Half year results for the six months ended 30th September 2015

Strong growth in emission control; outlook for full year in line with market expectations

Underlying 1 Underlying H1 on H1 change Reported
actual constant rates 2
Revenue £5,755m +20% +18% £5,755m
Sales excluding precious metals (sales) £1,588m +5% +4% £1,588m
Profit before tax (PBT) £203.3m -4% -4% £330.2m
Earnings per share (EPS) 86.3p -3% 137.9p
Ordinary dividend per share
Special dividend per share

+5% 19.5p

Lost time injury and illness rate 3 0.44 -30% 0.44


Group Summary

  • Sales up 5% and underlying PBT 4% lower
  • Strong growth in Emission Control Technologies (ECT) and good progress in New Businesses
  • Challenging conditions in Process Technologies (PT) and Precious Metal Products
  • Actions being taken to reduce costs since half year end, mainly in PT; expect ~£30 million p.a. cost savings starting in Q4
  • Underlying EPS down 3%
  • PBT of £330.2m and EPS of 137.9p due to profit of £130.9m on sale of Research Chemicals
  • Strong balance sheet – net debt (including post tax pension deficits) / EBITDA of 0.7 times
  • Working capital improved by £386 million and cash flow conversion was 71%
  • Interim dividend of 19.5p, up 5%
  • Special dividend of 150.0p (£305 million) following sale of businesses
  • Full year performance for continuing businesses4 expected to be similar to 2014/15


Divisional Summary (at constant rates)


Emission Control Technologies – strong performance; sales up 8% and underlying operating profit up 16%

  • Strong growth in Europe driven by tighter legislation (Euro 6b) to control emissions of oxides of nitrogen (NOx) in diesel cars
  • Good sales growth in Asian light duty markets
  • Continued strong heavy duty diesel truck catalyst sales in North America, well ahead of growth in production, supported by good demand for large (Class 8) trucks


Process Technologies – sales broadly flat but underlying operating profit 28% lower

  • Good sales to catalyst customers in our Chemicals businesses but a less favourable catalyst product mix and a reduction in licensing activity both weighed on performance
  • Oil and Gas catalyst sales were ahead; slowdown in upstream oil and gas markets significantly impacted performance in Diagnostic Services


Precious Metal Products – sales fell by 15% and underlying operating profit 31% lower

  • Performance in Platinum group metal (Pgm) Refining and Recycling significantly impacted as a result of a decline of over 20% in average pgm prices
  • Mixed performance in Manufacturing businesses
  • Excluding Gold and Silver Refining business, sales down 6% and operating profit 25% lower


Fine Chemicals – sales 3% down and underlying operating profit 8% lower

  • Good demand for catalysts, chiral technologies and custom services offset by lower sales of active pharmaceutical ingredients (APIs)
  • Performance adversely impacted by safety shutdown in the USA
  • Sale of Research Chemicals business for £255 million completed on 30th September 2015

New Businesses – good progress; sales more than doubled to £72 million

  • Excluding £30 million contribution from acquisitions, division's sales were 27% ahead
  • Good growth in Battery Technologies, supported by contribution from two recent acquisitions
  • Division's underlying operating loss reduced


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

“I am pleased to report that Emission Control Technologies grew strongly in the first half and New Businesses made good progress. Challenging conditions in several of our other business areas have adversely impacted our performance and since the half year end we have taken action to reduce costs, particularly in Process Technologies.

We continued to focus on health and safety and our lost time injury and illness rate reduced. However, this was overshadowed by a tragic accident in July of this year when an employee at our Fine Chemicals' facility in Riverside, USA suffered fatal injuries. This incident has further reinforced our efforts to achieve a world class health and safety culture across Johnson Matthey.

Despite the current environment of low platinum group metal and oil prices, and the more muted outlook in the chemicals markets that we supply, we expect the underlying performance of the group's continuing businesses 4 in 2015/16 to be similar to 2014/15. The full year outlook for the group is in line with current market expectations.

As a result of the group's strong financial position following the two recent disposals, the board has agreed a special dividend of 150.0 pence per share in addition to the interim dividend of 19.5 pence per share.

Johnson Matthey remains well placed to benefit from major global sustainability drivers such as the continued drive to improve air quality, energy security, urbanisation and the increasing need for healthcare.

The restructuring actions we are taking in the second half will benefit the group's results towards the end of our financial year and this, together with attractive key end markets, position the group to return to growth in 2016/17."



Sally Jones
Director, IR and Corporate Communications
Tel: 020 7269 8407

David Allchurch
Tulchan Communications
Tel: 020 7353 4200


1 Before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses, significant taxrate changes and, where relevant, related tax effects.
2 At constant rates (if H1 2014/15 results are converted at average exchange rates for H1 2015/16).
3 Number of lost workday cases per 200,000 hours worked in a rolling year.
4 2014/15 and 2015/16 adjusted to exclude contribution of Gold and Silver Refining and Research Chemicals businesses.