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Johnson Matthey

Presentation of Results for the half year ended 30 th September 2001 29 th November 2001. Johnson Matthey. E. Johnson Matthey. E. Johnson Matthey. Overview. Profit before tax up 7% to £92.2 million Continued strong performance from Catalysts & Chemicals

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Johnson Matthey

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  1. Presentation of Results for the half year ended 30th September 2001 29th November 2001 Johnson Matthey E Johnson Matthey

  2. E Johnson Matthey

  3. Overview • Profit before tax up 7% to £92.2 million • Continued strong performance from Catalysts & Chemicals • New Pharmaceutical Materials Division making good progress • Work commenced on new fuel cell components factory

  4. E Johnson Matthey

  5. Summary Results 1H 1H 2001 2000 £m £m % Turnover 2,647 2,852 -7 Operating Profit 94.4 82.7 +14 Interest (2.2) 3.3 Profit before tax* 92.2 86.0 +7 Exceptionals 1.6 - Goodwill amortisation (2.4) (0.1) EPS * 29.5p 27.5p +7 Dividend 7.5p 7.0p +7 * Excluding exceptionals & goodwill amortisation

  6. Operating Profit 1H 1H 2001 2000 £m £m % Catalysts & Chemicals 45.1 37.4 +21 Precious Metals 29.3 27.3 +7 Colours & Coatings 14.5 15.5 -6 Pharmaceutical Materials 13.1 8.8 +49 Corporate (7.1) (6.3) Discontinued (0.5) - 94.4 82.7 +14 Excluding acquisitions 90.8 82.7 +10 & disposals

  7. Geographical SplitOperating Profit 1H 2001 £94.4m 1H 2000 £82.7m 10% 7% 8% 7% 43% 37% 40% 48% Asia Europe Rest of the World North America

  8. Interest 1H 1H 2001 2000 £m £m Financial (0.4) 3.7 Gold & Silver leases (1.8) (0.4) (2.2) 3.3

  9. Exceptional Items 1H 2001 £m Sale of unhedged palladium 7.2 Sale of French print business (5.5) Other (0.1) 1.6

  10. Taxation 1H 1H 2001 2000 Restated for FRS 19 £m £m Underlying tax 27.2 25.4 Tax on exceptionals 2.2 - 29.4 25.4 Underlying tax rate 29.5% 29.5%

  11. Free Cash Flow 1H 1H 2001 2000 £m £m Operating profit 99.1 82.7 Depreciation and amortisation 25.4 19.8 Working capital / other (10.1) (25.4) Cash flow from operations114.4 77.1 Interest / tax / dividends (55.3) (42.7) Capex (67.2) (39.6) Free cash flow(8.1) (5.2)

  12. Net Cash Flow 1H 1H 2001 2000 £m £m Free cash flow(8.1) (5.2) Acquisitions (139.6) (1.8) Disposals (1.4) (0.2) Shares issued/(bought) (39.6) 5.8 Net cash flow(188.7) (1.4) Debt acquired with subs. (46.6) - Loan notes issued (18.7) - Exchange 6.0(3.4) Movement in debt(248.0)(4.8)

  13. Capital Sep 01 Mar 01 £m £m Net debt / (cash) 108 (140) Equity and minorities803 812 Capital employed911 672 Gearing 13% n/m

  14. Divisional Performance SalesProfits 1H 1H 2001 2001 £m % £m % Catalysts & Chemicals 746 +20 45.1 +21 Precious Metals 1,729 -17 29.3 +7 Colours & Coatings 130 +4 14.5 -6 Pharmaceutical Materials 41 +157 13.1 +49

  15. Key Issues • Autocatalysts and car sales • Precious metals prices • Pharmaceutical Materials Division • Fuel cells

  16. Autocatalysts • Global car sales down 2-3% • Profits up following new factory at Royston

  17. Autocatalysts • New generation products help customers save costs • Market share growth in Europe • Investment in new production technology continues

  18. US Light Duty Vehicle Sales • Uncertainty in North America post 11th September • Poor September but better car sales in October • Confident of continued profit growth worldwide Source: Automotive News

  19. US $/oz Sep99 Mar00 Sep00 Mar01 Sep01 Platinum & Palladium Prices

  20. Platinum • Platinum most important metal to JM • Robust fundamentals • Autocatalyst • Jewellery in China

  21. European Demand for Platinum in Autocatalysts 1997 - 2001 '000 oz

  22. Demand for Platinumin Jewellery 1997 - 2001 million oz

  23. Pharmaceutical Materials Macfarlan Smith (Meconic) West Deptford Pharm-Eco • Platinum anti-cancer • Controlled substances • Controlled substances • Extraction technology • Contract research • Small scale synthesis

  24. Pharmaceutical Materials Key Features • Focus on active pharmaceutical ingredients, particularly controlled substances • Core skills of catalysis and security • Relationship with regulatory authorities important • Customer base primarily generic and smaller pharma companies

  25. Pharmaceutical MaterialsNew Products Macfarlan Smith (UK) Pharm-Eco WestDeptford (US) Patent Protected Pre-clinical Phase I Phase II Phase III Generic Approval New products in development 12 4 3 10 14

  26. Pharmaceutical MaterialsProfit Growth Opportunities • Market growth • Specialist opiates • Cross–selling • Share R&D, manufacturing processes

  27. Fuel Cells • Work commenced on new MEA plant at Swindon • Important collaborations in small stationary and transport applications • First commercial systems available next year containing JM products

  28. New Fuel Cell Products for 2002 Hydrogenics HyUPS™ for back up power (Photograph courtesy of Hydrogenics Corporation) Ballard NEXA™ power module for portable applications (Photograph courtesy of Ballard Power Systems Inc. )

  29. MEA Factory at Swindon

  30. MEA Factory at Swindon

  31. Outlook • Some impact of US slowdown and lower pgm prices • Continued growth in Catalysts & Chemicals despite weaker markets • Good prospects in Pharmaceutical Materials

  32. E Johnson Matthey

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