A year with significant progress against our strategy with performance in line with expectations
|Reported results||Year ended 31st March||%|
|Operating profit||£ million||359||493||-27|
|Profit before tax (PBT)||£ million||320||462||-31|
|Earnings before tax (EBT)||Pence||155.2||201.2||-23|
|Ordinary dividend share||Pence||80.0||75.0||+7|
|Underlying performance1||Year ended 31st March|| % change,
|Sales excluding precious metals (Sales)||£ million||3,846||3,578||+8||+7|
|Operating profit||£ million||525||513||+2||-|
|Profit before tax||£ million||486||482||+1||-1|
|Earnings per share||Pence||208.4||209.1||-|
- - Sales grew 7% at constant rates2, slightly ahead of our expectations with 8% growth in the second half
- - Underlying operating profit was flat at constant rates, impacted by the US post-retirement medical plan credit in the prior period. Excluding this, operating profit grew 4%3
- - Underlying EPS was flat as translational FX benefits were offset by higher net finance charges and a higher underlying tax rate
- - Free cash flow of £136 million (2016/17: £230 million) was impacted by the expected working capital outflow
- - Average working capital days excluding precious metals reduced by 7 days for the year to 62 days
- - Return on invested capital (ROIC) decreased from 18.2% to 16.4%, mainly due to an increase in the UK pension fund asset and higher precious metal working capital through the year
- - Strong balance sheet with net debt of £679 million; net debt (including post tax pension deficits) to EBITDA of 1.1 times
Robert MacLeod, Chief Executive, commented:
“We had a good year. We have made significant progress in executing our strategy and delivered a financial performance in line with our expectations at the start of the year.
Clean Air had another strong year, delivering strong top and bottom line growth. We improved the quality of our Efficient Natural Resources business and in Health we continued to progress our substantial API pipeline and are better positioned as we optimise our manufacturing footprint. The further development of eLNOTM, our next generation battery material, was a highlight of the year and I am excited about the speed of progress we are making and the plans we have to commercialise this product.
We have taken significant steps in running our businesses more effectively, delivering cost savings and becoming more agile and responsive to our customers. Our strong balance sheet continues to give us the flexibility to invest in our business, to maintain and extend our science and technology leadership supported by an optimised manufacturing footprint.
We are proposing an increase in the final dividend of 7%, reflecting our confidence in the prospects of Johnson Matthey.
In the coming year we expect mid to high single digit growth in operating performance. The changes we are making as we continue to develop our business give me confidence in our strategy to deliver, over the medium term, mid to high single digit EPS CAGR, expanding ROIC to 20% and, as a result, a progressive dividend."
Martin Dunwoodie Director of Investor Relations 020 7269 8241
Simon McGough Head of Investor Relations 020 7269 8235
Katharine Burrow Investor Relations Manager 020 7269 8444
Sally Jones Director of Corporate Relations 020 7269 8407
Latika Shah Tulchan Communications 020 7353 4200
1. Underlying is before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses, gain or loss on significant legal proceedings together with associated legal costs, significant tax rate changes and, where relevant, related tax effects.
2. Unless otherwise stated, sales and operating profit commentary refers to performance at constant rates. Growth at constant rates excludes the translation impact of foreign exchange movements, with 2016/17 results converted at 2017/18 average exchange rates.
3. See page 18 for further details of performance excluding the 2016/17 US post-retirement medical plan credit.
eLNO is a trademark of the Johnson Matthey group of companies.