with industry and legislative expectations. During the

year, we have not identified any new climate-related risks but we have combined two risks

which were previously reported separately as we recognised they were strongly

interconnected with both being influenced by pricing and carbon markets.

Assessing those risks

Our enterprise risk framework provides the tools and guidance to our businesses on how

toassess all risk types. The framework allows the comparison of risks using the metrics

oflikelihood, time horizon and financial impact to determine most material risks to our

business.

During the year climate risks have been approached with renewed focus through evaluating

potential impact and velocity – immediacy of impact. Use of this extra metric has allowed the

determination of which climate risks pose most immediate material impact to our operations.

This evolution from a reactive to a proactive strategic approach is essential for maturing our

assessment and integration of climate risk mitigation into our business strategy.

We also use external third parties to evaluate physical climate risks at our locations and those

of our suppliers. Following on from our assessment in 2021, in 2022 we began to carry out

detailed site resilience assessments on our top ten highest risk manufacturing locations.

Wewill continue this throughout 2023 to determine the requirements for areas we need

tofocus on in the short, medium and long term.

Integrating those risks

Through our enterprise risk framework, climate-related risks and opportunities are integrated

into our strategic decision making. Climate change considerations are part of how we

operate, and climate is included in our bottom-up operational risk management process,

providing a clear view of climate-related risks across the organisation.

Managing those risks

The Sustainability Council oversees our sustainability strategy, including managing our

climate-related risks. These risks may have a direct or indirect impact on our principal risks

and are therefore managed alongside and integrated within our principal risk process.

To drive consistency, each of our climate risks has been assigned a risk owner and sponsor as

per our principal risk approach. These individuals are senior stakeholders who are accountable

for reviewing, monitoring and assessing the magnitude of the risk as well as overseeing the

implementation of appropriate mitigations.

All of our principal risks are reviewed formally, twice a year, by the GLT and the Board.

In the coming year, we aim to develop detailed mitigation plans for each identified climate

risk with distinct intermediarygoals.

For more information on our risk management approach, please see pages 62-69

Preparing for weather-related issues at our sites

Last year, we completed a global review

of our assets to assess the degree of

exposure to physical climate risks and

identify the high-risk sites. This year, we

selected one of those high-risk sites, in

the UK, and worked with a 3

party to

conduct a more detailed climate change

risk assessment. The assessment covered

the site, buildings and processes, and

assessed the likely impact from climate

change now and in future years. The

climate risk assessment identified several

climate hazards, and a total of 31 risks.

The highest risks were associated with

surface-water flooding and damage

from high winds. Several measures for

adaption and mitigation have since been

implemented at the site, which address

those high-priority risks, and the

lower- priority risk actions have been

incorporated into the ongoing site

maintenance plans. Further rollout

of these climate change risk assessments

will be planned at strategic sites

this year.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force on Climate-related Financial Disclosures continued

Metrics and targets

The metrics and targets we use to help us manage our climate risks and opportunities effectively are shown below. They were identified in climate-impact tables on pages 48-50 and their values

are summarised here. Our Scope 1, 2 and 3 GHG emissions targets have been submitted to the Science-based Targets initiative for independent verification that they are consistent with the UN

Paris agreement on climate change’s 1.5°C pathway, and a full breakdown of performance in all categories over the last four years can be found on page 28.

Metric description Climate-

related risk

Target type Baseline year Baseline value 2030 target 2022/23

progress

More on page

Tonnes GHGs avoided by customers when using our technologies

1 Absolute 2020/21 200,932

50 million 848,643 25

% sales aligned with SDG7 and SDG13 1 Intensity 2020/21 6.1% No target 8% 22

% R&D spend aligned with SDG7 and SDG13 1 Intensity 2020/21 22.3% No target 19.2% 22

Total Scope 1 and Scope 2 GHG emissions (market-based) (tonnes CO

2,3 Absolute 2019/20 417,818

242,334 363,686 25

Scope 3 GHG purchased goods and services (tonnes CO

e) 2,3 Absolute 2019/20 3,433,660

1,991,523 2,495,475 25

% recycled PGM content in our products 2 Intensity 2021/22 70.1% 75% 69.2% 29

Potential exposure to carbon taxation in 2030 2 Intensity 2021/22 not disclosed no target not disclosed 70

CDP climate score 3 Absolute 2019/20 B A B 23

% physical asset value exposed to high weather-related hazard by 2030 4 Intensity 2020/21 35% no target 35% 50

Water consumed in regions of high baseline water stress (m

) 4 Absolute 2020/21 406,037

no target 399,174 30

Number of supply chain disruptions due to severe weather 5 Absolute 2020/21 not disclosed 0 0 50

1. Metrics are linked to long-term Performance Share Plan (PSP) for senior directors

2. Rebaselined to remove divested businesses, please see page 222 for more information

Internal carbon pricing (ICP)

Last year, we introduced a shadow carbon price to our capital investment business case

assessment process, as recommended by the Bank of England. The intention is that this will

incentivise us to reach net zero by ensuring all investments are made in the context of a

low-carbon world where the price of carbon is higher than it is today. Although the ICP is not

a real cost of the investment, it demonstrates what the impact would be of carbon taxation

forecast for 2030 and beyond, and we use it to evaluate and compare potential investments.

We have implemented the ICP for Scope 1 and 2 emissions for the asset when operational.

The intention is to extend this to Scope 3 (raw material and supply chain impacts emissions)

in the future. We chose not to apply ICP to emissions related to the development of the

project itself, such as equipment manufacture, or to construction-related emissions, since

such emissions are both short term and generally minor in relation to the overall life of the

asset. The price applied in 2022/23 was £100/tonnes CO

e, with sensitivity analysis conducted

at £50/tonnes CO

e and £150/tonnes CO

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Task Force on Climate-related Financial Disclosures continued

Chief Financial Officer’s review

Despite challenging markets, we have made steady

progress in implementing our new strategy – doing

exactly what we set out to do and starting to win back

the trust of stakeholders.

Executing with discipline

During this year, I have spent a lot of time speaking with our internal and external

stakeholders, and the message is clear. They see the pathway for strong ongoing cash

generation from our mature businesses, as well as the exciting potential of our growth

opportunities in hydrogen and catalyst technologies, all underpinned by our leading

technology. But they have also been repeatedly disappointed by our performance and

investment decisions in recent years and want to know why it will be different this time.

So, 2022/23, with our new leadership team, has been about doing what we said we would

doat the start of the year. We have achieved the key milestones we set for this year, and

ourstrategic scorecard is in good shape. This is an important part of showing ourselves,

ourinvestors and other stakeholders that we not only have market-leading technology and

expertise – but we are positioned for long-term value creation too. While still early days in

executing our strategy, I am encouraged by the progress that has been made to date and

more convinced than ever that we have set the right path to growth for Johnson Matthey.

We have continued to simplify our portfolio during the year, announcing the sale of Piezo

Products and the Diagnostics Services business. We are on track on our remaining

divestments. Simplifying the business removes complexity and allows us to focus on our core

strengths and the engines of growth within the business.

Internally, our cost-reduction programme is making inroads by simplifying, standardising and

getting greater value from our back-office functions. We have delivered c. £45 million in cost

savings this year and will further accelerate our efforts on this front in the coming years

tomore than deliver our £150 million savings target.

Our transformation, including the simplification of the portfolio and streamlining of

processes, is further building a strong platform for growth. As Liam has noted, our growth

opportunities are even greater than initially anticipated and they are approaching fast.

Tocapture these opportunities we need to invest, and we will do so in a disciplined way,

focusing on returns and keeping capex under control. I’m pleased to see the progress

wehavemade with our large projects on time and on budget. And of course, we are focused

oninvesting behind customer demand, which gives us more confidence in the returns from

these investments.

It is particularly encouraging that we were able to make so much headway towards our

strategic objectives despite a challenging macroeconomic backdrop and difficult operating

environment. This is testament to the dedication and hard work of the team at JM, and that

we see encouraging signs that our efforts are paying off.

Navigating economic headwinds

JM’s underlying operating profit was £465 million, down 21% from 2021/22 as we were

impacted by lower auto production, higher inflation and lower platinum group metal prices.

As expected, we saw a stronger second half of the year with operating profit down 12%

asweincreased prices and saw the benefits of our efficiency programmes. Our balance sheet

remains strong: net debt to EBITDA was 1.6x, towards the bottom of our stated range,

whilefree cash flow was £74 million. We delivered c. £45 million in efficiency savings during

the year, well on the way to achieving our target of £150 million annualised savings by end

2024/25. Our capital projects programme is also on track in terms of the amount invested,

expected returns and timing of execution.

We acted quickly to get costs down when the war in Ukraine disrupted supply chains and

added to significant inflation. But inflation has impacted a range of inputs to our operations,

including energy. Importantly, we did not allow the short-term impacts to deter us from

making strategic investments to position JM for long-term growth. These investments are

incredibly important as many future opportunities will rely on the expanded capacity we are

currently building.

Platinum group metal prices were volatile during 2022/23 and lower on average than the

prior year. The PGMS business also saw lower volumes of automotive scrap, which impacted

the performance of our refining business. This was partially offset by efficiency savings made

during the year. Meanwhile, we continued to invest in updating our infrastructure assets

andexpanding our capacity.

Catalyst Technologies is making good progress towards its goal of winning large-scale

projects, with five added to its portfolio during the year. Higher prices, improved mix and cost

savings offset cost inflation and the impact of the loss of business in Russia. Investment

continued, however, with the capacity expansion project at our facility in Perstorp, Sweden,

proceeding to plan.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The Hydrogen Technologies business was insulated from some of the market headwinds that

impacted our other businesses, with sales more than doubling over the course of 2022/23 to

reach £55 million. The business is benefiting from rapid growth in interest in hydrogen fuel

cells and clean hydrogen production, and we announced a large-scale partnership with

PlugPower, which will see us jointly build a significant new facility in the US. HT is already

investing to expand its capacity in the UK, with our new major site in Royston in the UK due

to complete construction in 2023/24.

While Clean Air’s results were below the prior year impacted by lower auto and truck

production and significant cost inflation, we underpinned the longer-term future of that

business with some key business wins. Notably, we won all of Mercedes-Benz’s light duty

diesel business in Europe. Looking ahead, the Euro 7 proposals and updated US EPA

legislation are expected to act as tailwinds for the business. Clean Air increased sales during

2022/23 to £2.6 billion and the business is on track to achieve its target of more than

£4 billion of cash in the decade to 2030/31, having delivered cumulative cashflow of

£1.4 billion to date.

In the year, we completed the sale of Piezo Products while the sale of Diagnostic Services

isexpected to complete in the third quarter of calendar 2023. These represent good progress

against our strategic milestone of divesting our Value Businesses by the end of 2023/24

andgenerating at least £300 million in proceeds.

Strengthening our commercial muscle

We have made encouraging progress in bringing greater commerciality into the business.

This has included reinvigorating the incentive programme for our sales teams and sharpening

our focus on pricing discipline. The fruits of these efforts can be seen in the results for the

second half of the year, not least in the increasing recovery of significant cost inflation – such

that by the end of the year we had recovered £95 million, of inflation through increased pricing.

The actions we have already taken as part of the transformation programme have laid strong

foundations. This is only the beginning of the process, and there is much more work to be

done to drive efficiency, remove complexity and further reduce costs. To become a more

commercially minded and customer-focused business, we will remain focused on disciplined

execution of our strategy and pursuing our purpose of catalysing the net zero transition

forour customers.

A bright future ahead

The significant customer wins during 2022/23 are testament to the size of the opportunity

ahead for JM. They are also confirmation that our strategy is focused on the right areas.

Withunprecedented interest (and growing urgency) around the energy transition,

themarket is well and truly moving towards JM.

It is a great position to be in, but one that we need to be prepared for. We will continue

toexecute our strategy, cautiously increasing the scale and the pace of our ambition while at

the same time driving the transformation of the business for growth and increased profitability.

I can honestly say I am more excited now about the prospects for JM than at any time since

Ijoined two years ago. As we emerge from a difficult economic environment in stronger

shape, I’m confident a much brighter future is within our reach, and as we help the world

build a more sustainable future.

Finally, I would like to say thank you to our teams for the hard work and dedication they have

again shown this year. The transformation of our company is beginning to bear fruit which

isa testament to their focus and commitment.

Stephen Oxley

Chief Financial Officer

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Chief Financial Officer’s review continued

Financial performance review

Reported results Underlying results (continuing)¹

Year ended 31

March Year ended 31

March

% change,

constant FX rates2023 2022 % change 2023 2022 % change

Revenue £m 14,933 16,025 -7

Sales excluding precious metals³ £m 4,201 3,778 +11 +6

Operating profit £m 406 255 +59 465 553 -16 -21

Profit before tax (continuing) £m 344 195 +76 404 493 -18

Profit after tax (continuing) £m 264 116 n/a 326 407 -20

Basic earnings per share (continuing) pence 144.2 30.9 n/a 178.6 213.2 -16

Ordinary dividend per share pence 77.0 77.0 -

Underlying performance – continuing operations

1,2

• Sales of £4.2 billion, up 6%, with higher prices to partially recover cost inflation, partly

offset by lower average PGM prices

• Underlying operating profit of £465 million, down 21%. Almost half was due to lower

average PGM prices with the remainder largely due to cost inflation and lower volumes

inPGM Services and Clean Air. This was partly offset by transformation benefits

• Underlying earnings per share of 178.6p, down 16% due to lower underlying

operatingprofit

• Free cash flow of £74 million, compared to £221 million in the prior year largely reflecting

lower underlying operating profit and working capital movements

• Strong balance sheet with net debt of £1.0 billion; net debt to EBITDA of 1.6 times

Notes:

1. Underlying is before profit or loss on disposal of businesses, gain or loss on significant legal proceedings together with associated legal costs, amortisation of acquired intangibles, share of profits or losses from non-strategic equity investments, major impairment and restructuring

chargesand, where relevant, related tax effects. For definitions and reconciliations of other non-GAAP measures, see pages 206-209

2. Unless otherwise stated, sales and operating profit commentary refers to performance at constant exchange rates. Growth at constant rates excludes the translation impact of foreign exchange movements, with 2021/22 results converted at 2022/23 average rates. In 2022/23,

thetranslational impact of exchange rates on group sales and underlying operating profit was a benefit of £193 million and £38 million respectively

3. Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers

Reported results

• Revenue down 7%, driven by lower average PGM prices

• Operating profit of £406 million, up materially, largely due to the absence of a one-off

impairment in the prior period relating to Battery Materials

• Profit before tax (continuing) of £344 million, compared to £195 million in the prior

period, reflecting higher operating profit due to the absence of the Battery Materials

impairment

• Reported earnings per share (continuing) of 144.2 pence

• Cash inflow from operating activities of £291 million (2021/22: £605 million)

• Ordinary dividend of 77.0 pence per share stable year-on-year

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Summary of underlying operating results from

continuing operations

Unless otherwise stated, commentary refers to performance at constant rates¹. Percentage

changes in the tables are calculated on rounded numbers.

Sales

(£ million)

Year ended 31

March

% change

% change,

constant FX rates2023 2022²

Clean Air 2,644 2,457 +8 +2

PGM Services 570 587 -3 -8

Catalyst Technologies 560 454 +23 +17

Hydrogen Technologies 55 25 +120 +112

Value Businesses³

⁴ 470 354 +33 +28

Eliminations (98) (99)

Sales (continuing) 4,201 3,778 +11 +6

Underlying operating profit

(£ million)

Year ended 31

March

% change

% change,

constant FX rates2023 2022²

Clean Air 230 302 -24 -28

PGM Services 257 308 -17 -21

Catalyst Technologies 51 50 +2 -2

Hydrogen Technologies (45) (33) n/a n/a

Value Businesses³

⁵ 40 12 n/a n/a

Corporate (68) (86)

Underlying operating profit (continuing) 465 553 -16 -21

Reconciliation of underlying operating profit to operating profit

(£ million)

Year ended 31

March

2023 2022²

Underlying operating profit (continuing) 465 553

Profit on disposal of businesses

12 106

Major impairment and restructuring charges

(41) (440)

Amortisation of acquired intangibles (5) (6)

Gains and losses on significant legal proceedings

⁶

(25) 42

Operating profit (continuing) 406 255

Notes:

1. Growth at constant rates excludes the translation impact of foreign exchange movements, with 2021/22 results converted at 2022/23

average rates. In 2022/23, the translational impact of exchange rates on group sales and underlying operating profit was a benefit of

£193 million and £38 million respectively

2. 2021/22 is restated to reflect the group’s new reporting structure

3. Includes Battery Systems, Medical Device Components, Diagnostic Services, Battery Materials and Advanced Glass Technologies

4. Sales relating to divestments: Advanced Glass Technologies (2021/22: £62 million, 2022/23: nil) and Battery Materials

(2021/22: £12 million, 2022/23: £21 million)

5. Operating profit or loss related to divestments: Advanced Glass Technologies (2021/22: £16 million,

2022/23: -£1 million) and Battery Materials (2021/22: -£22 million, 2022/23: £3 million)

6. For further detail on these items please see page 168

Full year operating results by sector

Clean Air

Improved sequential performance supported by increased inflation recovery

• Sales up 2% supported by pricing as we partially recovered higher input costs

• Underlying operating profit decreased 28% impacted by cost inflation, product mix and

lower volumes

• Margins saw an improvement during the second half resulting from increased inflation

recovery and benefits from our transformation programme

• On track to deliver at least £4 billion of cash in the decade to 2030/31, having delivered

£1.4 billion since 2020/21 at actual precious metal prices

Year ended 31

March

% change

% change,

constant FX

rates

2023

£ million

2022

£ million

Sales

Light duty diesel 1,075 1,005 +7 +4

Light duty gasoline 599 574 +4 -1

Heavy duty diesel 970 878 +10 +3

Total sales 2,644 2,457 +8 +2

Underlying operating profit 230 302 -24 -28

Underlying margin 8.7% 12.3%

Reported operating profit 191 273

Clean Air provides catalysts for emission control after-treatment systems used in light and

heavy duty vehicles powered by internal combustion engines.

Sales during the period were up 2%. Vehicle production was impacted by a challenging supply

chain environment as well as COVID-related lockdowns in China. Although semiconductor

shortages have gradually eased, other supply chain disruptions such as labour availability

andlogistic bottlenecks have continued to affect vehicle production. As the year progressed,

pent-up demand and the easing of supply chain issues led to an improvement in

productionactivity.

Light duty catalysts – diesel and gasoline

Light duty diesel

Light duty diesel sales were up 4%, outperforming a declining market. We saw strong

performance in the Americas and good performance in Europe, partly offset by a decline in

Asia. In Europe, which represents around 60% of our total light duty diesel sales, our growth

was driven by strong platform performance despite some automotive OEMs continuing to

prioritise commercial vehicles over the passenger car platforms that we serve. In the Americas

we significantly outperformed a growing market, driven by the ramp up of a new platform

and strong platform performance.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

In Asia, our performance was in line with a declining market, which was impacted by a weak

commercial vehicle market in China and an increase in electric vehicle penetration. Our sales

decline in the region was also the result of lower revenue per unit as a result of product mix.

Light duty gasoline

Light duty gasoline sales were down 1%, underperforming the overall global market. In Europe

and Asia, previous platform losses led to a decline in sales in both regions. In the Americas,

sales grew slightly ahead of a strong underlying market as we benefited from the ramp up

ofnew platforms. We continue to invest in light duty gasoline to support our future growth

with early signs of success. For example, two OEMs in the high performance sports car

segment have chosen JM to be sole supplier which validates the strength of our technology

and gives confidence in winning future light duty gasoline platforms.

Heavy duty diesel catalysts

In heavy duty diesel sales were up 3%, significantly outperforming a declining market.

Wesaw strong performance in Europe and the Americas, partly offset by a decline in Asia.

InEurope our sales significantly outperformed a growing market due to higher revenue per

vehicle and we also benefited from good performance in our off road platforms. In the

Americas, the high value Class 8 truck cycle peaked during the last quarter of our fiscal year.

As expected, our heavy duty sales benefited from this cycle and were also supported by

improved product mix. Sales in Asia declined as COVID lockdowns in China significantly

impacted vehicle production and led to customers building stock in the prior year in

anticipation of these lockdowns. Looking ahead, our leading position in heavy duty means

weare well placed to benefit from future developments including hydrogen powered internal

combustion engines.

Underlying operating profit

Underlying operating profit declined 28% to £230 million and margins decreased to 8.7%.

This largely reflected cost inflation, product mix, lower volumes, and the transactional

impactof exchange rates. We saw a sequential improvement in margins during the year,

benefiting from an acceleration in the recovery of cost inflation and benefits from our

transformation programme.

On track to deliver at least £4 billion of cash in the decade to 2030/31

We delivered another year of strong cash flow as we continue to focus on driving efficiencies,

optimising capital expenditure and working capital. We generated around £600² million

ofcash and a cumulative £1.4 billion² since 2021/22, the first year of this guidance.

PGM Services

Performance reflects lower average PGM prices and reduced refinery volumes

• Sales performance primarily reflects lower average PGM prices and reduced refinery volumes

due to lower auto scrap levels as a result of the continued buoyant used car market

• Underlying operating profit was down mainly due to lower average PGM prices and reduced

refinery volumes

• Cost inflation was more than offset by efficiencies as well as higher pricing across both our

refining and products businesses

Year ended 31

March

% change

% change,

constant FX

rates

2023

£ million

2022

£ million

Sales

PGM Services 570 587 -3 -8

Underlying operating profit 257 308 -17 -21

Underlying margin 45.1% 52.5%

Reported operating profit 257 307

PGM Services is the world’s largest recycler of platinum group metals (PGMs). This business

has an important role in enabling the energy transition through providing circular solutions

as demand for scarce critical materials increases. PGM Services provides a strategic service

tothe group, supporting Clean Air, Catalyst Technologies and Hydrogen Technologies with

security of metal supply in a volatile market, recycling capabilities and manufactures value

added PGM products for both internal and external customers.

In PGM Services, sales declined 8% against a strong prior year. This was primarily driven

bylower average PGM prices, where average prices for platinum, palladium and rhodium

declined around 10%, 20% and 30% compared to the prior year. Recent PGM price weakness

has been driven by lower auto demand and also liquidation of some excess rhodium positions

in an illiquid market.

In our refineries, intake volumes were down as expected due to lower auto scrap resulting

from a buoyant used car market. Sales were partly offset by benefits from operational

efficiency and higher pricing. In a volatile market, our metal trading business had another

good year, with sales only moderately down against a strong prior period.

Across our PGM products businesses, sales were moderately down. This was primarily driven

by lower sales of catalysts for the pharmaceutical and agricultural chemicals markets due

tothe phasing of customers’ orders.

Underlying operating profit

Underlying operating profit declined 21% mainly impacted by lower average PGM prices

(c. £55 million impact

) and reduced refinery volumes. Cost inflation was more than offset

byefficiency benefits, as well as higher pricing across both our refining and products businesses.

Notes:

1. At least £4 billion of cash under our range of scenarios from 1

April 2021 to 31

March 2031. Cash target pre-tax and post

restructuringcosts

2. Delivered around £600 million of cash in 2022/23 at actual precious metal prices, which equates to just over £400 million at constant

prices (March 2022). Delivered around £1.4 billion cumulatively since 2021/22 at actual metal prices

3. Gross PGM price impact was c. £55 million, which was partly offset by foreign exchange benefits. Foreign exchange benefit reflects

thepricing of PGMs in US dollars

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

Catalyst Technologies

Strong sales growth and improved performance in the second half

• Sales up 17% largely reflecting growth in licensing and catalyst refills, as well as

improvedpricing

• Strong performance in licensing with five licence wins within low carbon hydrogen

andsustainable fuels (includes one win in May 2023)

• Underlying operating profit was in line with the prior year. Improved pricing, licensing and

transformation benefits offset significant cost inflation and the loss of Russian business

Year ended

March

% change

% change,

constant FX

rates

2023

£ million

2022

£ million

Sales

Catalyst Technologies 560 454 +23 +17

Underlying operating profit 51 50 +2 -2

Underlying margin 9.1% 11.0%

Reported operating profit 43 78

Catalyst Technologies is focused on enabling the decarbonisation of chemical and fuels value

chains and we have leading positions in syngas: methanol, ammonia, hydrogen and

formaldehyde. Catalyst Technologies has three key segments: industrial and consumer,

traditional fuels and sustainable solutions that help catalyse the transition to net zero.

Ourrevenue streams include licensing and engineering income, first fill and refill catalysts.

Sales during the period were up 17%, with strong growth in licensing and growth in first fills

and refills reflecting higher pricing and positive mix.

Industrial and consumer

Industrial and consumer includes our traditional syngas (methanol, ammonia and

formaldehyde) catalyst offerings as well as the majority of our current licensing business.

Wesaw double digit sales growth reflecting strong growth in licensing and first fills as new

plants came on stream following licence wins in recent years. In the year, we signed six new

licences (2021/22: three licences). Refills also grew well supported by growth in ammonia

and formaldehyde.

Traditional fuels

Traditional fuels includes our refining additives, hydrogen and natural gas purification

offerings. Growth in the segment was mainly driven by refills. High global demand

forliquified natural gas has led to strong sales of our natural gas purification catalysts.

Sustainable solutions

Sustainable solutions includes our new growth markets with our technology in low carbon

hydrogen, sustainable fuels and low carbon solutions. In the period to May 2023, we won five

large scale projects across low carbon hydrogen and sustainable fuels:

• H2H Saltend, expected to be one of the UK’s largest low carbon hydrogen projects

• A large scale low carbon hydrogen licence in North America

• A sustainable fuels project with Strategic Biofuels, also in North America

• A commercial scale sustainable fuels project in North America

• A commercial scale sustainable fuels project in Europe

In addition, we won a low carbon solutions licence in the year which will enable the

decarbonisation of one of our customer’s existing assets.

Underlying operating profit

Underlying operating profit of £51 million was in line with the prior year and margins

declined to 9.1%. However, we saw good improvement in operating margin from the first

tothe second half of the year (1H: 7.6% and 2H: 10.5%). Higher pricing, licensing and the

benefits of our transformation programme offset significant cost inflation and the loss

ofcatalyst sales and higher margin licensing income in Russia (c. £10 million loss of profit).

Hydrogen Technologies

Sales more than doubled and continued investment to scale the business

• Agreed strategic partnerships with Plug Power and Hystar

• Sales more than doubled driven by higher volumes for new and existing customers in fuel

cells, growth in electrolysers and increased manufacturing output as we focused

onimproving operational performance

• Underlying operating loss reflects continued investment to scale the business to meet

demand partly offset by higher volumes

Year ended 31

March

% change

% change,

constant FX

rates

2023

£ million

2022

£ million

Sales

Hydrogen Technologies 55 25 +120 +112

Underlying operating loss (45) (33) n/a n/a

Underlying margin n/a n/a

Reported operating loss (46) (33)

In Hydrogen Technologies, we provide catalyst coated membranes that are critical

performance defining components of fuel cells and electrolysers.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

In Hydrogen Technologies, sales in the year more than doubled to £55 million. This was

primarily driven by growth in fuel cells where we delivered higher commercial volumes

fornew and existing customers, enabled by improved operational performance. We continue

tofocus our fuel cell business towards strategic customers to develop deeper and longer

relationships. This trend will continue given the recent strategic partnership announcements,

for example with Plug Power which entails a long-term supply agreement, joint development

agreement and co-investment into new manufacturing capacity. In electrolysers, we

sawhigher sales from the supply of samples, prototypes and components as we develop

strategic partners.

In the year, we saw higher manufacturing output as we focused on operational performance

to improve our processes and drive efficiency. Sales also benefited as constraints eased

following the greater use of capacity in the prior period to qualify new customer products.

Underlying operating loss

Underlying operating loss of £45 million primarily reflects increased investment into product

development and building capability as we scale the business to meet customer demand,

partly offset by higher volumes.

Value Businesses

Comparable performance materially improved

• Market recovery and structural improvements driving improved performance

• Completed the sale of Piezo Products, part of Medical Device Components, and agreed the

sale of Diagnostic Services with completion expected in the third quarter of calendar 2023

Year ended 31

March

% change

% change,

constant FX

rates

2023

£ million

2022

£ million

Sales

Value Businesses¹ 470 354 +33 +28

Underlying operating profit² 40 12 n/a n/a

Underlying margin 8.5% 3.4%

Reported operating profit / (loss) 38 (276)

Value Businesses is managed to drive shareholder value from activities considered to be

non-core to JM, and now principally comprises Battery Systems, Medical Device Components

and Diagnostic Services. In the year, we completed the sale of Piezo Products, part of Medical

Device Components, and we have also agreed the sale of DiagnosticServices and Battery

Materials. In 2021/22, we completed the sale of AdvancedGlass Technologies.

Overall, sales in Value Businesses were up 28% in the year. On a like for like basis

(i.e.excluding Advanced Glass Technologies and Battery Materials), sales were up 55%.

In Battery Systems, sales almost doubled. We ramped up production of higher value next

generation e-bike products and satisfied a backlog of orders as supply chain constraints eased.

Medical Device Components also saw strong sales growth as we gained market share

following recent project wins, and benefited from higher effective production capacity

following investments to upgrade assets and drive efficiency. Diagnostic Services also grew

strongly reflecting a continued recovery in demand as COVID-related travel disruption eased

and a stronger commercial focus, supported by a higher oil price which drove increased

customer activity.

Underlying operating profit

Underlying operating profit of £40 million, an improvement of £28 million on the prior year,

reflecting both a supportive market environment and the execution of comprehensive value

creation plans that each business is driving forward.

Excluding the results of Advanced Glass Technologies and Battery Materials, underlying

operating profit was £38 million², an improvement of £20 million.

Corporate

Corporate costs were £68 million, a decrease of £18 million from the prior period, largely

reflecting transformation benefits as well as a one-off benefit from lower pension charges.

Notes:

1. Sales relating to divestments: Advanced Glass Technologies (2021/22: £62 million, 2022/23: £nil) and Battery Materials (2021/22: £12 million, 2022/23: £21 million)

2. Operating profit or loss related to divestments: Advanced Glass Technologies (2021/22: £16 million, 2022/23: -£1 million) and Battery Materials (2021/22: -£22 million, 2022/23: £3 million)

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

Financial review – continuing operations

Research and development (R&D)

R&D spend was £213 million in the year. This was up from £201 million in the prior year and

represents c. 5% of sales excluding precious metals. We are investing in our growth areas,

including Catalyst Technologies and also Hydrogen Technologies as we continue to

commercialise our fuel cell and electrolyser offerings. In addition, we are also investing

inourClean Air business to support future platform wins ahead of new emission regulations.

Foreign exchange

The calculation of growth at constant rates excludes the impact of foreign exchange

movements arising from the translation of overseas subsidiaries’ profit into sterling.

Thegroupdoes not hedge the impact of translation effects on the income statement.

Theprincipal overseas currencies, which represented 79% of the non-sterling denominated

underlying operating profit in the year ended 31

March 2023, were:

Share of 2022/23

non-sterling denominated

underlying operating profit

Average exchange rate

Year ended 31

March

% change2023 2022

US dollar 34% 1.20 1.36 -12%

Euro 37% 1.16 1.18 -2%

Chinese renminbi 8% 8.26 8.75 -6%

For the year, the impact of exchange rates increased sales by £193 million and underlying

operating profit by £38 million.

If current exchange rates (£:US$ 1.25, £:€ 1.14, £:RMB 8.70) are maintained throughout

theyear ending 31

March 2024, foreign currency translation will have an adverse impact

ofc.£10 million on underlying operating profit. A one cent change in the average US dollar

and euro exchange rates have an impact of approximately £2 million on operating profit

whilst a ten fen change in the average rate of the Chinese renminbi approximately has

a£1 million impact on full year underlying operating profit.

Efficiency savings

We have commenced our new group transformation programme as part of which we expect

to deliver efficiencies of at least £150 million by 2024/25. Associated costs to deliver the

programme are around £100 million, all of which are cash. In 2022/23, we delivered

c.£45 million of savings, ahead of our target of c. £35 million.

£ million

Efficiency

savings

delivered in

2022/23

Associated

costs incurred

2022/23

Transformation programme 45 20

Items outside underlying operating profit

Non-underlying (charge) / income

(£ million)

As at

March

2023

As at

March

2022

Profit on disposal of businesses 12 106

Major impairment and restructuring charges (41) (440)

Amortisation of acquired intangibles (5) (6)

Gains and losses on significant legal proceedings (25) 42

Total (59) (298)

A gain of £12 million was recognised relating to the sale of our Battery Materials Canada and

Piezo Product businesses.

There was a £41 million charge relating to major impairment and restructuring charges

comprised of a net impairment charge of £10 million and restructuring charges of

£31 million. The impairment charge includes impact from further consolidation of our Clean

Air manufacturing footprint to create a simplified and agile structure, as well as an

impairment of goodwill in Diagnostic Services and further impairment charges in relation to

parts of the Battery Materials business. Restructuring charges were also recognised in relation

to our Clean Air manufacturing footprint as well as the transformation initiatives announced

in May 2022 which largely comprise redundancy and implementation costs.

The group paid £25 million in respect of a settlement with a customer on mutually acceptable

terms with no admission of fault relating to failures in certain engine systems for which the

group supplied a particular coated substrate as a component for that customer’s emissions

after-treatment systems.

Finance charges

Net finance charges in the period amounted to £61 million, broadly in line with the prior year

charge of £60 million.

Taxation

The tax charge on underlying profit before tax for the year ended 31

March 2023

was£78million, an effective underlying tax rate of 19.3%, up from 17.4% in 2021/22.

Thislargely reflects the settlement of provisions for uncertain tax positions in the prior year.

The effective tax rate on reported profit for the year ended 31

March 2023 was 23.2%.

Thisrepresents a tax charge of £73 million, compared with £57 million in the prior period.

We currently expect the effective tax rate on underlying profit for the year ending 31

March

2024 to be around 20% reflecting the increase to the UK corporate tax rate.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

Post-employment benefits

IFRS – accounting basis

At 31

March 2023, the group’s net post-employment benefit position, was a surplus

of£165 million.

The cost of providing post-employment benefits in the year was £40 million, down from

£62 million last year.

Capital expenditure

Capital expenditure was £303 million in the year, 1.6 times depreciation and amortisation

(excluding amortisation of acquired intangibles). In the period, key projects included:

• Hydrogen Technologies – investing to increase manufacturing capacity in the UK

• PGM Services – investing in the resilience, efficiency and long-term sustainability of our

refinery assets, and also our fuel cells capacity expansion

Strong balance sheet

Net debt as at 31

March 2023 was £1,023 million, an increase from £856 million at

March 2022 and £963 million at 30

September 2022. Net debt is £19 million higher

at£1,042 million when post tax pension deficits are included. The group’s net debt

(includingpost tax pension deficits) to EBITDA was 1.6 times (31

March 2022: 1.2 times,

September 2022: 1.5 times), which was at the lower end of our target range of 1.5

to2.0times.

We use short-term metal leases as part of our mix of funding for working capital, which

areoutside the scope of IFRS 16 as they qualify as short-term leases. Precious metal leases

amounted to £138million as at 31

March 2023 (31

March 2022: £140 million,

September 2022: £129 million).

Free cash flow and working capital

Free cash flow was £74 million in the year, compared to £221 million in the prior period,

largely reflecting lower underlying operating profit and working capital movements.

Excluding precious metal, average working capital days to 31

March 2023 increased

to42days compared to 36 days to 31

March 2022.

Outlook for the year ending 31

March 2024

For 2023/24, we expect at least mid-single digit growth in operating performance at constant

precious metal prices and constant currency. This is underpinned by efficiency benefits of

c.£55 million in the year.

In Clean Air, we expect strong growth in operating performance. Whilst external data suggest

limited growth in vehicle production for 2023/24, margin expansion should mainly be driven

by efficiency benefits. PGM Services’ performance will be largely driven by precious metal

prices, with recycling volumes expected to be subdued. We expect strong growth in operating

performance for Catalyst Technologies. This reflects an improvement in licensing income

anda significant uplift in margins, benefiting from pricing and efficiencies. We expect sales

togrow strongly in Hydrogen Technologies and we will continue to invest for growth resulting

in an operating loss at a similar level to 2022/23.

Precious metal prices have been volatile and consequently it is difficult to predict how they

may develop. To illustrate the impact they may have on our results, assuming prices remain

attheir current level

for the remainder of 2023/24 there would be an adverse impact

ofc.£50 million

on full year operating performance compared with the prior year. We are

focused on mitigating the potential impact on our performance.

At current foreign exchange rates

, translational foreign exchange movements for the year

ending 31

March 2024 are expected to adversely impact underlying operating profit by

c.£10 million.

Dividend

The board will propose a final ordinary dividend for the year of 55.0 pence per share at the

Annual General Meeting (AGM) on 20

July 2023. Together with the interim dividend of

22.0pence per share, this gives a total ordinary dividend of 77.0 pence per share, maintained

at the same level as the prior year. Subject to approval by shareholders, the final dividend will

be paid on 1

August 2023, with an ex-dividend date of 8

June 2023.

Contingent liabilities

See note 32 of the financial statements on page 206.

1. Outlook commentary for Clean Air, PGM Services, Catalyst Technologies and Hydrogen Technologies assumes constant precious metal prices and constant currency

2. Based on average precious metal prices in May 2023 (month to date)

3. c. £50 million adverse impact represents a gross PGM price impact before any foreign exchange movement. A US$100 per troy ounce change in the average annual platinum, palladium and rhodium metal prices each have an impact of approximately £1 million, £1.5 million and

£0.75 million respectively on full year underlying operating profit. This assumes no foreign exchange movement

4. At average foreign exchange rates for May 2023 month to date (£:US$ 1.25, £:€ 1.14, £:RMB 8.70) translational foreign exchange movements for the year ending 31

March 2024 are expected to adversely impact underlying operating profit by c. £10 million

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Financial performance review continued

Risk report

Risk management is important for JM as it enables

protection, facilitates value-added insights, helps identify

competitive opportunities and supports the growth

afforded by the net zero transition. During the

year we have refined our principal risks to provide

further clarity and reflect progress made so far.

Managing risks effectively

Our ability to effectively manage the risks that we encounter is an enabler of our strategic

performance and owning what we do. Risk management is an essential component of our

governance and operations throughout the organisation. We continue to invest in awareness

initiatives and the training of our employees to stay ahead of various threats. We manage

ourrisks, procedures and controls with the aid of JMProtect, a comprehensive governance,

risk, and compliance (GRC) platform.

‘Perma-crisis’ is one of the characteristics that is used to describe the world around us, and

itiswithin this environment that risk management helps JM navigate delivery of strategy.

Theongoing war in Ukraine, energy supply instability, cyber-attacks and inflationary pressures

all impact us or our customers. Our ability to be prepared has been tested, and we responded

through taskforces and solutions to mitigate some of the impacts, or with additional efforts

totest our resilience and continuity plans.

Climate-related risks and opportunities

We continue to support the recommendations of the Task Force on Climate-related Financial

Disclosures (TCFD) and disclose how effectively we are managing climate-related risks and

opportunities. Further details are included on page 48.

Risk management framework

Group

Assurance

function

Challenges and helps the

Board, Audit Committee,

the Group Leadership

Team (GLT), businesses

and functions to consider

the range and materiality

of risks identified

Monitors how well

mitigating actions or

projects are implemented,

and how effectively they

reduce risk to ensure

alignment with our

riskappetite

Top down

Bottom up

Board

• Sponsors our approach to risk management and internal controls

• Sets the tone for risk management culture

• Approves risk management policies and processes

Audit Committee

• Reviews the effectiveness of our risk management framework and internal controls

GLT

• Regularly carries out top-down

reviewsof risk

• Develops strategy in line with our

riskappetite

• Manages our definitions of risks

andmitigation plans

• Monitors whether risks are within

ourrisk appetite

Businesses

• Regularly carries out bottom-up reviews of operational activities

• Ensures sites and functions have risk registers in place

• Reports to the GLT about business risk and issues

Sites / functional areas / programmes / projects

• Reports key risks to businesses

• Regularly carries out reviews as to how controls are implemented and

theireffectiveness

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk management framework

Our risk management methodology identifies and considers principal risks, including severe yet

plausible scenarios. Its purpose is to reassure stakeholders that we have fully considered and

understand a broad range of risks and are managing them in line with defined risk appetites.

The Board, which is ultimately accountable for risk management and internal controls,

evaluates how effective these systems are at mitigating principal and emerging risks at least

once every year. The GLT provides support for the Board’s reviews, which ensures the risks

we’ve identified are relevant to our current aims and strategic goals. The Audit Committee

supports the Board in assessing the effectiveness of our risk management and internal control

systems, processes and policies.

Our risk management methodology takes a top-down approach to identify our principal risks

(i.e. from board level down) and a bottom-up approach to identify operational risks (i.e. from

day-to-day level up). We’re constantly looking to improve how connected and aligned these

approaches are as they operate in parallel.

How we manage risk

We apply the three-lines-of-defence methodology. The first line represents business

operations, or the individuals who, employing effective internal controls, own and manage

risk daily. Governance and compliance, the second line, are represented by the functions and

businesses of the group that oversee and monitor these operations. The third line refers to the

independent assurance that our Group Assurance function provides over these activities.

Functions, businesses and site teams are responsible for identifying, assessing and prioritising

their risks. They also consider how likely it is that a risk will materialise and what effect that

would have on our objectives. This includes reviewing whether a risk has changed, how strong

the controls we use to manage the risk are and whether mitigating actions are in place.

Weuse a self-assessment and management attestation processes to report, at least once

ayear, on whether the relevant controls are effective. This is a maturing process with several

initiatives in progress to improve our controls environment.

In the past 12 months, we have continued to improve how we address and monitor risks

inanumber of ways, including:

• Making continued enhancements to our GRC platform, JMProtect, which offers a combined

and centralised view of our risk universe and controls framework

• Incorporating JMProtect risk data into our audit planning process to make sure the highest

risk areas of the business are prioritised for assurance activities

• Introducing an Integrated Assurance model that aligns second- and third-line assurance

activities for easier collaboration and more effective risk-based assurance.

We prioritise insurance cover for the most significant areas of risk across the Group, and areas

where insurance is a legal or contractual requirement. If insurance is available on

commercially reasonable terms, we also utilise it as a risk mitigation tool across our wider

business. Where appropriate, we get advice from industry to help us assess risks and develop

mitigation plans.

Emerging risks and opportunities

We continually monitor our external risk landscape using a mixture of key risk indicators, third

party reports, findings from internal and external assurance providers, and feedback from both

customers and suppliers. This information allows us to identify emerging risks and prepare

reasonable mitigations.

For any identified emerging risks, considered to be a threat to JM or its value chain, we tailor our

response to the size of the risk to ensure our mitigation strategy is proportionate. For example,

in 2022, we identified significant emerging risks in relation to geopolitical tensions, the

macroeconomic downturn and energy availability. We have chosen to include geopolitical

andmacroeconomic events as a principal risk given our global presence and strategic plans

invarious geographies including China and USA. This will also ensure we incorporate lessons

learned from ceasing operations in Russia.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Principal Risks

IncreasedNo change /

New

Alignment to our strategy: Focus Simplify Execute

Reduced

Failure to deliver

business value from

strategic capital

projects

A low-performing

culture undermines

our strategy

A significant

work-related EHS

incident

Disruption to

inbound goods or

services provided

Security of metal and

failure to manage

metal commitments

Failure in one or

more of JM’s critical

operational assets

Strategic Operational

Unsuccessful delivery

of key business

transformation

programme(s)

Development of

products that do not

meet the future

needs of customers

Business failure

through cyber-attack

or other IT incidents

A significant geopolitical

or macroeconomic

event impacting JM’s

operations

Significant shift in

demand and / or

commoditisation of

sustainable technology

Principal risks and uncertainties

In the following section, we have outlined our principal risks and how we manage them.

Weregularly review our risk landscape to best determine our principal risks and key

mitigating actions, while also assigning appropriate GLT sponsors to help us overcome our

biggest challenges and continue to meet our strategic ambitions. Our GLT sponsors evaluate

changes to their risks to better understand our exposure. When necessary, they order these

risks by importance and create targeted mitigation strategies.

Over the last year, we have continued to update our principal risks, clarifying associated

opportunities and priority actions:

• Three risks have been removed as principal risks – ‘Intellectual Property’ (IP), ‘Ethics and

Compliance’ and ‘Customer Contract Liability’. We consider the controls put in place over

the past year to be effectively mitigating the risks

• We have introduced two new principal risks: ‘A significant geopolitical or macroeconomic

event impacting JM’s operations’ and ‘Failure to deliver business value from strategic

capitalprojects’.

The principal risks we face are listed alongside the measures we’ve taken to reduce them on

the following pages. These risks could materially harm our company’s operations, either alone

or in combination.

Each of our strategic principal risks, if handled effectively, carries a significant opportunity

todeliver above stakeholder expectations. Some of these opportunities have been identified

in the table in the following section.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Strategic risks and opportunities

To execute our strategy, we must be mindful of the risks that may undermine us, while ensuring we capture most of the opportunity they present.

Significant shift in demand and / or commoditisation of sustainable technology

GLT sponsor: Liam Condon

Risk Opportunity Key mitigations Updates made to principal risk

JM’s strategy is focused on our ability to develop solutions

for sustainable chemicals, fuels and energy and catalysing

the net zero transition for our customers, pivoting away

from fossil fuel-based industries.

JM faces two main risks as part of the global transition to

alow-carbon economy:

• Risk that we fail to correctly anticipate climate-related

shifts in demand for our products (e.g. driven by

regulation, customer needs, societal expectations), as

well as the pace of commoditisation. These shifts could

impact both our existing products (e.g. in Clean Air) and

products which are expected to drive JM’s future growth

(e.g. in Hydrogen Technologies); there is a risk that

theseshifts could be slower or faster than anticipated

• Risk that we fail to make the right decisions in response

to these shifts, mostly in terms of capital allocation

(e.g.R&D, capital expenditure).

If we correctly anticipate future

market shifts and respond adequately,

we can create value from the

transition to the low-carbon economy

through increased revenues

andprofits.

Through our products and services we

have an opportunity to affect climate

change, nature and society.

• We continue to monitor the changing market

environment (e.g. technology choices, pace

ofcommoditisation) and our customers’

requirements. Using this information and our

scenario-based approach, we can update our

strategic plans and actions where needed

• We keep investing in innovation to make sure

wehave products that differentiate us in all our

markets, meeting our customers’ specific needs

when required

• For our maturing businesses, we have a plan

toreduce our cost base to improve efficiency and

cash flow

• For our growth businesses, we plan to invest in our

production assets and are working to mitigate the

risks associated with this (principal risk 3)

Formerly ‘Strategic growth: business transition

tolow-carbon economy’.

Risk re-titled to reflect the risk that we may not

have a viable business model in the face of

rapidly commoditising sustainable technologies,

posing a risk to some legacy products and

services that are designed for a declining market.

Risk reduced due to the achievements of some

strategic objectives, e.g. partnership with

PlugPower.

We have continued our investment in growth

platforms – particularly in Hydrogen

Technologies and Catalyst Technologies.

A significant geopolitical or macroeconomic event impacting JM’s operations

GLT sponsor: Christian Günther

Risk Opportunity Key mitigations Updates made to principal risk

Due to the nature of JM’s global footprint, there is a risk that

we may face disruption in our operations, supply chain and

/ or customer markets due to geopolitical events. This

includes conflict, trade disputes, sanctions, pandemics,

macroeconomic events or financial crises in specific

countries or regions where we operate, or where parts

ofour supply chains are located.

A properly mitigated risk may provide

some level of competitive advantage,

even in the event the risk fails to

become an issue – e.g. security of

supply for our customers, local

content and participation benefits.

• Ongoing identification, monitoring, assessment

ofand mitigation of key geopolitical risks

• Our strategic planning considers various aspects of

this risk when making future investment decisions

• We set up taskforces to deal with specific risks when

we identify them as a material risk

New principal risk promoted in response

toheightened geopolitical tensions.

We completed a review of the countries key

toour operations and / or value chains with

respect to their geopolitical and macroeconomic

landscape, making adjustments to our strategy

where necessary.

Failure to deliver business value from strategic capital projects

GLT sponsor: Maurits van Tol

Risk Opportunity Key mitigations Updates made to principal risk

The success of our strategy, especially in growth areas,

depends on our ability to effectively prioritise and deliver

our strategic capital investment pipeline. There is a risk that

we will be unable to meet production capacity

expectations, breach budgeted costs or lose our competitive

position in markets.

Robust portfolio planning,

management and governance,

combined with enhanced competence

in capital project delivery, will provide

us with the platform we need to meet

the growth ambitions of our growing

businesses and deliver on our

widerstrategy.

Delivering high-priority projects on

time, within budget and to

benchmarked costs will enable JM

togrow further and faster.

• Continuously strengthening our central engineering

and project organisation and eliminating functional

competency gaps

• Enhanced portfolio management and project

frameworks, with business-wide compliance as key

value driver and a foundation of governance

• Transformed role and confirmed accountability

ofsponsors for project value

• Established project teams with all key functions

represented

New principal risk added due to the high capital

investment being made, especially in high-

growth areas such as Hydrogen Technologies.

A transformation programme for Engineering

and Capital Projects has now been defined and

incorporated into our operating model.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Development of products that do not meet the future needs of customers

GLT sponsor: Maurits van Tol and Anish Taneja

Risk Opportunity Key mitigations Updates made to principal risk

There is a risk that we are unable to develop products that

are competitive enough to meet our market ambitions and

the needs of customers. This includes our ability to identify

and understand customer expectations, translating this into

effective R&D and developing our technologies into an

industrial production scale.

A strong product portfolio, effectively

designed in line with our customers’

future needs, will enable us to win

inour chosen markets for the years

tocome.

Effective product development will

continue to improve our brand and

enable us to win in new markets as

they are identified.

• We aim to maintain strong customer and partner

relationships, involving them in the development

process

• We leverage New Product Introduction (NPI)

andpeople processes from our mature businesses

to build capability in our growth businesses

• We continue to strongly invest in our R&D

capabilities

• OneJM strategy ensures a cross-business strategic

approach to markets

Formerly ‘Maintaining competitive advantage

ofour products and operations’.

Improved business systems and processes

toenhance planning effectiveness

Simplification of product development

workstreams to improve focus

Introduction of Group Commercial Council to

better understand customer needs and develop

the JM value proposition

A low-performing culture undermines our strategy

GLT sponsor: Annette Kelleher

Risk Opportunity Key mitigations Updates made to principal risk

A low-performing culture characterised by an insufficiently

engaged and inclusive workforce, lacking commitment to

taking accountability, keeping it simple and driving results

could impact on our ability to attract and retain key talent,

and therefore successfully execute our strategy.

A high-performance culture is

essential to executing our strategy,

delivering growth and being more

efficient. High-quality leaders can

build diverse, inclusive and engaged

teams in which everyone can deliver

better results.

• We have implemented an ongoing campaign

across JM to create a clear understanding of our

people leadership expectations and their

importance in delivering our play to win strategy

• We have put in place a global digital platform –

Workday – to underpin standard HR processes and

to provide meaningful insights into our business

• We have relaunched our global employee

engagement survey, utilising Workday Peakon

technology, helping to ensure that everyone in our

company can share their views

• We regularly review how we work across the

business to find ways of working more simply and

efficiently

Formerly ‘People, culture and leadership’.

Risk increased due to high levels of

organisational change.

Our new HR platform enables better talent

development and engagement.

We are improving our talent management

processes – particularly our approach to diversity

and inclusion – so that we’re creating the right

environment and capabilities to deliver the next

phase of our strategy.

During 2023/24 we will be implementing a new

approach to performance management.

We continue to prioritise our people’s health,

safety and wellbeing.

Unsuccessful delivery of key business transformation programme

GLT sponsor: Christian Günther

Risk Opportunity Key mitigations Updates made to principal risk

JM’s transformation is scoped to implement the strategy

ofcatalysing the net zero transition for our customers

inautomotive, chemicals and energy. There are currently

more than 30 programmes, across group functions and the

four core businesses, driving business growth, people

growth and efficiency.

Failure to successfully deliver these programmes may delay

the expected benefits, disrupt services to customers or

trigger a loss of key talent.

Together the transformation

programmes will address capability

gaps and poor competitiveness in key

markets. Through the transformation,

JM will develop and strengthen its

capability for ongoing continuous

improvement, delivery of complex

projects and agility to respond

tofuture external trends.

• We have established a robust framework for the

planning and delivery of transformational change

projects, including stage gates to structure key

decisions

• The JM-wide transformation office provides

specialist support to programme teams, tracks

progress and ensures effective oversight by senior

leadership

• Third-line assurance is provided by JM’s Group

Assurance function, with a focus on the most

critical and sensitive programmes

Formerly ‘Business Transformation’.

The overall rating of this risk has not changed.

Over the past 12 months we have established

stronger programme and change management

capability. This will allow us to expand the scope

of changes and accelerate delivery.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Operational risks

Our day-to-day operations carry a level of risk that must be managed effectively to ensure that we are able to keep our people safe and meet our strategic goals.

A significant work-related EHS incident

GLT sponsor: Mark Wilson

Risk Key mitigations Updates made to principal risk

If we fail to operate safely, we could injure people, incur significant

financial loss or breach applicable laws, which could have a negative

effect on our people, the environment or our reputation. This could also

mean we lose production time and attract negative interest from the

media and regulators, which could lead to fines and penalties.

Like other high-hazard manufacturing companies, our business

iscontrolled by a wide range of challenging health, safety and

environmental laws, standards and regulations, which are set

bygovernments and regulatory agencies around the world.

• We have a strong health and safety culture across the

business. This is based on clear policies, guidelines and

standards, continual training and awareness activities

and audits

• We regularly review process safety hazards at relevant

sites by carrying out deep-dive safety audits

• We thoroughly investigate incidents or accidents to

identify their root cause and then develop plans to

remediate the problem

• We monitor our environmental risk, report on

environmental data associated with our sites and always

look for opportunities to improve

• We regularly review our regulatory and reputational risks

and put mitigation plans in place where we need to

Formerly ‘Environment, health and safety (EHS)‘.

Overall, JM’s EHS risk is considered to have reduced due to:

• Several actions from high-priority Process Hazard Reviews (PHRs)

andprocess safety audits have been completed

• Over 98% of actions from maximum credible event assessments

completed

• Ongoing asset replacement programmes

• Training of over 90% of operational staff in process safety has been

completed

• Divestment of the Health business, which had all its sites classified

ashigh process safety risk sites

Nevertheless, we continue to review any emerging EHS risks (especially

process safety) across all our businesses, which we are fully evaluating

and mitigating.

Disruption to inbound goods or services provided

GLT sponsor: Anish Taneja

Risk Key mitigations Updates made to principal risk

Given the types of products and services we provide, there are only a few

suppliers that are approved to source certain important raw materials. If

there was a significant breakdown in our multi-tiered supply chains, how

we supply to customers’ demand would be affected or disrupted.

• We continually review our relationships with our

strategic and high-impact suppliers

• We are well connected in the market to anticipate

disruption and engage our businesses in proactive

scenario planning

• We carry strategic stocks of raw materials, including

PGMs, and regularly monitor those stock levels against

demand forecasts

• We regularly investigate alternative materials to use,

aspart of our research and development work

• We complete due diligence when selecting our suppliers

to ensure they meet our expectations and all regulations

with regard to ethics and sustainability

• When designing our supply base, we consider agility

toensure we are able to overcome geopolitical risks

– e.g. through local sourcing

 Formerly ‘Supply Failure’.

Risk increased, reflective of the challenging macro environment,

including potential supply issues due to second-tier supplier failure,

energy shortages and pricing fluctuations.

Following our refreshed JM strategy, we have better defined JM’s

procurement priorities for each of the businesses. Each business has

varying priorities. There are overarching common themes such as supply

resilience, where we want to aim for ‘resilience by design’ and prevent

bottlenecks, by building out our supply ecosystem.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Security of metal and failure to manage metal commitments

GLT sponsor: Alastair Judge

Risk Key mitigations Updates made to principal risk

JM uses significant quantities of high-value precious metals, which are

transported, stored and processed across our operations. We do not carry

significant exposure to price risk as we hedge all our metal transactions

centrally looking at overall group supply and demand.

Our PMM business ensures the group has sufficient metal to meet

business demands and manages our metal liquidity levels. There is a risk

that we do not have sufficient metal available. Therefore, we operate

within tight trading limits and defined liquidity levels to manage the

demand volatility. Metal price volatility affects how much our Trading

business earns. The precious metal industry globally is susceptible to

criminal activity resulting in the risk of theft, and we share those

challenges. Loss or theft due to a failure of the security management

systems associated with the protection of metal may result in financial

loss and / or a failure to satisfy our customers which could reduce our

customers’ confidence in JM and potential legal action. Failure to mitigate

this risk can have a significant impact on our working capital, financial

viability and/or undermine our ability to meet our customer

commitments.

• Long-term strategic planning around metal

requirements of the group is undertaken to ensure

appropriate positioning for the future

• We run a strong operational control environment within

our metal trading business

• We hedge the majority of our metal transactions

centrally through looking at the overall group supply

anddemand, minimising our exposure to metal price

volatility

• We maintain a robust security management system

toprotect our metal holdings

• We have appropriate insurance cover in place

Formerly ‘Managing our metal commitments’.

Due to increased crime within the global precious metal industry, the

overall rating of the risk is increasing.

We have continued to strengthen physical security and the operational

environment to ensure we have a proportionate control structure

tomanage and optimise our metal holdings.

Furthermore, we have launched a metal finance academy to continue

strengthening appreciation and understanding of our metal risks across

the group.

Failure in one or more of JM’s critical operational assets

GLT sponsor: Alastair Judge

Risk Key mitigations Updates made to principal risk

A critical asset failure may have a material effect on our supply chains,

performance, share value and reputation.

Our work on the effects of climate change means we understand that

more frequent extreme weather events and natural disasters may disrupt

our operations and increase our costs.

• We continue to monitor and prioritise critical spare parts

and capital expenditure for any ageing assets and

infrastructure

• The multi-year capital investment programme across

PGM Services continues to progress with focus on asset

renewal and replacement

• We continue to implement robust mitigation's at our

sites, including business impact assessments, business

continuity management plans, asset management

programmes and rigorous support systems for our

operational technology

• Group Assurance function reviews business continuity

planning (BCP) as part of the Site Extended Audits

 Formerly ‘Asset failure’.

We assess this risk based on the high level of exposure faced by our PGMs

business. The nature of this business means it would suffer the greatest

potential effect of a critical asset failure.

A climate resilience site assessment has been completed at one of our

sites. The report is being reviewed and action plans are being formulated

to address the recommendations and the requirements of future

site assessments.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Business failure through cyber-attack or other IT incidents

GLT sponsor: Stephen Oxley

Risk Key mitigations Updates made to principal risk

A failure to adapt our Information Technology to changing business

requirements, the occurrence of significant disruption to our systems or

amajor cyber security incident may adversely affect our financial position,

harm our reputation and could lead to regulatory penalties or non-

compliance with laws.

• We continue to refresh and standardise our core systems

and applications on an ongoing basis to reduce reliance

on legacy systems

• We are delivering a programme of work to identify and

reduce risk in operational technology

• We provide regular cyber security training for employees

to raise awareness of cyber risks

 We continue to adapt and respond to the increasingly complex and

heightened external threat landscape by enhancing cyber-security

technologies and processes to improve our ability to Predict, Prevent,

Detect, Respond and Recover to cyber risks, aligned to industry standards.

Dedicated IT projects have supported our divestment activities, helping

usto balance the value of the sale against transitional risks, including

theintegrity and availability of data.

Managing Intellectual

Property

In 2022/23 we removed ‘Intellectual

Property’ as a principal risk. Thiswas due to

the implementation of mitigating actions

that reduced our risk exposure to a level the

GLT assessed to be satisfactory. Implemented

mitigating actionsincluded:

Robust process for

product introduction that

ensures we capture our

own IP with

the appropriate

‘freedom to operate’

Launch of standardised

IP awareness e-learning

programmes across JM

for all employees and

new starters

Improvement of our

trade secret management

process, allowing us

to monitor and protect

our trade secrets

across the globe

As a result, our IP risks are now

managed on a ‘business as usual’ basis

and will only be escalated back to the

GLT if there is a material increase in our

risk exposure. This allows our senior

leaders to focus their resources on the

highest priority risks to JM.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Risk report continued

Going concern

In adopting the going concern basis for preparing the accounts, the directors have considered

the business activities as set out in the Strategic report and Financial review, pages 1 to 72,

aswell as the group’s principal risks and uncertainties, pages 62 to 69. As part of this

assessment, we have considered a base case and severe but plausible trading scenario.

Bothscenarios showed sufficient headroom under our committed facilities and financial

covenants. The directors therefore believe that the group has adequate resources to fund

itsoperations for the period of 12 months following the date of this announcement, making

it appropriate to prepare the accounts on a going concern basis. Further details on going

concern, viability and facilities can be found in Note 1 on page 150 respectively of the

accounts.

Viability

We have assessed how viable we are as a business over a three-year period, in line with our

annual planning horizon. During the year, the Board carried out a robust assessment of the

principal and emerging risks affecting our business, particularly those that could threaten

ourbusiness model. The risks, and the actions taken to mitigate them, are described in the

Riskreport on pages 62-69.

We assess our prospects through our annual strategic and business planning process.

Thisprocess includes a review of assumptions made including market, vehicle and production

outlooks, customer demand, underlying growth / cost assumptions, metal prices, key risks

and opportunities as well as an appraisal of our strategy and significant capital investment

decisions. The Group Chief Executive Officer and Chief Financial Officer lead these reviews,

along with the Chief Executives of each business.

The Board also reviews each sector’s strategy throughout the year, looking at our current

position and prospects for the coming years. This allows us to reaffirm our overall strategy

andreassess the risks that could impact its success.

We do not expect climate change risks to have a material near-term effect on our

forward-looking forecasts for going concern or viability. See scenarios opposite for more

details of ouranalysis.

Analysis through four stress scenarios

In making the viability assessment, we have analysed each of the principal risks facing the

group – as described in the Risk report on pages 64 to 69 – and identified the items within

each principal risk category that might significantly affect cash flow and viability. We have

then modelled these in four stress scenarios.

Scenario 1 – Maintaining competitive advantage of our products

and operations

This scenario considers the failure to maintain our competitive advantage in existing markets,

mostly because of poor execution of key initiatives or operations. It includes the effect of

a six- month delay to key capital projects, delays to deliver the transformation savings and

atemporary one-month shutdown of a refinery, which leads to higher working capital

andlower profits.

Scenario 2 – Geopolitical risks impacting JM’s operations

This scenario considers the increased risk presented by geopolitical risks, such as a one-year

slowdown in our operations in China, and increased inflation across the period.

Scenario 3 – Disruption to the platinum group metals value chain

This scenario considers the failure to source sufficient metal to manage and satisfy our

internal and external obligations. We modelled a shortage in the supply of metal, an increase

in individual metal prices to 12-month highs over the period April 2022 to March 2023 of our

key metals, and an increase in our metal holdings.

Scenario 4 – Other risks

This scenario includes the effect of all our other principal risks – outlined in the Risk report

onpages 64 to 69 where not already considered in the scenarios above. For each risk,

wehave estimated a financial effect, which considers the impact and likelihood of the risk.

Given the wide range of risks we face, we have then applied an overall probability weighting

of 20% which allows us to work out the potential financial impact. We have also included

impacts of carbon pricing and a one-month temporary shutdown of a key site due to an

extreme weather event.

Conclusion

In evaluating our viability under each of these scenarios, we considered our current financing

arrangements, see page 150, and assumed we would not refinance any maturing debt –

although, in reality, we would expect to refinance our debts well ahead of maturity thereby

increasing headroom. Our stress testing shows that, under each of the scenarios described

above, we have ample headroom under our committed facilities and financial covenants.

Asafinal review, given the climate of greater political and economic certainty, we have also

undertaken a reverse stress test to identify what additional or alternative scenarios and

circumstances would threaten our financial covenants or headroom. This shows that we have

headroom against either a further decline in profitability of more than 40% in the financial

year to March 2024, well beyond the severe-but-plausible scenario, or a significant increase

inborrowings (net debt would need to more than double in the financial year to March

2024). In this unlikely scenario, we still have other mitigating actions available, including

reducing capital expenditure, renegotiating payment terms or reducing our dividend. Based

on this assessment, the directors have a reasonable expectation that the company and group

will be able to continue operating, and meet its liabilities as they fall due, making it

appropriate to prepare the accounts on a going concern basis.

Going concern and viability

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Non-financial and sustainability information statement

The table below outlines how we meet the non-financial reporting requirements set out in the Companies Act 2006. Our business model is set out on pages 8 and 9. Our purpose described

onpage 4 and our sustainability strategy on pages 22 to 44 set out how we act as a responsible business. Our non-financial KPIs which support the delivery of our strategic priorities are shown

onpages 3 and 12. We have a range of different policies and standards in place to manage our principal risks, pages 62 to 69, which form part of our internal control framework.

A description of all matters relating to climate-related risks and opportunities, including the governance arrangements, scenario testing and metrics and targets, are included within the TaskForce

on Climate-related Financial Disclosures on pages 45 to 52.

Reporting requirement Information necessary to understand our business,

policies and due diligence activities and outcomes

Policies, guidance and standards which govern our approach.

Some of which are only published internally

Environmental matters

Our group policies that govern environmental matters support our commitment

to sustainability and help keep our people and the communities we serve safe.

Sustainability – see pages 22 - 44

Environment, Health and Safety Policy +

Procurement Policy

Supplier Code of Conduct

Task Force on Climate-related Financial Disclosures – see pages 45 - 54

Societal Value Committee report – see pages 88 - 89

Employees

At Johnson Matthey, we want our employees to feel safe, promote a culture of

inclusion and diversity, and build long-term fulfilling careers. Our HR, Ethics and

Compliance and EHS polices help support this.

Our people – see pages 33 - 34

Health and safety – see pages 33 - 34

Employee engagement – see page 35

Gender pay gap report – see page 37

Diversity – see pages 37 - 38

Speak Up – see page 41

Code of Ethics

Employee Leave Policy

Diversity, Equality, Inclusion and Belonging Policy

Board Diversity Policy

Smart Working Policy

Substance Misuse Policy

Working Together Policy

Environment, Health and Safety Policy

Speak Up Policy

Human Rights

We consider our entire value chain when looking at human rights, including

ourown operations, suppliers and customers.

Suppliers – see page 39

Modern Slavery Statement – see page 39

Responsible sourcing – see pages 39 - 40

Ethical standards – see page 38 - 39

Speak Up – see page 41

Code of Ethics

Modern Slavery Statement

Data Protection Policy and Employee Privacy Notice

Procurement Policy

Supplier Code of Conduct

Human Rights Policy

Speak Up Policy

Social matters

Our Code of Ethics helps our people do the right things and helps us put into

practice the principles by which the group operates; it also provides a framework

for responsible business practices. We ensure that our suppliers are also held

tohigh standards and adhere to our Supplier Code of Conduct.

Our stakeholders – see pages 44 and 84

Ethical standards – see pages 38 - 39

Engaging with our communities – see page 42

Sustainability – see page 33

Code of Ethics

Supplier Code of Conduct

Environmental, Health and Safety Policy

Anti-bribery and

corruption

Our global policies support the group with compliance with various laws relating

to anti-bribery and corruption. We strive to act with openness, fairness and

honesty and expect our stakeholders to do the same.

Suppliers – see page 39

Our people – see pages 38 - 39

Ethical standards – see page 38

Anti-Bribery and Corruption Policy

Code of Ethics

Gifts Hospitality and Charitable Donations Policy

Supplier Code of Conduct

Conflicts of Interest Policy

Global Tax Policy

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Section 172 statement

Our Section 172 statement comprises this section and pages 84 to 86 of the Governance report; it describes how the directors have had regard to stakeholders’ interests when discharging their

duties under Section 172 of the Companies Act 2006. The mechanisms used to engage with shareholders are described on page 84. You can also read more on how the Board considered each

matter during the year asfollows:

s.172(1) considerations Relevant disclosures Page reference

The likely consequences of any decision in the long term

During the year, the directors focused on the execution of our strategy and strategic milestones to ensure

we are positioned to create long-term value for shareholders. This recognises the role we play in wider

society helping the transition to a greener economy.

Our purpose

Business model

Our strategy

The drivers of our changing world

Financial review

Sustainability

8 - 9

12 - 13

6 - 7

53 - 54

22 to 44

Interests of employees

The directors recognise the importance of attracting, retaining and motivating high-performing

individuals. The directors consider the implications for our people where possible. They also seek to

ensure we remain committed to promoting a safe and inclusive working environment for all our people.

Our people

Employee engagement

Diversity, inclusion and belonging

Speak Up

Culture

33 - 38

35 - 36

Fostering the company’s business relationships with suppliers, customers and others

Our relationship with customers, suppliers, governments and partners is essential to ensure the success

ofour strategy and the long-term success of the Company. The board receives updates on engagement

across the group at meetings.

Financial review

Modern slavery statement

Business model

Sustainability

Human rights and ethical standards

53 - 54

8 - 9

22 - 44

38 - 39

Impact of operations on the community and the environment

Sustainability is at the heart of our strategy, and the impact we have on the community and environment

is carefully considered by the Board. The Board closely monitors decisions relating to our sustainability

strategy through the Societal Value Committee.

Our purpose

The drives of our changing world

Sustainability

Task Force on Climate-related Disclosures

Societal Value Committee report

6 - 7

22 - 44

45 - 52

88 - 89

Maintaining a reputation for high standards of businessconduct

Our Code of Ethics, Supplier Code of Conduct and Modern Slavery Statement are reviewed regularly

bythe Board. This ensures the high standards of conduct we expect are upheld by all levels of the

business. The Board monitors compliance with these through the internal control framework.

Our purpose

Speak Up

Human rights and ethical standards

Internal controls

Modern slavery statement

Ethics and compliance

38 - 39

100

38 - 39

The need to act fairly between members of the company

Following careful consideration of all relevant factors including the impact on our stakeholders, the

directors assess the course of action that enables the delivery of our strategy and the long-term success

ofthecompany.

Stakeholder engagement

Board activities

Annual General Meeting

84 - 86

82 - 83

130

The Strategic report from pages 1 to 72 was approved by the Board on

May 2023 and is signed on its behalf by:

Liam Condon

Chief Executive Officer

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Governance

In this section

Compliance with the UK Corporate Governance Code 73

Chair’s introduction 74

Board at a glance 75

Board of directors 76

Our governance structure 78

Corporate governance report 80

Board activities 82

Stakeholder engagement 84

Board and committee effectiveness review 87

Societal Value Committee report 88

Nomination Committee report 90

Audit Committee report 94

Remuneration Committee report 103

Remuneration at a glance 106

Remuneration Policy 107

Annual Report on remuneration 118

Directors’ report 128

Responsibilities of directors 132

Compliance with the UK Corporate Governance Code 2018

During the year under review, we have applied all the principles and complied with all the provisions of the 2018 UK

Corporate Governance Code (the Code) except the following:

• provision 5 – engagement with the workforce: The Board has not engaged with the workforce using the

methods prescribed by the Code. Following our strategic review last year, global town halls were held across

thegroup to communicate our new strategy and business priorities. It was felt that this method of engagement

would be the most effective for this financial year to ensure that all colleagues had the opportunity to ask detailed

questions about the strategy, values and cultural ambition to the Group Leadership Team (GLT). We intend to

resume our engagement focus groups in certain countries where JM has a significant footprint during 2023/24.

These focus groups will be attended by a non-executive director

• provision 41– engagement with the workforce on alignment of executive pay with the wider company pay

policy: While we inform our employees of global changes to pay and benefits, we have not actively sought a

two-way dialogue over executive pay. We benchmark remuneration against our peers to ensure we offer

competitive pay and benefits, so we continue to attract and retain the highest-calibre candidates. During the

year, all employees were able to provide feedback on a range of matters, including remuneration, as part of our

annual employee engagement survey. Read more in our Remuneration Committee report on page 103.

The Code is publicly available on the Financial Reporting Council (FRC) website, frc.org.uk

How we apply the principles of the Code

Board leadership and company purpose

The role of the Board Pages 78, 82-83

Purpose and culture Pages 35, 80

Resources and controls Pages 80, 100

Stakeholder engagement Pages 72, 84-85

Workforce engagement Page 80

Division of responsibilities

Role of the Chair, non-executive directors and Company Secretary Pages 78-79

Composition of the Board Pages 76-77

Composition, succession and evaluation

Appointments to the Board and succession planning Pages 90-92

Skills, experience and knowledge of the Board Pages 75-77

Board evaluation Page 87

Audit, risk and internal control

Audit Committee report Pages 94-102

Risk report Pages 62-69

Remuneration

Remuneration Committee report Pages 103-127

Fair, balanced and understandable

In accordance with the Code, the Board considers that, taken

as a whole, the 2022/23 Annual Report and Accounts is fair,

balanced and understandable, and provides the information

necessary for shareholders to assess Johnson Matthey’s

position, performance, business model and strategy. The

Audit Committee assesses the process that management

uses to support the recommendation to the Board. More

details are on page 100.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Following Liam Condon’s appointment as Chief Executive Officer in March 2022, the Board

began the year with several meetings focused on strategy. We discussed, challenged and

provided feedback on the strategic review, and our revised strategy was announced in May

2022. It followed a long and detailed process of reviewing our strengths, the markets in which

we operate, and getting feedback from our investors, customers and employees. Since then,

theBoard has overseen the implementation and delivery of our strategy, which is underpinned

by our transformation programme. As we move to a faster-paced, more customer-focused

culture, we have approved key strategic partnerships, and won business and large-scale projects,

delivering against our promises for each of our businesses to accelerate our growth and drive

value creation.

Read more about our strategy and progress against our milestones on pages 12 and 13

Readmore about the Board’s activities during the year on pages 82 and 83

“The Board’s debate and challenge supports the delivery

of our strategy”

Governance highlights

• Assessed and approved a refreshed group strategy

• Monitored the transformation programme

• Appointed Barbara Jeremiah as an independent non-executive director

• Approved investments and strategic partnerships linked to our strategic milestones

• Reviewed previous strategic decisions and evaluated the learnings to further

improve governance processes

Chair’s introduction

Sustainability is an integral part of Johnson Matthey and embedded into our strategy. We are committed

to achieving net zero by 2040, and our progress against the 2030 targets (set out on page 24) is closely

monitored by the Societal Value Committee. We are on track for a reduction in scope 1+2 CO

e (carbon

dioxide equivalent) emissions from a 2019/20 baseline. And through our products, we have continued

to helped our customers reduce CO

e emissions.

More information about our Societal Value Committee’s work is on page 88

The Audit Committee assessed JM’s readiness to implement recommendations from the

Department for Business, Energy and Industrial Strategy (BEIS) white paper on restoring trust in

audit and corporate governance. This included reviewing our climate-related assurance processes

and the creation of our sustainability assurance framework.

More information about our Audit Committee’s work is on page 94

During the year, we have continued to focus on succession planning, and the Nomination

Committee undertook a search for a new non-executive director. We look forward to welcoming

Barbara Jeremiah to the Board in July 2023. Barbara’s appointment will further enhance our

Board’s skills and experience, and she will also take on the role of Senior Independent Director.

Further information on the changes to the Board members’ roles and responsibilities can be

found in the Nomination Committee report on page 90.

The Board understands the importance of diversity and inclusivity, and the innovative thinking and

challenge it brings to the boardroom. I am pleased to report that plans are in place for the Board’s

composition to meet the ambitions set out in the FTSE Women Leaders Review for listed companies

to have at least 40% of female representation on the board with at least one of the senior board

positions (chair, chief executive officer, senior independent director or chief financial officer)

tobeheld by a woman by the end of 2025.

Read more about the Board’s composition and Board diversity policy on page 93

We have spent much of our time discussing the future of Johnson Matthey, our strategy, current

performance and the plans in place to catalyse the net zero transition. We have supported and

challenged senior leadership to ensure the continued acceleration of our transformation programme.

We have also reviewed some of our previous strategic decisions and evaluated the learnings from these

processes to continuously improve and challenge management in a robust and constructive way. As a

result of these discussions, there are several actions we will be taking to improve the Board’s governance

processes. In addition, the Board reviewed some of the wider governance processes to ensure they

supported our fast-paced cultural ambition. As part of that review, we approved a simplified delegation

ofauthority framework.

I am pleased to report that this year’s board effectiveness review confirmed that we continue to

operate effectively and have made good progress against the actions recommended in last year’s

review. In accordance with the Code, the next review will be externally facilitated.

Read more about our board effectiveness review on page 87

Patrick Thomas

Chair

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Board at a glance

as at 31

March 2023

Board and committee attendance

Board attendance Board

Societal Value

Committee

Nomination

Committee

Audit

Committee

Remuneration

Committee

Patrick Thomas

9/9 5/5 7/7 – 7/8

Liam Condon 9/9 5/5 – – –

Stephen Oxley 9/9 5/5 – – –

Rita Forst

8/9 5/5 6/7 5/6 8/8

Jane Griffiths 9/9 5/5 7/7 6/6 8/8

John O’Higgins 9/9 5/5 7/7 6/6 8/8

Xiaozhi Liu

9/9 5/5 7/7 6/6 7/8

Chris Mottershead

8/9 4/5 6/7 5/6 7/8

Doug Webb 9/9 5/5 7/7 6/6 8/8

1. Patrick Thomas was unable to attend one committee meeting due to unforeseen travel issues

2. Rita Forst was unable to attend one board meeting, two committee meetings and part of another board meeting due to serious illness

3. Xiaozhi Liu was unable to attend part of one board meeting and one committee meeting due to short-notice scheduling changes

4. Chris Mottershead was unable to attend one board meeting and four committee meetings due to serious illness

Non-executive director industry leadership

and experience

Patrick

Thomas

Rita

Forst

Jane

Griffiths

John

O’Higgins

Xiaozhi

Liu

Chris

Mottershead

Doug

Webb

Automotive

Chemicals

Energy

Oil and gas

Pharmaceuticals

Manufacturing

Professional services

Technology

Sustainability

Board composition

Female directors: three

Male directors: six

33%

67%

Gender diversity

Chair and non-executive director tenure

Chair: one

Executive: two

Non-executive: six

11%

22%

67%

0-3 years: one

4-6 years: five

7-9 years: one

14%

72%

14%

Role

British: five

Irish: two

German: two

56%

22%

Nationality

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Board of Directors

Appointed to the Board: March 2022

Skills and experience

Liam was previously a member of the Board

of Management of Bayer AG and President

of the Crop Science Division, a role he held

for nine years. He has also served in senior

roles at Schering AG and Bayer HealthCare.

Contribution

Liam is a dynamic and values-driven leader,

with an impressive track record of leading

science-based businesses while delivering

consistent high-quality performance.

Hebalances commercial ability with

astrong strategic perspective. He has

aproven track record of driving growth

andmodernising organisations.

Appointed to the Board: April 2021

Skills and experience

Stephen joined from KPMG, where he was

a partner. He is experienced in both audit

and advisory roles for large, complex

international companies across a variety of

sectors including FMCG, healthcare, natural

resources and industrials. Stephen is a

chartered accountant.

Contribution

Stephen brings operational and technical

understanding of Johnson Matthey

andsignificant experience working

withcompanies going through major

change programmes.

External appointments

Non-Executive Member of the Audit

andRisk Assurance Committee for the

Sovereign Grant and Trustee of Care

International UK.

Appointed to the Board: October 2021

Skills and experience

Rita has spent more than 35 years at the

Opel European division of General Motors

in senior engineering, product

development and management positions,

including Vice President, Engineering,

forGeneral Motors Europe. She was also a

member of Opel’s Management Board from

2010 to 2012. Rita was responsible for the

development of new generations of engines

and car models for Opel and General

Motors, as well as European research

anddevelopment activities.

Contribution

Rita has a deep understanding of the

automotive and powertrain sectors.

Herextensive knowledge includes research

and development of conventional and

alternative powertrains, as well as future

vehicle technologies.

External appointments

Non-Executive Director of Westport Fuel

Systems Inc and member of Technology

and Product Strategy Committee,

Non-Executive Director of AerCap Holdings

N.V. and member of ESG Committee and

Portfolio Management Committee,

Member of the Supervisory Board of

NORMA Group SE and Chair of Group

Strategy Committee, andMember

oftheAdvisory Board of iwis SE &Co.KG.

Appointed to the Board: January 2017

Skills and experience

Jane held various roles at Johnson

&Johnson (J&J) from 1982 until her

retirement in 2019, with experience

ininternational and affiliate strategic

marketing, sales management, product

management, general management

andclinical research. Most recently, she

was Global Head of Actelion, a Janssen

pharmaceutical subsidiary of J&J.

Contribution

Jane has significant experience and

understanding of global strategy

management across a variety of markets,

and a strong interest in sustainability

anddiversity.

External appointments

Chair of Redx Pharma Plc, Non-Executive

Director and Sustainability Committee

Chair of BAE Systems plc.

Patrick Thomas

Chair

Liam Condon

Chief Executive Officer

Stephen Oxley

Chief Financial Officer

Rita Forst

Independent Non-Executive

Director

Jane Griffiths

Independent Non-Executive

Director

Societal Value Committee member

Nomination Committee member

Audit Committee member

Remuneration Committee member

Committee Chair

Board committees

Appointed to the Board: June 2018

Skills and experience

Between 2015 and May 2018, Patrick

wasChief Executive Officer and Chair of

theBoard of Management at Covestro AG.

Between 2007 and 2015, he was Chief

Executive Officer of its predecessor, Bayer

MaterialScience, before its demerger

fromBayer AG. He is a fellow of the Royal

Academy of Engineering.

Contribution

Patrick has deep experience of leading

international speciality chemical businesses.

He also has a track record in driving growth

through science and innovation across global

markets, with a strong focus on sustainability.

External appointments

Non-Executive Director at AkzoNobel

and member of Covestro AG’s

Supervisory Board.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Appointed to the Board: November 2017

Skills and experience

John was Chief Executive of Spectris plc

from January 2006 to September 2018,

leading the business through a period of

significant transformation. He previously

worked for Honeywell as President of

Automation and Control Solutions, Asia

Pacific, and in other management roles.

From 2010 to 2015, John was a Non-

Executive Director at Exide Technologies

Inc, a battery technology supplier to

automotive and industrial users. He began

his career as a design engineer at

Daimler-Benz in Stuttgart.

Contribution

John has extensive business and industrial

experience, as well as a track record of

portfolio analysis and realignment,

drivinggrowth and improving

operationalefficiencies.

External appointments

Chair of Elementis plc, Non-Executive

Director of Oxford Nanopore Technologies

Plc, member of the Supervisory Board of

ENVEA Global SA and Trustee of the

WincottFoundation.

Appointed to the Board: April 2019

Skills and experience

Xiaozhi is the founder and Chief Executive

of ASL Automobile Science & Technology,

aposition she has held since 2009. She

waspreviously a senior executive in several

automotive companies, including Chair and

Chief Executive of General Motors Taiwan.

Contribution

Xiaozhi has deep knowledge and

perspective on sustainable and technology-

driven businesses, and strong experience

ofthe global automotive sector, particularly

in China, as well as Europe and the US.

External appointments

Chief Executive of ASL Automobile Science

& Technology, Non-Executive Director

ofAutoliv Inc and InBev SA/NV.

Appointed to the Board: January 2015

Skills and experience

Chris held roles at King’s College London

until his retirement in 2021, including

Senior Vice President of Quality, Strategy

and Innovation, and Director of King’s

College London Business Limited. Before

this, Chris had a 30-year career at BP,

including as Global Advisor on Energy

Security and Climate Change. He was also

Technology Vice President for BP’s Global

Gas, Power and Renewables businesses.

Heis a chartered engineer and fellow

of the Royal Society of Arts.

Contribution

Chris has a wealth of industrial and

academic knowledge, as well as experience

in energy technology and related global

sustainability issues. As Chair of the

Remuneration Committee, Chris is

asounding board for JM’s HRfunction.

External appointments

Member of the Audit Committee

of the Crick Institute.

Appointed to the Board: September 2019

Skills and experience

Doug was Chief Financial Officer at Meggitt

plc from 2013 to 2018, and was previously

Chief Financial Officer at London Stock

Exchange Group plc and QinetiQ Group plc.

Before that, he held senior finance roles at

Logica plc. Doug began his career in Price

Waterhouse’s audit and business advisory

team. He is a fellow of the Institute

ofChartered Accountants in England

andWales.

Contribution

Doug has a strong background in corporate

financial management and a deep

understanding of the technology and

engineering sectors. Doug chaired the

Audit Committee at SEGRO plc for nine

years until April 2019, making him ideally

suited to chairing our Audit Committee

andacting as its financial expert.

External appointments

Non-Executive Director, Audit Committee

Chair and Treasury Committee Chair

ofUnited Utilities Group PLC and Senior

Independent Director of BMT Group Ltd.

Appointed as General Counsel and

Company Secretary: June 2020

Skills and experience

Nick has strong experience

working across a diverse range

of sectors. After qualifying

as a solicitor, he worked in

general counsel and company

secretarial roles across the retail,

software, hospitality and

telecommunications sectors.

More recently, as Corporate

Services Director of Cable &

Wireless, he led the migration

of its central operations from

London to the US.

Contribution

Nick’s wide knowledge of

corporate law, governance and

operational experience means

heis ideally placed to support

theBoard.

External appointments

Non-Executive Director of

Springfield Properties PLC,

Director of Veranova Parent

Holdco, L.P.*

* JM holds 30% of the share capital

ofthis company

John O’Higgins

Senior Independent Director

Xiaozhi Liu

Independent Non-Executive

Director

Doug Webb

Independent Non-Executive

Director

Nick Cooper

General Counsel and

Company Secretary

Chris Mottershead

Independent Non-Executive

Director

Johnson Matthey | Annual Report and Accounts 2023

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Board of Directors continued

Our board of directors

At the date of this report, the Board comprises nine directors: the Chair, two executive

directors, the Senior Independent Director and five independent non-executive directors.

The Board is responsible for our long-term success. It provides leadership, direction and

monitors Johnson Matthey’s culture and values. The Board also sets our strategy and oversees its

implementation, ensuring we are managing risks appropriately and acting in the interests

ofour stakeholders. The responsibilities we do not delegate as a board are included in the

matters reserved for the Board in our Governance Framework.

Read JM’s Governance Framework on our website, matthey.com/governance-framework

Our governance structure

Board composition and roles

Our non-executive directors are determined to be independent by the Board, in accordance with the Code’s criteria. The Board members’ respective skills, experience and knowledge enable them

to discharge their respective duties and responsibilities effectively. Further details can be found on pages 75-77.The Chair was considered independent on appointment.

• Leads the Board

• Ensures an effective Board, including welcoming contributions

andchallenges from directors

• Maintains regular and effective shareholder communications

sothat the Board has a clear understanding of their views

• Chairs the Nomination Committee, initiating change and

succession planning for the Board and senior management

• Promotes high standards of integrity, probity and corporate

governance throughout JM

Chair

Patrick Thomas

• Constructively challenge the executive directors

• Scrutinise management’s performance

• Provide independent advice on strategy proposals

• Satisfy themselves on the integrity of financial information and on

the effectiveness of financial controls and risk management systems

• Determine appropriate executive director remuneration

Independent

Non-Executive Directors

Rita Forst, Jane Griffiths,

Xiaozhi Liu, Chris Mottershead

and Doug Webb

• Provides a sounding board for the Chair

• Acts, if necessary, as a focal point and intermediary for the

other directors

• Ensures any key issues not being addressed by the Chair or senior

management are acted upon

• Is available to shareholders should they have concerns

• Leads the annual appraisal of the Chair’s performance

Senior Independent Director

John O’Higgins

• Day-to-day responsibility for running the group’s operations

• Recommends and implements group strategy

• Applies group policies

• Promotes JM’s culture and standards

Chief Executive Officer

Liam Condon

• Has day-to-day responsibility for managing the finance, IT,

security and real estate functions

• Leads the group’s finance activities, risks and controls

Chief Financial Officer

StephenOxley

• Together with the Chair, keeps the effectiveness of the company’s

and the Board’s governance processes under review

• Provides advice on corporate governance matters

General Counsel and

Company Secretary

Nick Cooper

Key responsibilitiesBoard role

Johnson Matthey | Annual Report and Accounts 2023

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Audit Committee

Read more on pages – 88-89

Our board committees

All independent non-executive directors are members of the principal board committees.

TheChair is a member of the Remuneration Committee and the Societal Value Committee,

and he also chairs the Nomination Committee.

The number of board and committee meetings held during the financial year is included

on page 75. The Board keeps the number of meetings under review to ensure that

non-executive directors have sufficient time to discharge their duties.

Governance Framework: matthey.com/governance-framework

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Our governance structure continued

Corporate governance report

Purpose and culture

Our purpose, culture and vision are underpinned by our values

The Board monitors culture using a range of metrics, including our global employee

engagement survey, customer satisfaction scores, customer behaviour statistics, health and

safety reports, financial results, internal audit reports and progress against our key

transformation project milestones. Our Speak Up process is our formal channel for employees

to raise concerns. Any material issues or key themes arising from Speak Ups are discussed

bythe Ethics Panel and Societal Value Committee and escalated to the Board as appropriate.

As part of the strategic review, the Board set new cultural priorities aligned to our purpose

and values, to drive a simpler, higher-performing and more commercial organisation.

Duringthe year, we continued to transform our culture with a focus on efficiency, high

performance and commercialism. These new cultural priorities also helped us review some

ofour own governance practices, to ensure they enabled these behavioural changes and

supported thedelivery of our strategy.

Our Chief Executive Officer continues to focus on the key themes of people, culture and

commercial performance in his board reports throughout the year. This provides us with

avaluable insight into the day-to-day operations and the cultural context in which our

colleagues work. All our board directors go on site visits to engage with colleagues

atalllevelsof the business and gain a better understanding of the culture at our sites.

Read more about how our purpose and culture impacts our decisions on pages 82-83

Our board committees play an important role in monitoring our culture

The Societal Value Committee ensures we are

a truly inclusive organisation with a diverse

workforce. It monitors any key themes

andissues arising from our Speak Up process

See pages 88-89

The Nomination Committee makes sure

succession planning supports our culture

and promotes diversity

See pages 90-93

The Audit Committee has oversight of

internal controls that safeguard our culture

See pages 94-102

The Remuneration Committee steers the

group’s approach to reward and benefits

toensure it promotes our culture and

long-term success

See pages 103-127

Employee engagement

We are committed to engaging with employees to better understand the issues, challenges

and opportunities across the group. In 2022, the Board focused on reviewing our strategy

andconsidered employee feedback from The Big Listen. This employee survey was designed

to uncover strengths and barriers to our success from the bottom up. Since The Big Listen,

employee engagement has continued to be led by management, as we communicated our

refreshed strategy. Town halls and team sessions took place at all levels across the group

toshare our vision, play to win behaviours and provide progress updates on the execution

ofour strategy. This was an essential part of ensuring our people had the chance to discuss

andquestion management to better understand their role in delivering our ambitions.

Thetown halls also provided a platform to communicate the cultural and behavioural

changes that are vital for the successful delivery of our strategy.

Each year the Board conducts site visits to see operations first hand, meet colleagues and

develop a better understanding of the culture. During the Board’s visit to our Technology

Centre in Sonning in September 2022, the directors met with employees informally over

lunch, providing an opportunity for open discussion and the chance for directors to hear

theviews of our colleagues without having structured topics of discussion.

As described on page 73, this is an area where the Board has not complied with the Code.

Itwas felt that following the strategic review, direct engagement between management and

our employees was paramount to ensure the new cultural ambition and strategy was well

understood. The Board had previously considered employee engagement methods specified

by the Code and felt that our global and diverse employee network required a different

approach. We established engagement focus groups in countries where we have a significant

footprint, each led by a board member. Following the communication of our strategy, the

Board intends to re-establish simplified groups for 2023/24 to obtain a greater insight into

the views of our employees. The directors will report back to the Board on the key messages

they have heard from their engagement focus group and any actions arising will be

monitored through the year by regular reports.

Protecting people and the planet

Acting with integrity Innovating and improving

Working together Owning what we do

Catalysing the net zero transition

Our culture

Our values

Focus Simplify Execute

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Induction and training

All new directors receive comprehensive and tailored inductions during their first year at JM

togain a deeper understanding of how we work. Induction plans are adapted to support

eachdirector in meeting their statutory duties. Through the plan, directors develop a deep

understanding of our strategic priorities, as well as an insight into our purpose, values

andculture.

Following their induction, each director receives regular briefings from external advisers

orteach-ins on items of strategic importance as part of regular board training. In September

2022, as part of continuous development, the Board received a schedule of teach-ins, which

were delivered by subject matter experts from across the group. These covered Hydrogen

Technologies, PGM chemistry and applications, renewables and electrochemical

transformations, Clean Air (specifically, ammonia cracking, hydrogen ICE and methane

abatement), digitalisation of R&D, and metals. This provided the Board with insights into

thebusiness and an opportunity to ask questions of the wider workforce about the detailed

areas in which they work.

During the year, external legal advisors also provided an update on the UK Market Abuse

Regulation. All board members receive regular training on climate-related issues through the

Societal Value Committee, where external specialists are invited to present at each meeting.

The auditors also presented regulatory updates to the Audit Committee, including the key

changes for the next financial year.

Throughout each year, all directors receive information on mandatory training topics, including

on health and safety, information security and ethics and compliance matters. Legal and

governance updates are regularly provided by the General Counsel and Company Secretary.

The skills and experience of our board members are regularly assessed to ensure they

continue to be well placed to provide insight on our purpose and strategy. This, alongside

theannual board effectiveness review, informs our training agenda for the year.

Director

training

• Introduction to key management personnel

• Detailed strategic review

• Sector deep dives

• Detailed strategic review

• Mandatory training to ensure the directors

have a clear understanding of our

internalprocesses

• External experts provide training on relevant

topics to enhance technical knowledge

• Identify areas of improvement for future

boardtraining

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Corporate governance report continued

Our annual agenda plan reflects our strategy and gives us sufficient time to discuss and develop strategic proposals and monitor board performance. Below, we have set out some of the matters we

considered during the year, different stakeholder groups central to those decisions, as well as the outcomes. Our Stakeholder engagement on pages 84 to 86 (including our Section 172 statement

on page 72), illustrates how the Board considers stakeholder views and the outcome of those considerations.

Read more about our strategy on pages 12 and 13 and risk on pages 62 to 69

Matters considered Stakeholders considered How the Board received

stakeholder feedback

Outcomes Links to risk

Strategy and

execution

Strategic discussions included:

• Review of a refreshed strategy

• Delivery of our transformation

programme

• Investments and strategic

partnerships

• Reviews by business Chief

Executives

• Customers and strategic

partners

• Employees

• Investors

• Suppliers

• Society

• Communities

• Chief Executive Officer

updates

• Business updates

• M&A updates

• Strategy and

transformation updates

• Adopted a refreshed strategy, which

waspresented to the market in May

2022 and agreed a new cultural

ambition tosupport the successful

delivery ofthestrategy

• Monitored the progress of the

transformation programme

• Reviewed each business’sstrategic

update assessing the market, risks

andopportunities

• Agreed a strategic partnership with

PlugPower and investment in a new

USfacility

• Approved the investment in 3CR

• Approved several smaller investments

that help deliver against our

strategicmilestones

Financial

oversight

Scrutinised and monitored financial

data and performance, including:

• Trading and performance

• Full-year and half-year results

• Going concern and viability

statements

• Dividend payments

• Annual Report including

reporting against the Task Force

on Climate-related Financial

Disclosure (TCFD) requirements

• Customers and strategic

partners

• Employees

• Investors

• Suppliers

• Chief Financial Officer

updates

• PGM reports

• Regular broker reports

• Investor perception study

• Feedback following

full-year and half-year

results presentations

• Reviewed in detail the group’s financial

position, including working capital

andnetdebt

• Agreed the budget for 2023/24 and our

three-year plan

• Assessed the proposed dividend payment

• Approved the going concern and viability

statements

• Reviewed and approved the full-year

andhalf-year results and annual report

and accounts

Operational

management

We received regular updates from

the Chief Executive Officer on:

• Group operations

• Capital project execution

• Environmental, Health and Safety

(EHS) performance

• Business continuity and ongoing

site management

• Supply chain management

• Customers and strategic

partners

• Employees

• Investors

• Suppliers

• Society

• Communities

• Procurement update

• Payment practices

reporting

• EHS updates

• Modern Slavery Statement

• Conflict Minerals Disclosure

• Challenged group operations, including

capital projects, procurement, security,

EHS, IT and supply chain management

• Discussed process safety and instructed

an independent audit

Board activities

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Matters considered Stakeholders considered How the Board received

stakeholder feedback

Outcomes Links to risk

Governance Governance is at the heart of the

board agenda, including

consideration of:

• Stakeholder engagement

mechanisms

• Board effectiveness

• Our Governance Framework

• Our Delegation of Authority

Framework

• Policies and processes

• Customers and strategic

partners

• Employees

• Investors

• Suppliers

• Society

• Communities

• Attendance and

engagement at the AGM

• Investor perception survey

• Feedback following

meetings and direct

engagement with investors

• Review material news or

regulatory announcements

through the Disclosure

Committee

• Progressed the actions from the last

year’s internally facilitated board

effectiveness review and conducted

another internal board

effectivenessreview

• Reviewed the investor perception study

and associated actions

• Implemented changes to improve the

Governance Framework and simplified

committees at GLT level

• Approved changes to simplify the

Delegation of Authority Framework

• Approved updates to policies to ensure

alignment with best practice

People and

culture

The Board focused on:

• Our people strategy and

culture

• Diversity, inclusion and

belonging

• Employee engagement

surveys

• Employees

• Communities

• Insights gained from

sitevisits

• Annual talent review by the

Nomination Committee

• People strategy and culture

updates from the Chief

Executive Officer and Chief

HROfficer

• Results and feedback

fromour internal

engagement surveys

• Reviewed the feedback from employee

engagement surveys and agreed an

action plan

• Reviewed progress on changing

behaviours to support our cultural

ambition through the transformation

programme updates

Risk The Board reviewed the group’s

approach to risk management

and completed deep dives of

principal risks

• Customers and strategic

partners

• Employees

• Investors

• Suppliers

• Society

• Board reports on the

full-year and half-year risk

reviews

• Deep dive reports into

certain principal risks

andareas of emerging risks

• Considered any emerging risks as a result

of the external environment

• Reviewed each principal risk to ensure

they remained appropriate

• Approved the risk appetite for each

principal risk

• Reviewed mitigating activities

Key to principal risks

Significant shift in demand and / or commoditisation of sustainable technology

A significant work-related EHS incident

A significant geopolitical or macroeconomic event impacting JM's operations

Disruption to inbound goods or services provided

Failure to deliver business value from strategic capital projects

Security of metal and failure to manage metal commitments

Development of products that do not meet the future needs of customers

Failure in one or more of JM’s critical operational assets

Unsuccessful delivery of key business transformation programme

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Board activities continued

How we engage at board level How we engage across the company

Customers and strategic partners

• Customer relationships are discussed at every

board meeting

• Several key strategic partnerships were

approved by the Board during the year, and

the Board assesses potential partnerships

against our strategic ambitions and milestones

• Customer satisfaction surveys

• Tracking customer perceptions against

keyindicators

• Engaging customers in the development

process of new products

Investors

• Regular investor updates are presented

atboard meetings, including the results

ofaninvestor perception study

• Investors have the chance to ask directors

questions at the AGM

• The Board approves trading statements, full-

and half-year results and the Annual Report

and accounts

• The Chair, Chief Executive Officer and Chief

Financial Officer have regular engagement

with major shareholders

• The Remuneration Committee Chair engages

directly on remuneration matters and changes

of policy

• The SID and Committee Chairs are available

tomeet with investors

• Regular dialogue with shareholders to support

them in their investments

• Investor roadshows

• Roundtable teach-ins

Employees

• Review the results of the employee

engagement surveys

• Monitor culture and the impact of the

transformation programme on our people

• Regular visits to JM sites to meet colleagues

• Review process safety and EHS processes

toensure they keep our people safe

• The Nomination Committee receive talent

andsuccession updates

• The Societal Value Committee review matters

raised through our independent Speak Up process

• The Remuneration Committee sets the reward

and benefits framework

• Regular internal communications and

townhalls

• Employee engagement survey

• Policies, processes, and events to keep our

people safe and promote a culture of diversity,

inclusivity and belonging

• Annual JM Awards

Stakeholder engagement

How we engage at board level How we engage across the company

Society

• Ensure the delivery of our strategy, which

addresses key societal issues

• Through the Societal Value Committee review

the progress towards our sustainability targets

• Play an active role in global associations,

including a leading role as UK Hydrogen

Champion, an independent advisory role to the

government

Communities

• The Societal Value Committee receives reports

on ESG and actions to support our

communities

• Employee volunteering

• Match funding for employee donations

tocertain charitable causes. In 2022/23 JM

matched charitable donations made to the

Disaster Emergency Committee following

theTurkish and Syrian earthquake disaster

• Company donations to support communities

inthe regions that we operate in

Suppliers

• Review payment practices reporting and areas

of improvement

• Review and approve the Modern Slavery

Statement

• Promote an ethical culture

• Continually review relationships with our

strategic and high-impact suppliers

• Policies and processes to ensure an ethical

supply chain, including the Global Human

Rights Policy and Conflict Minerals and

CobaltPolicy

• Annual Ethics Week to raise awareness

of the importance of our suppliers

We are focused on driving long-term sustainable success for the benefit of our stakeholders. This section provides an insight into how we as a board engage with our stakeholders to understand

what matters to them. Examples of some of the principal decisions taken by the Board during the year and the stakeholder views and inputs considered as part of these decisions are on

pages84to86.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Stakeholder engagement in action

Stakeholder engagement is vital to building a sustainable business. The Board recognises

the need to foster positive business relationships with suppliers, customers and governments.

This section provides more details on how the directors have fulfilled their duties.

The matters we consider differ in relevance for each stakeholder, and sometimes stakeholders

may have conflicting interests. We aim to consider the key issues relevant to each stakeholder

group, and our decisions will ultimately promote the group’s long-term success and support

our vision, purpose and strategy. In making decisions, we consider the interests of

stakeholders across the company – not just at board level.

Transforming the way we operate

Our transformation programme is driving greater efficiency and cost savings through simplifying and

modernising the way we work. Following the strategic review, our focus has been structured around key pillars,

including external milestones, culture, efficiency and growth. The Board receives updates on transformational

workstreams associated with each of these pillars at every meeting. This allows the Board to maintain effective

oversight and an opportunity to assess the impact on our different stakeholders.

Stakeholder considerations

Our people: We understand the impact that transformation can have on our people and that driving cultural

and behavioural changes takes time. We listened to our people through our employee engagement surveys.

These helped shape our discussions during our strategic review last year. As a board we have reviewed our

owngovernance processes and approved a simplified delegation of authority and changes to the Governance

Framework, which reduced the number of GLT sub-committees.

Investors: Through our transformation programme updates, we closely monitor performance against external

milestones. This allows us to challenge management and demand greater accountability, ensuring the effective

delivery of our strategy for our investors and wider stakeholders. Our transformation programme will accelerate

our growth, drive efficiencies and cost savings across the group, ultimately providing better long-term returns

forour investors.

Suppliers: The Board has considered how best to support suppliers and by simplifying and clarifying processes

and systems, it allows greater ability to support smaller suppliers with shorter payment terms. This in turn

supports the Board’s commitment to prompt payment.

Outcomes and impact on our long-term success

We believe that JM needs to become simpler, more agile and more cost-effective in order to focus on longer-

term, sustainable value growth. The transformation programme will drive stronger execution, unlock

near-term cost opportunities and strengthen our capabilities in capital project execution and cross-group

commercialsynergies.

Safeguarding our people and our operations

As part of the Board’s deep dives, we reviewed process safety across the group. Process safety relates to the risk

ofmajor accidents during processing of hazardous chemicals or substances. Such accidents, typically fires,

explosions and toxic releases, have the potential to cause severe harm to people and the environment, both

onand off-site. Several actions were identified in the review and an independent third party was engaged

toundertake an audit of the process safety management programme and major risk priorities.

Stakeholder considerations

Our people, investors and communities: Our process safety and wider EHS procedures keep our people safe in

the workplace. Accidents can have a catastrophic impact on people, the environment and business. Whilst these

significant catastrophic events are rare within JM and the wider chemical industry, the Board wanted to ensure

that the management system was robust, with leadership driving a strong process safety culture. The audit

reviewed our practices against industry best practices enabling us to monitor their implementation across

various JM sites.

Outcomes and impact on our long-term success

The independent audit commenced in January 2023 and the results will be reported to the Board. As part of the

audit, the third party met with group, business and site leadership, covering various topics agreed by the Board,

including protocols, process safety performance indicators and escalation methods to management. Following

the completion of the meetings with leadership and the final report to the Board, a detailed action plan will

becreated to ensure that our process safety is in line with industry best practice.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Stakeholder engagement continued

Strategic partnerships that deliver against our milestones

The Board approved a long-term strategic partnership with Plug Power to accelerate the green hydrogen

economy. This partnership creates a volume and scale for green hydrogen that has not existed until now.

Itbrings together one of the largest green hydrogen and fuel cells companies in the world with our technology

and manufacturing capabilities.

Stakeholder considerations

Our people: Plug Power and JM will co-invest in what is expected to be the largest catalyst coated membranes

(CCMs) manufacturing facility in the world. The facility will be built in the US and is likely to begin production

in2025. To support this, we are already increasing our manufacturing capability in the UK through a new 3GW

gigafactory in Royston, UK. As part of this project and the scale-up of our manufacturing capabilities, there will

inevitably be new opportunities created for our people to transfer to different roles as we refocus and redirect

thegroup to support our strategic ambitions.

Investors: Our long-term partnership with Plug Power is a key deliverable in our strategic growth plan for our

Hydrogen Technologies business. This partnership confirms our world-class position in catalyst coated

membranes, the key performance-defining components of electrolyzers and fuel cells. It further emphasises the

key role we have to play in the green hydrogen economy. The Board considered that this partnership would

positively contribute to investors’ long-term returns.

Customers and innovation partners: JM will become an important strategic supplier of MEA components,

providing a substantial portion of Plug’s demand for catalysts, membranes, and catalyst coated membranes. This

is an incredibly important validation of our technology and our ability to deliver for our customers as we support

the rapid scale-up of key raw material value chains by contributing expertise in sourcing, managing and

recycling PGMs.

Governments and trade associations: A £400 million government-backed loan (unrelated to the Plug Power

partnership) was granted to JM in April 2022. The long-term strategic plan for JM’s hydrogen products will

further help to deliver the UK government’s Ten Point Plan for a green industrial revolution, to help develop

global solutions to the climate crisis.

Communities: This partnership will contribute significantly towards our 2030 target for 50 million tonnes

ofgreenhouse gas emissions avoided per year. It will also help Plug Power meet its strategic ambitions, and

therefore will help its customers – including Amazon, Carrefour, Walmart and BMW – to meet their business

goals, helping to decarbonise the economy.

Outcomes and impact on our long-term success

The partnership enables each company to leverage its specific areas of expertise, working together to accelerate

itsgrowth. It also delivers on a key strategic milestone for partnerships for Hydrogen Technologies and materially

accelerates our ambition to be a leading provider of CCMs globally.

The partnership will support Plug Power in delivering its targeted revenue of US$5 billion and US$20 billion by

2026 and 2030 respectively. To help achieve these targets, Plug Power and JM will co-invest in what is expected

to be the largest (5GW scaling to 10GW over time) CCMs manufacturing facility in the world. Plug Power and

JMwill also continue to leverage government incentives where possible, including from the Inflation Reduction

Act in the US and REPowerEU in Europe to push for exponential growth across the hydrogen industry.

Investing in our future and securing our

leadership position

We are investing for growth and generating attractive returns. As part of our plans to invest £1.1 billion in

capital expenditure from 2022/23 to 2024/25, the Board approved several investments to expand and improve

our existing infrastructure in a number of our businesses.

The Board approved a gigafactory to scale up the manufacture of hydrogen fuel cell components.

Thegigafactory will initially be capable of manufacturing 3GW of proton exchange membrane components

annually for hydrogen vehicles and the project is supported by the UK government through the Automotive

Transformation Fund.

In PGMS, our refineries need investment to set them up for decades of profitable operation. This year

wecontinued to invest to maintain these assets.

Stakeholder considerations

Our people: Old equipment, challenging conditions and increasingly unreliable assets posed potential EHS risks

and placed a strain on our operations, engineering and maintenance teams. We considered the potential

benefits to our people, and the invaluable impact replacing the existing metals refinery would have on the

working environment and safety.

In addition, we considered the positive impacts of scaling up our operations in Hydrogen Technologies and

therole it would play in securing hundreds of highly skilled manufacturing jobs in the UK.

Investors and customers: The scale-up of manufacturing for hydrogen fuel cell components will position

Johnson Matthey to be a market leader in performance components for fuel cells and electrolysers, driving

long-term value creation for our investors and the improvement of the electric vehicle supply chain for

ourcustomers.

The age of the existing refinery and machinery could cause regular issues and delays in refining customer metal,

resulting in longer lead times and working capital constraints. The new refinery will increase refining capacity,

reduce working capital, and therefore create new commercial opportunities for us. It will bring innovation to our

refining processes, including more automation and control systems to optimise the way in which the plant is run

and drives circularity for our customers.

Community and society: Decarbonising freight transformation is critical to help societies and industries meet

their ambitious net zero emission targets. Our investment into fuel cells will be a crucial part of this transition.

The 3CR project will have significant environmental and social benefits over the existing refinery. It will

future-proof the plant against potential tightening of legislation around platinum salts sensitisation through

engineering-based controls and containment. 3CR will also deliver energy efficiency and sustainability

improvements, including the reduction of hazardous waste, moving us towards our 2030 targets including

Scope 1 + 2 emissions.

Outcomes and impact on our long-term success

The scale-up of manufacturing for hydrogen fuel cell components positions us as a market leader in

performance components for fuel cells and electrolysers, targeting more than £200 million sales in Hydrogen

Technologies by the end of 2024/25.

The refining business underpins the group, providing a secure and cost-effective source of PGMs to our Clean Air

and Hydrogen Technologies businesses, while generating significant operating profit for the group. Further

investment in 3CR will enable us to refine in a safe, effective and sustainable manner. The investment mitigates

the business continuity risk associated with an older asset and will provide improvements in refining lead times,

reductions in energy consumption and volume upsides.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Section 172 statement continued

Each year, the Board reviews its performance and effectiveness, including that of its

committees and individual directors. This helps identify areas for improvement and ensure

itis well placed to provide constructive challenge.

We carried out an externally facilitated board effectiveness review in 2021. The 2023 review

was facilitated internally and led by the Chair, with support from the General Counsel and

Company Secretary. The review involved a questionnaire seeking input on a range of topics

including leadership, strategy, dynamics and culture. Compiled by Independent Audit

Limited, a specialist corporate governance consultancy, the questionnaire was circulated

toallboard members, certain external advisers and a number of senior leaders who regularly

present to us. Obtaining feedback from a wide range of stakeholders provides a more diverse

perspective on the performance of the Board. TheChair discussed themes emerging from

thequestionnaire findings and individual performance with each board member. The results

of the review were compiled by Independent Audit Limited, who produced a report for review

by the Chair and the General Counsel and Company Secretary.

Outcome

The results of the self-assessment questionnaire indicate that the Board continues to perform

well. There is a high degree of openness and trust between board members with a good level

of debate. There was recognition of the Remuneration Committee’s work on communication,

including externally, and the Audit Committee’s relationship with the external auditor was

praised. The review highlighted the importance of having oversight of culture and ensuring

that cyber risk remains an area of focus.

Board and committee effectiveness

The tables below provides an update on the progress made on the actions from our 2021/22 review and the actions agreed as part of the 2022/23 review:

2021/22 Action 2021/22 progress and insight

• Consider the output of the strategic review on the Board’s processes, including agenda planning

and the skills of the Board members

• Board agendas have been refined to give more time to business updates, in order to update the Board

onprogress of our strategic milestones

• The Nomination Committee reviewed the board skills matrix and agreed this remained appropriate

inlight of the company’s refreshed strategy

• The Board approved a new delegated authorities framework to support more efficient decisions and

toempower management

• Review how culture is monitored in order to drive our strategy • This action was deferred as we communicated our strategy to our people and engaged with our senior

leaders on the values and behaviours needed to transform our business

• Review the principal risks and their prioritisation in light of the strategic review to continue to embed risk

management across JM

• The principal risks were reviewed and revised by the Board to ensure they aligned to our strategy

• Clarify the roles and responsibilities of the Board committees with a particular focus on climate-related

issues

• During 2022, a workshop including the Chief Financial Officer, Audit Committee Chair, Chief

Sustainability Officer and Director of Risk and Assurance was held and the roles and responsibilities

ofeach committee were clarified. The changes were incorporated in the respective committee terms

ofreference

• Create a greater focus on executive succession planning through the Nomination Committee • At its meeting in November 2022, the Nomination Committee undertook a detailed review of executive

succession plans. This included a discussion of individuals who were “ready now” as well as potential

successors in the medium and longer term

Action 2022/23 Responsibility

Review and discuss how cyber risk is managed and mitigated across the group Stephen Oxley

Discuss the approach to culture and agree the methodology of reviewing progress (deferred from 2021/22) Liam Condon

Secure more opportunities for board members to meet members of the senior leadership teams outside

offormal board meetings

Nick Cooper

Review of the Chair’s performance

Led by John O’Higgins, the Senior Independent Director, the non-executive directors met without Patrick Thomas to discuss his performance as Chair. They considered he continues to provide

robust leadership for the Board and facilitates open and constructive debate.

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Established in 2021, the Societal Value Committee supports the Board by providing oversight,

challenge and rigour to our sustainability strategy, diversity and inclusion agenda and ethical

conduct. Following the Company’s strategic review, the Committee spent time discussing

Johnson Matthey’s vision for sustainability and its importance in everything we do. Since her

appointment as our first Chief Sustainability Officer in May 2022, Anne Chassagnette has

worked closely with the Committee. Her in-depth experience in leading sustainable

transitions has been a great resource for our discussions.

We ensure our sustainability goals and targets are focused on the areas where JM can have

the greatest positive impact on society. Having updated our materiality assessment and in

light of our refreshed strategy, the Committee recommended our 2030 goals be reorganised

under two pillars, ‘Planet’ and ‘People’ and focus on ten public targets.

As part of our ongoing review and monitoring of climate impacts, we approved a raised climate

ambition to put us firmly on SBTi’s .5˚C pathway to net zero for 2029/30. This commits us

toreducing Scope 1+2 and Scope 3 emissions by 42% by 2030, compared to 2019/20 levels.

Creating and embedding a sustainable culture across all areas of JM is hugely important.

Diversity, inclusion and belonging is key to executing our strategy, leading to more innovation,

high-performing teams and helping us attract and retain talent. During the year we reviewed

progress and provided feedback on the roadmap to achieve our diversity and inclusion goals.

We approved a standalone human rights policy, which defines our commitments to, and our

expectations from, our colleagues and value chain partners.

At JM we uphold the highest ethical standards in everything we do, underpinned by our value,

acting with integrity. The Committee is regularly updated on the plans and actions to embed

anethical culture. We discuss ethical dilemmas that arise and are briefed on notable ethics

andcompliance trends. The ethical dilemmas review actual JM fact patterns and provide recent

examples of how we live by our values. We confront geopolitical and ethical issues involving

sanctions and export controls on the world stage. This includes specific commercial opportunities

where we have chosen to walk away, because they did not comply with our business ethics.

The world is changing rapidly and as a committee, we need to consider different external

perspectives, trends and the industry landscape. Through presentations and discussions with

both internal and external experts, the Committee is kept informed of new developments and

best practice in relevant areas under the societal value remit. During the year, we deepened

relationships with external associations and think tanks, committed to advancing sustainable

business priorities through presentations and discussions on global human rights, the EU plan

for hydrogen and the impact of the US Inflation Reduction Act.

The Committee has been impressed with progress made this year on embedding the sustainability

strategy, driving the diversity and inclusion agenda, and ensuring high standards of ethical conduct.

Our internal committee effectiveness review showed that the Committee continues

tooperate effectively and has become more embedded into our governance framework.

Jane Griffiths

Societal Value Committee Chair

Societal Value Committee report

“Our sustainability

targets and goals are

focused on the areas

where we can make a

real difference.”

Membership

The Committee comprises all members of the Board.

Members’ attendance at committee meetings during the year is on page 75

Regular attendees at committee meetings

• Chief Sustainability Officer

• Chief HR Officer

• General Counsel and Company Secretary

• Group Sustainability Director

• Group Head of Ethics and Compliance

• Corporate Affairs Director

The Committee’s Terms of Reference set out its full responsibilities

matthey.com/governance-framework

Sustainability disclosures

The Committee reviewed and recommended to the Board the approval of the disclosures

in the Sustainability report on pages 20 to 44, including our TCFD disclosures on

pages45to 52.

Sustainability Performance Data Book: matthey.com/sustainability-databook

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

The Committee’s role

Societal value covers a range of economic, social and environmental topics. Given the central role of sustainability to our overall strategy, the Committee was established to bring continued focus

to this area. The Committee assists the Board in overseeing the group sustainability strategy, including net zero commitments and science-based greenhouse gas targets; driving a truly inclusive

organisation; overseeing the group’s ethical conduct; and keeping up to date with societal value topics, including stakeholder expectations.

More information on the governance of sustainability matters beyond the Committee can be found within our TCFD disclosures

How we delivered on our responsibilities

Sustainability Climate change Diversity and inclusion Ethics and compliance

What we did

• Oversaw plans and actions to execute the group

sustainability strategy including 10 roadmaps

to deliver on our 2030 target

• Discussed the results of an update to our

third-party materiality assessment, validated

our sustainability framework and refocused

our2030 targets

• Challenged sustainability performance data

• Reviewed the approach to communication

onsustainability

• Reviewed the proposed approach on advocacy,

including links with external organisations

(e.g. trade associations)

• Received regular horizon scanning updates,

competitor analysis and ESG benchmarking

• Challenged and validated increasing our

ambition for GHG emission reductions onto

SBTi’s 1.5˚C pathway to net zero

• Reviewed our strategy’s product portfolio

alignment with our company purpose of

catalysing the net zero transition and estimated

GHG emissions avoided by our product sales

by2030

• Agreed the application of internal carbon

pricing for capital decisions

• Received updates on hydrogen geopolitics

andlegislative developments

• Reviewed our diversity and inclusion gender

target for 2030 and actions to support

itsachievement

• Discussed the approach to employee

engagement and areas for immediate focus

• Reviewed actions to continue promoting

ourethical culture

• Received updates on Speak Up themes

andtrends

• Discussed real examples of ethical dilemmas

and how they were managed including actions

on responsible sourcing

• Received an external presentation on global

human rights and legislative developments

Outcomes

• Agreed the realignment of our sustainability

goals to our strategy and recommended to the

Board that our public targets for 2023 be

refocused to 10 targets

• Agreed our new communications and advocacy

approaches on sustainability

• Agreed and recommended to the

Remuneration Committee sustainability targets

for 2023 and the next three years for

incorporation into our Performance Share Plan.

• Reviewed and recommended that the Board

approve the sustainability section of the

AnnualReport

• Confirmed support for our updated 2030

climate ambition in line with SBTi Net Zero

Standard

• Reviewed and recommended that the Board

approve the TCFD report

• Recommended GHG emissions targets be

included within the Executive Directors’

Long-Term Incentive Share plan

• Challenged management on our diversity and

inclusion target and provided feedback on ways

to improve diversity, inclusion and belonging

• Reviewed and recommended that the Board

approve the Modern Slavery Statement

andConflict Minerals Disclosure

• Approved a standalone Human Rights Policy

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Societal Value Committee report continued

Nomination Committee report

As we deliver our strategy and simplify our structure, the Committee has focused on the

composition of the Board and the collective skills needed to oversee this transformation.

Westrengthened the Board’s composition with the appointment of Barbara Jeremiah

as an independent Non-Executive Director.

Having been a member of the Board for eight years, and chaired the Remuneration

Committee for the last six, Chris Mottershead will retire from the Board in January 2024.

TheCommittee has recommended, and the Board has approved the appointment of John

O’Higgins as the new Chair of the Remuneration Committee, with effect from our 2023 AGM.

At the beginning of the year, the Committee oversaw several new appointments to the GLT,

and changes to responsibilities of existing members, which were reported on in the 2022

Annual Report and Accounts.

Following this period of executive change, the Committee‘s activities in 2022/23 turned

toexecutive succession. We need to ensure we have the right leaders, both now and in the

future, to drive performance for the group’s long-term success. As part of these discussions,

the Committee also recommended the promotion and appointment of Simon Price as

General Counsel and Company Secretary, with effect from 7

June 2023, succeeding Nick

Cooper. Nick will remain a member of the GLT and take on a new role as Global Business

Services Director.

In all the Committee’s decisions, we place great importance on diversity, inclusion and

belonging. Our board and committee effectiveness review confirmed that our discussions

areopen and honest, with an atmosphere of trust. As a board, we must continue to make

sure everyone is welcomed and able to be themselves across all areas of JM.

Patrick Thomas

Nomination Committee Chair

“We are committed to

ensuring we have the

right leaders to execute

our strategy.”

Membership

The Committee comprises the Chair and all independent non-executive directors.

Members’ attendance at committee meetings during the year is on page 75

Regular attendees at committee meetings

• Chief Executive Officer

• Chief HR Officer

The Committee’s Terms of Reference set out its full responsibilities

matthey.com/governance-framework

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

How we delivered on our responsibilities

Board composition Tenure of directors Election of directors Succession planning

and senior leadership

appointments

Talent management

framework

Diversity and inclusion Performance and

effectiveness review

What we did

• Discussed and

recommended

proposed appointments

to the Board and

itscommittees

• Discussed and reviewed

the tenure of directors

• Evaluated the

performance of

individual board

members, their

contributions to the

Board, tenure and time

commitment

• Reviewed the

succession plans for the

most senior roles and

ensured plans were in

place to meet future

succession needs

• Reviewed and discussed

the approach to talent

and leadership

development plans for

the GLT and senior

leaders

• Reviewed the directors’

skills, experience and

diversity through

self-assessment, to

identify areas for

development

• Reviewed our Board

Diversity Policy

• Considered the

outcomes of the

internal effectiveness

review with regard

toboard composition,

talent management

and succession

planning

Outcomes

• Approved the

appointment of

Barbara Jeremiah as

anindependent

Non-Executive Director

from 1

July 2023 and

Senior Independent

Director from 20

July2023

• Approved the

appointment of John

O’Higgins as Chair of

our Remuneration

Committee from

July 2023

• Approved the

appointment of Simon

Price as General

Counsel and Company

Secretary from 7

June2023

• Recommended the

re-appointment of

Doug Webb and Jane

Griffiths for a further

three-year term,

subject to annual

re-election by

shareholders

• Recommended that

the Chair and all

directors are elected

or re-elected at the

2023 AGM

• Oversaw the

appointments of Anne

Chassagnette, Anish

Taneja, Mark Wilson

and Simon Price as

members of the GLT

• Non-executive directors

challenged and provided

feedback on the key

activities to strengthen

the talent pipeline

• Identified areas for

development to ensure

the directors can drive

our strategic priorities

• Agreed an updated

Board Diversity Policy

reflecting our

commitments to

maintain a level of 33%

of females appointed to

the Board and at least

one director from an

ethnic minority group

• Agreed that the board

skills matrix remained

appropriate in light of

our refreshed strategy

• Agreed to review the

approach to executive

succession planning

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Nomination Committee report continued

Succession planning

The Committee ensures we are led by a diverse, high-quality board, with the appropriate

skills, knowledge and experience to support the group’s strategic priorities. This includes

overseeing succession plans for all board roles. In accordance with the Code, the Committee

monitors the tenure of JM’s non-executive directors against the recommended nine-year term

to ensure an orderly succession. The tenures of our non-executive directors, Senior

Independent Director and the Chair are on page 75.

Non-Executive

By January 2024, Chris Mottershead will have achieved a nine-year tenure on the Board.

In anticipation of his retirement, the Committee discussed the roles and responsibilities

of the board members.

Having reviewed the skills and expertise of the current board members, we recommended

that a further non-executive director be appointed to the Board as Senior Independent

Director. The Committee sought an individual with strong leadership experience, experience

of delivering transformation programmes and an understanding of the US commercial

market. Egon Zehnder, a third-party search and recruitment specialist, assisted with the

search. Following evaluation of the final short list of candidates, the Committee

recommended Barbara Jeremiah’s appointment. It was felt that Barbara’s understanding of

metals, along with her investor experience, would enhance the Board’s deliberations.

Executive

The Committee also oversees succession planning for senior leadership roles and talent

development to build capability for the future. Our senior leaders are a source of future GLT

and board talent, with some of our most recent GLT appointments progressing through this

route. The Committee reviews, at least annually, the existing formal succession plan against

the internal talent pipeline of candidates, for immediate and medium to longer-term

movement into key leadership roles. This is routinely challenged to understand the breadth

ofpotential and to balance internal succession planning with the need for external perspectives.

During the year, Egon Zehnder provided senior-level recruitment services, including

assessment and people development services. It has no other connection with the Company

or any other directors.

Board skills

We regularly assess the Board’s collective skillset by asking each non-executive director to

identify their strengths, scoring their level of expertise on a scale of one to five. The table on

page 75 shows the skills held by our non-executive directors that are most relevant to their

role at Johnson Matthey. This assessment helps us identify any gaps that can be addressed

through future appointments or additional training.

Board inductions

All new directors receive a tailored induction programme upon joining the Board.

The diagram below shows some of the key activities that are undertaken by all new

directors.

Visits to our key

sites to meet

employees

Meeting key

customers

Meeting the

external

auditor, brokers

and company

advisers

Training on

health and

safety and

compliance

topics

Financial

briefings

Introductions to

the businesses

and leadership

teams

Pre-reading

board and

relevant

committee

papers

Briefings on

directors’ duties

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Nomination Committee report continued

Diversity and inclusion

The Committee continues to drive the diversity agenda across JM. A diverse and inclusive

organisation is fundamental to our vision, and our Board Diversity Policy ensures that the

tone is set from the top.

At the beginning of the year, the Committee reviewed our Board Diversity Policy and

refreshed its objectives to maintain:

• 33% female representation on the Board

• One director from an ethnic minority group.

Throughout the year and as of 31

March 2023, these targets were successfully met.

Detailsof gender and ethnic representation as prescribed by Listing Rule 9.8.6 are set out

inthe tables on this page. The Board and GLT members confirmed their gender and ethnicity

for the purpose of collecting this data.

Board Diversity Policy: matthey.com/board-diversity

As at 31

March 2023, the Board does not fully comply with the new board diversity targets

set by the FCA for at least 40% of individuals on the board to be women, and for one of the

senior board positions (Chair, Chief Executive Officer, Senior Independent Director or Chief

Financial Officer) to be held by a woman. Following the appointment of Barbara as Non-

Executive Director on 1

July 2023 and her appointment as Senior Independent Director from

July 2023, female representation on the Board will meet the FCA targets and exceed

those set out in our current Board Diversity Policy.

We are pleased that the Board’s composition meets the FCA’s ethnicity target to have one

member of the board from a minority ethnic group. The Committee intends to review the

Board Diversity Policy in 2023/24 and will set new targets.

All of our non-executive directors are members of each committee, which provides the most

diverse perspective and assists our decision making in these forums.

The Board also supports the terms of the Enhanced Voluntary Code of Conduct for executive

search firms. All our appointed executive search firms are required to secure a diverse longlist

of candidates, including Black, Asian and Minority Ethnic talent.

Beyond the Board, we aspire to have gender balance across all levels of the group. One of our

key milestones is to achieve greater than 40% of female representation across professional

management by 2030. While gender diversity has improved, we want to accelerate the pace

of change. Further details on how we are improving gender diversity across the group, the

gender balance of senior management and our Diversity, Inclusion and Belonging Policy are

set out on pages 36 to 37.

Gender representation as at 31

March 2023

Number of

board members

% of the Board Number of

senior board

positions (CEO,

CFO, SID, Chair)

Number in

executive

management

% of executive

management

Men 6 67 4 9 75

Women 3 33 0 3 25

Other categories 0 0 0 0 0

Not specified / prefer

not to disclose

0 0 0 0 0

Ethnic representation as at 31

March 2023

Number of

board members

% of the Board Number of

senior board

positions (CEO,

CFO, SID, Chair)

Number in

executive

management

% of executive

management

White British or other White

(including minority-white

groups)

8 89 4 10 84

Mixed/Multiple Ethnic

Groups

0 0 0 1 8

Asian/Asian British 1 11 0 1 8

Black/African/ Caribbean/

Black British

0 0 0 0 0

Other ethnic group,

including Arab

0 0 0 0 0

Not specified/ prefer not to say 0 0 0 0 0

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Nomination Committee report continued

The Audit Committee forms a critical part of the overall framework of corporate governance

for JM. We are responsible for overseeing the financial reporting, internal financial controls,

internal control and risk management systems, and maintaining an appropriate relationship

with the external auditors.

The Committee supports the Board by obtaining assurances that controls are working

asdesigned and by challenging those assurances. We receive and consider reports from

management on the effectiveness of the systems that have been established, to ensure that

both JM’s management and PwC, our external auditor, are appropriately challenged and held

to account. Management and PwC have again worked hard during 2022/23 to maintain

theongoing integrity of our financial reporting, and I have continued to hold regular dialogue

with management, the Group Assurance and Risk Director, and PwC.

The last three years have seen Covid-19, the Russia/Ukraine conflict and other issues cause

political and economic turmoil. This has put significant pressure on the risk environment and

companies’ financial reporting processes. Accordingly, we have continued to focus on

financial reporting and related internal control risks as well as ensuring the company

maintains a strong performance on ethics, compliance and audit quality.

The focus of assurance activities during the year has been post Covid-19 controls’ culture

across the group’s locations and key strategic and emerging risks. In this context,

acomprehensive improvement programme across JM’s financial and operational controls,

including raising awareness and simplifying requirements, has been established and is

sponsored by the Group’s Chief Financial Officer. Within Group Assurance and Risk (GAR)

anew form of site extended audit covers several core processes based on an assessment of

risk, to provide assurance on the control environment and framework at site level. These

typically cover design and effectiveness of operating controls, including Internal Controls

forFinancial Reporting (ICFR), metal controls, procurement, ethics and compliance, business

continuity planning, security, and technology controls. It has been important to validate these

controls following the return to site post Covid-19 pandemic and to respond to new risks

occurring at unprecedented speeds and various pressures on our entities. These audits also

provide insight on the culture found at the site.

Flexibility of our assurance plans has proven helpful during the year, especially in the context

of emerging risks in the fast-moving external environment. The GAR team has been providing

live assurance as part of various business-led task forces, such as JM’s energy resilience in response

to the conflict in the Ukraine. Specific focus has been dedicated to our sustainability agenda,

an area of increasing importance from an assurance perspective. Our internal audit activity has

been focused on driving improvements in quality of the data and management reviews.

Audit Committee report

“ The Committee’s work

provides a focus to ensure

robust controls support

the execution of our

group strategy”

Membership

The Audit Committee comprises all independent non-executive directors. Doug Webb,

our Committee Chair, is a chartered accountant who brings a wealth of recent and

relevant financial experience, including acting as Chief Financial Officer at the London

Stock Exchange Group, QinetiQ and Meggitt.

Members’ attendance at committee meetings during the year is on page 75.

Other regular attendees at committee meetings

• Chair of the Board

• Chief Executive Officer

• Chief Financial Officer

• General Counsel and Company Secretary

• Group Assurance and Risk Director

• Director of Group Finance

• PwC Audit Partner

The Committee’s Terms of Reference set out its full responsibilities.

matthey.com/governance-framework

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

During the year, we looked at the anticipated impact and readiness of our internal controls

financial reporting framework and fraud risk management programme. We examined these

factors in relation to the recommendations of the Department for Business, Energy and

Industrial Strategy (BEIS) white paper on restoring trust in audit and corporate governance.

The position paper issued by the Financial Reporting Council (FRC) in July 2022 proposed that

the revised UK Corporate Governance Code will apply on or after 1

January 2024. For us this

will apply to the financial year ending 31

March 2025. With ongoing work to strengthen our

internal control environment and address additional reporting requirements, we concluded

that existing procedures, our in-progress work on controls and other areas of change, would

meet evolving corporate governance requirements. We await additional clarification on some

requirements, and these are subject to ongoing monitoring by group and business

management.

To address the anticipated changes, the outcome of our review on the key changes and

impact for JM is as follows:

• Statement on internal controls – substantial work has been carried out over recent years

toimprove JM’s overall control environment and provide sufficient evidence that controls

are operating effectively, using JMProtect, our integrated governance, risk and compliance

platform

• Resilience Statement – updated requirements are expected to be substantially covered

bywork already performed to support the existing disclosures in the Viability Statement

onpage 70

• Dividends and capital maintenance – existing disclosures will be reviewed once guidance

isavailable from the FRC

• Audit and Assurance Policy (AAP) – the Committee approved an internal policy drafted by

the GAR team, with cross-functional support. Committee reviews began at the end of 2022

and take account of guidance from the FRC

• Fraud Statement – an assessment of fraud risks, current detection, and prevention

mechanisms, reporting and documentation of associated controls was completed in 2022.

Fraud training for JM’s extended finance community began in 2022. A regular governance

mechanism was established via monthly Governance, Risk and Compliance (GRC)

committee meetings. A fraud risk policy will be incorporated into the AAP, and fully

integrated into JMProtect.

The Committee also reviewed the key changes and impact for JM of the new requirements

forauditors and the regulator. We will assess this area in more detail once the FRC issues

more guidance.

In 2022, the group refreshed its sustainability goals and 2030 targets. ESG data in annual

reports is coming under increasing scrutiny as the investor community relies on it to evaluate

the value proposition of listed companies. We are conscious of the need for transparency,

accuracy and the avoidance of overstating our performance in these measures. We reviewed

the group’s processes for ESG data management and independent assurance for the Task

Force for Climate-related Financial Disclosures (TCFD). The Committee also reviewed a final

report of JM’s 2022 sustainability audit, carried out by our internal audit team. The purpose

was to understand and review the processes for generating data for the products and services

sustainability targets and metrics, and to assess the efficiency and effectiveness of any second

line review controls. During the year, the Committee reviewed our Climate-related Assurance

Plan for 2023. A workshop was held with management, internal audit and myself to define

our longer term assurance expectation over its sustainability data, the output of which was

reported to the Committee. This resulted in a sustainability assurance framework, and also

clarified the roles and responsibilities of each of the Audit Committee and the Societal Value

Committee (SVC). The SVC oversees the delivery of our sustainability strategy and determines

the related KPI’s to be reported, and the Audit Committee is responsible for the quality of the

data in the sustainability reporting.

The FRC’s Audit Quality Review (AQR) report, following inspection of PwC’s 2022 audit of JM,

was completed in early January 2023 and the Committee reviewed the detailed findings.

Following receipt of the report, we discussed the findings with PwC, none of which were

considered significant. Recommendations have been built into ongoing processes and the

Committee was satisfied with the external auditor’s commitment to audit quality, the robust

and professional working relationship with management, and demonstration of strong

technical knowledge. The Committee considered whether the report gave us any concern

about the quality of the 2022 audit and associated report, and we concluded that it did not.

I am pleased that our internal committee effectiveness review this year confirmed that

theCommittee continues to operate well and remains informed of relevant changes

anddevelopments in the external audit market. We have identified areas for further

improvement, including focusing on reviewing our fitness for purpose and approach;

theeffectiveness and impact of the overall risk management framework and activity;

andfocusing on the future development and effectiveness of the internal audit function.

Doug Webb

Audit Committee Chair

Johnson Matthey | Annual Report and Accounts 2023

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Audit Committee Report continued

How we delivered on our responsibilities

Our responsibility What we did Outcomes

Published financial information

Monitoring the integrity

of the reported financial

information and

reviewing significant

financial considerations

and judgements.

• Reviewed, discussed and challenged management’s reports on the group’s full-year results and half-year

results, and considered the significant accounting policies, principal estimates and accounting

judgements used in their preparation.

• Reviewed the matters, assumptions and sensitivities in support of preparing the accounts on a going

concern basis and assessed the long-term viability of the group.

• Considered the impact of scenario testing on financial disclosures in relation to TCFD.

• Reviewed the financial reporting framework of the Company’s financial statements.

• Assessed the process management used to support the Board when giving its assurance that the 2023

Annual Report and Accounts, taken as a whole, is fair, balanced and understandable (FBU).

• Reviewed reports from the General Counsel and Company Secretary on group litigation and disputes.

• Reviewed reports on credit controls and credit risks.

• Approved the Audit Committee report within the 2023 Annual Report and Accounts.

• Reviewed elements of the 2023 Annual Report and Accounts.

• Reviewed and discussed the results of the Committee’s assessment of its effectiveness.

• Recommended the approval of the half-year and full-year results to the

Board, following a thorough review, and challenging management

assumptions.

• Recommended to the Board the going concern and viability statements

following an in-depth review and assessment of scenarios with

management.

• Determined that the FBU process undertaken by management for the

Annual Report and Accounts was effective.

• Reviewed credit controls and risks in the context of continuous challenging

market conditions.

• Discussed the outcome of an internal evaluation and concluded that the

Committee continued to be effective.

• Recommended to the Board the approval of elements of the 2023 Annual

Report and Accounts.

Risk management and internal control

Reviewing the group’s

internal financial controls

and its risk management

systems and monitoring

the effectiveness of the

group assurance function.

• Received reports from the Group Assurance and Risk Director on group assurance, risk reviews and risk

management processes.

• Monitored progress against the 2022/23 group assurance and risk plan.

• Agreed the 2023/24 group assurance and risk plan.

• Considered changes to internal control weaknesses brought to the Committee’s attention by PwC.

• Reviewed an assessment of the results and further improvements in the overall internal control

environment of the internal control self-assessments.

• Challenged management to enhance the assurance processes supporting sustainability sections in the

Annual Report.

• Monitored the effectiveness of the GAR function.

• Reviewed precious metal governance.

• Carried out a deep-dive into liquidity risk-based methodology.

• Received presentations from the security team, and reports on finance and controls from the business

finance directors.

• Reviewed fraud risk and fraud investigations including those raised via the Speak Up process.

• Met the Group Assurance and Risk Director without management present.

• Reviewed a summarised appraisal of the group’s year-end control environment to assess any control

issues identified.

• Assessed the anticipated impact of, and JM readiness for, recommendations resulting from the BEIS

‘Restoring trust in audit and governance’ white paper.

• Reviewed our internal AAP.

• Reviewed the Committee’s Terms of Reference.

• Determined that risk management and internal controls effectively meet

the group’s needs and manage risk exposure.

• Challenged management to resolve any issues relating to internal controls

and risk management systems.

• Approved the change to the metal liquidity risk methodology in the group’s

Precious Metals policy.

• Continue to monitor emerging regulatory developments and assess

applicability of any new guidance to JM.

• Agreed with management’s determination that there were no significant

control weaknesses or lack of adherence to policies and procedures

identified.

• The Committee made no changes to its terms of reference during the year.

• Approved JM’s internal AAP.

• Approved the Sustainability Assurance Framework.

Johnson Matthey | Annual Report and Accounts 2023

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Audit Committee Report continued

Our responsibility What we did Outcomes

Our external auditor

Overseeing the relationship with

the external auditor, monitoring

the external auditors’ independence

and objectivity, approving its fees,

recommending its re-appointment

or not, and ensuring it delivers a

high-quality effective audit, based

on a sound plan.

• Considered reports from PwC including their views on our accounting judgements and

control observations.

• Monitored the transition to the new lead audit partner to ensure it was effective.

• Met PwC without management present.

• Considered and reviewed indicators of audit quality.

• Assessed PwC’s independence and objectivity.

• Reviewed the non-audit fees incurred during the year and the non-audit fee policy.

• Reviewed the inspection of PwC’s audit of our financial statements for the year ended 31

March 2022 and discussed with PwC the actions to be taken in response to the findings.

• Oversight of recommendations from PwC’s FRC AQR being built into ongoing processes.

• Approved, after due challenge and discussion, PwC’s audit plan and fees

for2022/23.

• Determined a good-quality, comprehensive audit was completed, following

a review of PwC’s regular reports to the Committee, the outcome of PwC’s

FRC AQR, and feedback from the Independent Quality Review Partner.

• Recommended the re-appointment of PwC as auditor.

• Approved the non-audit fee policy.

Financial reporting

Significant issues considered by the committee in relation to the group’s and company’s accounts

It is a fundamental part of the committee’s role that we act independently from management to ensure that the interests of shareholders are properly protected in relation to financial reporting.

When the accounts are being prepared, there are areas where management exercises a particular judgement or degree of estimation. The committee assesses whether the judgements and

estimates made by management are reasonable and appropriate. In the process of applying the group’s accounting policies, management also makes judgements and estimates that have a

significant effect on the amounts recognised in the financial statements. The group’s key accounting judgements discussed and challenged by the Audit Committee are set out below.

Significant current year considerations in relation to the accounts Work undertaken / outcome

Major impairment and restructuring activities

Key judgements in relation to impairment testing relate

primarily to estimates in assessing recoverable value.

Key judgements in relation to restructuring provisions

related to estimates of future cost.

We received a report from management which explains the basis of recognition and estimate for impairments and

restructuring costs. The report also detailed how transformation-related costs were reconciled back to previously announced

transformation programmes.

We challenged the rationale behind the presentation of the costs as non-underlying, with particular focus on areas that

required judgement around recognition.

We concluded that management has appropriately accounted for and disclosed the impacts from major impairment and

restructuring activities (see note 6 in the annual report).

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Audit Committee Report continued

Significant current year considerations in relation to the accounts Work undertaken/outcome

Gains and losses on significant legal proceedings

Significant progress was made during the year with the

settlement of legal proceedings requiring accounting

consideration.

We received a report from management which summarised the outcomes and accounting implications for legal proceedings,

one of which was settled in the year at a loss of £25 million. The report also detailed the nature of other key legal provisions.

We agreed with management’s rationale behind the presentation of the loss as non-underlying.

Profit on disposal of businesses and businesses classified

as“heldfor sale”.

Key judgements in relation to assessing the fair value

lesscosts to sell of businesses classified as “held for sale”.

We reviewed and discussed the accounting for the following disposals:

On 1

June 2022, the group completed the sale of its Health business for a consideration of £325 million.

On 26

May 2022, the group completed the sale of part of its Battery Materials UK business for a consideration of £20 million.

On 1

November 2022, the group completed the sale of its Battery Materials Canada business for a cash consideration of

£12 million.

On 31

January 2023, the group completed the sale of its Piezo Products business for a consideration of £18 million.

We concluded that management’s key assumptions and disclosures on the profit on disposal of businesses above were

reasonable and appropriate.

We also considered the assessment in arriving at the fair value of the Diagnostics Services (Tracerco), Battery Materials

Germany and Poland businesses and noted that classifications as “held for sale” were appropriate.

Impairment of goodwill, other intangibles and other assets

Key judgements are made in determining the appropriate

level of cash generating unit (CGU) for the group’s

impairment analysis. Key estimates are made in relation

tothe assumptions used in calculating discounted cash

flow projections to value the CGUs containing goodwill,

tovalue other intangible assets not yet being amortised,

and to value other assets when there are indications that

they may be impaired. The key assumptions are

management’s estimates of budgets and plans for how the

relevant businesses will develop or how the relevant assets

will be used in the future, as well as discount rates and

long-term average growth rates for each CGU.

We reviewed a report from management explaining the methodology used, assumptions made and significant changes from

those used in prior years. In light of the current volatile macroeconomic environment, including high inflation, interest rates

and increased energy costs, management considered impact within underlying forecasts and discount rates.

We challenged management on the rationale behind the key assumptions and sensitivities such as discount rates and growth

rates in the goodwill value in use calculations, especially within Clean Air and Catalyst Technologies to ensure we were satisfied

on their reasonableness.

The impairment reviews were an area of focus for PwC who reported their findings to us.

We concluded that management’s key assumptions and disclosures are reasonable and appropriate.

Johnson Matthey | Annual Report and Accounts 2023

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Audit Committee Report continued

Significant current year considerations in relation to the accounts Work undertaken/outcome

Refining process and stock takes

When agreeing commercial terms with customers and

establishing process loss provisions, key estimates are

made of the amount of precious metal that may be lost

during the refining and fabrication processes. Refining

stocktakes involve key estimates regarding the volumes

ofprecious metal-bearing material in the refining system

and the subsequent sampling and assaying to assess the

precious metal content.

We received a report from management which summarises the results of the material refinery stock takes. The report

wasreviewed to ensure that the results were in line with expectations and historic trends.

The refining process and stock takes were an area of focus for PwC who reported their findings to us.

We concluded that management’s accounting for refining stock take gains and losses was in accordance with the agreed

methodology.

Post-employment benefits

Key estimates are made in relation to the assumptions

used to value post-employment benefit obligations,

including the discount rate and inflation.

The key assumptions are based on recommendations from

independent qualified actuaries.

We received a report from management which summarises the key assumptions used to value the liabilities of the main

post-employment benefit plans. The assumptions were compared with those made by other companies and PwC’s assessment

of the reasonableness of the assumptions was considered.

We concluded that the assumptions used, and accounting treatment, are appropriate for the group’s post-employment benefit

plans.

Tax provisions

Key estimates are made in determining the tax charge

inthe accounts where the precise impact of tax laws and

regulations is unclear.

We received a report from management which explains the issues in dispute, or at risk of this, with tax authorities across the

business, the calculation of tax provisions and relevant disclosures. We also considered the sensitivities around the provisions

and debated the circumstances in arriving at the key provisions.

Tax provisioning was an area of focus for PwC who reported their findings to us.

We concluded that management’s key assumptions and disclosures are reasonable and appropriate.

Climate change

Key estimates are made in relation to climate change and

the impact on the going concern period and viability of the

period over the next three years. Additionally, the potential

impact of climate on the financial statements including

forecasts of cash flows used in impairment assessments,

recoverability of deferred tax assets and expected lives

offixed assets and their exposure to the physical risk posed

by climate change.

We received a report from management which summarises the potential impacts of climate change to the business. This was

based on a Zurich insurers report commissioned in 2021/22. Management has considered the impact of climate change in

their goodwill impairment calculations and going concern/viability forecasts.

We concluded that management’s key assumptions and disclosures are reasonable and appropriate.

We also received a report outlining how TCFD considerations are factored into the financial statements.

Provisions and contingent liabilities (judgement)

Key estimates are made in determining provisions in the

accounts for disputes and claims which arise from time to

time in the ordinary course of business. Key judgements

are made in determining appropriate disclosures in respect

of contingent liabilities.

We received a report from management which provides information in respect of disputes and claims and identifies the

accounting and disclosure implications which were challenged and discussed. The report included an assessment of a claimfrom

the purchaser of the Health business. This was supported by the group’s advisors whom we also discussed the matterwith.

We concurred with management’s conclusions regarding provisioning and contingent liability disclosures.

Johnson Matthey | Annual Report and Accounts 2023

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Audit Committee Report continued

Going concern and viability statement

We reviewed the matters, assumptions and sensitivities being used to assess both the going

concern basis and the long-term viability of the group. This included assessing risks that

would threaten our business model, current funding position as well as different stress

scenarios and mitigating actions. Further details on our going concern and viability, and the

scenarios considered, are on page 70.

Following our review and recommendation, the Board concluded that Johnson Matthey

isable to continue operating and can meet liabilities over at least three years, which remains

the most appropriate timespan.

Fair, balanced and understandable (FBU)

We review and assess management’s process to support the Board, so it can give its assurance

that the 2023 Annual Report and Accounts, taken as a whole, is FBU and provides the

information necessary for shareholders to assess JM’s position and performance, business

model and strategy.

Management selected three individuals from across the group to form an FBU panel and carry

out a detailed review of the Annual Report. To maintain objectivity, the FBU panel members

were not involved in drafting the 2023 Annual Report and Accounts, but all were familiar

with our strategy and business model. The panel members were also briefed on the role and

provided with detailed notes on what to consider during their review. The FBU panel, PwC

and Annual Report project team determined whether key messages aligned with the group’s

position, performance and strategy, and whether the narrative sections and financial

statements were consistent.

The FBU panel presented a report to the Board, highlighting the key themes from the review

and discussion points. The Disclosure Committee reviewed the verification process dealing

with the report’s factual content to further support the Board’s review.

Risk management and internal control

The Committee reviews the adequacy and effectiveness of control and risk management

systems. These controls are a critical component of our governance and assurance

framework, and they detail the minimum controls we need to keep our people safe, ensure

compliance with our standards and regulations, protect our physical and intellectual assets,

and facilitate the accuracy and completeness of financial reporting. During the year, the

Committee assessed the effectiveness of these controls, considered the key identified control

gaps, and assessed how management planned to address the findings.

The Group Assurance and Risk Director independently assures that our risk management

andinternal control processes operate effectively. Working closely with leadership and

management, she provides regular oversight of risk matters that affect our business, makes

recommendations to address key issues, and ensures that any mitigating actions are properly

tracked, challenged and reported. During the year, our co-sourcing partnership with Deloitte

ensured we had access to additional specialist skills and expertise.

The group’s internal controls over financial reporting include policies and procedures

designed to ensure the accuracy of our financial statements. JM’s control self-assessment and

business filing assurance processes provide management with a view of the operation of these

controls. The results are presented to the Committee as part of their assessment of the

year-end control environment.

The Committee is satisfied that the group’s internal financial controls operated effectively

throughout the year and up to the date of approval of this report. However, these controls

donot provide absolute assurance against material misstatement or loss and are assessed

based on materiality and level of activities within the business.

Operation of controls and assurance

There is an ongoing comprehensive improvement programme across JM’s financial and

operational controls including control self-assessment which replaced our key control

questionnaire. While this has led to positive development in our internal controls over

financial reporting, we will continue to make improvements in this area.

During the year, we spent time reviewing the control strategy, which focused on several

cultural and operational factors to ensure JM’s readiness for the enhanced reporting

ontheoperating effectiveness of controls expected to be required from 2024/25. To provide

management with independent assurance over the effectiveness of the control self-

assessment process, structured, internal controls testing will be introduced from 2024.

Group assurance and risk

The Group Assurance and Risk Director provides regular reports on internal audit reviews,

including key findings, actions needed and progress on their implementation. We focus

onlocal, business and executive managers’ engagement levels in implementing corrective

actions and in strengthening the control framework across all our sites. The focus of

assurance activities during the year has been on post Covid-19 controls’ culture across the

group’s locations and key strategic and emerging risks. Establishing site extended audits

re-evaluated and re-assessed how our businesses adjusted to the new realities and how the

control mindset has been applied across a selection of our sites. It was expected that in this

changed landscape, the audits would uncover some weaknesses; however they have also

allowed us to see how the businesses have managed the challenges caused by the

extraordinary measures implemented during that period. One issue highlighted was the need

for further training and awareness around certain controls, systems and simplification of

processes. The comprehensive improvement programme across our financial and operational

controls, sponsored by the CFO, has been established to raise awareness and simplify the

requirements. The GAR team has also undertaken various ‘lessons learnt’ activities, including

for major business decisions and capital investment projects. The recommendations have

been captured and are being implemented by the business and transformation office.

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Audit Committee Report continued

We continually review the effectiveness of the GAR function, using inputs including audit

reports, management’s response to audit actions and discussions over risk exposures. We look

at whether the function has adequate standing across the group, is free from management

influence or other restrictions and is sufficiently resourced.

An independent external quality assessment (EQA) of the Internal Audit function within

GARwas undertaken by EY last year. As a result, the function has worked through the actions

agreed to ensure it has become better aligned with the changing shape of the group. This is

acontinuous activity for the function, underpinned by regular dialogue with management,

external auditors, and benchmarking within industry and beyond.

The integrated assurance mapping allows us to have a fuller understanding and visibility

ofrisk coverage in a consistent manner across the organisation. We aim to have a clearly

articulated link between levels of assurance and risk appetite across key organisational

andstrategic risks.

Group assurance and risk annual plan

We review the GAR annual plan to ensure that it reflects challenges and changes to our

business. We are confident that it provides the appropriate level of assurance over the group’s

key risks.

When we reviewed the 2023/24 plan, we specifically considered whether it provided the level

of assurance over JM’s principal and operational risks and continues to contribute to the

improvement in our overall controls culture and maturity of the second line of defence.

The GAR annual plan is based on a risk-based audit universe covering areas of risk across

financial and operational functions including IT and transformation activities at group and

business levels. We consider a wide range of risks that fall into those areas including level of

change and transformation in the group and organisational culture. Close collaboration with

the business ensures it adds value to management with pragmatic and manageable action

plans. The plan also allows greater flexibility to ensure that the GAR team has capacity to deal

with unexpected events.

We believe our 2023/24 assurance plans are adequate for JM’s size and nature. It is our

opinion they will continue to provide the group with necessary focus on maturing controls

culture across business and IT processes. The quality and standing of GAR function is

appropriate to provide necessary challenge and support to the transforming organisation.

Risk management

We work with the Board to review and refine the risk assurance processes – including the

integrated assurance framework and control self-assessment. We concentrate on reviewing

the mitigating controls and the levels of assurance, while the Board is directly responsible

formanaging risks and establishing levels of risk appetite for the group’s principal risks.

The GAR function carries out any additional assurance and reports back to the Committee.

Speak Up process

Every year, we review our Speak Up whistleblowing process to ensure procedures are

proportionate and independent. We reviewed the process and agreed that the procedures

allow proportionate and independent investigation and appropriate effective follow-up

action. We report the findings of this review to the Board as appropriate. The Societal Value

Committee reviews the outcomes of significant investigations and remedial actions.

More information on Speak Up can be found on page 42

External auditor

Auditor independence is an essential part of our audit framework and the assurance it provides.

We confirm ongoing compliance with the Competition and Markets Authority’s Statutory

Audit Services Order.

Tenure

Our shareholders appointed PwC as the group’s external auditor in July 2018, following a formal

tender process. This is the fifth year that PwC has audited the group, with Graham Parsons

ascurrent lead audit partner. We have no immediate plans to retender the auditor; however

we anticipate that it would be carried out to coincide with when Graham Parsons is required

to rotate off after the 2027 audit, in accordance with the current regulation that requires

atender every ten years. The proposed tender date is in the best interests of shareholders

andthe Company as PwC has a detailed knowledge of our business, an understanding of our

industry, and continues to demonstrate that it has the necessary expertise and capability to

undertake the audit.

External audit plan

In developing the external audit plan for 2023, PwC carried out a risk assessment to identify

potential risks of material misstatement in the financial statements. This risk assessment

considered the nature, magnitude and likelihood of each identified risk, together with

relevant controls, to identify audit risks. Graham Parsons reviewed the plan with a fresh

perspective on the risk assessment. PwC refer to key audit matters in the independent

auditors’ report on pages 133 to 143, which formed the basis of the external audit plan.

In determining the scope of coverage, PwC considered management reporting, the group’s

legal entity structure, the 2022 financial results and the financial forecast for 2023. PwC set

out details of the coverage and the agreed scope in the independent auditors’ report on page

133. The methodology of assessing materiality was consistent with the prior year and agreed

at approximately 5% of the three-year average profit before tax adjusted for loss on business

disposals, loss on significant legal proceedings, major impairment and restructuring charges.

Following discussion and challenge, we concluded the proposed external audit plan was

sufficiently comprehensive for the audit of the group’s accounts and approved the proposed fee.

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Audit Committee Report continued

How we review PwC’s performance

Throughout the year, we review the ongoing effectiveness and quality of PwC and the audit

process. We look at several factors: the auditors’ reports to the Committee; Graham Parsons

and the PwC team’s performance in and outside committee meetings; how the PwC team

interacts with and challenges management; and on PwC’s efforts at building relationships

with our Internal Audit team. We ensure that we spend sufficient time with the auditors

without management present as part of our assessment.

We considered how PwC challenged management’s judgements and assumptions on matters

highlighted on pages 98 and 99, and asked PwC to confirm if those matters had been

addressed correctly by management. Following detailed analysis of the assurance completed,

PwC agreed with management’s judgements and assumptions.

We seek direct feedback from the independent Quality Review Partner to review its assessment

of PwC’s key planning judgements and the execution of PwC’s response to significant risks and

reporting. We also ask PwC to share with us the results of their internal quality inspections of the

audit as well as those conducted by the FRC. In addition, we feel it is important to understand

management’s opinion of audit quality and effectiveness: the executive directors and senior

management complete a questionnaire on the external auditor each year.

Provision of non-audit services

Our Non-Audit Services Policy ensures the provision of non-audit services is no threat to PwC’s

independence and objectivity as an auditor. In accordance with the FRC’s Revised Ethical

Standard 2019, the auditor can only provide additional services directly linked to the audit.

Our policy sets out how approval should be obtained before PwC is engaged to provide a

permitted non-audit service. Services likely to cost £25,000 or less must be approved by the

Chief Financial Officer; services likely to cost more than £25,000 but less than £100,000 must

be approved by the Committee Chair. Services likely to cost over £100,000 must be approved

by the Committee.

We reviewed compliance with the Non-Audit Services Policy, the provision of non-audit

services, details of the non-audit services provided by PwC and associated fees. Audit-related

assurance services reported as non-audit services related to the review of half-year financial

information and reporting, amounting to £325,000, other non-audit services in the year

were £28,200, in total representing 8% of the audit fee, compared with audit fees of

£4.64 million. More information on fees incurred by PwC for non-audit services, as well as

thesplit between PwC’s audit and non-audit fees, are in note 4 to the accounts, on page 169.

Objectivity and independence

We are responsible for monitoring and reviewing the objectivity and independence of PwC.

We considered the information provided by PwC, confirming that no PwC employees involved

with the audit have links or connections to JM, and that they complied with the FRC’s Revised

Ethical Standard. We conclude that PwC is independent.

Proposed re-appointment of PwC

Following our assessment, we believe that PwC provides a robust audit and valuable technical

knowledge and is free from third-party influence and restrictive contractual clauses.

Asaresult, we have included a resolution proposing PwC’s re-appointment as auditor and

authorised the Committee to determine PwC’s remuneration in our Notice of AGM.

How we gather feedback on the effectiveness of our

external auditor and external audit process

Information provided by the auditor

• Details on the audit plan delivery and any changes to the scope of work

• Assurance on the operation of PwC’s audit quality control procedures and insight into

theiroutcomes as they relate to the audit and key members of audit team

Management feedback

• Survey of audit quality and effectiveness by executive directors and senior management

including recommendations for improvement

• Seek assurance on the disclosure process for the provision of information to the auditor

Committee assessment

• Quality of regular audit reports

• Feedback from committee members and regular attendees, including the Director

ofGroup Finance and the Group Assurance and Risk Director

Third-party reviews

• External reviews of PwC by the FRC’s AQR team and the Quality Assurance Department

ofThe Institute of Chartered Accountants in England and Wales

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Audit Committee Report continued

Introduction

I am pleased to present our Annual Report on remuneration for the year ended 31

March

2023. This report is divided into three sections, i) my annual statement, ii) the Directors’

Remuneration Policy being put to shareholders at the 2023 Annual General Meeting,

andiii)our Annual Report on remuneration for the year ended 31

March 2023.

Our approach to remuneration

Our overall purpose at Johnson Matthey is catalysing the net zero transition. We currently

have an important role to play in this process through the application of our sustainable

technologies, products and services. We will have an increasingly important role to play

aswefurther commercialise long-term sustainable technologies, including our portfolio

ofhydrogen technologies, that will enable decarbonisation and enhance circularity.

This year has been a year of progress in delivering on our strategy following the appointment

of our current Chief Executive Officer, Liam Condon, in March 2022. We have simplified

ourportfolio of businesses and have also implemented a revised business reporting structure

withCatalyst Technologies and PGMS now identified separately and, in addition, we have

strengthened our senior leadership team. These changes, in conjunction with establishing

ahigher performance culture, create a strong platform for delivering on our purpose

andstrategy.

In the context of the above, undertaking our triennial Directors’ Remuneration Policy review

was timely given the need to determine if our remuneration structures remained appropriate

as we look to the future. In undertaking the review, we took feedback from both internal and

external stakeholders, along with benchmarking our remuneration practices, and concluded

that the focus on long-term performance within our current remuneration policy remained

appropriate to our purpose and strategy. As a result, the committee was comfortable

retaining our current pay model and philosophy, and so the changes we are making are

limited to ensuring our performance metrics better align with our reinvigorated strategy

andwe simplify our approach where possible.

Overview of company performance

In the face of a challenging environment brought on by political and economic uncertainty,

our Chief Executive Officer and the senior leadership team have delivered a robust underlying

financial performance and made good progress against our strategic milestones.

During the year, Clean Air was impacted by automotive customers constraining their production

volumes, and PGMS was impacted by lower precious metal prices and lower refinery intake

volumes due to lower scrap levels with the semi-conductor chip shortage creating a buoyant

second-hand car market. However, we’ve made good progress on our group transformation

and cost reduction targets; have made excellent progress with Euro 7 business wins in Clean

Air, and several new large-scale project wins in our Catalyst Technologies business.

Remuneration Committee report

“Our Directors’

Remuneration Policy has

been designed to

incentivise and reward for

delivering sustainable value

creation and long-term

growth. This will be

achieved through a

combination of business

transformation and

strategic execution all

underpinned by a high-

performance culture.”

Membership

All six of our independent non-executive directors sit on the Remuneration Committee.

Members’ attendance at committee meetings during the year is on page 75

Regular attendees at committee meetings

• Chief Executive Officer

• Chief HR Officer

• Group Total Reward, Wellbeing & People Services Director

The committee’s Terms of Reference set out its full responsibilities

matthey.com/governance-framework

Key activities during 2022/23:

• Triennial review of the Directors’ Remuneration Policy

• Reviewed our short and long-term incentives and their alignment to the company’s

strategy

• Reviewed broader employee total reward, including pay equity and benchmarking

Our focus areas for 2023/24:

• Oversee the implementation of the new Directors’ Remuneration Policy

• Set the incentive plan performance targets for the upcoming year

• Continued focus on broader employee remuneration

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In addition, in January 2023 we entered a long-term strategic partnership with Plug Power,

aleading provider of turnkey hydrogen solutions for the global green hydrogen economy,

toaccelerate the deployment of fuel cells and electrolysers (green hydrogen). This partnership

isevidence of clear progress towards JM’s published milestone in Hydrogen Technologies and

will significantly contribute towards JM’s 2030 target for 50 million tonnes of GHG emissions

avoided per year.

In the context of a challenging market environment, and the progress made against our

long-term strategy, the committee considered the level of payout from our incentive plans

asappropriate.

2022/23 incentive plan outcomes

The Committee always seeks to ensure that there is a clear link between pay and

performance. Additionally, we will continue to focus on setting stretching performance

targets and consider the performance of the wider business and individual accomplishment

over the period, including how the performance was delivered. In that context, we believe

that the payments outlined in this report fairly reflect the performance achieved.

Annual Incentive Plan (AIP)

The maximum bonus opportunity for 2022/23 remained unchanged at 180% of salary

for the Chief Executive Officer and 150% of salary for the Chief Financial Officer. The bonus

was based on underlying PBT (50%), working capital (20%) and strategic and transformation

objectives (30%).

Based on a robust underlying financial performance, the outcome of our AIP results in a

bonus of 75% of maximum is payable to both Liam Condon and Stephen Oxley. The

committee is comfortable that the outcome of the bonus is appropriate and so no discretion

has been applied. One half of the bonus payable will be deferred in shares for a period of

three-years. More details on the performance against the annual targets and strategic

objectives are set out on page 121.

Performance Share Plan (PSP)

Neither Liam Condon or Stephen Oxley have any Performance Share Plan (PSP) awards that

were eligible to vest in respect of the three-year performance period ending 31

March 2023.

The PSP award granted on 1

August 2020 was based on challenging earnings per share and

total shareholder return performance targets for the three-year period ending 31

March

2023. The outcome of this award was a performance below the threshold targets. As a result,

there is no vesting for either executive directors or any other participants in the PSP. The

committee was comfortable that the formulaic outcome is appropriate and so no discretion

has been applied.

Overall, the committee is satisfied that the Remuneration Policy operated as intended

duringthe year.

Directors’ Remuneration Policy

The 2023 AGM marks the three-year anniversary of our current Remuneration Policy.

Asaresult, we will be seeking shareholder approval for an updated Remuneration Policy

atour forthcoming AGM.

During the year a full review process was undertaken that considered the pay model, the

historic relationship between performance and reward, the alignment between performance

metrics and strategy, and alignment with institutional investors’ best practice. All of this was

considered in light of our reinvigorated strategy.

Having had regard to these factors, with the current Remuneration Policy operating

effectively against each of the review criteria, the committee concluded that subject to some

minor refinements to the approach to target setting and the choice of performance metrics,

the current Remuneration Policy would be largely retained. A summary of the minor changes

to the policy are set out on page 107.

Applying the Remuneration Policy in 2023/24

Base salary

With high inflation impacting the cost of living, the company set aside a higher pay budget

for its annual pay awards in July 2022 with a greater portion of the budget set aside for

non-management roles. In addition, the company paid a temporary monthly allowance

toemployees below a certain earnings level to provide additional support until June 2023.

The pay budget for the forthcoming year has also been set at a higher level compared

tohistoric norms given that the cost-of-living pressures continue in many countries. Again,

agreater proportion of the budget is being allocated to lower paid employees. For example,

for the coming year the UK salary budget for non-management roles is 5.25% and for

management roles is 4.0%.

With regard to the salary increase for executive directors the committee considered the

UKsalary budget for the forthcoming year and deemed it appropriate that the salary increase

awarded to executive directors should be at a discount to that awarded to other employees.

As such executive director salaries were increased by 3.5% with effect from 1

April 2023.

AIP

The maximum opportunity will remain at 180% of salary for the CEO and 150% of salary for

the CFO, and the target will continue to be set at 50% of the maximum. However, the payout

for threshold performance will reduce from 15% of maximum (equivalent to 30% of target)

to 25% of the target bonus opportunity, which represents a modest toughening of the bonus

structure. This change is being made for all participants in our annual incentive plans and will

result in greater focus on delivery against the group’s targeted performance levels.

The performance targets for executive directors will be based on group underlying PBT

(50%), working capital days (20%) and strategic targets (30%) that are aligned with

delivering against our transformation strategy.

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Remuneration Committee report continued

PSP

The Remuneration Committee intends to grant awards at the same level as in 2022/23,

being250% and 175% of salary for the CEO and CFO respectively.

The performance measures will continue to be a combination of growth in underlying EPS

(30%), relative total shareholder return (versus the FTSE 31 to 100 companies but excluding

those in financial services) (40%), and strategic and sustainability objectives (30%). The main

change compared to the awards granted last year is a greater weighting to the strategic and

sustainability targets (up from 20%) which reflects the strategic priorities over the next

three-year period.

The EPS growth targets to apply to the awards are considered similarly challenging to the

targets set in prior years. However, in recognition of ongoing uncertainty and volatility in

external markets, we have set a wider range of targets versus historic awards.

Our strategic and sustainability targets are focused on increasing the GHG emissions avoided

through the use of our products and solutions, reducing our own GHG (Scope 1 and Scope 2),

increasing the percentage of female representation across our management levels and

delivering a key business transformation associated with global business services.

Given our refreshed strategy will require investment over the coming years, a final change to

the PSP awards is the removal of the discretionary return on invested capital (ROIC) underpin.

However, the Committee retains discretion to adjust the vesting outcomes based on

underlying performance and having had regard to ROIC.

Prior to granting the 2023/24 PSP award the committee intends to undertake a final review

of the performance targets allowing for the prevailing market conditions versus the time at

which the proposed targets were set. Full details of the intended awards are set out on page

122.

Chair and non-executive director fees

The fees payable to the Chair and non-executive directors are reviewed annually. In line with

the increase in base salaries for executive directors, the Chair fee and non-executive director

base fee will be increased by 3.5% from 1

April 23 (lower than the increase to the wider

workforce).The additional premiums for acting as a Chair of a committee were also

reviewedandincreased.

Wider employee remuneration

Paying our employees fairly for their role, skills, experience and performance is central to our

approach to remuneration, and our reward framework and policies support us in doing this.

Equal pay is also critical, and we review our pay levels on an ongoing basis to ensure that

employees are paid fairly. During the year we reviewed a global analysis, conducted by an

independent reward consultancy (Willis Tower Watson) on pay levels and pay equity across

the organisation, which showed that nearly 95% of roles are paid fairly, and we continue

tomake targeted actions to remove any form of potential inequality. We are also committed

to the real living wage and narrowing the gender pay gap that exists among our employees,

and to tackling the root causes of gender imbalance to ensure a truly inclusive culture that

supports diversity. Our commitment in this area has resulted in a reduction in our gender pay

gap in the UK from 9.2% to 5.6% over the past few years, and we are starting to make

progress in other countries.

We aspire to offer a well-balanced, progressive and structured approach to reward, with

appropriate variation by location. We also find that the non-financial reward elements are

essential to a supportive culture, with the wellbeing of staff a prominent part of our

employment proposition.

This year, all employees were able to provide their feedback on a range of matters, including

remuneration, through The Big Listen, our annual employee engagement survey (YourSay)

and local and global town hall meetings. This provided valuable employee context to decision

making when considering changes to the Remuneration Policy and how the company

rewards employees for the impact of their contributions.

Shareholder engagement

Ahead of the 2023 AGM, we engaged with our largest investors as well as Institutional

Shareholder Services (‘ISS’), The Investment Association (‘IA’) and Glass Lewis, to understand

their views on our proposed new policy and the proposed implementation in 2023/24.

Thefeedback we received was supportive of retaining our current approach to directors’

remuneration and the minor refinements we proposed.

2023 AGM

I would like to thank shareholders for their input and engagement during the year in relation

to the Remuneration Policy. We believe that our policy remains simple, transparent and

effective, strongly supporting our business strategy with remuneration outcomes aligned

tothe shareholder experience.

I ask you to support the binding vote on Directors' Remuneration Policy and the advisory vote

on this Annual Statement and the 2023 Annual Report on Remuneration at our AGM on

July 2023. This AGM will be my last as Chair of the Remuneration Committee as I stand

down as Committee Chair with effect from the upcoming AGM but will continue on the Board

until January 2024 when I will retire from the Board. I’m pleased to advise that John O’Higgins

will take-over from me as the Chair of the Remuneration Committee following our AGM.

We welcome an open dialogue with our shareholders, and I will be available at the meeting

toanswer any questions about the work of the Remuneration Committee.

Chris Mottershead

Chair of the Remuneration Committee

Johnson Matthey | Annual Report and Accounts 2023

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Remuneration Committee report continued

Remuneration at a glance

Aligning remuneration

with strategy

We will use our deep knowledge of metals

chemistry to help our customers address the

complex technical challenges of the four

transitions – transport, energy, decarbonising

chemicals production and a circular economy

– by delivering sustainable products, services

and technologies.

KPIs

Group profit before tax

Annual Incentive Plan

Group working capital days

Annual Incentive Plan

Earnings per share

Performance Share Plan

Total shareholder return

Performance Share Plan

Sustainability-related KPI

Performance Share Plan

1. Measure included in awards from 2020 onwards

2. Sustainability KPI added in 2022

Our strategic objectives

Invest in growth areas targeted

atclimate change and circularity

Manage our established businesses

to support growth

Promote a fast-paced, efficient

business and high-performance

culture

Outcomes of variable remuneration

Weighting

Liam Condon Stephen Oxley

Formulaic outcome

(% base salary)

Formulaic outcome

(% base salary)

Annual bonus

Profit before tax 50% 81.0% 67.5%

Working capital days (excluding PGMs) 10% 18.0% 15.0%

Working capital days (including PGMs) 10% 8.1% 6.7%

Strategic objectives 30% 27.0% 22.5%

Total 100% 134.1% 111.7%

Performance Share Plan

Compound annual growth rate in earnings per share 50% - -

Total Shareholder return 50% - -

1. Liam Condon and Stephen Oxley did not hold any 2020–23 Performance Share Plan awards

Stephen Oxley

— Chief Financial Officer

Liam Condon

— Chief Executive Officer

2023 pay outcomes

The pay breakdowns for the executive directors in 2021/22 and 2022/23 are set out below:

Element 2021/22 2022/23

Fixed pay (£’000)

Salary 79 950

Benefits 24 280

Pension 12 143

Variable pay (£’000)

Annual Incentive Plan 0 1,274

Performance Share Plan 0 0

1. Liam Condon was appointed Chief Executive Officer on 1

March 2022

Element 2021/22 2022/23

Fixed pay (£’000)

Salary 565 582

Benefits 15 20

Pension 85 87

Variable pay (£’000)

Annual Incentive Plan 607 650

Performance Share Plan 0 0

2. Stephen Oxley was appointed Chief Financial Officer on 1

April 2021

21/22

22/23

115

1373 1274

21/22

22/23

607665

650689

Johnson Matthey | Annual Report and Accounts 2023

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Remuneration Policy

Remuneration Policy continued

Set out below is a summary of the modest revisions to apply to the 2023 Directors’

Remuneration Policy when compared against the policy approved at the 2020 AGM.

The table that follows describes each component of the Directors’ Remuneration Policy,

itspurpose and link to strategy, how it works, the opportunity, boundaries and performance

measures and any clawback or withholding conditions that apply. The policy was informed

byconsultation with key stakeholders, including our institutional investors and shareholder

advisory bodies.

Subject to approval, the policy will apply for three years from the 2023 AGM. The key changes

to the policy are set out below:

• The payout for achieving the threshold performance target under the AIP is to be reduced

to 25% of the target opportunity. It was previously 15% of the maximum opportunity,

which is equivalent to 30% of the target opportunity. This change represents a modest

toughening of the bonus structure and affects all participants in our annual incentive plans

and will result in greater focus on delivery against the Group’s targeted performance levels.

• The threshold vesting percentage for each performance measure within the long-term

PSPwill be set at the time of each award having regard to the targets set. The vesting at

threshold for each performance measure will be no more than 25%. For example, if the

committee set a broader range of EPS targets than in prior years this may result in threshold

vesting being as low as 0% as opposed to 15% (or higher) for that part of the award.

• Given our refreshed strategy will require investment over the coming years there will be

nodefined ROIC underpin applied to future PSP awards. Instead, the committee will be able

to take ROIC performance into account as part of a broader discretion to adjust vesting

outcomes based on an overall assessment of company performance.

Remuneration Policy Table

Purpose and link to strategy Operation (and changes if appropriate) of the element Potential value of element and performance measures

Base salary

Base salary is the basic pay for

doing the job. Its purpose is

toprovide a fair and competitive

level of base pay to attract and

retain individuals of the calibre

required to lead the business.

Base salaries will normally be reviewed annually, and any changes normally take effect from 1

April each year.

In determining salaries and salary increases, the Remuneration Committee will take account of the performance of the

individual director against a broad set of parameters including financial, environmental, social and governance issues.

The Remuneration Committee will also take into account the director’s knowledge, contribution to the role, length

oftime in post, and any additional responsibilities since the last salary review, as well as the level of salary increases

awarded to the wider Johnson Matthey workforce.

Salaries across the group are benchmarked against a comparator group of similarly sized companies, predominantly within

the FTSE, with a comparable international presence and geographic spread and operating in relevant industry sectors.

New appointments or promotions will be paid at a level reflecting the executive director’s level of experience in the

particular role and experience at board level. New or promoted executive directors may receive higher pay increases

than typical for the group over a period of time following their appointment as their pay trends toward an appropriate

level for their role.

Maximum opportunity

No salary increase will be awarded which results in a base

salarywhich exceeds the competitive market range considered

appropriate by the committee for the role.

Details of the current salaries for the executive directors

areincluded in the Annual Report on Remuneration on

(seepage119).

Benefits

Benefits are provided to support

the director in his or her

performance in the role. They

help to remove certain day-to-day

concerns from executive directors,

to allow them to focus on

managing and directing the

business. In general, benefits will

be restricted to the typical level

inthe relevant market for an

executive director.

Benefits include, but are not limited to, medical, life and income protection insurance, medical assessments, company

sick pay, and a company car (or equivalent).

Other appropriate benefits may also be provided from time to time at the discretion of the Remuneration Committee.

Directors’ and officers’ liability insurance is maintained for all directors.

Directors who are required to move for a business reason may, where appropriate, also be provided with benefits such

as relocation benefits (e.g. the provision of accommodation, transport or medical insurance away from their country

ofresidence) and schooling for dependants. The company may pay the tax on these benefits.

Directors may be assisted with tax advice and tax compliance services.

The company will reimburse all reasonable expenses (including any associated tax charges) which the executive

director is authorised to incur while carrying out executive duties.

Benefits are not generally expected to be a significant part

oftheremuneration package in financial terms.

Car benefits will not exceed a total of £25,000 per annum.

The cost of medical insurance for an individual executive director

and dependants will not exceed £25,000 per annum.

Company sick pay is 52 weeks’ full pay.

Pension

Provides for post-retirement

remuneration, ensures that the

total package is competitive

andaids retention.

All executive directors will be eligible to participate in a company pension plan and/or paid a cash supplement in lieu

ofmembership in a pension plan.

The maximum company contribution is 15% of base salary for

executive directors. This is aligned to the typical cost of providing

pension benefits to other employees in the UK. To the extent

there is a reduction in this typical cost the company’s contribution

for executive directors will reduce.

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Purpose and link to strategy Operation (and changes if appropriate) of the element Potential value of element and performance measures

Annual Incentive Plan

The AIP provides a strong

incentive aligned to strategy

inthe short term. It allows

theboard to drive and reward

both financial and non-

financial metrics, including

leadership behaviours, in

order to deliver sustainable

growth in shareholder value.

The AIP bonus plays a key part

in the motivation and

retention of executive

directors, one of the key

requirements for long-term

growth.

Bonus deferral as well as

malus and clawback

provisions ensure that

longer- term considerations

are properly taken into

account in the pursuit of

annual targets.

The Remuneration Committee sets the AIP performance measures and targets for each new award cycle.

At the end of the year, the committee determines the extent to which these have been achieved. The

committee retains the discretion to reduce any bonus award if, in its opinion, the underlying financial

performance of the company has not been satisfactory in the circumstances.

Deferral

Of any bonus paid, up to 50% is paid in cash and the remaining balance is deferred into shares for a

three-year period as an award under the deferred bonus plan. As defined in the relevant plan rules, no

further performance conditions apply to awards under the Deferred Bonus Plan. Dividends that accrue on

the deferred shares during the vesting period will be paid in either cash and/or shares at the time of vesting.

Malus and Clawback

The cash and deferred elements of the bonus are subject to malus and clawback provisions such that they

can be forfeited or recouped in part or in full in the event of a misstatement of results, error in the

calculation, misconduct by the individual or serious reputational damage.

Adjustments

The Remuneration Committee retains discretion to change the performance targets if there is a significant

and/or material event which causes the committee to believe the original targets are no longer appropriate

(e.g. to reflect material acquisitions or disposals).

The Remuneration Committee also retains discretion to amend the level of annual bonuses determined

bythe performance condition to seek to ensure that the incentive structure for executive directors does

notraise environmental, social and governance risks by inadvertently motivating irresponsible behaviour.

For example, reducing or eliminating bonuses where the company has suffered reputational damage

orwhere other aspects of performance, including leadership behaviour, have been unacceptable.

The Remuneration Committee retains the ability to increase bonus awards from the formulaic outcome

where there is identifiable and exceptional performance by the executive director. Bonus payments in such

circumstances would remain within the maximum bonus opportunity and shareholders would be fully

informed of the justification.

Maximum opportunity and vesting thresholds

• Chief Executive Officer – 180% of base salary.

• Other executive directors – 150% of base salary.

Where financial measures are set the threshold performance level will

result in a bonus of up to 25% of the target bonus opportunity. On-target

performance will result in 50% payment of the maximum opportunity.

Where non-financial targets are set, it may not be practicable to set targets

on a sliding scale.

Performance measures

Bonuses are based on the achievement of demanding financial and, where

appropriate, non-financial targets. The committee may use different

performances and/or weightings for each performance cycle as

appropriate to take into account the strategic needs of the business.

However, a substantial proportion (i.e. at least 60%) will be based on key

financial measures, for example, underlying PBT.

Targets are set applying a robust bottom-up process to achieve full

accountability. The financial performance targets are retrospectively

published in the immediately following Annual Report on Remuneration.

Details of last year’s bonus awards are on pages 106 and120.

The performance period for annual bonus purposes matches the financial

year (currently 1

April to 31

March).

Performance Share Plan

The Performance Share Plan

(PSP) is designed to ensure

that executives take decisions

in the interest of the

longer-term success of the

group. Having measures that

look at profitable growth and

performance relative to a

comparator group over the

longer term ensures that the

interests of executives are

aligned with shareholder

interest for long-term value.

Shares may be awarded each year and are subject to performance conditions tested over a minimum

three- year performance period. Subject to the performance conditions being met the shares will vest after

which the directors will be required to hold any vested shares until the fifth anniversary of the award.

The performance targets are set by the Remuneration Committee based on internal and external growth

forecasts to ensure they remain appropriate and aligned with shareholder expectations.

The awards are granted in accordance with the rules of the plan approved by shareholders. The maximum

award level is 250% of base salary. Awards may be granted in the form of conditional shares, nil or nominal

cost options or cash (where the awards cannot be settled in shares). Dividends that accrue during the

post-vesting holding period will be managed in accordance with our dividend re-investment process.

Malus and clawback

PSP awards are subject to malus and clawback provisions that can apply in the case of a misstatement of

results, error in the calculation, misconduct by the individual, serious reputational damage, failures of risk

management or corporate failure.

Award levels and vesting thresholds

The maximum award level is 250% of salary.

The current award levels are:

• Chief Executive Officer – 250% of base salary

• Other Executive Directors – 175% of salary.

Threshold performance will result in vesting of up to a maximum of 25%

for each performance measure. The actual threshold vesting will depend

on the performance metric and the performance range set for the specific

award. Vesting at maximum is 100% of the relevant part of the award,

increasing on a graduated scale.

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Remuneration Policy continued

Purpose and link to strategy Operation (and changes if appropriate) of the element Potential value of element and performance measures

Performance Share Plan (continued)

Adjustment

The Remuneration Committee has the power to adjust the annual award level, for example in the event

ofa material fall in share price, as well as the power to adjust the vesting level of an award based on the

underlying performance of the company.

The committee may adjust the performance measure to reflect material changes (e.g. significant

acquisitions or disposals, share consolidation, share buy-backs or special dividends). Any such change

would be fully explained to shareholders.

Performance measures

PSP awards vest over a minimum three-year performance period and will

be subject to financial and/or shareholder return targets. In addition,

strategic and/or sustainability targets may be included in future awards.

Inall cases, the majority of the award will remain linked to financial

and/or shareholder return targets.

It is expected that during the policy period the following three metrics

willform the majority of awards:

a) The compound annual growth rate (CAGR) of underlying EPS;

b) The Total Shareholder Return (TSR) relative to a comparator group

(e.g. the FTSE 31-100 excluding financial services companies);

c) Strategic and/or sustainability targets.

Vesting is also subject to a broad committee discretion that will enable

thecommittee to adjust the extent to which an award vests by exercising

appropriate discretion to the formulaic outcomes in order to reflect

thewider financial performance and / or circumstances of the group.

The prospective weightings, targets and measures for the year

commencing 1

April 2023 are shown on page 122.

The Remuneration Committee retains the discretion to amend the

weightings, targets and the performance measures detailed on page 122

for future awards as appropriate to reflect the business strategy.

All employee share plan

Encourages share ownership Executive directors are entitled to participate in the company’s all-employee plan under which regular

monthly share purchases are made and matched with the award of company shares, subject to

retentionconditions.

Executive directors would also be entitled to participate in any other all-employee arrangements that

maybe established by the company on the same terms as all other employees.

Executive directors are entitled to participate up to the same limits in force

from time to time for all employees.

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Remuneration Policy continued

Purpose and link to strategy Operation (and changes if appropriate) of the element Potential value of element and performance measures

Shareholding requirements

To encourage executive

directors to build a

shareholding in the company

and ensure the interests of

management are aligned with

those of shareholders

Executive directors are expected to build up a shareholding in the company over a reasonable period

oftime, and upon cessation of employment are expected to retain a shareholding for a period of up

totwoyears.

Shares that count towards achieving these guidelines while an executive director include: all shares

beneficially owned by an executive director, or a person connected to the executive as recognised by the

Remuneration Committee; deferred bonus shares and PSP awards which have vested and so are no longer

subject to performance conditions but are within a holding period.

Executive directors are expected to retain at least 50% of the net (after tax) vested shares that are released

under the PSP and Deferred Bonus Plan until the required levels of shareholding are achieved.

Executive directors are not required to make personal share purchases should awards not meet the

performance conditions and so a newly appointed director may take longer to reach the expected level,

depending on the company’s performance against targets over the period. In addition, a director who

ceases employment with the company is not required to purchase shares to satisfy the post-cessation

shareholding requirement.

The minimum shareholding requirement while an executive director

andfor the two-year period after cessation of employment is as follows:

• Chief Executive Officer – 250% of base salary.

• Other executive directors – 200% of base salary.

If the executive director has not been able to build up their shareholding

prior to cessation they are not required to purchase shares upon cessation

to satisfy the requirement.

There is no requirement for non-executive directors to hold shares,

butthey are encouraged to acquire a holding over time.

Non-executive director fees

To attract, retain and motivate

non-executive directors with

the required knowledge and

experience.

Non-executive director fees are determined by the board and the non-executive directors exclude

themselves from these discussions.

The fees for the Chair are determined by the Remuneration Committee taking into account the views of the

Chief Executive Officer. The Chair excludes himself from these discussions.

Non-executive directors are paid a base fee each year with an additional fee for each committee Chair or

additional role held.

Non-executive director fees are reviewed every year. Any increase will take into account the market rate for

the relevant positions within the comparator group of similarly sized companies with a comparable

international presence and geographic spread and operating in relevant industry sectors and the

experience of the individuals and the expected time commitment of the role.

In exceptional circumstances, additional fees or non-executive benefits (e.g. assistance with tax filings or

an allowance for intercontinental travel including any associated tax) may be payable to reflect a

substantial increase in time commitment.

The company will also reimburse the Chair and non-executive directors for all reasonable expenses

(including any tax thereon) incurred while carrying out duties for the company.

Details of the current fee levels for the Chair and non-executive directors

are set out in the Annual Report on Remuneration on page 119.

The fee levels are set subject to the maximum limits set out in the

company’s Articles of Association.

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Remuneration Policy continued

The committee is responsible for determining, and agreeing with the board, the Directors’ Remuneration Policy and has oversight of its implementation. The committee has clear terms

ofreference, works with management and independent advisers to develop proposals and recommendations, and exercises independent judgement when making decisions. This process

isconsidered to manage any potential conflicts of interest.

The policy is performance focused and, given the long-term nature of JM’s business, is weighted towards long-term performance and includes market standard shareholding expectations

andrecovery and withholding provisions.

The committee considered the principles listed in the 2018 UK Corporate Governance Code when reviewing the Directors’ Remuneration Policy and took these into account in its design

andimplementation.

Clarity

Remuneration arrangements have defined parameters which can be transparently communicated to shareholders and other stakeholders.

Simplicity

Remuneration arrangements for executive directors consist of:

• Salary, benefits, and a fixed pension contribution – set to reflect the typical rate provided to the UK workforce.

• Annual Incentive Plan (AIP), a portion of which is deferred into shares.

• Annual long-term Performance Share Plan (PSP) awards which provide focus on performance over the longer term.

Unnecessary complexity is avoided by the committee in operating the arrangements.

Risk

The remuneration arrangements are designed to have a robust link between pay and performance, thereby mitigating the risk of excessive reward. In addition,

behavioural risks are considered when setting targets for performance-related pay, and the arrangements have safeguards to ensure that pay remains appropriate,

including committee discretion to adjust incentive outturns, deferral of incentive payments in shares, recovery provisions and share ownership requirements.

Toavoid conflicts of interest, committee members are required to disclose any conflicts or potential conflicts ahead of committee meetings. No executive director

or other member of management is present when their own remuneration is under discussion.

Predictability

The committee set specific targets for different levels of performance which are communicated to the individuals and disclosed to shareholders.

Proportionality

The AIP and PSP have performance metrics that are aligned with the company’s KPIs, and the payouts reflect achievement against the targets. The committee

may reduce payouts under the AIP and PSP if they are not considered aligned with underlying performance. Safeguards are identified to ensure that poor

performance is not rewarded.

Alignment to culture

The directors’ remuneration arrangements are cascaded through the organisation ensuring that there are common goals. The committee reviews remuneration

arrangements throughout the company and takes these into account when setting directors’ remuneration.

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Remuneration Policy continued

Selection of performance targets

Annual Incentive Plan

Financial performance targets under the AIP are set by the Remuneration Committee

withreference to the prior year and to the budgets and business plans for the coming year,

ensuring the levels to achieve threshold, target or maximum payout are appropriately

challenging.

The performance targets for 2023/24 are predominantly based on financial measures

(70%of maximum opportunity) including budgeted underlying PBT and working capital

daysto ensure that there is strong attention paid to delivery of current operational plans

andoperational efficiency.

Commercial sensitivity precludes the advance publication of the actual bonus targets,

butthese targets will be retrospectively published in the Annual Report on Remuneration

for2023/24.

Performance Share Plan

The performance targets under the PSP are set to reflect the company’s longer-term

growthobjectives at a level where the maximum represents genuine outperformance.

Theperformance measures are currently based on underlying EPS, TSR and strategic

objectives (including sustainability).

Underlying EPS is considered a simple and clear measure of absolute growth in line with

thecompany’s strategy.

TSR is considered a simple and clear performance relative to a comparator group

(FTSE31-100 excluding financial services companies).

The strategic objectives will consist of four equally weighted metrics. For 2023/24,

threemetrics will relate to our sustainability framework, and one will relate to a business

transformation objective.

Discretion

The Remuneration Committee can exercise discretion in a number of areas when operating

the company’s incentive plans, in line with the relevant rules of the plan. These include

(butare not limited to):

• The choice of participants

• The size of awards in any year (subject to the limits set out in the Directors’ Remuneration

Policy table)

• The extent of payments or vesting in light of the achievement of the relevant performance

conditions

• The determination of good or bad leavers and the treatment of outstanding awards

(subject to the provisions of the plan rules and the remuneration policy provisions)

• The treatment of outstanding awards and assessing performance in the event of a change

of control.

In addition, if events occur which cause the Remuneration Committee to conclude that any

performance condition is no longer appropriate, that condition may be substituted, varied or

waived as is considered reasonable in the circumstances, in order to produce a fairer measure

of performance that is not materially less difficult to satisfy.

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Remuneration Policy continued

Remuneration scenarios

Below is an illustration of the potential future remuneration that could be received by each executive director for the year starting 1

April 2023, both in absolute terms and as a proportion of

thetotal package under different performance scenarios. The value of the PSP is based on the award that will be granted in August 2023. In developing the scenarios, the following assumptions

have been made:

Below threshold Only fixed elements of remuneration (base salary, pension and benefits) are payable

Threshold Fixed elements of remuneration plus 25% of target bonus and 22% vesting of PSP award are payable

Target Fixed elements of remuneration plus 50% of maximum bonus and 60% vesting of PSP award are payable

Maximum Fixed elements of remuneration plus 100% of maximum bonus and 100% vesting of PSP award are payable

Maximum plus 50% share

price appreciation

Maximum plus a 50% share price appreciation on the PSP award and Deferred Bonus Plan (DBP) award

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Maximum with

50% share price appreciation

Maximum

Target

Threshold

Below threshold

0 20 40 60 80 100

Maximum with

50% share price appreciation

Maximum

Target

Threshold

Below threshold

Value £000

0 500 1,000 1,500 2,000 2,500 3,000 3,500

Maximum with

50% share price appreciation

Maximum

Target

Threshold

Below threshold

0 20 40 60 80 100

Maximum with

50% share price appreciation

Maximum

Target

Threshold

Below threshold

Value £000

Liam Condon

Stephen Oxley

Value of package Composition of package

Base salary Benefits Pension Bonus DBP share price appreciation PSP PSP share price appreciation

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Remuneration Policy continued

Group employee considerations

The Remuneration Committee considers the directors’ remuneration, along with the

remuneration of the Group Leadership Team (GLT), in the context of the wider employee

population, and is kept regularly updated on pay and conditions across the group.

We aspire to offer a well-balanced, progressive and structured approach to reward,

withappropriate variation by location. We also find that the non-financial reward elements

are essential to a supportive culture, with the wellbeing of staff a prominent part of our

employment proposition.

The general principle for remuneration in Johnson Matthey is to provide a competitive

package of pay and benefits in all markets and at all job levels to attract and retain

high-quality and diverse employees. Equal and fair pay is also a critical component of our

proposition, and we regularly review our pay levels and develop actions to remove any form

ofpotential inequality. The proportion of variable pay increases with progression through

management levels, with the highest proportion of variable pay at executive director level,

asdefined by the Remuneration Policy.

This year, all employees were able to provide their feedback on a range of matters, including

remuneration, through The Big Listen and our annual employee engagement survey

(YourSay). This provided valuable employee context to decision making when considering

changes to the Remuneration Policy. While we inform our employees of global changes

topay and benefits, we have not actively sought a two-way dialogue over executive pay

during 2022/23.

Corporate Governance: matthey.com/corporate-governance

The table below sets out how our remuneration arrangements cascade through the organisation:

Executive directors Senior managers Middle managers Managers Wider workforce

Base salary

Base salary is set with reference to the relevant local market and takes account of the employee’s knowledge, experience and

contribution to the role. Base salaries are usually reviewed annually and take into account local salary norms, local inflation

and business conditions. Increases in base salary for directors will take into account the level of salary increases granted to all

employees within the group.

Base salary is either subject

to negotiation with local

trade unions or follows the

market pay approach

outlined for managers.

Pension and benefits

Employment-related benefits are offered in line with local market conditions.

Short-term incentives

Annual incentive based on

70% financial metrics plus

30% strategic objectives.

Compulsory deferral into

shares for three years.

Annual incentive based on

70% financial metrics or

strategic business goals, plus

30% individual

performance. Compulsory

deferral into shares for

three-years for certain levels

within this category.

Annual incentive based on 70% financial metrics or strategic

business goals plus 30% individual performance.

Annual incentive is either

subject to negotiation with

local trade unions or follows

the standard AIP framework

with financial, non-financial

and individual performance

measures used.

Long-term incentives

PSP awards are subject to a

three-year performance

period and a two-year

holding period. Performance

conditions are designed to

drive company financial

performance and align with

stakeholder interests.

PSP awards are subject to a three-year performance period.

Performance conditions are designed to drive company

financial performance and align with stakeholder interests.

Restricted Share Plan (RSP) awards may be granted as

special recognition or to motivate and retain key talent. They

are typically subject to a three-year service condition.

RSP awards may be granted as special recognition or to

motivate and retain key talent. They are typically subject to a

three-year service condition.

Eligible employees may participate in JM’s Share Incentive Plan (ShareMatch). Two free matching shares are awarded for every one partnership share

purchased by the employee, subject to an annual maximum employee contribution of £1,500.

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Remuneration Policy continued

Shareholder considerations

The committee has a standard annual agenda item whereby the feedback from shareholders

and investor advisory bodies is presented and discussed following the AGM. The Committee

Chair is also available for questions at the AGM. The feedback that the committee receives

then informs discussions for the formulation of future policy and subsequent remuneration

decisions. The committee is also regularly updated on the collective views of shareholders

andinvestor advisory bodies by its independent advisor.

As part of the policy renewal process, the Committee Chair consulted with major

shareholders, as well as proxy voting bodies and shareholder advisory groups. Based

onthefeedback from our engagement, shareholders welcomed the proposed changes

totheremuneration policy and so no amendments were required to the proposed policy.

Approach to recruitment

The recruitment policy provides an appropriate framework within which to attract individuals

of the required calibre to lead a company of Johnson Matthey’s size, scale and complexity.

TheRemuneration Committee determines the remuneration package for any appointment

toan executive director position, either from within or outside Johnson Matthey.

The following table sets out the various components which would be considered for inclusion

in the remuneration package for the appointment of an executive director and the approach

to be adopted by the Remuneration Committee in respect of each component.

In the case of an internal promotion to the board, the company will honour any contractual

commitments made prior to the promotion.

Area Policy and operation

Overall The policy of the board is to recruit the best candidate possible for any board position and to structure pay and benefits in line with the Remuneration Policy set out in this report.

The ongoing structure of a new recruit’s package would be the same as for existing directors, with the possible exception of an identifiable buy-out provision, as set out below.

Base salary or fees Salary or fees will be determined by the Remuneration Committee in accordance with the principles set out in the policy table on page 107.

Benefits and

pension

An executive director will be eligible for benefits and pension arrangements in line with the company’s policy for current executive directors, as set out in the policy table

onpage 107.

Annual Incentive

Plan

The maximum level of opportunity is as set out in the policy table on page107. The Remuneration Committee retains discretion to set different performance targets for a new

externally appointed executive director, or to adjust performance targets and/or measures in the case of an internal promotion, to be assessed over the remainder of the financial

year. In this case any bonus payment would be made at the same time as for existing directors, such award to be pro-rated for the time served in the performance period.

Performance

Share Plan

The maximum level of opportunity is as set out in the policy table on page 107. In order to achieve rapid alignment with Johnson Matthey’s and shareholder interests, the

Remuneration Committee retains discretion to grant a PSP award to a new externally appointed executive director on or soon after appointment if they join outside of the

normal grant period.

Replacement

awards buy-out

The Remuneration Committee retains discretion to grant replacement buy-out awards (in cash or shares) to a new externally appointed executive director to reflect the loss

ofawards granted by a previous employer. Where this is the case, the Remuneration Committee will seek to structure the replacement award such that overall it is on an

equivalent basis to broadly replicate that foregone, using appropriate performance terms. If granted, any replacement buy-out award would not exceed the maximum set out

inthe rules of the 2017 Performance Share Plan (350% of base salary).

If the executive director’s prior employer pays any portion of the remuneration that was anticipated to be forfeited, the replacement awards shall be reduced by an equivalent

amount.

Other The Remuneration Committee may agree that the company will meet certain mobility costs and relocation costs including temporary living and transportation expenses,

inlinewith the company’s prevailing mobility policy for senior executives as described in the policy table on page 107.

Service contracts and policy on payment for loss of office

The following table summarises relevant key provisions of executive directors’ service contracts and the treatment of payments on termination of employment. The full contracts of service of the

executive directors (as well as the terms and conditions of appointment of the non-executive directors) are available for inspection at the registered office of the company during normal business

hours as well as prior to and during the forthcoming AGM.

In exceptional circumstances, the Remuneration Committee may authorise, where it considers it to be in the best interests of the company and shareholders, entering into contractual

arrangements with a departing executive director, for example a settlement, confidentiality, restrictive covenant or other arrangement, pursuant to which sums not set out in the following table

may become payable. Full disclosure of the payments will be made in accordance with the remuneration reporting requirements.

The table on the following page describes the contractual conditions pertaining to the contracts for Liam Condon and Stephen Oxley and for any future executive director.

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Remuneration Policy continued

Summary of key provisions of executive directors’ service contracts and treatment of payments on termination

Liam Condon Stephen Oxley

Date of service agreement 10

November 2021 1

December 2020

Date of appointment as director 1

March 2022 1

April 2021

Employing company Johnson Matthey Plc

Contract duration No fixed term.

Notice period No more than 12 months’ notice

Post-termination restrictions The contracts of employment contain the following restrictions on the director for the following periods from the date of termination of employment:

• non-compete – six months

• non-dealing and non-solicitation of client/customers – 12 months

• non-solicitation of suppliers and non-interference with supply chain – 12 months

• non-solicitation of employees – 12 months.

Summary termination –

payment in lieu of notice

(PILON)

The company may, in its absolute discretion, terminate the employment of the director with immediate effect by giving written notice together with payment

ofa sum equivalent to the director’s base salary and the value of his contractual benefits as at the date such notice is given, in respect of the director’s notice

period, less any period of notice actually worked.

The company may elect to pay the PILON in equal monthly instalments. The director is under a duty to seek alternative employment and to keep the

company informed about whether they have been successful. If the director commences alternative employment, the monthly instalments shall be reduced

(if appropriate to nil) by the amount of the director’s gross earnings from the alternative employment. A PILON paid to a director who is a US taxpayer

would be in equal monthly instalments.

Termination payment – change

of control

If, within one year after a change of control, the director’s service agreement is terminated by the company (other than in accordance with the summary

termination provisions), the company shall pay, as liquidated damages, one year’s base salary, together with a sum equivalent to the value of the director’s

contractual benefits, as at the date of termination, less the period of any notice given by the company to the director.

Termination – treatment of

annual incentive awards

Annual bonus awards are made at the discretion of the Remuneration Committee.

Executive directors leaving the company’s employment will receive a bonus, pro-rata to service, unless the reason for leaving is resignation or misconduct.

Any bonus awarded would continue to be subject to deferral as set out in the Remuneration Policy.

In relation to deferred bonus awards which have already been made, shares will be released on the normal vesting date unless one of the following

circumstances applies, and subject to the discretion of the Remuneration Committee:

• the participant leaves as a result of misconduct; or

• the participant, prior to vesting, breaches one of the post-termination restrictions or covenants contained in their employment contract, termination

agreement or similar agreement.

In which case the deferred awards will lapse on cessation of employment.

The Remuneration Committee has the discretion to accelerate vesting of a deferred award if appropriate to do so to reflect the circumstances of the

departure. It is intended that this would only be used in the event of a departure due to ill health (or death).

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Remuneration Policy continued

Summary of key provisions of executive directors’ service contracts and treatment of payments on termination

(continued)

Liam Condon Stephen Oxley

Termination – treatment of

long-term incentive awards

Employees, including executive directors, leaving the company’s employment will normally lose their long-term incentive awards unless they leave for

aspecified “good leaver” reason (e.g. death, retirement), in which case their shares will be released on the normal release dates, subject to the performance

condition. The Remuneration Committee has discretion to accelerate vesting, in which case the performance condition would be assessed based on

available information at the time. In either case, unless the Remuneration Committee determines otherwise, the level of vesting shall be pro-rated to reflect

the proportion of the performance period which has elapsed to the date of leaving. In the post-vesting deferral period, only those who leave due to

misconduct will lose their shares.

Redundancy arrangements Directors are not entitled to any benefit under any redundancy payments arrangement operated by the company.

Holiday Upon termination for any reason, directors will be entitled to payment in lieu of accrued but untaken holiday entitlement.

Chair and Non-Executive Directors

The Chair and each of the non-executive directors have letters of appointment. The letters of appointment do not contain any contractual entitlement to a termination payment and the

non-executive directors can be removed in accordance with the company’s Articles of Association. Directors are required to retire at each AGM and seek re-election by shareholders.

The details of the service contracts, including notice periods, contained in the letters of appointment in relation to the non-executive directors who served during the year are set out in the table

below. Neither the Chair or the non-executive directors has provisions in his or her letter of appointment that relate to a change of control of the company.

Non-Executive Director Committee appointments Date of appointment Expiry of current term Notice period by the individual Notice period by the company

Patrick Thomas (Chair)

June 2018 31

May 2024 6 months 6 months

Jane Griffiths

January 2017 31

December 2025 1 month 1 month

Chris Mottershead

January 2015 26

January 2024 1 month 1 month

John O’Higgins

November 2017 15

November 2023 1 month 1 month

Xiaozhi Liu

April 2019 1

April 2025 1 month 1 month

Doug Webb

September 2019 1

September 2025 1 month 1 month

Rita Forst

October 2021 3

October 2024 1 month 1 month

Audit Committee

Remuneration Committee

Nomination Committee

Social Value Committee

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Remuneration Policy continued

This section provides details of how the Directors’

Remuneration Policy was implemented during 2022/23

and how we intend to apply it in 2023/24.

About the Remuneration Committee

All the independent non-executive directors sit on the Remuneration Committee, including

the group Chair, Patrick Thomas. Details of attendance at committee meetings during the

year ended 31

March 2023 are shown on page 75.

The Remuneration Committee’s Terms of Reference can be found at matthey.com/REM-

terms-of-reference. These include determination of fair remuneration for the Chief Executive

Officer, the other executive directors and the group Chair (no director participates in

discussions of their own remuneration). In addition, the committee receives

recommendations from the Chief Executive Officer on the remuneration of those reporting

tohim, as well as advice from the Chief HR Officer, who acts as secretary to the committee.

Advisers to the committee

The committee appoints and receives advice from independent remuneration consultants

onthe latest developments in corporate governance and market trends in pay and incentive

arrangements. The committee appointed Korn Ferry as adviser to the Remuneration

Committee after a competitive tender process in 2017. The total fees paid to Korn Ferry in

respect of its services to the committee during the year were £100,520 plus VAT. The fees

paid to Korn Ferry are based on the standard market rates Korn Ferry has for remuneration

committee advisory services.

Korn Ferry also provides consultancy services to the company in relation to certain employee

and benefit matters to those below the Board. Korn Ferry is a signatory to the Remuneration

Consultants Group Code of Conduct.

The committee is satisfied that the advice provided by Korn Ferry was independent and

objective and that the provision of additional services did not compromise that independence.

The committee is also satisfied that the team who provided that advice does not have any

connection to Johnson Matthey that may impair their independence and objectivity.

Herbert Smith Freehills is the committee’s legal adviser. There was no requirement during

2022/23 for Herbert Smith Freehills to provide advice to the committee. The committee is

aware that Herbert Smith Freehills is one of a number of legal firms that provide legal advice

and services to the company on a range of matters.

A statement regarding the use of remuneration consultants for the year ended 31

March

2023 is available at matthey.com/corporate-governance

Statement of shareholder voting

We carefully monitor shareholder voting on our Remuneration Policy and its implementation.

We recognise the importance of our shareholders’ continued support for our remuneration

arrangements.

The next table shows the results of the polls taken on the resolution to approve the

Remuneration Policy at the 2020 AGM and Annual Report on Remuneration at the

2022 AGM.

Resolution Number of votes cast For Against Votes withheld

Remuneration

Policy 148,233,329

126,978,681

(85.66%)

21,183,260

(14.29%)

1,552,871

Annual Report on

Remuneration 131,879,954

122,460,038

(92.86%)

9,419,916

(7.14%) 1,271,380

1. Percentage of votes cast, excluding votes withheld

The Remuneration Committee believes that the 85.66% vote in favour of the Remuneration

Policy at the 2020 AGM and the 92.86% vote in favour of the Annual Report on

Remuneration at the 2022 AGM showed strong shareholder support for the group’s

remuneration arrangements at that time.

Annual Report on remuneration

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Remuneration for the year ended 31

March 2023

Single total figure table of remuneration (audited)

Our Remuneration Policy operated as intended over the year, and the table below sets out the total remuneration and breakdown of the elements each director received in relation to the years

ended 31

March 2023 and 31

March 2022. An explanation of how the figures are calculated follows the table.

Base salary/fees

£’000

Benefits

£’000

Pension

£’000

Total fixed remuneration

£’000

Annual incentive

£’000

Long-term incentive

£’000

Total variable

remuneration

£’000

Total remuneration

£’000

2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022

Executive directors

Liam Condon

950 79 280

24 143 12 1,373 115 1,274 – - – 1,274 – 2,647 115

Stephen Oxley 582 565 20 15 87 85 689 665 650 607 - – 650 607 1,339 1,272

Non-executive directors

Patrick Thomas 376 376 - – - – 376 376 - – - – - – 376 376

Jane Griffiths

86 83 - – - – 86 83 - – - – - – 86 83

Chris Mottershead 86 86 - – - – 86 86 - – - – - – 86 86

John O’Higgins 87 87 - – - – 87 87 - – - – - – 87 87

Xiaozhi Liu 68 68 - – - – 68 68 - – - – - – 68 68

Doug Webb 89 89 - – - – 89 89 - – - – - – 89 89

Rita Forst

67 33 - – - – 67 33 - – - – - – 67 33

1. Represents a cash allowance in lieu of a pension

2. Liam Condon was appointed to the Board as Chief Executive Officer on 1

March 2022

3. Jane Griffiths was appointed Chair of the SVC on 1

June 2021. 2022 fee pro-rated accordingly based on 2 and 10 months

4. Rita Forst was appointed to the Board on 4

October 2021

5. Liam Condon is entitled to certain allowances and benefits associated with his international relocation. These include housing (£180k), schooling and other family disturbance allowances (£70k)

Explanation of figures

Base salary/fees Salary paid during the year to executive directors and fees paid during the year to non-executive directors.

Benefits All taxable benefits, such as medical and life insurance, service and car allowances, mobility allowances, matching shares under the all-employee share incentive

plan and assistance with tax advice and tax compliance services, where appropriate.

Pension The amounts shown represent the value of any cash supplements paid in lieu of pension membership.

Annual incentives Annual bonus awarded for the year ended 31

March 2023. The figure includes any amounts deferred and awarded as shares.

Long-term

incentives

The 2023 figure represents the value of shares that satisfied performance conditions on 31

March 2023. The 2022 figure represents the value of shares that satisfied

performance conditions on 31

March 2022.

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Annual report on remuneration continued

Annual bonus for the year ended 31

March 2023 (audited)

Liam Condon and Stephen Oxley were eligible for a maximum annual bonus of 180% of base

salary and 150% of base salary, respectively. The target bonus opportunity was set at 50%

ofmaximum and the threshold bonus opportunity was 15% of maximum.

The performance measures and weightings for the annual bonus were as follows:

Percentage of bonus available

Group underlying

PBT

Group working

capital days

Strategic

objectives

Liam Condon 50% 20% 30%

Stephen Oxley 50% 20% 30%

1. Group working capital days is split 50% total working capital (including PGMs) and 50% totalworking capital days (excluding PGMs).

Performance targets were set by looking at:

• Previous year financial performance.

• Budgets and business plans for 2022/23. These are built from the bottom up and

aresubject to thorough challenge before being finalised by the board.

• Consensus of industry analysts’ forecasts, provided by Vara Research.

The committee also considered the performance range for the group profit measures and

concluded that given the decrease in uncertainty in the market at the time the targets were

set, the range should return to between 95% and 105% of target performance. The absolute

level of profit needing to be achieved was also reset to better reflect the more positive outlook

at the beginning of the year. The 2022/23 targets are considered similarly challenging, if not

more challenging than those set in 2021/22.

The strategic objectives were set based on well-defined key deliverables that support our

strategy relating to science, customers, operations and people.

Bonus outcomes

Based on performance against the targets, total bonuses for the year ended 31

March 2023

were:

Financial

measures

outcome

(% base salary)

Strategic

measures

formulaic

outcome

(% base salary)

Total bonus

outcome

(% base salary)

Total bonus

outcome

(% of target)

Total value of

bonus

(£)

Liam Condon 107.1% 27.0% 134.1% 149.0% 1,273,567

Stephen Oxley 89.2% 22.5% 111.7% 149.0% 650,133

1. 50% of this figure is deferred into conditional shares subject to a three-year vesting period with no other performance conditions.

This figure represents the full bonus paid for the year

The detailed breakdown of performance against the financial targets and strategic objectives

is set out in the next tables.

Financial measures

Performance measure

Bonus

weighting Unit

Liam Condon Stephen Oxley

Maximum bonus

available

(% base salary)

Outcome

(% base salary)

Maximum bonus

available

(% base salary)

Outcome

(% base salary)

Group underlying PBT

50%

£m

£403.8m£365.3m £384.6m£399.9m

90 81 75 67.5

Group Working Capital Days (incl. pgms)

10%

Average

days

25.7 days28.4 days27.0 days27.3 days

18 8.1 15 6.7

Group Working Capital Days (excl. pgms)

10%

Average

days

46.1 days51.0 days48.6 days39.7 days

18 18 15 15

Total bonus for financial measures 126 107.1 105 89.2

1. Group underlying PBT and group working capital days are measured using Johnson Matthey’s budgeted foreign exchange rates

2. Outcome includes adjustments for business unit divestments and bonus targets being based on 50% constant and 50% actual metal prices

Outcome Target Threshold Maximum

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Annual report on remuneration continued

Strategic objectives

Objective Assessment

Formulaic

outcome (% of

target bonus)

Bonus

payable (% of

base salary)

Liam Condon

A reduction in our ongoing operating cost as a contribution toward

the three-year strategic goal of reducing our cost base by £150m.

A reduction of c. £45m was achieved, which was in excess of the target

fortheyear.

100% 27%

An improvement in our employment engagement score as

acontribution toward our 2030 sustainability target.

Given the energy crisis and extended China lockdown we had to accelerate and

broaden the scope of the business transformation, which has been unsettling

foremployees. As a result, there was no improvement in our engagement score

andso this objective was missed.

Develop detailed roadmap and action plans to ensure the

achievement of our sustainability targets.

Detailed roadmaps for ten sustainability targets were developed and validated

by the board during the year. These roadmaps include over 100 identifiable

actions in total that will ensure the delivery of our sustainability targets.

Win at least two large-scale strategic partnerships in Hydrogen

Technologies.

Good progress has been made developing and securing partnerships in

Hydrogen Technologies, plus strategic partnerships with Plug Power and Hystar

have been announced.

Complete succession planning for Group Leadership Team with

afocus on internal talent and diversity in the broadest sense,

withdevelopment plans in place for potential successors.

Internal succession candidates were identified against an agreed success profile.

Development actions were identified and development plans were prepared.

Inaddition, progress continues to be made on increasing gender representation

of our business leadership teams.

Complete investor sentiment study and take steps to attract new

investors, with the aim to diversify and strengthen investment base

both geographically and from an ESG-point of view.

A high level of investor engagement was had during the year with 30% more

meetings with existing and prospective investors, with increasing interest from

US investors. ESG has been more embedded into our investor engagement.

Stephen Oxley

A reduction in our ongoing operating cost as a contribution toward

the 3-year strategic goal of reducing our cost base by £150m.

A reduction of c. £45m was achieved, which was in excess of the target for

theyear.

100% 22.5%

An improvement in our employment engagement score as

acontribution toward our 2030 sustainability target.

Given the energy crisis and extended China lockdown we had to accelerate and

broaden the scope of the business transformation, which has been unsettling

for employees. As a result, there was no improvement in our engagement score

and so this objective was missed.

Develop detailed roadmap and action plans to ensure the

achievement of our sustainability targets

Detailed roadmaps for ten sustainability targets were developed and validated

by the board during the year. These roadmaps include over 100 identifiable

actions in total that will ensure the delivery of our sustainability targets.

Implement a finance transformation plan including clarity of the

specific three-year milestones and cost reductions to be achieved.

Finance transformation is progressing with savings delivered in 2022/23 and

identified for 2023/24. Financial controls, assurance and risk management

hasalso been improved.

Complete the sale of at least one Value Business and be well

progressed in targeting >£300m of cash from disposals by 2025.

Two businesses have been sold, with one other well progressed.

Complete investor sentiment study and take steps to attract

newinvestors, with the aim to diversify and strengthen investment

base both geographically and from an ESG point of view.

A high level of investor engagement was had during the year with 30% more

meetings with existing and prospective investors, with increasing interest from

USinvestors. ESG has been more embedded into our investor engagement.

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Long-term incentives

PSP awards vesting for the three-year performance period ended 31

March 2023 (audited)

The 2020 PSP awards were made in August 2020 and performance was measured over the period 1

April 2020 to 31

March 2023. After the performance period, shares are no longer subject

toperformance conditions, and where the performance conditions are met, the shares will vest on the fifth anniversary of the award. The awards vest on a straight-line basis between threshold

(15% vesting for EPS and 25% vesting for TSR) and maximum (100% vesting). The performance condition for the 2020 award and the actual performance achieved are shown below.

Weighting Threshold Maximum Actual

Compound annual growth rate in earnings per share 50% 3% 8% -1%

Relative total shareholder return 50%

Median

(22.2%)

Upper

Quartile

(53.6%)

Below

Threshold

(6.23%)

Liam Condon and Stephen Oxley did not have 2020 PSP awards.

PSP awards granted in the year ended 31

March 2023 (audited)

The next table provides details of the PSP awards entitled to executive directors in the year ended 31

March 2023.

Executive directors Award date Award type

Award size

(% of base salary)

Number of shares

awarded Face value

% vesting at threshold

End of performance period End of holding period

Liam Condon 1

August 2022 Conditional shares 250 115,260 £2,374,990 21% 31st March 2025 1st August 2027

Stephen Oxley 1

August 2022 Conditional shares 175 49,424 £1,018,406 21% 31st March 2025 1st August 2027

1. Face value is calculated using the award share price of 2,060.55 pence, which is the average closing share price over the four-week period starting on 26

May 2022

2. Threshold vesting is 15% for the earnings per share (EPS) measure and 25% for the relative total shareholder return (TSR) measure. The value shown is the average threshold vesting for the award

The performance targets and vesting ranges for the 2022 award are set out below:

40% of performance condition 40% of performance condition

Compound annual growth rate in earnings per share Relative total shareholder return

Performance Proportion of shares vesting Performance Proportion of shares vesting

<3% 0% Below median 0%

3% 15% Median 25%

8% 100% Upper quartile 100%

Between 3% and 8% Straight-line between 15% and 100% Between median and upper quartile Straight-line between 25% and 100%

20% of performance condition

Sustainability scorecard (targets equally weighted)

Tonnes of GHG avoided using technologies enabled by our products and solutions Reduction in scope 1 and 2 GHG emissions Percentage of female representation across management levels

Performance Proportion of shares vesting Performance Proportion of shares vesting Performance Proportion of shares vesting

< 5.2m tonnes (MT) 0% Below 12% reduction 0% Below 31% representation 0%

5.2 MT 25% 12% reduction 25% 31% representation 25%

6.0 MT 100% 14% reduction 100% 32% representation 100%

Between 5.2 MT

and 6.0 MT

Straight-line between 25%

and 100%

Between 12% and 14%

reduction

Straight-line between 25%

and 100%

Between 31% and 32%

representation

Straight-line between 25%

and 100%

In addition to the EPS, TSR and sustainability scorecard performance conditions, the Remuneration Committee considers the performance of ROIC over the performance period to ensure that

earnings growth is achieved in a sustainable and efficient manner.

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Statement of directors’ shareholding (audited)

The table below shows the directors’ interests in the shares of the company, together with

their unvested scheme interests, effective 31

March 2023.

Ordinary

Subject to

ongoing

performance

conditions

Not subject

to further

performance

conditions

Executive directors

Liam Condon 31,000 145,075 –

Stephen Oxley 14,991 81,117 56,223

Non-executive directors

Patrick Thomas 13,194 – –

Jane Griffiths 5,171 – –

Chris Mottershead 5,718 – –

John O’Higgins 1,500 – –

Xiaozhi Liu 4,000 – –

Doug Webb 6,500 – –

Rita Forst 4,000 – –

1. Includes shares held by the director and / or connected persons, including those in the all-employee share matching plan. Shares in the

all-employee share matching plan may be subject to forfeiture in accordance with the rules of the plan

2. Represents unvested PSP shares within three years of the date of award

3. Represents unvested deferred bonus shares that are not subject to service conditions and the buy-out award made to Stephen Oxley

onjoining JM, which is subject to ongoing service conditions

4. Includes 41,500 shares awarded in year end 31

March 2022 to compensate for the loss of KMPG long-term deferred cash award

Directors’ interests as at 25

May 2023 were unchanged from those listed above other

thanthat the Trustees of the all-employee share matching plan have purchased another

130shares for Stephen Oxley.

Executive directors are expected to achieve a shareholding guideline of 250% of base salary

for the Chief Executive Officer and 200% for other executive directors, within a reasonable

timeframe. The director’s total shareholding for the purposes of comparing it with the

minimum shareholding requirement includes shares held beneficially by the director and

anyconnected persons (as recognised by the Remuneration Committee), together with

theshares awarded under the Deferred Bonus Plan (DBP), for which there are no further

performance or service conditions.

Shares that count towards achieving the post-cessation guideline include the same as those

while an executive director. Executive directors are expected to retain at least 50% of the net

(after tax) vested shares that are released under the PSP and DBP until the required levels

ofshareholding are achieved.

Executive director shareholdings as at 31

March 2023 as a percentage of base salary

areshown below:

Requirement

Achievement

Liam Condon

70%250%

Stephen Oxley

110%200%

1. Value of shares as a percentage of base salary is calculated using a share value of 2,145.67 pence, which was the average share price

prevailing between 1

January 2023 and 31

March 2023

2. Liam Condon was appointed Chief Executive Officer on 1

March 2022 and will build his shareholding over a reasonable timeframe

3. Stephen Oxley was appointed Chief Financial Officer on 1

April 2021 and will build his shareholding over a reasonable timeframe

Pension entitlements (audited)

No director is currently accruing any pension benefit in the group’s pension schemes.

BothLiam Condon and Stephen Oxley receive an annual cash payment in lieu of pension

membership, equal to 15% of base salary. This is in line with pension provision for the

widerworkforce.

Payments to former Chief Executive (Robert MacLeod)

Robert MacLeod received a total of £325,401 in salary and benefits prior to retirement

on21

July 2022 (comprising of £264,720 basic pay, £54,048 pension and £6,633 benefits).

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Annual report on remuneration continued

Performance graph and comparison to Chief Executive Officer’s remuneration

Johnson Matthey and FTSE 100 total shareholder return rebased to 100

The following chart illustrates the total cumulative shareholder return of the company for the ten-year period from 1

April 2013 to 31

March 2023 against the FTSE 100 as the most appropriate

comparator group when considering our market capitalisation over the period, rebased to 100 at 1

April 2013.

FTSE 100 Johnson Matthey

March 2023March 2022March 2021March 2020March 2019March 2018March 2017March 2016March 2015March 2014March 2013

100

150

200

250

300

Historical data regarding Chief Executive Officer’s remuneration

2012/13 2013/14

2014/15

2015/16

2016/17 2017/18 2018/19 2019/20 2020/21 2021/22

2022/23

Single total figure of remuneration (£000) 3,025 3,855 2,539 1,429 1,971 2,013 2,784 1,462 2,532 1,672 2,647

Annual incentives (% of maximum) – 71 54 15 40 69 45 26 98 42 75

Long-term incentives (% of award vesting)

100 75 – 33 28 – 67 – – – -

1. Figures before to 2014/15 are in respect of Neil Carson

2. The figures for 2014/15 are in respect of both Robert MacLeod and Neil Carson, who both held the position of Chief Executive Officer in the year. The single total figure of £2,539k comprises £1,594k for Robert MacLeod and £945k for Neil Carson

3. Figures from 2015/16 to 2020/21 are in respect of Robert MacLeod

4. The figures for 2021/22 are in respect of both Robert MacLeod and Liam Condon, who both held the position of Chief Executive Officer in the year. The single total figure of £1,672k comprises £1,557k for Robert MacLeod and £115k for Liam Condon. The value shown for annual incentives

relates to Robert MacLeod only because Liam Condon was not eligible to participate in the AIP in 2021/22

5. Vesting of long-term incentive awards whose three-year performance period ended in the financial year shown

6. Figures for 2022/23 are in respect of Liam Condon

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Annual report on remuneration continued

Change in directors’ remuneration

The table below shows how the remuneration of directors, both executive and non-executive, has changed over the year ended 31

March 2023. This is then compared to employees

ofJohnsonMatthey Plc.

2023 2022 2021

Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits

Executive directors

Liam Condon

0% – – – – – – – –

Stephen Oxley

3% 7% – – – – – – –

Non-executive directors

Patrick Thomas 0% 0% 0% 2% 0% 0% 0% 0% 0%

Jane Griffiths 3%

0% 0% 24%

0% 0% 0% 0% 0%

Chris Mottershead 0% 0% 0% 2% 0% 0% 0% 0% 0%

John O’Higgins 0% 0% 0% 10%

0% 0% 27% 0% 0%

Xiaozhi Liu 0% 0% 0% 2% 0% 0% 0% 0% 0%

Doug Webb 0% 0% 0% 10%

0% 0% 31% 0% 0%

Rita Forst

100%

0% 0% – – – – – –

Comparator group

JM Plc employees 8%

-10%

4% 0% 2% 312% 0%

1. Liam Condon was appointed Chief Executive Officer on 1

March 2022, so no change in compensation can be calculated for 2021 or 2022. No change in bonus can be calculated for 2023 as not eligible in 2022

2. Stephen Oxley was appointed Chief Financial Officer on 1

April 2021, so no change in compensation can be calculated for 2021 or 2022

3. Represents the additional fee received for taking the SVC Chair position on 1

June 2021 and annual fee review

4. Represents the additional fee received for taking the Senior Independent Director role on 23

July 2020 and annual fee review

5. Represents the additional fee received for taking the Audit Committee Chair role on 23

July 2020 and annual fee review

6. Rita Forst was appointed to the board on 4

October 2021, so no change in compensation can be calculated for 2021 or 2022

7. Includes promotions and market adjustments

8. The percentage change in bonus was calculated based on the change in bonus accrual taken for Johnson Matthey Plc (JM Plc) employees, excluding the directors, for the 2021/22 and 2022/23 years and for the 2020/21 and 2021/22 years, respectively

9. There has been no change to the benefits policy for JM Plc employees; therefore, a 0% change has been reported

10. Represents the additional fee received for taking the SVC Chair position on 1

June 2021, which was pro-rated in 2022

11. Rita Forst was appointed to the Board on 4

October 2021 and received a pro-rated fee for 6 months in 2022 and full fee based on 12 months in 2023

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Relative spend on pay

The table below shows the absolute and relative amounts of distributions to shareholders

and the total remuneration for the group for the years ended 31

March 2022 and

March 2023.

Year ended

March 2022

£ million

Year ended

March 2023

£ million % change

Payments to shareholders – special dividends – – –

Payments to shareholders – ordinary dividends 139 141 1%

Share buyback

155 45

Total remuneration (all employees)

718 732 2%

1. On 13

May 2022, the company completed its £200 million share buyback programme which commenced on 21

December 2021.

During the year the company purchased 2,271,920 shares at a cost of £45 million

2. Figure is for all operations (excluding Health) and excludes termination benefits

Chief Executive Officer to employee pay ratio

The table below shows the ratio of Chief Executive Officer to employee pay for 2020-2023.

We have compared the single total figure of remuneration for the Chief Executive Officer

tothe total pay and benefits of UK employees, on a full-time equivalent basis, who are

rankedat the lower quartile, median and upper quartile across all UK employees effective

March 2023.

We believe that using total pay and benefits for the year ending 31

March 2023 provides

alike-for-like comparison to the Chief Executive Officer pay data.

Chief Executive Officer pay ratio 2020 2021 2022

2023

Method

Total pay and

benefits in 2019/20

Total pay and

benefits in 2020/21

Total pay and

benefits in 2021/22

Total pay and

benefits in 2022/23

Chief Executive

Officer single figure £1,462,000 £2,532,000 £1,672,000

£2,646,222

Upper quartile 22:1 35:1 20:1 37:1

Median 28:1 45:1 28:1 49:1

Lower quartile 36:1 57:1 35:1 60:1

1. Chief Executive Officer pay ratio revised to include employee bonuses payable in relation to 2021/22. This changed upper quartile from

36:1 to 20:1, median from 34:1 to 28:1 and lower quartile from 41:1 to 35:1

2. The Chief Executive Officer single figure for 2021/22 is in respect of both Robert MacLeod and Liam Condon, who both held the position

of Chief Executive Officer in the year. The single total figure of £1,672,000 comprises £1,557,000 for Robert MacLeod and £115,000

forLiam Condon

Bonus data for UK employees was left out of the 2023 calculation because it was not

administratively possible to calculate these bonuses before the publication of this report.

However, the calculation will be revised to include these bonuses once available and will

bedisclosed in the 2024 report. Excluding the 2022/23 bonus payable to the Chief Executive

Officer from the calculation would result in the following pay ratios: lower quartile – 29:1,

median – 23:1 and upper quartile – 18:1.

The salary and total pay for the individuals identified at the lower quartile, median and upper

quartile positions in 2023 are set out below:

2023 Salary

Total pay

Upper quartile individual £59,278 £72,086

Median individual £47,149 £54,458

Lower quartile individual £38,401 £44,108

1. Includes shift allowance

Our principles for pay setting and progression are consistent across the organisation.

Underpinning our principles is a need to provide a competitive total reward to enable the

attraction and retention of high-calibre individuals and giving the opportunity for individual

development and career progression. The pay ratios reflect the difference in role

accountabilities that are recognised through our pay structures and the greater variable pay

opportunity for more senior positions. The Chief Executive Officer’s variable pay opportunity

ishigher than those employees noted in the table reflecting the weighting towards long-term

value creation and alignment with shareholder interests inherent in this role.

The movement in our Chief Executive Officer to employee pay ratio between 2020-2023

isdriven by the different bonus outcomes and fixed income for the Chief Executive Officer

ineach of these years. There have been no other changes to remuneration arrangements

forour UK employees that would affect the CEO pay ratio.

We are satisfied that the median pay ratio is consistent with our wider pay, reward and

progression policies for employees. All our employees have the opportunity for annual pay

increases, career progression and development opportunities.

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Implementing the Directors’ Remuneration Policy for 2023/24

The table below sets out how the Remuneration Committee intends to apply the Directors’ Remuneration Policy for the year ended 31

March 2024.

Salary The Chief Executive Officer and Chief Financial Officer both received a pay increase of 3.5%. This is below the increase awarded to other UK employees.

Benefits No change to policy applied in 2023/24.

Pension All executive directors will have a maximum pension cash supplement of 15%.

Annual incentives The maximum bonus opportunity for 2023/24 remains unchanged at 180% of salary for the Chief Executive Officer and 150% of salary for the Chief Financial Officer.

2023/24 bonus will be based on underlying profit before tax (50%), working capital (20%) and strategic and transformation objectives (30%). Targets for the Chief Executive Officer

andChief Financial Officer will be based on group performance.

The 2023/24 targets are considered similarly challenging, if not more challenging to those set in 2022/23, when accounting for the divestments in the year and uncertain economic

outlook. The recalibration of targets has been set taking this into account as well as internal and external planning. To the extent that metal prices move outside a defined corridor the

Remuneration Committee will rebase the targets such that they are similarly challenging as when the targets were originally set. The Remuneration Committee considers the forward-

looking targets to be commercially sensitive but full retrospective disclosure of the actual targets will be included in next year’s Directors’ Remuneration report.

50% of any bonus paid will be deferred in shares for three years, and the payment of any bonus is subject to appropriate malus and clawback provisions.

Long-term incentives The Chief Executive Officer award level is 250% of base salary and the Chief Financial Officer award level is 175% of base salary. These award levels are in line with our remuneration policy.

The long-term Performance Share Plan will be based on EPS growth targets (30% of the award), relative TSR performance (40% of the award) and specific and measurable strategic

objectives (30% of award).

The range of annualised EPS growth targets that the committee intends to set for the 2023/24 awards is 1% per annum growth for threshold (15%) vesting, rising to 7% per annum growth for

maximum vesting (100%). Vesting will be on a straight-line basis between 1% and 7%. The committee considered the effect of metal price volatility on potential outcomes and, as a result, earnings

will be assessed 50% against actual metal prices and 50% against constant metal prices. The committee believes that this will allow for a more accurate assessment of underlying business performance.

The TSR target will be 25% vesting for median performance, increasing on a straight-line basis to 100% vesting for upper quartile performance. The TSR peer group will be the FTSE 31

– 100 (excluding financial services companies). The committee considers that this comparator group remains the most appropriate given our current market capitalisation.

The strategic objectives scorecard will consist of four equally weighted metrics. Threshold vesting will be 25%, increasing on a straight-line basis to 100% at maximum. The four metrics

are as follows:

• Products and services – tonnes of GHG avoided during the period using technologies enabled by our products and solutions, compared to conventional solutions, where threshold vesting

will be 8.0 million tonnes GHG avoided and maximum will be 12.0 million tonnes GHG avoided.

• Operations – reduction in Scope 1 and 2 GHG emissions (from the 2020 baseline), where threshold vesting will be achieved for a 20% reduction in GHG emissions and maximum vesting

for a 25% reduction in GHG emissions.

• People – percentage of female representation across our management levels, where threshold vesting will be achieved at 32% female representation at management levels and

maximum at 33% female representation at management levels.

• Business transformation – establish global business services and deliver a reduction in associated employment costs (from the 2022 baseline). The performance range is commercially

sensitive and will be disclosed at such a time when it is no longer considered commercially sensitive.

Awards vest in year three and are then subject to a two-year holding period.

Chairman and

non-executive

director fees

The fees for the Chair and non-executive directors were reviewed during the year and increased in line with the increase awarded to executive directors.

This Remuneration Report was approved by the Board of Directors on 25

May 2023 and signed on its behalf by:

Chris Mottershead

Chair of the Remuneration Committee

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Directors’ report

Statutory and other information

The Directors’ report required under the Companies Act 2006 (2006 Act) comprises the Governance report (pages 73 to127), including the Sustainability report for our disclosure of carbon

emissions, which is included in the Strategic report (pages 20 to 44). The management report required under Disclosure Guidance and Transparency Rule 4.1.8R comprises the Strategic report

(pages 1 to 72), which includes the risks relating to our business, and the Directors’ report.

Other disclosures

Dividend reinvestment plan A dividend reinvestment plan is available. This allows shareholders to purchase additional shares in Johnson Matthey Plc with their dividend payment. Further information and

amandate can be obtained from our registrar, Equiniti, and on our website: matthey.com

Directors’ indemnities

andinsurance

Johnson Matthey Plc has granted indemnities to each Johnson Matthey Plc director and the directors of the group’s subsidiaries in respect of certain liabilities arising against them

inthe course of their duties. Neither Johnson Matthey Plc or any subsidiary has indemnified any director of the Company or a subsidiary in respect of any liability that they may incur

toa third party in relation to a relevant occupational pension scheme. The Company maintains appropriate directors’ and officers’ liability insurance.

Conflicts of interest The Board has a policy for identifying and managing directors’ conflicts of interest, which extends to cover close family members. The Board annually reviews external appointments

toconsider any potential or actual conflict of interest. If a conflict of interest is declared, the Board will review the authorisation and terms associated, to ensure that all matters

presented to the Board are considered solely with a view to promoting JM’s business success. For the year under review, there were no potential or actual conflicts of interest.

External appointments The Board approves all external appointments in advance of acceptance. If an external appointment arises between meetings, this is considered by the Chair and Chief Executive

Officer, with the assistance of the Company Secretary. In approving each additional external appointment, the Board assesses time commitment to ensure that no directors are

considered over boarded.

Index of disclosures referred to elsewhere in the report

Business model

8-9

Employee engagement 35, 80

Dividends

193

Diversity and employment of disabled persons 36

Results

55-61, 144

Greenhouse gas emissions 28

Research and development activities

14-21, 60

Human rights and anti-bribery and corruption 38-39

Future developments

14-21

Modern slavery and human trafficking statement 39 /matthey.com

Non-financial key performance indicators

Whistleblowing (Speak Up) 42

Directors

76-77

Use of financial instruments 154

Directors’ interests

123

Related party transactions 205

Corporate governance statement

Share capital 193-194

Section 172 statement and stakeholder engagement

72, 84-86

Listing Rule 9.8.4R

Details of the disclosures to be made

under Listing Rule 9.8.4R are listedbelow.

• Interest capitalised 175

• Allotments of equity securities

for cash

130

• Dividend waiver 130

There are no other applicable disclosures.

Johnson Matthey | Annual Report and Accounts 2023

128

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Other disclosures

Directors’ reappointment Johnson Matthey Plc’s Articles of Association (the Articles) provide the rules on director appointments and are consistent with the recommendation contained within the Code.

Alldirectors retire and are eligible for re-election at each AGM (except any director appointed after the notice of an AGM meeting is published and before that AGM is held).

Directors’ powers The powers of the directors are determined by the Articles, UK legislation including the 2006 Act, and any directions given by the Company in general meetings. The directors are

authorised by the Company’s Articles to issue and allot ordinary shares and to make market purchases of its own shares. These powers are referred to shareholders for renewal at each

AGM. Further information is set out below under ‘Authority to purchase own shares’.

Constitution

Articles of Association The Articles may only be amended by a special resolution at a general meeting of the Company. The Articles were adopted on 17

July 2019 and are available on our

website: matthey.com/corporate-governance.

Branches The Company and its subsidiaries have established branches in several different countries in which they operate.

Change of control As at 31

March 2023 and as at the date of approval of this Annual Report, there were no significant agreements, to which the company or any subsidiary was or is a party to, that take

effect, alter or terminate on a change of control of the Company, whether following a takeover bid or otherwise.

However, the Company and its subsidiaries were, as at 31

March 2023, and as at the date of approval of this report, party to a number of commercial agreements. These may allow

counterparties to alter or terminate the commercial agreements on a change of control of JM following a takeover bid. These are not deemed significant in terms of their potential

effect on the group.

The group also has a number of loan notes and borrowing facilities that may require prepayment of principal and payment of accrued interest and breakage costs if there is a change

of control of JM. The group has entered into a series of financial instruments to hedge its currency, interest rate and metal price exposures, which provide for termination or alteration

if a change of control at JM materially weakens the creditworthiness of the group.

The executive directors’ service contracts each contain a provision to the effect that, if the contract is terminated by the Company within one year after a change of control of the

Company, JM will pay an amount equivalent to one year’s gross base salary and other contractual benefits, less the period of any notice given by the Company, to the director as

liquidated damages.

The rules of the Company’s employee share schemes set out the consequences of a change of control of the Company on participants’ rights under the schemes. Generally, the rights

will vest and become exercisable on a change of control, subject to the satisfaction of relevant performance conditions. As at 31

March 2023, and as at the date of approval of this

Annual Report, there were no other agreements between the Company, any subsidiaries and directors or employees, providing compensation for loss of office or employment

(through resignation, purported redundancy or otherwise) that occurs due to a takeover bid.

Stakeholders and policies

Suppliers

We recognise the importance of good supplier relationships to our overall success. Further information on our payment practices is on the UK government’s reporting portal.

Read more about our Supplier Code of Conduct and our engagement with suppliers during the year on page 40

Political donations No political donations or contributions to political parties under the 2006 Act have been made during the year. The group policy is that no political donations be made or political

expenditure incurred.

Events occurring after

thereporting period

There have been no important events affecting Johnson Matthey Plc or any subsidiary between 31

March 2023 and the date of approval of this annual report, 25

May 2023.

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Directors’ Report continued

Shareholders and share capital

AGM Our 2023 AGM will be held on Thursday 20

July 2023 at 11.00 am at Herbert Smith Freehills, Exchange House, 12 Primrose Street, London EC2A 2EG. We will provide a live webcast

and telephone conference so shareholders can also participate virtually and ask questions in real time. Details on how to join are included in the Notice of AGM. In the Notice,

wepropose separate resolutions on each substantially separate issue. For each resolution, shareholders may direct their proxy to vote either for or against or to withhold their vote.

A‘vote withheld’ is not legally a vote and will not be counted in the calculation of the proportion of the votes cast. All AGM resolutions are decided with an electronic poll, with the

results announced as soon as possible and posted on our website. This poll will show votes for and against, as well as votes withheld.

Authority to purchase

ownshares

At the 2022 AGM, shareholders authorised Johnson Matthey Plc to make market purchases of up to 18,312,226 ordinary shares of 110

49/53

pence each, representing 10% of the then

issued share capital of the company (excluding treasury shares). Any shares so purchased by Johnson Matthey may be cancelled or held as treasury shares. This authority will cease

atthe conclusion of the 2023 AGM, and shareholders will be asked to give a similar authority at the AGM.

There were no share allotments during the year.

Rights and obligations

attaching to shares

The rights and obligations attaching to the ordinary shares in Johnson Matthey Plc are set out in the Articles.

As at 31

March 2023, and as at the date of approval of this Annual Report, there were no restrictions on the transfer of ordinary shares in the Company, no limitations on the holding

of securities and no requirements to obtain the approval of the Company, or of other holders of securities in Johnson Matthey Plc, for a transfer of securities – except as referred

tobelow. The directors may, in certain circumstances, refuse to register the transfer of a share in certificated form that is not fully paid up, where the instrument of transfer does

notcomply with the requirements of the Company’s Articles, or if entitled under the Uncertificated Securities Regulations 2001. As at 31

March 2023 and as at the date of approval

of this report:

• No person held securities in Johnson Matthey Plc carrying any special rights with regard to control of the Company

• There were no restrictions on voting rights (including any limitations on voting rights of holders of a given percentage or number of votes or deadlines for exercising voting rights),

except that a shareholder can only vote in respect of a share if it is fully paid

• There were no arrangements by which, with the Company’s cooperation, financial rights carried by shares in the Company are held by a person other than the holder of the shares

• There were no agreements known to the Company between holders of securities that may result in restrictions on the transfer of securities or on voting rights.

Nominees, financial assistance

and liens

During the year:

• No shares in Johnson Matthey Plc were acquired by the Company’s nominee, or by a person with financial assistance from the Company, in either case where the Company has

abeneficial interest in the shares (and no person acquired shares in the Company in any previous financial year in its capacity as the Company’s nominee or with financial assistance

from the Company)

• The Company did not obtain or hold a lien or other charge over its own shares.

Allotment of securities for cash

and placing of equity securities

During the year neither Johnson Matthey Plc or any major subsidiary undertaking of the Company has allotted equity securities for cash. During the year, JM has not participated in any

equity securities’ placing.

American Depositary Receipt

programme

Johnson Matthey has a sponsored Level 1 American Depositary Receipt (ADR) programme, which BNY Mellon administers and for which it acts as Depositary. Each ADR represents two

ordinary Johnson Matthey shares. The ADRs trade on the US over-the-counter market under the symbol JMPLY. When dividends are paid to shareholders, the Depositary converts those

dividends into US dollars, net of fees and expenses, and distributes the net amount to ADR holders.

Employee share schemes At 31

March 2023, 3,211 current and former employees were shareholders in Johnson Matthey Plc through the group’s employee share schemes. Through these schemes, current

and former employees held 2,773,189 ordinary shares or 1.51% of issued share capital, excluding treasury shares. Also as at 31

March 2023, 2,930,062 ordinary shares had been

awarded but had not yet vested, under the Company’s long-term incentive plans, to 407 current and former employees.

Shares acquired by employees through JM’s employee share schemes rank equally with the other shares in issue and have no special rights. Voting rights in respect of shares held

through the Company’s employee share schemes are not exercisable directly by employees. However, employees can direct the trustee of the schemes to exercise voting rights on their

behalf. The trustee of the Company’s Employee Share Ownership Trust (ESOT) has waived its right to dividends on shares held by the ESOT, which have not yet vested unconditionally

to employees.

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Directors’ Report continued

Shareholders and share capital

Interests in voting rights The following information has been disclosed to the Company under the FCA’s Disclosure Guidance and Transparency Rules in respect of notifiable interests in the voting rights

inJohnson Matthey Plc’s issued share capital:

As at 31

March 2023:

Nature

of holding

Total

voting rights

% of total

voting rights

Bank of America Corporation Indirect

17,234,329 9.39

BlackRock, Inc. Indirect

20,545,316 11.73

Jefferies Financial Group Direct 10,540,153 5.74

Standard Latitude Master Fund Ltd Direct 9,655,039 5.23

1. Total voting rights attaching to the issued ordinary share capital of the company (excluding treasury shares) at the time of disclosure to the Company

2. % of total voting rights at the date of disclosure to the Company

3. Indirect holdings include qualifying financial instruments and contract for differences

Other than as stated above, as far as the Company is aware, there is no person with a significant direct or indirect holding of securities in Johnson Matthey Plc. This information was

correct at the date of notification. However, since notiﬁcation of any change is not required until the next notiﬁable threshold is crossed, these holdings are likely to have changed.

Between 31

March 2023 and the date of this report, 24

May 2023, the Company has been notified of changes in the following interests:

Nature

of holding

Total

voting rights

% of total

voting rights

Bank of America Corporation Indirect

21,966,209 11.98

BlackRock, Inc. Indirect

20,516,280 11.16

1. Total voting rights attaching to the issued ordinary share capital of the company (excluding treasury shares) at the time of disclosure to the company

2. % of total voting rights at the date of disclosure to the company

3. Indirect holdings include qualifying financial instruments and contract for differences

Contracts with controlling

shareholders

During the year there were no contracts of significance (as defined in the FCA’s Listing Rules) between any group undertaking and a controlling shareholder, and no contracts

fortheprovision of services to any group undertaking by a controlling shareholder.

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Directors’ Report continued

Statement of directors’ responsibilities in

respect of the Annual Report and Accounts

The directors are responsible for preparing the Annual Report and Accounts and the financial

statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year.

Under that law, the directors have prepared the group and the parent company financial

statements in accordance with UK-adopted international accounting standards.

Under company law, directors must not approve the financial statements unless they are

satisfied that they give a true and fair view of the state of affairs of the group and parent

company and of the profit or loss of the group for that period. In preparing the financial

statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable UK-adopted international accounting standards have

been followed, subject to any material departures disclosed and explained in the

financial statements;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate

to presume that the group and parent company will continue in business.

The directors are responsible for safeguarding the assets of the group and parent company

and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The directors are also responsible for keeping adequate accounting records that are sufficient

to show and explain the group’s and parent company’s transactions and disclose with

reasonable accuracy at any time the financial position of the group and parent company

andenable them to ensure that the financial statements and the Directors’ Remuneration

Report comply with the Companies Act 2006.

The directors are responsible for the maintenance and integrity of the parent company’s

website. Legislation in the UK governing the preparation and dissemination of financial

statements may differ from legislation in other jurisdictions.

Responsibilities of directors

Directors’ confirmations

The directors consider that the Annual Report and Accounts, taken as a whole, is fair,

balanced and understandable and provides the information necessary for shareholders

toassess the group’s and parent company’s position and performance, business model

andstrategy.

Each of the directors, whose names and functions are listed in the Governance section ofthe

Annual Report and Accounts, confirm that, to the best of their knowledge:

• the group and parent company financial statements, which have been prepared in

accordance with UK-adopted international accounting standards, give a true and fair view

of the assets, liabilities and financial position of the group and parent company, and of

theloss of the group; and

• the Strategic report includes a fair review of the development and performance of the

business and the position of the group and parent company, together with a description

of the principal risks and uncertainties that it faces.

• In the case of each director in office at the date the directors’ report is approved:

• so far as the director is aware, there is no relevant audit information of which the group’s

and parent company’s auditors are unaware; and

• they have taken all the steps that they ought to have taken as a director in order to make

themselves aware of any relevant audit information and to establish that the group’s

and parent company’s auditors are aware of that information.

The Directors’ report and responsibilities statement was approved by the Board on

May 2023 and is signed on its behalf by:

Nick Cooper

General Counsel and Company Secretary

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132

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Independent auditors’ report to the members

of Johnson Matthey Plc

Report on the audit of the financial statements

Opinion

In our opinion:

• Johnson Matthey Plc’s group financial statements and company financial statements

(the“financial statements”) give a true and fair view of the state of the group’s and of the

company’s affairs as at 31March2023 and of the group’s profit and the group’s cash flows

for the year then ended;

• the group financial statements have been properly prepared in accordance with

UK‑adopted international accounting standards as applied in accordance with the

provisions ofthe Companies Act 2006;

• the company financial statements have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards,

including FRS 101 “Reduced Disclosure Framework”, and applicable law); and

• the financial statements have been prepared in accordance with the requirements

oftheCompanies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts

(the “Annual Report”), which comprise: the Consolidated Statement of Financial Position

andParent Company Statement of Financial Position as at 31March2023; the Consolidated

Income Statement and Consolidated Statement of Total Comprehensive Income, the

Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity

andParent Company Statement of Changes in Equity for the year then ended; and the notes

to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK)

(“ISAs(UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described

inthe Auditors’ responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

abasis for our opinion.

Independence

We remained independent of the group in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical

Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non‑audit services prohibited by the

FRC’s Ethical Standard were not provided.

Other than those disclosed in note 4, we have provided no non‑audit services to the company

or its controlled undertakings in the period under audit.

Our audit approach

Overview

Audit scope

• We conducted a full scope audit or specified procedures at 32 business units which together

account for 83% of group revenue and 71% of group underlying profit before tax from

continuing operations.

• We maintained regular contact with our component teams and evaluated the outcome

oftheir audit work.

Key audit matters

• Refinery metal accounting (group and parent)

• Carrying value of goodwill (group and parent)

• Uncertain tax provisions (group and parent)

• Claims, uncertainties and other provisions (group and parent)

Materiality

• Overall group materiality: £21.1 million (2022: £21.8 million) based on approximately

5%of the three year average profit before tax from continuing operations, adjusted

forlosson disposal of businesses, gains and losses on significant legal proceedings, major

impairment and restructuring charges.

• Overall company materiality: £60 million (2022: £60 million) based on 1% of total assets.

However the materiality is capped at £20 million (2021: £20 million) for the purpose

ofthe audit of the consolidated financial statements, this being the maximum allocation

ofgroup materiality to a component.

• Performance materiality: £15.8 million (2022: £16.3 million) (group) and £15 million

(2022: £15 million) (company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material

misstatement in the financial statements.

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133

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Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most

significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy;

theallocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed

inthe context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Claims, uncertainties and other provisions is a new key audit matter this year. Divestment of the Health business and Battery Materials exit, which were key audit matters last year, are no longer

included because these represent transactions that have been less complex and required less audit effort from the engagement team in the current year. Otherwise, the key audit matters below

are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Refinery metal accounting (group and parent) 

Refer to the Significant issues considered by the Audit Committee within the Audit Committee

Report and note 1 and 36 to the financial statements.

As part of its refining activities the group processes a significant amount of metal on behalf of third

parties, whereby the group must return pre‑agreed recoverable quantities of refined metal to those

parties at an agreed date. Any metal in excess of this pre‑agreed quantity is retained by the group.

As such, the group makes an estimate of how much metal it will recover as part of its refining

operations.

The majority of metal processed at refineries is owned by customers and is not held on the financial

balance sheet of the group. As such, the group performs a metal balance sheet reconciliation

toensure quantities of precious metals held at year‑end are appropriately understood, classified

aseither owned by Johnson Matthey or the customer and reconciled to its financial position.

This ensures that only the group‑owned inventory is recorded on the balance sheet and that the

price allocated to this owned inventory is at the lower of cost and net realisable value.

During the refining process there are a series of complex estimates including:

(i) Estimation of the level of metal contained in the carrier material entering the refining process,

the refined metal that leaves the refining process, and the residual metal in the refining process

at year-end;

(ii) Estimates of the process losses of precious metals that may be lost during the refining and

fabrication process, and the adequacy of these provisions;

(iii) Estimates of the metal in the refinery process as informed by refinery stocktakes, and

thesubsequent sampling and assaying to assess the precious metal content in stocktake

samples; and

(iv) Estimates of the net realisable value of unhedged metal held at year‑end.

Each of these estimates impacts different areas of the audit. The refining process and its

associated estimates are an area of focus for our audit due to the inherent complexity of the

accounting and amount of metal processed are deemed a significant risk due to the inherent

complexity of the accounting and amount of metal processed.

We evaluated the design and operation of key controls at the main refining locations over

refinery stocktakes and metal assaying procedures.

We tested that the metal balance sheet was prepared and reviewed on a monthly basis.

We tested the classification of precious metals at year‑end on the metal balance sheet,

todetermine if metal was owned by the group or the customer. Our procedures included

sending confirmations to customers, and testing the balance of customer metal that was

inthe refining process, but not contractually due.

We assessed management’s policy for recognising stocktake gains and losses arising

fromstocktakes. We attended physical stock counts at sites where these were performed

bymanagement. The purpose was to verify the existence of inventory and adherence

tothegroup’s stocktake processes, and the reasonableness of stocktake gains and losses

atthese sites.

We assessed the underlying controls that have been implemented by management,

tomonitor potential inventory gains or losses through the refining process and stocktake

results, to assess the likelihood and quantum of process losses (if any) of metal between the

date ofthe stocktake and the year‑end date. We assessed process loss provisions compared

tohistorical metal gain revenue and refinery stocktake results.

We tested that all unhedged metal was being held at the lower of cost and net realisable

value, on an individual metal by metal methodology, with reference to external metal

pricedata.

We considered the adequacy of the group’s disclosures about the degree of estimation

involved in arriving at the value of metal inventory.

Based on the procedures performed, we noted no material issues arising from our work.

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134

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Independent auditors’ report to the members of Johnson Matthey Plc continued

Key audit matter How our audit addressed the key audit matter

Carrying value of goodwill (group and parent)

Refer to the Significant issues considered by the Audit Committee within the Audit Committee

Report and notes 1, 5, 13, 36 and 38 to the financial statements.

The group holds goodwill of £364 million (2022: £366 million) at 31 March 2023. Of this amount,

£113 million (2022: £113 million) is held within the parent company.

The group has significant goodwill arising from the acquisition of businesses and the carrying value

is dependent on the financial performance of the cash generating unit (CGU) to which it relates.

The two largest CGUs are Catalyst Technologies and Clean Air Heavy Duty Catalysts which account

for £268m (2022: £266m) and £87m (2022: £83m) respectively of goodwill at 31 March 2023.

The goodwill held in the parent company relates to the Catalyst Technologies CGU.

The impairment assessments prepared by management reflect its best estimates of future

cashflows. These estimates contain significant uncertainty and are inherently judgemental in

nature, where changes in the key assumptions can result in materially different impairment charges

or available headroom. As set out in note 1 management has considered the impacts of climate

change in their models. This is therefore an area of focus in our audit procedures.

In the year, an impairment charge of £4 million was recorded against goodwill in relation to

theDiagnostic Services CGU as the fair value of the proceeds less costs to dispose was lower than

thecarrying value. Management’s assessment of the goodwill in the other CGUs concluded that

noimpairment was required.

Management included disclosures to explain its key judgements and estimates as part of

notes 1 and 5.

We obtained management’s value in use goodwill impairment models and agreed the

forecast cash flows to board‑approved budgets, assessed how these budgets are compiled,

confirmed data accuracy and understood key related judgements and estimates.

We assessed management’s historical forecasting accuracy by comparing the prior year

forecasts with actual results. This informed our independent sensitivity analysis.

We performed work over each material CGU being the Catalyst Technologies and Clean Air

Heavy Duty Catalysts CGUs. The nature and extent of work was commensurate with the level

of headroom and sensitivity of the CGU to impairment.

Our testing was focused on the key assumptions in the board‑approved three year forecasts

and we corroborated the assumptions to supporting evidence which included both internal

and external sources of evidence. In addition, we assessed the appropriateness and impact

ofthe specific growth assumptions applied by management for the period after the year three

forecast but before a long term growth rate is applied (typically year ten).

Management has included certain key assumptions relating to climate change. These include

restricting the useful economic life applied in modelling Heavy Duty Catalysts to 2040

(2022: 2040), and the application of a negative growth rate from 2033 (2022: 2033).

Working with our valuation experts we have considered external market outlooks and

information on emission legislation to corroborate these assumptions.

We engaged our valuations experts to assess the long term growth rate and discount rate

foreach CGU by comparison with third party information, past performance and relevant risk

factors. Our procedures also included considering the overall level of risk in the future cash

flow projections.

Our procedures included testing the basis for management’s business plans and expectations

in line with the group’s latest strategy and considering the latest industry outlooks used

bymanagement.

We tested the mathematical integrity of the forecasts and of the value in use model, audited

the allocation of central costs to the CGUs and agreed the carrying values in management’s

impairment models to underlying accounting records.

We assessed management’s sensitivity analysis and performed our own independent

sensitivity analysis which were more severe than management’s to assess whether a

reasonable downside change in the key assumptions could give rise to a material impairment.

We consider the disclosures with respect of goodwill, including the associated sensitivities

tobe appropriate.

Based on the procedures performed, we noted no material issues arising from our work.

Johnson Matthey | Annual Report and Accounts 2023

135

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

Key audit matter How our audit addressed the key audit matter

Uncertain tax provisions (group and parent)

Refer to the Significant issues considered by the Audit Committee and note 1 and 36 to the financial

statements.

The group operates in a number of international jurisdictions, and as a result there is risk

ofuncertain tax exposures arising around the group, as well as heightened risk around estimates

indetermining the tax effect of cross border transactions including transfer pricing arrangements.

As at 31 March 2023 the group had provisions for uncertain tax liabilities of £97 million

(2022: £103 million). Management’s estimate of the range of possible outcomes is an increase in

those liabilities by £66 million (2022: £83 million) to a decrease of £55 million (2022: £93 million).

Where the precise impact of the tax laws and regulations on taxes payable with respect to profit

arising in those jurisdictions is unclear, the group seeks to make reasonable estimates to determine

the most likely amount in a range of possible outcomes.

There is inherent judgement and estimation uncertainty involved in determining provisions

foruncertain tax positions, as described by management in the accounting policies to the financial

statements. Our audit focused on the most significant of exposures based on both the provision

recorded and maximum possible exposure.

We engaged our tax specialists in support of our audit of tax and obtained an understanding

of the group’s tax strategy and risks. We recalculated the group’s tax provisions and

determined whether the treatments adopted were in line with the group’s tax policies and

had been applied consistently.

We evaluated the key underlying assumptions and judgements, including considering the

status of tax authority audits and enquiries through examining the latest correspondence and

enquiring of management, and where applicable management’s advisors. We considered the

basis and support in particular for provisions not subject to tax audit, in comparison with our

experience of similar situations.

We discussed the recognition of specific uncertain tax positions with third‑party tax advisors

appointed by management to verify the key assumptions, judgements and likely outcome

with respect to specific uncertain tax positions recognised. We confirmed the appropriateness

of management’s application of either a single best estimate, or a weighted average range

ofoutcomes, for each exposure, as driven by the facts and circumstances under IFRIC 23.

We evaluated the consistency of management’s approach to identifying triggering events

toreassess or record a provision for an exposure.

We also evaluated the consistency of management’s approach to establishing or changing

prior provision estimates and validated that changes in provisions established in previous

periods reflected a change in facts and circumstances.

We consider the disclosures with respect to tax matters to be appropriate.

Based on the procedures performed, we noted no material issues arising from our work.

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136

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

Key audit matter How our audit addressed the key audit matter

Claims, uncertainties and other provisions (group and parent)

Refer to the Significant issues considered by the Audit Committee on page 98 and notes 4, 22, 32,

36 and 47 to the financial statements.

This risk covers warranty provisions, product liability issues, and other litigious matters across the

group. There is inherent judgement and estimation involved in determining when and how much

to provide for claims and uncertainties.

Due to the complex nature of the products offered by Johnson Matthey, the group at any point

intime may be exposed to product liability issues including claims for damages or compensation.

The assumptions underpinning these claims and the identification of when such claims arise

areinherently judgemental. Careful consideration needs to be given as to how the claim and any

potential exposure are estimated and subsequently accounted for.

The group is also involved in various legal proceedings, including actual or threatened litigation and

regulatory investigations. The number and nature of claims vary from year to year; note 32 discloses

the major movements in the year. The two most significant movements included the closure of the

contingent liability relating to failures in certain engine systems for which the group supplied a

particular coated substrate as a component for that customer’s emissions after‑treatment systems

and the new contingent liability arising following the sale of its Health Business in May 2022.

The group discloses such risks as contingent liabilities where it is unable to make a reliable estimate

of potential exposures or where it believes a possible outflow is not probable. If the group is unable

to defend against such claims, these risks could give rise to a future liability.

For litigation matters, we read the summary of major litigation matters provided by

management and held discussions with group and sector level general counsel. For a sample

of matters, we obtained and reviewed correspondence with external legal counsel, including

any particulars of claim.

We have circularised external legal counsel to independently assess legal exposures and the

expected outcome for material cases across the group.

We reviewed board minutes and made inquiries of management to address the risk of

undisclosed claims and uncertainties. We performed audit procedures to identify all third

party legal counsel used by management and as appropriate included them in our

circularisation.

We applied professional scepticism in auditing both the likely outcome and quantification

ofexposures, including performing audit procedures over claims management determined

tobe immaterial, and being sceptical of where a constructive obligation existed but

management considered a reliable estimate could not be made. As we deem it to be

necessary we also instruct third party legal experts to support an independent assessment

ofpossible outcomes of claims.

Where material settlements have occurred we have agreed these to settlement agreements

between the company and the claimant.

We have assessed the level of provisioning and contingent liability disclosures, where relevant,

in response to known claims.

Based on the procedures performed, we noted no material issues arising from our work.

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137

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able

togive an opinion on the financial statements as a whole, taking into account the structure

ofthe group and the company, the accounting processes and controls, and the industry in

which they operate.

The group is structured across five sectors: Clean Air, PGM Services, Catalyst Technologies,

Hydrogen Technologies and Value Businesses, as well as the central Corporate unit.

The financial statements are a consolidation of approximately 230 business units. We have

identified each individual business unit, or a series of business units where they map to

asingle legal statutory entity, as a component. These components comprise the group’s

operating businesses and holding companies across the five sectors and corporate.

Based on our risk and materiality assessments, we determined which components required

an audit of their complete financial information having considered the relative significance

ofeach entity to the group, locations with significant inherent risks and the overall coverage

obtained over each material line item in the consolidated financial statements.

We identified 23 business units which, in our view, required an audit of their complete

financial information, due to size or risk characteristics.

In addition to the business units in full scope, we performed specified procedures or audit

ofspecified financial statement line items at 9 business units covering revenue, trade and

other receivables and deferred income, cash, inventory, metal inventory, accruals, fixed assets

and depreciation, cost of sales and operating expenses and tested manual journal entries.

Thisensured that appropriate audit procedures were performed to achieve sufficient coverage

over these financial statement line items.

The total 32 in‑scope business units are located in numerous countries around the world.

Weused local teams in these countries to perform the relevant audit procedures. Of these,

three business units have been determined to be financially significant based on their

contribution to the group. These financially significant component teams are located

intheUK and Macedonia.

The group consolidation, financial statement disclosures and corporate functions were

audited by the group audit team. This included our work over the consolidation, litigation

provisions, centrally recognised tax balances, goodwill, post‑retirement benefits, earnings

pershare and treasury related balances. This scope of work, together with additional

procedures performed at the group level, accounted for 83% of group revenue and 71%

ofgroup underlying profit before taxation from continuing operations. This provided the

evidence we needed for our opinion on the consolidated financial statements taken as a

whole. This was before considering the contribution to our audit evidence from performing

audit work at the group level, including disaggregated analytical review procedures, which

covers certain of the group’s smaller and lower risk components that were not directly

included in our group audit scope.

The impact of climate risk on our audit

Climate change is expected to present both risks and opportunities for the group.

Asexplained in the Sustainability section of the Strategic Report , the group is mindful

ofitsimpact on the environment and is focussed on ways to reduce climate‑related impacts

as management continues to develop its plans towards a Net Zero pathway by 2040.

Management’s climate change initiatives and commitments will impact the group in a variety

of ways, and while the group has started to quantify some of the impacts that may arise

onitsnet zero pathway, the future financial impacts are clearly uncertain given the medium

to long term horizon. Disclosure of the impact of climate change risk based on management’s

current assessment is incorporated in the Task Force on climate related financial disclosures

(‘TCFD’) section of the Annual Report.

As part of our audit, we made enquiries of management to understand the extent of the

potential impact of climate change on the group’s business and the financial statements,

including reviewing management’s climate change risk assessment which was prepared with

support from an external expert. We used our knowledge of the group to evaluate the risk

assessment performed by management.

We assessed that the key areas in the financial statements which are more likely to be

materially impacted by climate change are those areas that are based on future cash flows.

Asa result, we particularly considered how climate change risks and the impact of climate

commitments made by the group would impact the assumptions made in the forecasts

prepared by management that are used in the group’s impairment analysis (see also key audit

matter on Carrying value of goodwill) and for going concern purposes. We challenged how

management had considered longer term physical risks such as severe weather related

impacts, and shorter‑term transitional risks such as the introduction of carbon taxes.

Ourprocedures did not identify any material impact on our audit for the year ended 31 March

2023. We also checked the consistency of the disclosures in the TCFD section of the Annual

Report with the relevant financial statement disclosures, including notes 1 and the going

concern section of the accounting policies, and with our understanding of the business and

knowledge obtained in the audit.

We confirmed with management and the Audit Committee that the estimated financial

impacts of climate change will be reassessed prospectively and our expectation is that climate

change disclosures will evolve as the understanding of the actual and potential impacts

onthegroup’s future operations are established with greater certainty.

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138

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Independent auditors’ report to the members of Johnson Matthey Plc continued

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped

ustodetermine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect

ofmisstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – group Financial statements – company

Overall materiality £21.1 million (2022: £21.8 million). £60 million (2022: £60 million).

How we determined it Approximately 5% of the three year average profit before tax from continuing

operations, adjusted for loss on disposal of businesses, gains and losses on

significant legal proceedings, major impairment and restructuring charges

1% of total assets. However the materiality is capped at £20 million

(2021: £20 million) for the purpose of the audit of the consolidated financial

statements, this being the maximum allocation of group materiality to

acomponent

Rationale for benchmark

applied

Adjusted (underlying) profit before tax from continuing operations is used

asthe materiality benchmark excluding amortisation of acquired intangibles

and share of losses from associates. Management uses this measure as it

believes that it reflects the underlying performance of the group and this

ishow the directors and key management personnel are measured on their

performance. We did not adjust profit before tax to add back amortisation

ofacquired intangibles or share of losses of associates as in our view these

arerecurring items.

We considered total assets to be an appropriate benchmark for the parent

company given that, whilst it does include trading businesses, it is the ultimate

holding company, incurs corporate costs and enters into financing on behalf

ofthe group. The materiality level was capped at £20 million given overall

group materiality for the purposes of the audit of the consolidated financial

statements, this being the maximum allocation of group materiality

toacomponent.

For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was between

£1 million and £20 million. Certain components were audited to a local statutory audit materiality that was also less than our overall group materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically,

we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in

determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to £15.8 million (2022: £16.3 million) for the group financial statements

and£15 million (2022: £15 million) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded

that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1 million (group audit) (2022: £1 million) and £1 million (company audit)

(2022: £1 million) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

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Independent auditors’ report to the members of Johnson Matthey Plc continued

Conclusion relating to going concern

Our evaluation of the directors’ assessment of the group’s and the company’s ability

tocontinue to adopt the going concern basis of accounting included:

• Evaluation of management’s base case and downside case scenarios, understanding

andevaluating the key assumptions, including assumptions related to inflation and other

macro-economic factors;

• Validation that the cash flow forecasts used to support management’s impairment, going

concern and viability assessments were consistent;

• Assessment of the historical accuracy and reasonableness of management’s forecasting;

• Consideration of the group’s available financing and debt maturity profile;

• Testing of the mathematical integrity of management’s liquidity headroom, covenant

compliance, sensitivity and stress testing calculations;

• Assessment of the reasonableness of management’s planned or potential mitigating

actions; and

• Review of the related disclosures in the Annual Report.

Based on the work we have performed, we have not identified any material uncertainties

relating to events or conditions that, individually or collectively, may cast significant doubt

onthe group’s and the company’s ability to continue as a going concern for a period of at

least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is

notaguarantee as to the group’s and the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the UK Corporate Governance

Code, we have nothing material to add or draw attention to in relation to the directors’

statement in the financial statements about whether the directors considered it appropriate

to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern

aredescribed in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the

financial statements and our auditors’ report thereon. The directors are responsible for the

other information, which includes reporting based on the Task Force on Climate‑related

Financial Disclosures (TCFD) recommendations. Our opinion on the financial statements does

not cover the other information and, accordingly, we do not express an audit opinion or,

except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read

theotherinformation and, in doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge obtained in the audit,

orotherwise appears to be materially misstated. If we identify an apparent material

inconsistency or material misstatement, we are required to perform procedures to conclude

whether there is a material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we have performed, weconclude

that there is a material misstatement of this other information, we are required toreport

thatfact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also considered whether

thedisclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires

usalso to report certain opinions and matters as described below.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the audit, the information

given in the Strategic report and Directors’ Report for the year ended 31 March 2023

isconsistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the group and company and their

environment obtained in the course of the audit, we did not identify any material

misstatements in the Strategic report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Annual Report on Remuneration to be audited has been

properly prepared in accordance with the Companies Act 2006.

Johnson Matthey | Annual Report and Accounts 2023

140

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern,

longer‑term viability and that part of the corporate governance statement relating to the

company’s compliance with the provisions of the UK Corporate Governance Code specified

forour review. Our additional responsibilities with respect to the corporate governance

statement as other information are described in the Reporting on other information section

of this report.

Based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the corporate governance statement is materially consistent with

thefinancial statements and our knowledge obtained during the audit, and we have nothing

material to add or draw attention to in relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging

and principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures

are in place to identify emerging risks and an explanation of how these are being managed

or mitigated;

• The directors’ statement in the financial statements about whether they considered it

appropriate to adopt the going concern basis of accounting in preparing them, and their

identification of any material uncertainties to the group’s and company’s ability to continue

to do so over a period of at least twelve months from the date of approval of the financial

statements;

• The directors’ explanation as to their assessment of the group’s and company’s prospects,

the period this assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the

company will be able to continue in operation and meet its liabilities as they fall due over

the period of its assessment, including any related disclosures drawing attention to any

necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer‑term viability of the group and

company was substantially less in scope than an audit and only consisted of making inquiries

and considering the directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK Corporate Governance Code;

and considering whether the statement is consistent with the financial statements and our

knowledge and understanding of the group and company and their environment obtained

inthe course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that

eachof the following elements of the corporate governance statement is materially

consistent with the financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair,

balanced and understandable, and provides the information necessary for the members

toassess the group’s and company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk

management and internal control systems; and

• The section of the Annual Report describing the work of the Audit Committee.

We have nothing to report in respect of our responsibility to report when the directors’

statement relating to the company’s compliance with the Code does not properly disclose

adeparture from a relevant provision of the Code specified under the Listing Rules for review

by the auditors.

Responsibilities for the financial statements and

the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of directors’ responsibilities in respect of the Annual

Report and Accounts, the directors are responsible for the preparation of the financial

statements in accordance with the applicable framework and for being satisfied that they

givea true and fair view. The directors are also responsible for such internal control as they

determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s

and the company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless the directors

either intend to liquidate the group or the company or to cease operations, or have no

realistic alternative but to do so.

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141

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements

asa whole are free from material misstatement, whether due to fraud or error, and to issue

an auditors’ report that includes our opinion. Reasonable assurance is a high level of

assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists. Misstatements can arise from fraud

orerror and are considered material if, individually or in the aggregate, they could reasonably

beexpected to influence the economic decisions of users taken on the basis of these

financialstatements.

Irregularities, including fraud, are instances of non‑compliance with laws and regulations.

Wedesign procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. The extent to which our procedures

are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the group and industry, we identified that the principal risks

ofnon‑compliance with laws and regulations related to international tax regulations,

environmental regulations, health and safety regulations (EHS), and anti bribery and

corruption laws, and we considered the extent to which non‑compliance might have a

material effect on the financial statements. We also considered those laws and regulations

that have a direct impact on the financial statements such as the Companies Act 2006.

Weevaluated management’s incentives and opportunities for fraudulent manipulation of

thefinancial statements (including the risk of override of controls), and determined that the

principal risks were related to posting inappropriate journal entries, management bias in

accounting estimates, expected credit losses, timing of recognition of litigation provisions

andmetal gains and losses. The group engagement team shared this risk assessment with the

component auditors so that they could include appropriate audit procedures in response to

such risks in their work. Audit procedures performed by the group engagement team and/or

component auditors included:

• Discussions with management, internal audit and the group’s legal advisors, and the head

of ethics and compliance including consideration of known or suspected instances of

non‑compliance with laws and regulations and fraud;

• Reading the minutes of board meetings and the Ethics Committee, and assessment of

“SpeakUp” matters through the ethics reporting line and the results of management’s

investigation into these matters (including engaging with our own forensics specialists

where relevant);

• Reviewing financial statement disclosures to supporting documentation to assess

compliance with applicable laws and regulations;

• Challenging management’s significant judgements and estimates in particular those

relating to the carrying value of goodwill, other intangibles and other assets, post‑

employment benefits, tax provisions, deferred tax assets, refining processes and stocktakes,

climate change, metal accounting and provisions and contingent liabilities;

• Identifying and testing manual journal entries, in particular any journal entries posted

withunusual account combinations, and all material consolidation journals;

• Incorporating unpredictable procedures into our audit approach including varying

thetiming and nature of testing performed; and

• Considering the outcome of key transactions in the year and the assessing the

appropriateness of related accounting and disclosure within the financial statements.

There are inherent limitations in the audit procedures described above. We are less likely

tobecome aware of instances of non‑compliance with laws and regulations that are not

closely related to events and transactions reflected in the financial statements. Also, the risk

of not detecting a material misstatement due to fraud is higher than the risk of not detecting

one resulting from error, as fraud may involve deliberate concealment by, for example,

forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and

balances, possibly using data auditing techniques. However, it typically involves selecting

alimited number of items for testing, rather than testing complete populations. We will often

seek to target particular items for testing based on their size or risk characteristics. In other

cases, we will use audit sampling to enable us to draw a conclusion about the population

from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located

on the FRC’s website at: www.frc. org.uk/auditorsresponsibilities. This description forms part

of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s

members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006

andfor no other purpose. We do not, in giving these opinions, accept or assume responsibility

forany other purpose or to any other person to whom this report is shown or into whose

hands itmay come save where expressly agreed by our prior consent in writing.

Johnson Matthey | Annual Report and Accounts 2023

142

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Independent auditors’ report to the members of Johnson Matthey Plc continued

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate

forour audit have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the company financial statements and the part of the Annual Report on Remuneration

tobe audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit Committee, we were appointed by the members

on 18 July 2018 to audit the financial statements for the year ended 31 March 2019 and

subsequent financial periods. The period of total uninterrupted engagement is five years,

covering the years ended 31 March 2019 to 31 March 2023.

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and

Transparency Rule 4.1.14R, these financial statements will form part of the ESEF‑prepared

annual financial report filed on the National Storage Mechanism of the Financial Conduct

Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’).

Thisauditors’ report provides no assurance over whether the annual financial report will

beprepared using the single electronic format specified in the ESEF RTS.

Graham Parsons (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

25 May 2023

Johnson Matthey | Annual Report and Accounts 2023

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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Independent auditors’ report to the members of Johnson Matthey Plc continued

Consolidated Income Statement

for the year ended 31

March 2023

144

Notes

2023

£m

2022

£m

Revenue 2,3 14,933 16,025

Cost of sales (13,939) (14,971)

Gross profit 994 1,054

Distribution costs (117) (101)

Administrative expenses (412) (400)

Profit on disposal of businesses 27 12 106

Amortisation of acquired intangibles 4 (5) (6)

Gains and losses on significant legal proceedings 4 (25) 42

Major impairment and restructuring charges 4,6 (41) (440)

Operating profit 2,4 406 255

Finance costs 8 (110) (101)

Investment income 8 49 4 1

Share of losses of associates 15 (1) –

Profit before tax from continuing operations 344 195

Tax expense 9 (80) (79)

Profit for the year from continuing operations 264 116

Profit / (loss) after tax from discontinued operations 26 12 (217)

Profit / (loss) for the year 276 (101)

Pence pence

Earnings / (loss) per ordinary share

Basic 10 150.9 (52.6)

Diluted 10 150.2 (52.6)

Earnings per ordinary share from continuing operations

Basic 10 144.2 60.9

Diluted 10 143.6 60.8

Johnson Matthey | Annual Report and Accounts 2023

144

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Consolidated Income Statement

for the year ended 31

March 2023

144

Notes

2023

£m

2022

£m

Revenue 2,3 14,933 16,025

Cost of sales (13,939) (14,971)

Gross profit 994 1,054

Distribution costs (117) (101)

Administrative expenses (412) (400)

Profit on disposal of businesses 27 12 106

Amortisation of acquired intangibles 4 (5) (6)

Gains and losses on significant legal proceedings 4 (25) 42

Major impairment and restructuring charges 4,6 (41) (440)

Operating profit 2,4 406 255

Finance costs 8 (110) (101)

Investment income 8 49 41

Share of losses of associates 15 (1) –

Profit before tax from continuing operations 344 195

Tax expense 9 (80) (79)

Profit for the year from continuing operations 264 116

Profit / (loss) after tax from discontinued operations 26 12 (217)

Profit / (loss) for the year 276 (101)

Pence pence

Earnings / (loss) per ordinary share

Basic 10 150.9 (52.6)

Diluted 10 150.2 (52.6)

Earnings per ordinary share from continuing operations

Basic 10 144.2 60.9

Diluted 10 143.6 60.8

Consolidated Statement of Total Comprehensive Income

for the year ended 31

March 2023

145

Notes

2023

£m

2022

£m

Profit / (loss) for the year 276 (101)

Other comprehensive (expense) / income

Items that will not be reclassified to the income statement in subsequent years

Remeasurements of post-employment benefit assets and liabilities 24 (149) 177

Fair value losses on equity investments at fair value through other comprehensive income (12) (5)

Tax on items that will not be reclassified to the income statement

37 (35)

Total items that will not be reclassified to the income statement (124) 137

Items that may be reclassified to the income statement

Exchange differences on translation of foreign operations 25 33 75

Exchange differences on translation of discontinued foreign operations 26, 27 (32) 5

Amounts credited / (charged) to hedging reserve 114 (36)

Fair value losses on net investment hedges (10) (2)

Tax on above items taken directly to or transferred from equity

(28) 10

Total items that may be reclassified to the income statement (in subsequent years) 77 52

Other comprehensive (expense) / income for the year (47) 189

Total comprehensive income for the year 229 88

Total comprehensive income for the year arises from:

Continuing operations 249 300

Discontinued operations 26 (20) (212)

229 88

1. The tax credit / (charge) on other comprehensive income that will not be reclassified to the income statement of £37 million (2022: £(35) million) relates to remeasurements of post-employment benefit assets and liabilities.

2. The tax (charge) / credit on other comprehensive income that may be reclassified to the income statement of £(28) million (2022: £10 million) relates to tax on amounts credited / (charged) to hedging reserve.

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145

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Consolidated Statement of Financial Position

as at 31

March 2023

146

Notes

2023

£m

2022

£m

ssets

Non-current assets

Property, plant and equipment 11 1,332 1,238

Right-of-use assets 12 49 61

Goodwill 13 364 366

Other intangible assets 14 287 267

Investments in joint ventures and associates 15 75 2

Investments at fair value through other comprehensive income 29 49 45

Other receivables 17 113 42

Interest rate swaps 20 12

Other financial assets 18 48 –

Deferred tax assets 23 121 98

Post-employment benefit net assets 24 203 352

Total non-current assets 2,66 1 2,483

Current assets

Inventories 16 1,702 1,549

Taxation recoverable 12 18

Trade and other receivables 17 1,882 1,796

Cash and cash equivalents 650 391

Other financial assets 18 47 27

Assets classified as held for sale 26 75 402

Total current assets 4,368 4,183

Total assets 7,029 6,666

The accounts were approved by the Board of Directors on 25

May 2023 and signed on its

behalf by:

L Condon

Directors

S Oxle

The notes on pages 150 to 221 form an integral part of the accounts.

Notes

2023

£m

2022

£m

Liabilities

Current liabilities

Trade and other payables 19 (2,497) (2,563)

Lease liabilities 12 (9) (10)

Taxation liabilities (105) (97)

Cash and cash equivalents - bank overdrafts (13) (37)

Borrowings and related swaps 20 (155) (265)

Other financial liabilities 18 (27) (44)

Provisions 22 (63) (56)

Liabilities classified as held for sale 26 (25) (80)

Total current liabilities (2,894) (3,152)

Non-current liabilities

Borrowings and related swaps 20 (1,460) (899)

Lease liabilities 12 (31) (40)

Deferred tax liabilities 23 (19) (18)

Interest rate swaps (15) (2)

Employee benefit obligations 24 (4 1) (72)

Other financial liabilities 18 – (12)

Provisions 22 (28) (28)

Trade and other payables 19 (2) (2)

Total non-current liabilities (1,596) (1,073)

Total liabilities (4,490) (4,225)

Net assets 2,539 2,441

Equity

Share capital 25 215 218

Share premium 148 148

Treasury shares (19) (24)

Other reserves 25 118 50

Retained earnings 2,077 2,049

Total equity 2,539 2,441

Johnson Matthey | Annual Report and Accounts 2023

146

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Consolidated Statement of Financial Position

as at 31

March 2023

146

Notes

2023

£m

2022

£m

ssets

Non-current assets

Property, plant and equipment 11 1,332 1,238

Right-of-use assets 12 49 61

Goodwill 13 364 366

Other intangible assets 14 287 267

Investments in joint ventures and associates 15 75 2

Investments at fair value through other comprehensive income 29 49 45

Other receivables 17 113 42

Interest rate swaps 20 12

Other financial assets 18 48 –

Deferred tax assets 23 121 98

Post-employment benefit net assets 24 203 352

Total non-current assets 2,661 2,483

Current assets

Inventories 16 1,702 1,549

Taxation recoverable 12 18

Trade and other receivables 17 1,882 1,796

Cash and cash equivalents 650 391

Other financial assets 18 47 27

Assets classified as held for sale 26 75 402

Total current assets 4,368 4,183

Total assets 7,029 6,666

The accounts were approved by the Board of Directors on 25

May 2023 and signed on its

behalf by:

L Condon

Directors

S Oxle

The notes on pages 150 to 221 form an integral part of the accounts.

Notes

2023

£m

2022

£m

Liabilities

Current liabilities

Trade and other payables 19 (2,497) (2,563)

Lease liabilities 12 (9) (10)

Taxation liabilities (105) (97)

Cash and cash equivalents - bank overdrafts (13) (37)

Borrowings and related swaps 20 (155) (265)

Other financial liabilities 18 (27) (44)

Provisions 22 (63) (56)

Liabilities classified as held for sale 26 (25) (80)

Total current liabilities (2,894) (3,152)

Non-current liabilities

Borrowings and related swaps 20 (1,460) (899)

Lease liabilities 12 (31) (40)

Deferred tax liabilities 23 (19) (18)

Interest rate swaps (15) (2)

Employee benefit obligations 24 (41) (72)

Other financial liabilities 18 – (12)

Provisions 22 (28) (28)

Trade and other payables 19 (2) (2)

Total non-current liabilities (1,596) (1,073)

Total liabilities (4,490) (4,225)

Net assets 2,539 2,441

Equity

Share capital 25 215 218

Share premium 148 148

Treasury shares (19) (24)

Other reserves 25 118 50

Retained earnings 2,077 2,049

Total equity 2,539 2,441

Consolidated Statement of Cash Flows

for the year ended 31

March 2023

147

Notes

2023

£m*

2022

£m*

Cash flows from operating activities

Profit before tax from continuing operations 344 195

Profit / (loss) before tax from discontinued operations 5 (239)

djustment

for:

Share of losses of associates 1 –

Profit on disposal of businesses 27 (23) (106)

Depreciation 151 151

Amortisation 36 39

Impairment losses 27 632

(Profit) / loss on sale of non-current assets (6) 2

Share-based payments 7 8

(Increase) / decrease in inventories (13 9) 123

(Increase) / decrease in receivables (102) 588

Decrease in payables (4) (783)

Increase in provisions 7 25

Contributions in excess of employee benefit obligations charge (21) (2)

Changes in fair value of financial instruments 22 19

Net finance costs 61 60

Income tax paid (75) (107)

Net cash inflow from operating activities 291 605

Cash flows from investing activities

Interest received 28 32

Purchases of property, plant and equipment (253) (358)

Purchases of intangible assets (63) (95)

Purchases of investments held at fair value through other

comprehensive income

(17) –

Government grant income received 7 –

Proceeds from sale of non-current assets 8 1

Proceeds from sale of investment in joint ventures 2 –

Net proceeds from sale of businesses 187 160

Net cash outflow from investing activities (101) (260)

Notes

2023

£m

2022

£m*

Cash flows from financing activities

Purchase of treasury shares 25 (45) (155)

Proceeds from borrowings 672 9

Repayment of borrowings (281) (140)

Dividends paid to equity shareholders 25 (141) (139)

Interest paid (94) (111)

Principal element of lease payments (14) (14)

Net cash inflow / (outflow) from financing activities 97 (550)

Change in cash and cash equivalents 287 (205)

Exchange differences on cash and cash equivalents 4 6

Cash and cash equivalents at beginning of year 346 545

Cash and cash equivalents at end of year 637 346

Cash and deposits 129 254

Money market funds 521 137

Bank overdrafts (13) (37)

Bank overdrafts transferred to liabilities classified as held for sale – (8)

Cash and cash equivalents 637 346

* For cash flows of discontinued operations see note 26.

Johnson Matthey | Annual Report and Accounts 2023

147

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Consolidated Statement of Changes in Equity

for the year ended 31

March 2023

148

capital

£m

premium

account

£m

Treasury

£m

Other

reserves

(note 25)

£m

Retained

earnings

£m

Total

equity

£m

At 1

April 2021 221 148 (29) – 2,345 2,685

Loss for the year – – – – (101) (101)

Remeasurements of post-employment benefit assets and liabilities – – – – 177 177

Fair value losses on investments at fair value through other comprehensive income – – – (5) – (5)

Exchange differences on translation of foreign operations – – – 80 – 80

Amounts charged to hedging reserve – – – (36) – (36)

Fair value losses on net investment hedges taken to equity – – – (2) – (2)

Tax on other comprehensive income – – – 10 (35) (25)

Total comprehensive income – – – 47 41 88

Dividends paid (note 25) – – – – (139) (139)

Purchase of treasury shares (note 25) (3) – – 3 (200) (200)

Share-based payments – – – – 15 15

Cost of shares transferred to employees – – 5 – (13) (8)

At 31

March 2022 218 148 (24) 50 2,049 2,441

Profit for the year – – – – 276 276

Remeasurements of post-employment benefit assets and liabilities – – – – (149) (149)

Fair value losses on investments at fair value through other comprehensive income – – – (12) – (12)

Exchange differences on translation of foreign operations – – – 1 – 1

Amounts credited to hedging reserve – – – 114 – 114

Fair value losses on net investment hedges taken to equity – – – (1 0) – (1 0)

Tax on other comprehensive income – – – (2 8) 37 9

Total comprehensive income – – – 65 164 229

Dividends paid (note 25) – – – – (141) (141)

Purchase of treasury shares (note 25) (3) – – 3 (1) (1)

Share-based payments – – – – 18 1 8

Cost of shares transferred to employees – – 5 – (14) (9)

Tax on share-based payments – – – – 2 2

t 31

March 2023 215 148 (19) 118 2,077 2,539

Johnson Matthey | Annual Report and Accounts 2023

148

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Consolidated Statement of Changes in Equity

for the year ended 31

March 2023

148

capital

£m

premium

account

£m

Treasury

£m

Other

reserves

(note 25)

£m

Retained

earnings

£m

Total

equity

£m

At 1

April 2021 221 148 (29) – 2,345 2,685

Loss for the year – – – – (101) (101)

Remeasurements of post-employment benefit assets and liabilities – – – – 177 177

Fair value losses on investments at fair value through other comprehensive income – – – (5) – (5)

Exchange differences on translation of foreign operations – – – 80 – 80

Amounts charged to hedging reserve – – – (36) – (36)

Fair value losses on net investment hedges taken to equity – – – (2) – (2)

Tax on other comprehensive income – – – 10 (35) (25)

Total comprehensive income – – – 47 41 88

Dividends paid (note 25) – – – – (139) (139)

Purchase of treasury shares (note 25) (3) – – 3 (200) (200)

Share-based payments – – – – 15 15

Cost of shares transferred to employees – – 5 – (13) (8)

At 31

March 2022 218 148 (24) 50 2,049 2,441

Profit for the year – – – – 276 276

Remeasurements of post-employment benefit assets and liabilities – – – – (149) (149)

Fair value losses on investments at fair value through other comprehensive income – – – (12) – (12)

Exchange differences on translation of foreign operations – – – 1 – 1

Amounts credited to hedging reserve – – – 114 – 114

Fair value losses on net investment hedges taken to equity – – – (10) – (10)

Tax on other comprehensive income – – – (28) 37 9

Total comprehensive income – – – 65 164 229

Dividends paid (note 25) – – – – (141) (141)

Purchase of treasury shares (note 25) (3) – – 3 (1) (1)

Share-based payments – – – – 18 18

Cost of shares transferred to employees – – 5 – (14) (9)

Tax on share-based payments – – – – 2 2

t 31

March 2023 215 148 (19) 118 2,077 2,539

Guide to financial statement disclosures

for the year ended 31

March 2023

149

Notes and appendices Page Notes and appendices Page

Operations - information relating to our operating performance

2 Segmental information 158 6 Major impairment and restructuring charges 172

3 Revenue 163 10 Earnings / (loss) per ordinary share 174

4 Operating profit 168 34 Non-GAAP measures 207

5 Impairment losses 170

Financing - information relating to how we finance our business

8 Investment income and financing costs 173 25 Share capital and other reserves 192

18 Other financial assets and liabilities 179 28 Financial risk management 197

20 Borrowings and related swaps 180 29 Fair values 202

21 Movements in assets and liabilities from financing activities 181

Working capital - information relating to the day-to-day working capital of our business

16 Inventories 179 19 Trade and other payables 179

17 Trade and other receivables 179 22 Provisions 182

Tax - information relating to our current and deferred taxation

9 Tax expense 174 23 Deferred tax 182

Employees - information relating to the costs associated with employing our people

7 Employee information 173 30 Share-based payments 204

24 Post-employment benefits 183

Long-term assets - information relating to our long-term operational and investment assets

11 Property, plant and equipment 175 14 Other intangible assets 177

12 Leases 176 15 Investments in joint ventures and associates 178

13 Goodwill 176 24 Post-employment benefits 183

Other - other useful information

1 Accounting policies 150 31 Commitments 205

Discontinued operations and assets and liabilities classified as

held for sale

195 32 Contingent liabilities 206

33 Transactions with related parties 206

27 Disposals 196 34 Non-GAAP measures 207

Johnson Matthey | Annual Report and Accounts 2023

149

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

Notes on the Accounts

for the year ended 31

March 2023

1 Accounting policies

The severe-but-plausible case for Clean Air modelled scenarios assuming a smaller light duty

vehicle market from reduced vehicle production and/or market consumer demand disruption

The Company and the Group

or greater share of zero emission vehicles in market, assumed to result in a 10% drop in sales.

Johnson Matthey plc (the ‘Company’) is a public company limited by shares incorporated

For PGMS and Catalyst Technologies, it also assumed a reduction in sales and associated

under the Companies Act 2006 and domiciled in England in the United Kingdom. The

operating profit based on adverse scenarios using external and internal market insights.

consolidated accounts of the company for the year ended 31

March 2023 consist of the

audited consolidation of the accounts of the Company and its subsidiaries (together referred

Additionally, as part of viability testing, the group considered scenarios including the impact

to as the ‘Group’), together with the employee share ownership trust and the group's interest

from metal price volatility, higher inflation, delays in capital projects and delivery of cost

in joint ventures and associates.

transformation savings, and slow down of operations in China. Whilst the combined impact

would reduce profitability and EBITDA against our latest forecast, our balance sheet remains

Basis of accounting and preparation – group

strong with ample working capital and Net Debt/EBITDA ratios.

The financial statements of the group have been prepared in accordance with UK-adopted

International Accounting Standards and with the requirements of the Companies Act 2006 as

The group has a robust funding position comprising a range of long-term debt and a £1 billion

applicable to companies reporting under those standards.

five year committed revolving credit facility maturing in March 2027 which was entirely

undrawn at 31

March 2023. There was £521 million of cash held in money market funds

The accounts are prepared on the historical cost basis, except for certain assets and liabilities

and £129 million of other cash and bank deposits. Of the existing loans, £151 million of term

which are measured at fair value as explained below.

debt and £4 million of other bank loans mature in the period to June 2024. We assume no

The group accounts comprise the accounts of the parent company and its subsidiaries,

refinancing of this debt in our going concern modelling. As a long time, highly rated issuer in

including the employee share ownership trust, and include the group's interest in joint

the US private placement market and having recently extended its UK Export Financing

ventures and associates. Entities the group controls are accounted for as subsidiaries. Entities

facility, the group expects to be able to access additional funding in its existing markets if

that are joint ventures or associates are accounted for using the equity method of accounting.

required but the going concern conclusion is not dependant on such access as the company

Transactions and balances between group companies are eliminated. No profit is recognised

has sufficient financing and liquidity to fund its obligations in the base and severe-but-

on transactions between group companies.

plausible scenarios. The group also has a number of additional sources of funding available

including uncommitted metal lease facilities that support precious metal funding. Whilst we

The results of businesses acquired or disposed of in the year are consolidated from or up to the

would fully expect to be able to utilise the metal lease facilities, they are excluded from our

effective date of acquisition or disposal, respectively. The net assets of businesses acquired are

going concern modelling.

recognised in the consolidated accounts at their fair values at the date of acquisition.

Conclusion

Going concern

Under all scenarios above, the group has sufficient headroom against committed facilities and

The directors have reviewed a range of scenario forecasts for the group and have reasonable

key financial covenants are not in breach during the going concern period. To give further

expectation that there are no material uncertainties that cast doubt about the group’s ability to

assurance on liquidity, we have also undertaken a reverse stress test to identify what

continue operating for at least twelve months from the date of approving these annual accounts.

additional or alternative scenarios and circumstances would threaten our current financing

As at 31

March 2023, the group maintains a strong balance sheet with around £1.6 billion

arrangements. This shows that we have headroom against a further decline in profitability

of available cash and undrawn committed facilities. Free cash flow was positive in the year

beyond the severe-but-plausible scenario or a significant increase in borrowings. Furthermore,

at £74 million. Net debt at 31

March 2023 was £1,023 million at 1.6 times net debt

the group has a range of levers which it could utilise to protect headroom including reducing

(including post tax pension deficits) to underlying EBITDA which was at the lower end of

capital expenditure, renegotiating payment terms and reducing future dividend distributions.

our target range.

The directors are therefore of the opinion that the group has adequate resources to fund its

Although impacted by the significant headwinds faced in the current macroeconomic

operations for the period of at least twelve months following the date of this announcement

environment such as high inflation, the impacts of Russia’s war with Ukraine and uncertainty

these financial statements and there are no material uncertainties relating to going concern so

in outlook for major economies, the group’s performance during the period was resilient, both

determine that it is appropriate to prepare the accounts on a going concern basis.

in terms of underlying operating profit and cash flow. For the purposes of assessing going

concern, we have revisited our financial projections using the latest forecasts for our base case

scenario. The base case scenario was stress tested to a severe-but-plausible downside case

which reflects severe recession scenarios.