Transcript No Slide Title

Johnson Matthey
Presentation of Results for the year
ended 31st March 2000
8th June 2000
Johnson Matthey
Overview





Continuing businesses’ profits up 17%
EMD sold for US$655 million
Profit before tax up 10% to £143.8 million
Double digit growth in all three divisions
Earnings and dividend up 7%
Strategy




Strategy successfully implemented
Investment for growth
Fuel Cells
Refocusing Colours & Coatings
Johnson Matthey
Summary Results
2000
£m
1999
£m
%
Turnover – Continuing
3,769
2,963
+27
Op. Profit – Continuing
– Discontinued
Interest
Profit before tax*
146.5
(0.3)
(2.4)
143.8
125.0
22.1
(15.9)
131.2
+17
EPS*
EPS
Dividend
47.5p
51.4p
20.3p
44.3p
49.3p
19.0p
+7
+4
+7
* Excluding exceptionals
+10
Operating Profit Continuing
Catalysts & Chemicals
Precious Metals
Colours & Coatings
Corporate
2000
£m
1999
£m
84.8
45.4
27.9
(11.6)
146.5
74.2
37.3
25.1
(11.6)
125.0
%
+14
+22
+11
+17
2000 at 1999 rates
£m
%
83.6
44.9
29.2
(11.5)
146.2
+13
+20
+16
+17
Return on Sales
Catalysts & Chemicals
Precious Metals
Colours & Coatings
2000
£m
Sales
1999
Growth
£m
%
856
2,672
241
3,769
677
2,041
244
2,963
+26
+31
-1
+27
2000
%
ROS
1999
%
9.9
1.7
11.6
3.9
11.0
1.8
10.3
4.2
Return Excl. Precious Metals
Sales excl. PM’s
2000
1999
£m
£m
Catalysts & Chemicals 494
Precious Metals
114
Colours & Coatings
234
841
408
96
240
744
Growth
%
2000
%
ROS
1999
%
+21
+18
-2
+13
17.2
40.0
11.9
17.4
18.2
38.8
10.5
16.8
Geographical Split
Operating Profit - Continuing
2000
£146.5m
1999
£125.0m
9.2
16.2
3.6
8.8
52.2
58.1
69.3
54.1
Europe
Asia
North America
Rest of World
Interest
Financial
Gold & Silver leases
2000
1H
£m
2000
2H
£m
2000
1999
Full Year
£m
£m
(4.1)
(1.1)
(5.2)
3.9
(1.1)
2.8
(0.2)
(2.2)
(2.4)
(14.6)
(1.3)
(15.9)
Exceptional Items
£m
Rationalisation cost of Tableware
Profit on sale of Electronics
Loss on sale of Organic Pigments
Profit on disposal of surplus properties
Goodwill amortisation
(9.8)
28.5
(6.2)
1.1
13.6
(0.2)
13.4
Taxation
2000
£m
1999
£m
Underlying tax
Tax on rationalisation costs
Tax on sale of EMD
Tax on sale of Org. Pigments
ACT saving on FIDs
40.4
(2.9)
9.9
(2.1)
45.3
35.8
(3.9)
31.9
Average tax rate
Underlying tax rate
29%
28%
23%
27%
Return on Investment
Operating profit
Average assets:
Equity and minorities
Cumulative goodwill
Net (cash) / borrowings
Total investment
Pre-tax ROA - continuing
- total
Post-tax ROA
Economic value added
2000
£m
1999
£m
146.2
147.1
657
109
28
794
521
171
223
915
24.2%
18.4%
13.2%
£32m
n/a
16.1%
11.7%
£16m
Free Cash Flow
Continuing
2000
£m
Operating profit
Depreciation and amortisation
Working capital / other
Cash flow from operations
Interest / tax / dividends
Capital expenditure (gross)
Sale of fixed assets
Free cash flow
136.1
38.0
(54.5)
119.6
(72.2)
(63.4)
8.4
(7.6)
EMD
2000
£m
TOTAL
2000
£m
0.1
8.6
2.0
10.7
(5.9)
(11.4)
0.7
(5.9)
136.2
46.6
(52.5)
130.3
(78.1)
(74.8)
9.1
(13.5)
Net Cash Flow
Free cash flow
Acquisitions
Disposals
Shares issued
Net cash flow
Exchange
Movement in debt
Continuing
2000
£m
EMD
2000
£m
TOTAL
2000
£m
(7.6)
(0.1)
0.8
8.0
1.1
(5.9)
(2.8)
400.9
392.2
(13.5)
(2.9)
401.7
8.0
393.3
(5.9)
387.4
Gearing
Net (cash) / debt
Equity and minorities
Capital employed
Gearing
Interest cover
Mar 00
£m
Mar 99
£m
(166)
760
594
222
559
781
n/a
61x
40%
9x
Catalysts & Chemicals Division
£m
+26%
+14%
1000
£m
100
800
80
856
84.8
600
74.2
677
60
400
40
200
20
0
0
1999
Sales
2000
1999
2000
Operating Profit
Autocatalysts
 Volumes up 11%
- tighter legislation
- strong car sales
 Investing in capacity and technology
 Well placed in developing markets
 Progress with Heavy Duty Diesel
Major Changes in Emissions Legislation
Europe
Euro IV
Euro III
Euro “V”
(HDD)
Euro II
Euro I
Euro IV
(HDD)
Euro III
(HDD)
Tier 2
USA
CAL.
HDD
Tier 1
Fed 75 and amendments to CAA
Tier 1
LEV I
(CAL.)
Fed 75
1970
75
80
LEV II
(CAL.)
Tier 1
Fed 75
Fed 75
85
90
95
US
HDD
00
05
US
HDD
2010
“I am very excited about fuel cells. I believe they’re
going to be a significant part of our industry a lot
sooner than many people think. I think that it’s
possible that they could displace the internal
combustion engine as the dominant source of power
for consumer vehicles within my lifetime.”
William Clay Ford Jr,
Chairman, Ford Motor Company
Fuel Cells
 £12 million being invested in development
and testing capability
 Customer collaborations on plan
 Securing supply base
 Fuel Reformer developed for residential
market
Chemicals
 PGM refining strong on back of higher
prices
 High throughput screening adding value
for customers
 Expansion of process catalyst
manufacturing
 Smoptech acquisition
Pharmaceutical Materials
 Methylphenidate prices hit by competition
 Strong performance from carboplatin and
organics
 Good progress on new products
 New facility under way
Precious Metals Division
£m
+31%
+22%
3000
50
2500
2000
£m
45.4
2,672
37.3
2,041
40
30
1500
20
1000
10
500
0
0
1999
Sales
2000
1999
2000
Operating Profit
Precious Metals Division
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Strong demand for pgms
50% growth in China jewellery
Robust prices
Good growth in fabricated products
Outlook strengthening further with
uncertainty over palladium availability
 Gold satisfactory in difficult markets
Platinum & Palladium Prices
$/oz
900
800
700
600
500
Platinum
400
300
200
Palladium
100
0
April
1997
April
1998
April
1999
April
2000
Colours & Coatings Division
£m
-1%
+11%
300
£m
30
27.9
250
244
241
25
25.1
200
20
150
15
100
10
50
5
0
0
1999
Sales
2000
1999
2000
Operating Profit
Colours & Coatings Division
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Underlying sales growth
Margins up to 12%
Focus on growth businesses
Investment in Spain
Expansion of facilities at Maastricht
Exit from organic pigments complete
Colours & Coatings Division
Rationalisation Update
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Spent £5.2 million out of £10 million provision
Headcount reduced by 113
Singapore and Milan operations closed
Closure of Burslem underway
Annual savings of £2.8 million already
secured
 Savings of £4 million in current year and
£7 million p.a. thereafter
e - Commerce
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Longstanding internet presence
Catalogue sales in US
Expanding into Europe this year
e-Procurement project
Developments in car industry
Outlook
 Prospects for growth very encouraging
 Investing in new technology and new
facilities
 Acquisition opportunities
Johnson Matthey