Preliminary results for the year ended 31st March 2017
Robust performance in challenging markets; continued investment for future growth.
01 June 2017
Year ended 31st March
Profit before tax (PBT)
Earnings per share (EPS)
Ordinary dividend per share
% change continuing businesses2 at constant rates3
Sales excluding precious metals (Sales)
Profit before tax
Earnings per share
Group performance in 2016/17
Highlights of the year ended 31st March 2017
Revenue up 12% to £12,031 million and operating profit up 18% to £493.2 million including translational FX benefit of £721 million and £69 million respectively
At constant rates3, sales for continuing businesses2 grew 3% with underlying1 PBT up 1%
In H2, at constant rates, sales for continuing businesses grew 6% and underlying operating profit grew 4%
As a result of the restructuring programme announced in 2015/16, costs were reduced by £26 million, primarily in Process Technologies and Fuel Cells
EPS up 21% at 201.2 pence and underlying EPS up 17% at 209.1 pence
Cash flow from operating activities of £523 million and free cash flow of £230 million. Working capital days4 reduced from 56 to 54 days
Capex and R&D spend to drive future growth: capex was £265 million, 1.7 times depreciation, with gross R&D £201 million5, 5.6% of sales
Return on invested capital increased to 18.2% from 17.3%
Strong balance sheet with net debt to EBITDA of 1.1 times (2015/16: 1.2 times)
Recommended final dividend per share of 54.5 pence, up 5% reflecting confidence in group's medium term prospects. Full year dividend per share 75.0p.
Commenting on the results, Robert MacLeod, Chief Executive of Johnson Matthey said:
"This has been a year of further progress; strengthening our business, implementing our strategy and delivering financial results in line with our expectations. Across each of our businesses we are applying our world class science and technology strengths to help customers solve problems, enabling Johnson Matthey to contribute to a cleaner, healthier world.
Underlying sales growth has come from the application of our leading technologies. We have invested over £440 million in capex and R&D combined, underpinning our commitment to science in the UK and internationally. In ECT in Europe, our technology strengths delivered strong sales growth by providing customer focused solutions to meet increasing emissions standards. We have broadened our platforms, especially in our pipeline of new active pharmaceutical ingredients and in high energy battery materials. Our cost saving programme has increased efficiency, primarily in Process Technologies and Fuel Cells, and we have improved our agility and are capturing greater synergy across the divisions. Cash generation has improved through our disciplined management of working capital.
For the full year 2017/18, sales growth, at constant rates, is expected to be broadly in line with the 6% growth delivered in the second half of this year. Improving operating performance at constant rates, with stronger sales growth and further efficiency savings, is expected to be offset as there will be no US post-retirement medical benefit credit and there are higher non cash pension charges in 2017/18. At current exchange rates, reported results in 2017/18 will benefit from the positive impact of translational foreign exchange.
Beyond 2017/18, our stronger business platform and operational momentum will deliver sustained sales growth and margin expansion."
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Underlying is before amortisation of acquired intangibles, major impairment and restructuring charges, profit or loss on disposal of businesses, significant tax rate changes and, where relevant, related tax effects. For reconciliation see note 5 on page 26
Growth for continuing businesses excludes the contribution from the Research Chemicals business in 2015/16
Growth at constant rates excludes the translation impact of foreign exchange movements, with 2015/16 results converted at 2016/17 average exchange rates
Working capital days are calculated as non-precious metal related inventories, trade and other receivables and trade and other payables (including any classified as held for sale) divided by sales excluding precious metals for the last three months multiplied by 90 days
Gross R&D includes capitalised development of £19 million which is also included in capex
For definitions and reconciliations of other non-GAAP measures see page 29