REG - Johnson Matthey PLC - Annual Financial Report - Part 2
12/06/2025 09:00
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RNS Number : 4802M Johnson Matthey PLC 12 June 2025
12(th) June 2025
Johnson Matthey Plc
(the "Company")
Annual Report and Accounts 2025
Appendix Part 2 (see RNS number 4800M for Part 1)
Johnson Matthey Plc
Final Audited Results for the year ended 31st March 2025
21 Movements in assets and liabilities arising from financing activities
Non-cash movements
2024 Cash (inflow) / outflow Transfers Transfers to held for sale Foreign exchange movements Fair value and other movements 2025
£m £m £m £m £m £m £m
Non-current assets
Derivative financial instruments - cross currency and interest rate swaps 15 - (14) - (1) 4 4
Non-current liabilities
Borrowings (1,339) (297) 312 - 13 10 (1,301)
Derivative financial instruments - cross currency and interest rate swaps (10) - 1 - - - (9)
Lease liabilities (24) - 6 - - (22) (40)
Current assets
Derivative financial instruments - cross currency and interest rate swaps - - 13 - (2) 2 13
Current liabilities
Borrowings (110) 84 (309) - 2 - (333)
Derivative financial instruments - cross currency and interest rate swaps - - (3) - - 2 (1)
Lease liabilities (8) 9 (6) - - (1) (6)
Net movements in assets and liabilities arising (204) - - 12 (5)
from financing activities
Purchase of treasury shares 251
Dividends paid to equity shareholders 138
Interest paid 148
Net cash outflow from financing activities 333
Non-cash movements
2023 Cash outflow Transfers Transfers to held for sale Foreign exchange movements Fair value and other movements 2024
£m £m £m £m £m £m £m
Non-current assets
Derivative financial instruments 20 - - - - (5) 15
Non-current liabilities
Borrowings (1,460) - 105 - 16 - (1,339)
Derivative financial instruments (15) - - - - 5 (10)
Lease liabilities (31) - 10 4 2 (9) (24)
Current liabilities
Borrowings (155) 150 (105) - - - (110)
Lease liabilities (9) 11 (10) 1 - (1) (8)
Net movements in assets and liabilities arising 161 - 5 18 (10)
from financing activities
Dividends paid to equity shareholders 141
Interest paid 137
Net cash outflow from financing activities 439
22 Provisions
Restructuring Warranty and Other Total
provisions technology provisions
provisions
£m £m £m £m
At 1(st) April 2023 38 12 41 91
Charge for the year 36 2 7 45
Utilised (34) (2) (1) (37)
Released (10) (4) (5) (19)
At 31(st) March 2024 30 8 42 80
Charge for the year 36 1 7 44
Utilised (24) (2) - (26)
Released - (2) (1) (3)
At 31(st) March 2025 42 5 48 95
2025 2024
£m £m
Current 69 63
Non-current 26 17
Total provisions 95 80
Restructuring
The restructuring provisions are part of the group's efficiency initiatives
(see note 6) and are expected to be utilised within one year.
Warranty and technology
The warranty and technology provisions represent management's best estimate of
the group's liability under warranties granted and remedial work required
under technology licences based on past experience in Clean Air and Catalyst
Technologies. Warranties generally cover a period of up to three years.
Other
The other provisions include environmental and legal provisions arising across
the group. Amounts provided reflect management's best estimate of the
expenditure required to settle the obligations at the balance sheet date.
23 Deferred tax
Property, Post- Provisions Inventories Intangibles Other Total
plant and employment deferred tax
equipment benefits (assets) /
liabilities
£m £m £m £m £m £m £m
At 1(st) April 2023 (37) 55 (55) (26) (17) (22) (102)
Charge / (credit) to the income
statement - 3 (8) (1) 25 (31) (12)
Transferred to assets classified
as held for sale - - - - - 4 4
Tax on items taken directly to or
transferred from equity - (17) - - - - (17)
Exchange adjustments - - - - - 1 1
At 31(st) March 2024 (37) 41 (63) (27) 8 (48) (126)
(Credit) / charge to the income
statement (note 9) (22) 12 19 13 4 (26) -
Reclassification - - 6 (4) - (2) -
Tax on items taken directly to or
transferred from equity - 8 - - - (10) (2)
Exchange adjustments (1) 1 1 - - (4) (3)
At 31(st) March 2025 (60) 62 (37) (18) 12 (90) (131)
2025 2024
£m £m
Deferred tax assets (135) (128)
Deferred tax liabilities 4 2
Net amount (131) (126)
Deferred tax has not been recognised in respect of tax losses of £245 million
(2024: £158 million) and other temporary differences of £30 million (2024:
£8 million). Of the total tax losses, £112 million (2024: £69 million) is
expected to expire within 5 years, £36 million within 5 to 10 years (2024:
£36 million), £nil after 10 years (2024: £nil) and £97 million carry no
expiry (2024: £53 million). These deferred tax assets have not been
recognised on the basis that their future economic benefit is not probable.
In addition, the group's overseas subsidiaries have net unremitted earnings of
£3,426 million (2024: £1,149 million), resulting in gross temporary
differences of £860 million (2024: £451 million). No deferred tax has been
provided in respect of these differences since the timing of the reversals can
be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
The recognition of deferred tax assets has been determined by the
recoverability of those assets against future tax liabilities as determined by
budgets and plans that are showing profits in relevant businesses. The
majority of the deferred tax assets and liabilities noted above are
anticipated to be realised after more than 12 months.
24 Post-employment benefits
Background
Pension plans
The group operates a number of post-employment retirement and medical benefit
plans around the world. The retirement plans in the UK, US and other countries
include both defined contribution and defined benefit plans.
For defined contribution plans, retirement benefits are determined by the
value of funds arising from contributions paid in respect of each employee and
the investment returns on those contributions prior to retirement.
For defined benefit plans, which include final salary, career average and
other types of plans with committed pension payments, the retirement benefits
are based on factors, such as the employee's pensionable salary and length of
service. The majority of the group's final salary and career average defined
benefit retirement plans are now closed to new entrants and future accrual.
Regulatory framework and governance
The UK pension plan, the Johnson Matthey Employees' Pension Scheme (JMEPS), is
a registered arrangement established under trust law and, as such, is subject
to UK pension, tax and trust legislation. It is managed by a corporate
trustee, JMEPS Trustees Limited. The trustee board includes representatives
appointed by both the parent company and employees and includes an independent
chairman.
Although the parent company bears the financial cost of the plan, the trustee
directors are responsible for the overall management and governance of JMEPS,
including compliance with all applicable legislation and regulations. The
trustee directors are required by law to act in the interests of all relevant
beneficiaries and: to set certain policies; to manage the day-to-day
administration of the benefits; and to set the plan's investment strategy
following consultation with the parent company.
UK pensions are regulated by the Pensions Regulator whose statutory objectives
and regulatory powers are described on its website:
www.thepensionsregulator.gov.uk (http://www.thepensionsregulator.gov.uk)
The JMEPS Trustee Board considers how climate risk is integrated within
investment processes when appointing, monitoring and withdrawing from
investment managers using the investment consultant's Environmental, Social
and Governance (ESG) ratings. The ESG ratings include consideration of climate
risk management policies. On a periodic basis, JMEPS will review the ESG
ratings assigned to the underlying investments based on the investment
consultant's ESG research.
The US pension plans are qualified pension arrangements and are subject to the
requirements of the Employee Retirement Income Security Act, the Pension
Protection Act 2006 and the Department of Labor and Internal Revenue. The
plans are managed by a pension committee which acts as the fiduciary and, as
such, is ultimately responsible for: the management of the plans' investments;
compliance with all applicable legislation and regulations; and overseeing the
general management of the plans.
Other trustee or fiduciary arrangements that have similar responsibilities and
obligations are in place for the group's other funded defined benefit pension
plans outside of the UK and US.
Benefits
The UK defined benefit pension plan is segregated into two sections - a legacy
section which provides final salary and career average pension benefits and a
hybrid arrangement which provides three levels of membership offering cash
balance and defined contribution sections.
The legacy section provides benefits to members in the form of a set level of
pension payable for life based on the member's length of service and final
pensionable salary at retirement or averaged over their career with the
company. The majority of the benefits attract inflation-related increases both
before and after retirement. The final salary element of the legacy section
was closed to future accrual of benefits from 1(st) April 2010 and the career
average element of the legacy section was closed to new entrants on 1(st)
October 2012 and closed to future accrual on 31(st) March 2024.
The cash balance section provides benefits to members at the point of
retirement in the form of a cash lump sum. The benefits attract
inflation-related increases before retirement but, following the payment of
the retirement lump sum benefit, the plan has no obligation to pay any further
benefits to the member. All new employees join the defined contribution
section but have the opportunity to switch to the cash balance section of the
plan within 60 days of joining the Company.
The group operates two defined benefit pension plans in the US. The hourly
pension plan is for unionised employees and provides a fixed retirement
benefit for life based upon years of service. The salaried pension plan
provides retirement benefits for life based on the member's length of service
and final pensionable salary (averaged over the last five years). The salaried
plan benefits attract inflation-related increases before leaving but are
non-increasing thereafter. On retirement, members in either plan have the
option to take the cash value of their benefit instead of a lifetime annuity
in which case the plan has no obligation to pay any further benefits to the
member.
The US salaried pension plan was closed to new entrants on 1(st) September
2013, and the US hourly pension plan was closed to new entrants on 1(st)
January 2019. The hourly pension plan remains open to future accrual for
existing members but the salaried pension plan was closed to future accrual
from 1(st) July 2023 with plan participants transferring to a defined
contribution plan. The US salaried pension plan will be terminated on 30(th)
June 2025. All new US employees now join a defined contribution plan.
Other post-employment benefits
The group's principal post-employment medical plans are in the UK and US and
are unfunded arrangements that have been closed to new entrants for over ten
years.
Maturity profile
The estimated weighted average durations of the defined benefit obligations of
the main plans as at 31(st) March 2025 are:
Weighted average duration
Years
Pensions:
UK 13
US 9
Post-retirement medical benefits:
UK 8
US 9
Funding
Introduction
The group's principal defined benefit retirement plans are funded through
separate fiduciary or trustee administered funds that are independent of the
sponsoring company. The contributions paid to these arrangements are jointly
agreed by the sponsoring company and the relevant trustee or fiduciary body
after each funding valuation and in consultation with independent qualified
actuaries. The plans' assets, together with the agreed funding contributions,
should be sufficient to meet the plans' future pension obligations.
UK valuations
UK legislation requires that pension plans are funded prudently and that, when
undertaking a funding valuation (every three years), assets are taken at their
market value and liabilities are determined based on a set of prudent
assumptions set by the trustee following consultation with their appointed
actuary. The assumptions used for funding valuations may, therefore, differ to
the actuarial assumptions used for IAS 19, Employee Benefits, accounting
purposes.
In January 2013, a special purpose vehicle (SPV), Johnson Matthey (Scotland)
Limited Partnership, was set up to provide deficit reduction contributions and
greater security to the trustee. The group invested £50 million in a bond
portfolio which is beneficially held by the SPV. The income generated by the
SPV is used to make annual distributions of £3.5 million to JMEPS for a
period of up to 25 years. These annual distributions are only payable if the
legacy section of JMEPS continues to be in deficit, on a funding basis. This
bond portfolio is held as a non-current investment at fair value through other
comprehensive income and the group's liability to pay the income to the plan
is not a plan asset under IAS 19 although it is for actuarial funding
valuation purposes. The SPV is exempt from the requirement to prepare audited
annual accounts as it is included on a consolidated basis in these accounts.
A funding valuation of JMEPS was carried out as at 1(st) April 2024 and showed
that there was a deficit of £9 million in the legacy section of the plan, or
a surplus of £19 million after taking account of the future additional
deficit contributions from the SPV. The valuation also showed a surplus in the
cash balance section of the plan of £37 million.
In accordance with the governing documentation of JMEPS, any future plan
surplus would be returned to the parent company by way of a refund assuming
gradual settlement of the liabilities over the lifetime of the plan. As such,
there are no adjustments required in respect of IFRIC 14, IAS 19 - The Limit
on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction.
US valuations
The last annual review of the US defined benefit pension plans was carried out
by a qualified actuary as at 1(st) July 2023 and showed that there was a
surplus of $18 million on the projected funding basis.
The assumptions used for funding valuations may differ to the actuarial
assumptions used for IAS 19 accounting purposes.
Other valuations
Similar funding valuations are undertaken on the group's other defined benefit
pension plans outside of the UK and US in accordance with prevailing local
legislation.
Risk management
The group is exposed to a number of risks relating to its post-retirement
pension plans, the most significant of which are:
Risk Mitigation
Market (investment) risk
Asset returns may not move in line with the liabilities and may be subject to The group's various plans have highly diversified investment portfolios,
volatility. investing in a wide range of assets that provide reasonable assurance that no
single security or type of security could have a material adverse impact on
the plan.
A de-risking strategy is in place to reduce volatility in the plans as a
result of the mismatch between the assets and liabilities. The funding level
of the plans are monitored and as they improve, plan investments are generally
switched from return-seeking assets to liability-matching assets.
The plans implement partial currency hedging on their overseas assets to
mitigate currency risk.
Interest (discount) rate risk
Liabilities are sensitive to movements in bond yields (interest rates), with The group's defined benefit plans hold a high proportion of their assets in
lower interest rates leading to an increase in the valuation of liabilities, government or corporate bonds, which provide a natural hedge against falling
albeit the impact on the plan's funding level will be partially offset by an interest rates.
increase in the value of its bond holdings.
In the UK, this interest rate hedge is extended by the use of interest rate
swaps, such that the plan is 100% hedged on the plan's funding basis. The
swaps are held with several banks to reduce counterparty risk.
Inflation risk
Liabilities are sensitive to movements in inflation, with higher inflation Where plan benefits provide inflation-related increases, the plan holds some
leading to an increase in the valuation of liabilities. inflation-linked assets which provide a natural hedge against higher than
expected inflation increases.
In the UK, this inflation hedge is extended by the use of inflation swaps,
such that the plan is 100% hedged on the plan's funding basis. The swaps are
held with several banks to reduce counterparty risk.
Longevity risk
The majority of the group's defined benefit plans provide benefits for the The group has closed most of its defined benefit pension plans to new
life of the member, so the liabilities are sensitive to life expectancy, with entrants, replacing them with either a cash balance plan or defined
increases in life expectancy leading to an increase in the valuation of contribution plans, both of which are unaffected by life expectancy.
liabilities.
For the plans where a benefit for life continues to be payable, prudent
mortality assumptions are used that appropriately allow for a future
improvement in life expectancy. These assumptions are reviewed on a regular
basis.
Liquidity risk
The pension plan may have insufficient access to cash to meet its short-term The group's defined benefit plans hold sufficient liquid assets to meet its
cash and collateral obligations, such that adverse scenarios could force the cashflow obligations and the collateral requirements of its inflation and
sale of a less-liquid assets at depressed prices. interest rate hedging. This reduces the risk of being a forced seller of
less-liquid assets. The UK pension plan also has a loan facility in place with
the Company which it can access at short notice in the event of liquidity
issues.
Contributions
During the year, total contributions to the group's post-employment defined
benefit plans were £53 million (2024: £38 million), including a one-off £25
million contribution during the year. It is estimated that the group will
contribute approximately £20 million to the post-employment defined benefit
plans during the year ending 31(st) March 2026.
IAS 19 accounting
Principal actuarial assumptions
Qualified independent actuaries have updated the IAS 19 valuations of the
group's major defined benefit plans to 31(st) March 2025. The assumptions
used are chosen from a range of possible actuarial assumptions which, due to
the long-term nature of the plans, may not necessarily be borne out in
practice.
Financial assumptions
2025 2025 2025 2024 2024 2024
UK plan US plans Other plans UK plan US plans Other plans
% % % % % %
First year's rate of increase in salaries - - 2.29 3.50 - 2.43
Ultimate rate of increase in salaries - - 2.29 3.50 - 2.20
Rate of increase in pensions in payment 2.90 - 2.00 2.90 - 2.20
Discount rate 5.90 5.40 3.73 4.90 5.20 3.30
Inflation - 2.20 2.00 - 2.20 2.20
- UK Retail Prices Index (RPI) 3.00 - - 3.10 - -
- UK Consumer Prices Index (CPI) 2.75 - - 2.75 - -
Current medical benefits cost trend rate 6.50 - - 8.95 - -
Ultimate medical benefits cost trend rate 6.50 - - 5.40 - -
Demographic assumptions
The mortality assumptions are based on country-specific mortality tables and,
where appropriate, include an allowance for future improvements in life
expectancy. In addition, where credible data exists, actual plan experience is
taken into account. The group's most substantial pension liabilities are in
the UK and the US where, using the mortality tables adopted, the expected
lifetime of average members currently at age 65 and average members at age 65
in 25 years' time (i.e. members who are currently aged 40 years) is
respectively:
Currently age 65 Age 65 in 25 years
UK plan US plans UK plan US plans
Male 87 86 88 88
Female 89 88 91 89
Financial information
Plan assets
Movements in the fair value of plan assets during the year were:
UK pension - UK pension - UK post- US US post- Other Total
legacy section cash balance retirement pensions retirement
section medical medical
benefits benefits
£m £m £m £m £m £m £m
At 1(st) April 2023 1,472 159 - 250 - 8 1,889
Administrative expenses (4) - - (1) - - (5)
Interest income 68 8 - 12 - - 88
Return on plan assets excluding interest (106) (4) - (9) - (1) (120)
Employee contributions 2 7 - - - - 9
Company contributions 10 22 1 3 - 2 38
Benefits paid (58) (3) (1) (29) - (3) (94)
Exchange adjustments - - - (5) - - (5)
At 31(st) March 2024 1,384 189 - 221 - 6 1,800
Administrative expenses (2) (1) - (2) - - (5)
Interest income 67 10 - 11 - - 88
Return on plan assets excluding interest (134) (16) - (4) - - (154)
Employee contributions - 8 - - - - 8
Company contributions 28 21 1 2 - 1 53
Benefits paid (58) (5) (1) (27) - (1) (92)
Exchange adjustments - - - (6) - (1) (7)
At 31(st) March 2025 1,285 206 - 195 - 5 1,691
The fair values of plan assets are analysed as follows:
2025 2025 2025 2025 2024 2024 2024 2024
UK pension - UK US pensions Other UK UK US Other
legacy section pension - pension - pension - pensions
cash balance legacy section cash balance
section section
£m £m £m £m £m £m £m £m
Quoted corporate bonds 327 73 71 4 494 61 80 -
Inflation and interest rate swaps (1) 2 - - (8) 1 - -
Quoted government bonds 354 40 50 - 490 45 65 -
Cash and cash equivalents 244 56 74 1 25 4 76 -
Quoted equity - 19 - - 1 62 - -
Unquoted equity 53 - - - 49 - - -
Property 56 - - - 51 - - -
Insurance policies - - - - - - - 6
Other 252 16 - - 282 16 - -
Plan assets 1,285 206 195 5 1,384 189 221 6
The UK plan's unquoted equities are assets within a pooled infrastructure fund
where the underlying assets are a broad range of private infrastructure
investments, diversified by geographic region, infrastructure sector,
underlying asset type and development stage. These infrastructure assets are
valued using widely recognised valuation techniques which use market data and
discounted cash flows. The same valuation approach is used to determine the
value of the swaps and insurance policies.
The UK plan's property represents an investment in the Blackrock UK Property
Fund, which is a unitised fund where the underlying assets are taken at market
value. The valuation of the fund is independently audited by KPMG on an annual
basis.
The BlackRock Diversified Private Debt is represented as 'Other' in the table
above and invests primarily in unquoted debt.
The defined benefit pension plans do not invest directly in Johnson Matthey
Plc shares and no property or other assets owned by the pension plans are used
by the group.
At year end, there was a considerable allocation to the Legal and General
Sterling Liquidity Cash Fund as the Trustee and Company took the decision to
de-risk the two Multi-Asset Credit mandates and are now working with their
Investment Consultant to agree the new investment strategy.
Defined benefit obligation
Movements in the defined benefit obligation during the year were:
UK pension - UK pension - UK post- US US post- Other Total
legacy section cash balance retirement pensions retirement
section medical medical
benefits benefits
£m £m £m £m £m £m £m
At 1(st) April 2023 (1,303) (132) (7) (244) (10) (29) (1,725)
Current service cost (2) (15) - (2) - (1) (20)
Interest cost (61) (7) - (11) (1) (1) (81)
Employee contributions (2) (7) - - - - (9)
Remeasurements due to changes in:
Financial assumptions 15 4 - 8 1 - 28
Demographic assumptions 32 - - - - - 32
Experience adjustments (6) - - (2) - - (8)
Benefits paid 58 3 1 29 - 3 94
Exchange adjustments - - - 3 - 2 5
At 31(st) March 2024 (1,269) (154) (6) (219) (10) (26) (1,684)
Current service cost - (17) - (2) - (1) (20)
Past service credit 14 - - - - - 14
Interest cost (61) (9) (1) (10) - (1) (82)
Employee contributions - (8) - - - - (8)
Remeasurements due to changes in:
Financial assumptions 158 30 - 4 (1) 4 195
Demographic assumptions (1) - - - - - (1)
Experience adjustments (9) 5 - - 1 - (3)
Benefits paid 58 5 1 27 - 1 92
Exchange adjustments - - - 6 1 2 9
At 31(st) March 2025 (1,110) (148) (6) (194) (9) (21) (1,488)
Net post-employment benefit assets and liabilities
The net post-employment benefit assets and liabilities are:
UK pension - UK pension - UK post- US US post- Other Total
legacy section cash balance retirement pensions retirement
section medical medical
benefits benefits
£m £m £m £m £m £m £m
At 31(st) March 2025
Defined benefit obligation (1,110) (148) (6) (194) (9) (21) (1,488)
Fair value of plan assets 1,285 206 - 195 - 5 1,691
Net post-employment benefit assets and liabilities 175 58 (6) 1 (9) (16) 203
At 31(st) March 2024
Defined benefit obligation (1,269) (154) (6) (219) (10) (26) (1,684)
Fair value of plan assets 1,384 189 - 221 - 6 1,800
Reimbursement rights - - - - - 1 1
Net post-employment benefit assets and liabilities 115 35 (6) 2 (10) (19) 117
These are included in the balance sheet as follows:
2025 2025 2025 2024 2024 2024
Post- Employee Post- Employee
employment benefit employment benefit
benefit net benefit net
net assets obligations Total net assets obligations Total
£m £m £m £m £m £m
UK pension - legacy section 175 - 175 115 - 115
UK pension - cash balance section 58 - 58 35 - 35
UK post-retirement medical benefits - (6) (6) - (6) (6)
US pensions 4 (3) 1 2 - 2
US post-retirement medical benefits - (9) (9) - (10) (10)
Other 1 (17) (16) 1 (20) (19)
Total post-employment plans 238 (35) 203 153 (36) 117
Other long-term employee benefits (3) (3)
Total long-term employee benefit obligations (38) (39)
Income statement
Amounts recognised in the income statement for long term employment benefits
were:
2025 2024
£m £m
Administrative expenses (5) (5)
Current service cost (20) (20)
Past service credit 14 -
Defined benefit post-employment costs charged to operating profit (11) (25)
Defined contribution plans' expense (28) (28)
Charge to operating profit (39) (53)
Interest on post-employment benefits charged to finance costs (2) -
Interest on post-employment benefits charged to investment income 8 7
Charge to profit before tax (33) (46)
Statement of total comprehensive income
Amounts recognised in the statement of total comprehensive income for long
term employment benefits were:
2025 2024
£m £m
Return on plan assets excluding interest (154) (120)
Remeasurements due to changes in:
Financial assumptions 195 28
Experience adjustments (1) (8)
Demographic assumptions (3) 32
Remeasurements of post-employment benefit assets and liabilities 37 (68)
Sensitivity analysis
The calculations of the defined benefit obligations are sensitive to the
assumptions used. The following summarises the estimated impact on the group's
main plans of a change in the assumption while holding all other assumptions
constant. This sensitivity analysis may not be representative of the actual
change as it is unlikely that the change in assumptions would occur in
isolation of one another.
Financial assumptions
A 0.1% change in the discount rate and inflation assumptions would (increase)
/ decrease the UK and US pension plans' defined benefit obligations at 31(st)
March 2025 as follows:
0.1% increase 0.1% decrease
UK plan US plans UK plan US plans
£m £m £m £m
Effect of discount rate 16 2 (17) (2)
Effect of inflation (15) - 15 -
Demographic assumptions
A one-year increase in life expectancy would increase the UK and US pension
plans' defined benefit obligation by £30 million and £4 million,
respectively.
Other
In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees
II Limited) ruled that certain historical amendments for contracted out
defined benefit schemes were invalid if they were not accompanied by the
correct actuarial confirmation. Whilst the Court of Appeal upheld this ruling
in July 2024, there remains material uncertainty in relation to the legal
position itself and in particular, the application of the ruling.
Since the judgement, the Trustee has continued to liaise with its legal
adviser on developments. We understand that the Pensions Trust court case was
recently heard in the High Court and the judgement from that case is due out
some time in the Autumn. That case, as we understand it, included some
questions around section 37 confirmations. The Trustee's view is that it would
be prudent to wait and see what that judgement says and also whether the
Department for Work and Pensions responds in some way (e.g. by issuing
regulations to resolve the issues). Additionally, whilst the Trustee has not
conducted any detailed investigations at this point, we note their current
position that they have no reason to believe that section 37 confirmations
were not provided. The Group and the Trustee will at such stage assess
exposure based on the Virgin Media ruling of the Court of Appeal in July 2024
and any other relevant developments (e.g. awaited developments mentioned
above).
The Group's latest discussions on the ruling with the Trustee and its
potential implications for the UK pension plan were in November 2024 and since
then the Trustee has continued to monitor developments as further government
guidance and/or case law emerges and the Group will maintain a dialogue on
this matter. Since November 2024, the Group has liaised with the Trustee and
the Trustee's position remains as indicated above.
25 Share capital and other reserves
Share capital
Number £m
Issued and fully paid ordinary shares
At 1(st) April 2023 and 31(st) March 2024 193,589,845 215
Share buyback (16,302,747) (18)
At 31(st) March 2025 177,287,098 197
Details of outstanding allocations under the company's long term incentive
plans and awards under the deferred bonus which have yet to mature are
disclosed in note 29.
On 3(rd) July 2024, the company announced its intention to conduct a share
buyback programme for up to a maximum consideration of £250 million. The
first tranche of the share buyback programme of up to £125 million commenced
on 3(rd) July 2024 and completed on 23(rd) September 2024. On 24(th) September
2024, the company commenced the second tranche of up to £125 million, which
completed on 12(th) December 2024. During the year the company purchased
16,302,747 shares at a cost of £250 million excluding related stamp duty. All
of these shares were cancelled. Distributable reserves have been reduced by
£251 million, being the total amount of the share buyback. The total number
of treasury shares held was 9,448,309 (2024: 9,649,874) at a total cost of
£173 million (2024: £177 million).
The group and parent company's employee share ownership trust (ESOT) also buys
shares on the open market and holds them in trust for employees participating
in the group's executive long term incentive plans. At 31(st) March 2025, the
ESOT held 294,316 shares (2024: 511,623 shares) which had not yet vested
unconditionally to employees. Computershare Trustees (CI) Limited, as trustee
for the ESOT, has waived its dividend entitlement.
Dividends
2025 2024
£m £m
2022/23 final ordinary dividend paid ─ 55.00 pence per share - 101
2023/24 interim ordinary dividend paid ─ 22.00 pence per share - 40
2023/24 final ordinary dividend paid ─ 55.00 pence per share 101 -
2024/25 interim ordinary dividend paid ─ 22.00 pence per share 37 -
Total dividends 138 141
A final dividend of 55.0 pence per ordinary share has been proposed by the
board which will be paid on 5(th) August 2025 to shareholders on the register
at the close of business on 6(th) June 2025, subject to shareholders'
approval. The estimated amount to be paid is £92 million and has not been
recognised in these accounts.
The board is responsible for the group's capital management including the
approval of dividends. This includes an assessment of both the level of
reserves legally available for distribution and consideration as to whether
Johnson Matthey Plc would be solvent and maintain sufficient liquidity
following any proposed distribution. The board has assessed the level of
distributable profits as at 31(st) March 2025 and is satisfied that they are
sufficient to support the proposed dividend.
Other reserves
Capital redemption reserve, The capital redemption reserve represents the
cumulative nominal value of the company's ordinary shares repurchased and
subsequently cancelled.
Foreign currency translation reserve, The foreign currency translation reserve
comprises all foreign currency differences arising from the translation of the
financial statements of foreign operations.
Fair value through other comprehensive income reserve, The fair value through
other comprehensive income reserve represents the equity movements on
financial assets held within this category.
Hedging reserve, The hedging reserve comprises the effective portion of the
cumulative net change in the fair value of cash flow hedging instruments.
The Foreign currency translation reserve includes a £8 million gain (2024:
£2 million loss) in relation to continuing hedge relationships and £107
million loss (2024: £104 million loss) in relation to discontinued hedge
relationships. All cash flow hedge reserves balances relate to continuing
hedge relationships.
Hedging reserve
Capital Foreign Fair value through Forward Cross Forward Total
redemption currency other comprehensive income reserve currency currency metal other
reserve translation contracts contracts contracts reserves
reserve
£m £m £m £m £m £m £m
At 1(st) April 2023 13 60 (12) (4) 1 60 118
Cash flow hedges ─ gains / (losses) taken to equity - - - 3 (4) 27 26
Cash flow hedges ─ transferred to revenue (income statement) - - - 12 - (31) (19)
Cash flow hedges ─ transferred to cost of sales (income statement) - - - (10) - - (10)
Cash flow hedges ─ transferred to foreign exchange
(income statement) - - - - 2 - 2
Cash flow hedges ─ transferred to inventory (balance sheet) - - - - - - -
Fair value gains on net investment hedges taken to equity - 4 - - - - 4
Fair value losses on investments at fair value through
other comprehensive income - - (7) - - - (7)
Exchange differences on translation of foreign operations
taken to equity - (79) - - - - (79)
Tax on above items taken directly to or transferred from equity - - - (5) - 6 1
At 31(st) March 2024 13 (15) (19) (4) (1) 62 36
Cash flow hedges ─ gains / (losses) taken to equity - - - 3 1 (2) 2
Cash flow hedges ─ transferred to revenue (income statement) - - - (2) - (41) (43)
Cash flow hedges ─ transferred to disposal of subsidiaries
(income statement) - - - 1 - - 1
Cash flow hedges ─ transferred to foreign exchange
(income statement) - - - - 2 - 2
Fair value gains on net investment hedges taken to equity - 7 - - - - 7
Fair value losses on investments at fair value through
other comprehensive income - - (2) - - - (2)
Exchange differences on translation of foreign operations
taken to equity - (82) - - - - (82)
Cancelled ordinary shares from share buyback 18 - - - - - 18
Tax on above items taken directly to or transferred from equity - - - - - 10 10
At 31(st) March 2025 31 (90) (21) (2) 2 29 (51)
Capital
The group's policy for managing capital is to maintain an efficient balance
sheet to ensure that the group always has sufficient resources to be able to
invest in future growth. During the year, the group complied with all
externally imposed capital requirements to which it is subject, including
ensuring it has sufficient distributable reserves to pay the dividends and
complete the share buyback.
The directors determine the appropriate capital structure of the group,
specifically how much capital is raised from shareholders (equity) and how
much is borrowed from financial institutions (debt) in order to finance the
group's activities. The group defines its capital employed as equity, as
presented in the statement of financial position, plus net debt. Capital
employed is managed on a basis that enables the group to continue trading as a
going concern, while delivering acceptable returns to shareholders. The group
is committed to managing its cost of capital by maintaining an appropriate
capital structure, with a balance between equity and net debt.
The group utilises its capital employed to fund its business. The group
reviews its capital employed on a regular basis and makes use of several
indicative ratios which are appropriate to the nature of its operations and
consistent with conventional industry measures. The principal ratios used
include net debt to underlying EBITDA, return on capital employed and
underlying earnings per share - refer to note 33 for further information.
The dividend policy also forms part of the Board's capital management policy,
and the board ensures there is appropriate earnings cover for the dividend
proposed at both the interim and year-end.
26 Disposals
Medical Device Components
On 1(st) July 2024, the group completed the sale of its Medical Device
Components business for an enterprise value of £555 million (£559 million on
a debt free basis after working capital adjustments). The business was
disclosed as a disposal group held for sale as at 31(st) March 2024.
Battery Systems
On 30(th) April 2024, the group completed the sale of its Battery Systems
business for an enterprise value of £14 million (£19 million on a debt free
basis after working capital adjustments). The business was disclosed as a
disposal group held for sale as at 31(st) March 2024.
Battery Materials Poland
On 24(th) July 2024, the group completed the sale of the land and buildings of
our previous Battery Materials business in Poland for £26 million. This was
disclosed as assets held for sale as at 31(st) March 2024.
All held for sale balances from the prior year financial statements were
disposed of during the current year. With the exception of £10 million of
cash in Medical Device Components not classified as held for sale at year end,
the balances below are materially consistent with the prior year held for sale
balances.
2025
Medical Device Other
Components disposals Total 2024
£m £m £m £m*
Proceeds
Cash consideration 559 38 597 59
Cash and cash equivalents disposed (10) - (10) (18)
Net cash consideration 549 38 587 41
Disposal costs paid (12) (6) (18) (9)
Net cash inflow 537 32 569 32
Assets and liabilities disposed
Non-current assets
Property, plant and equipment 24 25 49 10
Right-of-use assets 4 - 4 9
Goodwill 3 - 3 -
Current assets
Inventories 8 22 30 5
Trade and other receivables 18 20 38 32
Cash and cash equivalents 10 - 10 18
Deferred tax assets - 3 3 3
Current liabilities
Trade and other payables (6) (20) (26) (12)
Current income tax liabilities (1) (1) (2) -
Lease liabilities (4) - (4) -
Non-current liabilities
Lease liabilities - (1) (1) (11)
Provisions (1) (1) (2) -
Net assets disposed 55 47 102 54
2025
Medical Device Other
Components disposals Total 2024
£m £m £m £m*
Cash consideration 559 38 597 59
Deferred consideration - 7 7 4
Working capital adjustments at time of disposal - - - 4
Less: carrying amount of net assets sold (55) (47) (102) (54)
Less: disposal costs (13) (9) (22) (17)
Cumulative currency translation gain / (loss) recycled from other - 2 2 (5)
comprehensive income
Profit recognised in the income statement 491 (9) 482 (9)
* The prior year comparative includes £4 million profit on disposal for
Diagnostic Services, loss of £4 million for Johnson Matthey Catalysts LLC and
profit of £nil for Battery Materials Germany, and other disposal related
costs of £9 million.
Disposal proceeds
During the period we received £3 million of proceeds relating to the
Diagnostic Services disposal in the prior year. This was recognised within
profit on disposal in the prior year.
27 Financial risk management
The group's activities expose it to a variety of financial risks, including
credit risk, market risk and liquidity risk. Market risk includes foreign
currency risk, interest rate risk and price risk. The financial risks are
managed by the group, under policies approved by the board. The financial risk
management is carried out by a centralised group treasury function. Group
Treasury's role is to optimise the group's liquidity, mitigate financial risks
and provide treasury services to the group's operating businesses. The group
uses derivative financial instruments, including forward currency contracts,
interest rate swaps and currency swaps, to manage the financial risks
associated with its underlying business activities and the financing of those
activities. Some derivative financial instruments used to manage financial
risk are not designated as hedges and, therefore, are classified as at fair
value through profit or loss. The group does not undertake any speculative
trading activity in financial instruments.
Credit risk
Within certain businesses, the group derives a significant proportion of its
revenue from sales to major customers. Sales to individual customers are large
if the value of precious metals is included in the price. The failure of any
such company to honour its debts could materially impact the group's results.
The group derives significant benefit from trading with its customers and
manages the risk at many levels. Each business has a credit committee that
regularly monitors its exposure. The Audit Committee receives a report every
six months that details all significant credit limits, amounts due and overdue
within the group, and the relevant actions being taken. At 31(st) March 2025,
trade receivables for the group amounted to £925 million (2024: £964
million), of which £706 million (2024: £792 million) are in Clean Air which
mainly supplies car and truck manufacturers and component suppliers in the
automotive industry. Although Clean Air has a wide range of customers, the
concentrated nature of this industry means that amounts owed by individual
customers can be large and, in the event that one of those customers
experiences financial difficulty, there could be a material adverse impact on
the group. Other parts of the group tend to sell to a larger number of
customers and amounts owed tend to be lower. At 31(st) March 2025, no single
outstanding balance exceeded 2% (2024: 2%) of revenue.
The credit profiles of the group's customers are obtained from credit rating
agencies where possible and are closely monitored. The scope of these reviews
includes amounts overdue and credit limits. The group's exposure to credit
risk is influenced mainly by the individual characteristics of each customer.
However, risk associated with the industry and country in which customers
operate may also influence the credit risk. The credit quality of customers is
assessed against the appropriate credit ratings, financial strength, trading
experience and market position to define credit limits. Controls and risk
mitigants include daily monitoring of exposures, investing in counterparties
with investment grade ratings, restricting the amount that can be invested
with one counterparty and credit-rating mitigation techniques. Generally,
payments are made promptly in the automotive industry and in the other markets
in which the group operates.
A provision matrix is used to calculate lifetime expected credit losses using
historical loss rates based on days past due and a broad range of
forward-looking information, including country and market growth forecasts.
This year, expected credit losses on unimpaired trade and contract receivables
reduced to £10 million (2024: £12 million) driven by a lower trade
receivables balance.
Trade receivables are specifically impaired when the amount is in dispute,
customers are in financial difficulty or for other reasons which imply there
is doubt over the recoverability of the debt. They are written off when there
is no reasonable expectation of recovery, based on an estimate of the
financial position of the counterparty.
Movements in the allowance for credit losses on trade and contract receivables
are as follows:
2025 2024
£m £m
At beginning of year 29 30
Charge for year 4 11
Utilised - (2)
Released (3) (10)
At end of year 30 29
The group's maximum exposure to default on trade and contract receivables is
£1,008 million (2024: £1,079 million).
The group's financial assets included in other receivables are all current and
not impaired.
The credit risk on cash and deposits and derivative financial instruments is
limited because the counterparties with significant balances are banks with
strong credit ratings. The exposure to individual banks is monitored
frequently against internally-defined limits, together with each bank's credit
rating and credit default swap prices. At 31(st) March 2025, the maximum net
exposure with a single bank for cash and deposits was £169 million (2024:
£81 million), whilst the largest mark to market exposure for derivative
financial instruments to a single bank was £12 million (2024: £8 million).
The group also uses money market funds to invest surplus cash thereby further
diversifying credit risk and, at 31(st) March 2025, the group's exposure to
these funds was £435 million (2024: £334 million). The amounts on deposit
at the year end represent the group's maximum exposure to credit risk on cash
and deposits. Expected credit losses on cash and cash equivalents are
immaterial.
Foreign currency risk
The group operates globally with a significant amount of its profit earned
outside the UK. The main impact of movements in exchange rates on the group's
results arises on translation of overseas subsidiaries' profits into sterling.
The largest exposure is to the euro and a 5% (5.9 cent (2024: 5.8 cent))
movement in the average exchange rate for the euro against sterling would have
had a £10 million (2024: £11 million) impact on underlying operating profit.
The group is also exposed to the US dollar and a 5% (6.4 cent (2024: 6.3
cent)) movement in the average exchange rate for the US dollar against
sterling would have had a £5 million (2024: £7 million) impact on underlying
operating profit. This exposure is part of the group's economic risk of
operating globally which is essential to remain competitive in the markets in
which it operates.
The group matches foreign currency assets and liabilities (where these differ
to the functional currency of the relevant subsidiary) to avoid the risk of a
material impact on the income statement resulting from movements in exchange
rates. The group does, however, have foreign exchange exposure on movements
through equity related to cash flow and net investment hedges. A 10%
depreciation or appreciation in the US dollar and euro exchange rates against
sterling would increase / (decrease) other reserves as follows:
10% depreciation 10% appreciation
2025 2024 2025 2024
£m £m £m £m
Cash flow hedges 17 16 (14) (22)
Net investment hedges (34) (22) 24 21
For the net investment hedges, these movements would be fully offset in
reserves by an opposite movement on the retranslation of the net assets of the
overseas subsidiaries.
Investments in foreign operations
To protect the group's sterling balance sheet and reduce cash flow risk, the
group has financed most of its investment in the US and Europe by borrowing US
dollars and euros, respectively. Although much of this funding is obtained by
directly borrowing the relevant currency, a part is achieved through currency
swaps which can be more efficient and reduce costs.
The group has designated US dollar and euro loans and a cross currency swap as
hedges of net investments in foreign operations as they hedge changes in the
value of the subsidiaries' net assets against movements in exchange rates. The
change in the value of the net investment hedges from movements in foreign
currency exchange rates is recognised in equity and is offset by an equal and
opposite movement in the carrying value of the net assets of the subsidiaries.
All critical terms of the hedging instruments and hedged items matched during
the year and, therefore, hedge ineffectiveness was immaterial. The hedge ratio
is 1:1.
Year ended 31(st) March 2025
US dollar and euro loans(1) Cross currency swap(2) FX Total
Forwards
£m £m £m £m
Carrying value of hedging instruments at 31(st) March 2025 (549) (3) - (552)
Change in carrying value of hedging instruments recognised in equity
during the year 5 - 2 7
Change in fair value of hedged items during the year used to determine
hedge effectiveness (5) - (2) (7)
Year ended 31(st) March 2024
US dollar and euro loans(1) Cross currency swap(2) FX Total
Forwards
£m £m £m £m
Carrying value of hedging instruments at 31(st) March 2024 (160) (3) (2) (165)
Change in carrying value of hedging instruments recognised in equity
during the year 4 2 (2) 4
Change in fair value of hedged items during the year used to determine
hedge effectiveness (4) (2) 2 (4)
(1) The designated hedging instruments are $50 million of the 3.79% $130
million Bonds 2025, $30 million of the 3.14% $130 million Bonds 2025, 3.97%
$120 million Bonds 2027, 3.39% $180 million Bonds 2028, $29.7 million of the
4.1% $30 million Bonds 2030, 1.81% €90 million Bonds 2028, €10 million of
the 2.92% €25 million Bonds 2030, €17 million of the 1.9% €225 million
Bonds 2032, €60 million of the 4.03% €125 million Bonds 2031, 4.19% €94
million Bonds 2034 and €8 million of the 4.32% €20 million Bonds 2036.
(2) The designated hedging instrument are a cross currency swap expiring in
June 2025 whereby the group pays 2.609% fixed on €77 million and receives
2.83% fixed on £65 million, a cross currency swap expiring in 2029 whereby
the group pays 1.712% fixed on €46 million and receives 2.6723% fixed on
£38 million, a cross currency swap expiring in 2031 whereby the group pays
4.03% fixed on €45 million and receives 5.37% fixed on £38 million, a cross
currency swap expiring in 2031 whereby the group pays 4.04% fixed on €40.5
million and receives 5.20% fixed on £34 million and a cross currency swap
expiring in 2034 whereby the group pays 4.16% fixed on €30.6 million and
receives 5.31% fixed on £26 million.
Forecast receipts and payments in foreign currencies
The group uses forward foreign exchange contracts to hedge foreign exchange
exposures arising on forecast receipts and payments in foreign currencies.
These are designated and accounted for as cash flow hedges. The group's policy
is to hedge between 50% and 80% of forecast receipts and payments in foreign
currencies over the next 12 months.
For hedges of forecast receipts and payments in foreign currencies, the
critical terms of the hedging instruments match exactly with the terms of the
hedged items and, therefore, the group performs a qualitative assessment of
effectiveness. Ineffectiveness may arise if the timing of the forecast
transaction changes from what was originally estimated or if there are changes
in the credit risk of the group or the derivative counterparty. Hedge
ineffectiveness was immaterial during the year. The hedge ratio is 1:1.
Year ended 31(st) March 2025
Sterling / US dollar Sterling / euro Other Total
£m £m £m £m
Carrying value of hedging instruments at 31(st) March 2025 - assets 5 - 2 7
- liabilities (1) - (1) (2)
Change in carrying value of hedging instruments recognised in equity
during the year 4 (1) (1) 2
Change in fair value of hedged items during the year used to determine
hedge effectiveness (4) 1 1 (2)
Notional amount(1) 152 58 22 -
Year ended 31(st) March 2024
Sterling / US dollar Sterling / euro Other Total
£m £m £m £m
Carrying value of hedging instruments at 31(st) March 2024 - assets 4 1 3 8
- liabilities (4) - (1) (5)
Change in carrying value of hedging instruments recognised in equity
during the year 7 (1) (3) 3
Change in fair value of hedged items during the year used to determine
hedge effectiveness (7) 1 3 (3)
Notional amount(1) 477 76 44 -
(1) The notional amount is the sterling equivalent of the net currency amount
purchased or sold.
The weighted average exchange rates on sterling / US dollar and sterling /
euro forward foreign exchange contracts are 1.26 and 0.85 (2024: 1.26 and
0.87), respectively. The hedged, highly probable forecast transactions
denominated in foreign currencies are expected to occur over the next 12
months.
Foreign currency borrowings
The group has designated five US dollar fixed interest rate to sterling fixed
interest rate cross currency swaps as cash flow hedges. The first swap hedges
the movement in the cash flows on $100 million of the 3.14% $130 million bonds
2025 attributable to changes in the US dollar / sterling exchange rate, the
second swap hedges the movement in the cash flows on the 3.00% $50 million
bonds 2029 attributable to changes in the US dollar / sterling exchange rate,
the third swap hedges the movement in the cash flows on $50 million of the
5.02% $95 million bonds 2031 attributable to changes in the US dollar /
sterling exchange rate, the fourth swap hedges the movement in the cash flows
on $45 million of the 5.02% $95 million bonds 2031 attributable to changes in
the US dollar / sterling exchange rate and the fifth swap hedges the movement
in the cash flows on the 5.18% $34 million bonds 2034 attributable to changes
in the US dollar / sterling exchange rate. The currency swaps have similar
critical terms as the hedged items, such as reference rate, reset dates,
payment dates, maturity and notional amounts. As all critical terms matched
during the year, hedge ineffectiveness was immaterial. The hedge ratio is 1:1.
The interest element of the swaps is recognised in the income statement each
year.
Cross currency swap
2025 2024
£m £m
Carrying value of hedging instruments at 31(st) March(1) 16 15
Change in carrying value of hedging instruments recognised in equity during 1 (4)
the year
Change in fair value of hedged items during the year used to determine hedge (1) 4
effectiveness
(1) The designated hedging instruments are five cross currency swaps, one
expiring in 2025 whereby the group pays 2.83% fixed on £65 million and
receives 3.14% fixed on $100 million, the second expiring in 2029 whereby
the group pays 2.67% fixed on £38 million and receives 3.00% fixed on $50
million, the third expiring in 2031 whereby the group pays 5.37% fixed on £38
million and receives 5.02% fixed on $50 million, the fourth expiring in 2031
whereby the group pays 5.20% fixed on £34 million and receives 5.02% $45
million and the fifth one expiring in 2034 whereby the group pays 5.31% fixed
on £26 million and receives 5.18% fixed on $34 million.
Interest rate risk
The group's interest rate risk arises from fixed rate borrowings (fair value
risk) and floating rate borrowings (cash flow risk) as well as cash deposits
and short term investments. Its policy is to optimise interest cost and reduce
volatility in reported earnings and equity. The group manages its risk by
reviewing the profile of debt regularly and by selectively using interest rate
swaps to maintain borrowings at competitive rates. At 31(st) March 2025, 68%
(2024: 63%) of the group's borrowings was at fixed rates with an average
interest rate of 3.5% (2024: 3.1%). The remaining debt is floating rate. Based
on the group's borrowings at floating rates, after taking into account the
effect of the swaps, a 1% change in all interest rates during the current year
would have a £5 million impact on the group's profit before tax (2024: £5
million).
The group has designated three (2024: three) fixed rate to floating interest
rate swaps as fair value hedges as they hedge the changes in fair value of
bonds attributable to changes in interest rates. All hedging instruments have
maturities in line with the repayment dates of the hedged bonds and the cash
flows of the instruments are consistent. All critical terms of the hedging
instruments and hedged items matched during the year and, therefore, hedge
ineffectiveness was immaterial. Hedge ineffectiveness is recognised in
'Interest payable on financial liabilities held at amortised cost and interest
on related swaps' in note 8.
2025 2024
£m £m
Carrying value of hedging instruments at 31(st) March(1) (5) (10)
Amortised cost (140) (143)
Fair value adjustment 9 8
Carrying value of hedged items at 31(st) March(1) (131) (135)
Change in carrying value of hedging instruments recognised in profit or loss 5 5
during the year
Change in fair value of hedged items during the year used to determine hedge 1 (9)
effectiveness
(1) The hedged items in the current year are the 1.40% €77 million Bonds
2025 and 1.81% €90 million Bonds 2028. Interest rate swaps have been
contracted with aligned notional amounts and maturities to the bonds with the
effect that the group pays an average floating rate of six-month LIBOR plus
0.64% on the US dollar bonds and six-month EURIBOR plus 0.94% on the euro
bonds.
Price risk
Fluctuations in precious metal prices have an impact on the group's financial
results. Our policy for all manufacturing businesses is to limit this exposure
by hedging against future price changes where such hedging can be done at
acceptable cost. The group enters into forward precious metal price contracts
for the receipt or delivery of precious metal. The group does not take
material price exposures on metal trading. A proportion of the group's
precious metal inventories are unhedged due to the ongoing risk over security
of supply.
Liquidity risk
The group's funding strategy includes maintaining appropriate levels of
working capital, undrawn committed facilities and access to the capital
markets. We regularly review liquidity levels and sources of cash, and we
maintain access to committed credit facilities and debt capital markets. At
31(st) March 2025, the group had borrowings under committed bank facilities of
£nil (2024: £nil). The group also has a number of uncommitted facilities and
overdraft lines at its disposal.
The group has a £1 billion revolving credit facility with a maturity date of
March 2027 which includes Environmental, Social and Governance key performance
indicators which provides the group with a nominal interest saving or cost
depending on our performance.
The group has three sustainability-linked private placements (€225 million,
£35 million and $50 million). The notes have interest rates linked with
Johnson Matthey's Key Performance Indicator for the reduction of its Scope 1
and 2 greenhouse gas emissions and are among the first sustainability-linked
financing in the market from a UK corporate issuer.
2025 2024
£m £m
Expiring in more than one year 1,000 1,000
Undrawn committed bank facilities 1,000 1,000
The maturity analyses for financial liabilities showing the remaining
contractual undiscounted cash flows, including future interest payments, at
current year exchange rates and assuming floating interest rates remain at the
latest fixing rates, are:
At 31(st) March 2025 Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
£m £m £m £m £m
Bank overdrafts 24 - - - 24
Bank and other loans - principal 333 - 781 532 1,646
Bank and other loans - interest payments 52 50 88 50 240
Lease liabilities - principal 6 7 14 19 46
Lease liabilities - interest payments 2 2 3 4 11
Financial liabilities in trade and other payables 1,879 6 - - 1,885
Total non-derivative financial liabilities 2,296 65 886 605 3,852
Forward foreign exchange contracts - payments 155 - - - 155
Forward foreign exchange contracts - receipts (152) - - - (152)
Currency swaps - payments 971 - - - 971
Currency swaps - receipts (959) - - - (959)
Cross currency interest rate swaps - payments 140 10 67 218 435
Cross currency interest rate swaps - receipts (155) (11) (72) (223) (461)
Interest rate swaps - payments 69 3 80 - 152
Interest rate swaps - receipts (66) (1) (78) - (145)
Total derivative financial liabilities 3 1 (3) (5) (4)
At 31(st) March 2024 Within 1 year 1 to 2 years 2 to 5 years After 5 years Total
£m £m £m £m £m
Bank overdrafts 12 - - - 12
Bank and other loans - principal 105 317 719 312 1,453
Bank and other loans - interest payments 53 44 89 14 200
Lease liabilities - principal 8 6 9 9 32
Lease liabilities - principal - classified as held for sale 1 1 3 - 5
Lease liabilities - interest payments 1 1 2 8 12
Financial liabilities in trade and other payables 2,032 2 - - 2,034
Financial liabilities in trade and other payables classified as held for sale 27 - - - 27
Total non-derivative financial liabilities 2,239 371 822 343 3,775
Forward foreign exchange contracts - payments 713 7 - - 720
Forward foreign exchange contracts - receipts (705) (7) - - (712)
Currency swaps - payments 760 - - - 760
Currency swaps - receipts (755) - - - (755)
Cross currency interest rate swaps - payments 4 133 2 78 217
Cross currency interest rate swaps - receipts (6) (147) (4) (78) (235)
Interest rate swaps - payments 7 72 88 - 167
Interest rate swaps - receipts (2) (68) (81) - (151)
Total derivative financial liabilities 16 (10) 5 - 11
Offsetting financial assets and liabilities
The group offsets financial assets and liabilities when it currently has a
legally enforceable right to offset the recognised amounts and it intends to
either settle on a net basis or realise the asset and settle the liability
simultaneously. The following financial assets and liabilities are subject to
offsetting or enforceable master netting arrangements:
At 31(st) March 2025 Gross Amounts Net amounts Amounts Net
financial set off in balance not set off(1)
assets / sheet
(liabilities)
£m £m £m £m £m
Derivative financial instruments - assets - current 55 - 55 (9) 46
Derivative financial instruments - assets - non-current 4 - 4 (4) -
Derivative financial instruments - liabilities - current (14) - (14) 4 (10)
Derivative financial instruments - liabilities - non-current (9) - (9) 9 -
At 31(st) March 2024 Gross Amounts Net amounts Amounts Net
financial set off in balance not set off(1)
assets / sheet
(liabilities)
£m £m £m £m £m
Derivative financial instruments - assets - current 53 - 53 (7) 46
Derivative financial instruments - assets - non-current 49 - 49 (5) 44
Derivative financial instruments - liabilities - current (11) - (11) 7 (4)
Non-current borrowings (1,339) - (1,339) 5 (1,334)
(1) Agreements with derivative counterparties are based on an ISDA Master
Agreement. Under these arrangements, whilst the group does not have a legally
enforceable right of set off, where certain credit events occur, such as
default, the net position receivable from or payable to a single counterparty
in the same currency would be taken as owing and all the relevant arrangements
terminated.
Note, to simplify the primary statements we have represented the prior year
comparative balances in the Statement of Financial Position to include 'Other
financial assets and liabilities' and 'Interest rate swaps' within the
singular line 'Derivative financial instruments'.
28 Fair values
Fair value hierarchy
Fair values are measured using a hierarchy where the inputs are:
· Level 1 ─ quoted prices in active markets for identical assets or
liabilities.
· Level 2 ─ not level 1 but are observable for that asset or
liability either directly or indirectly.
· Level 3 ─ not based on observable market data (unobservable).
Fair value of financial instruments
Certain of the group's financial instruments are held at fair value. The fair
value of a financial instrument is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the balance sheet date.
The fair value of forward foreign exchange contracts, interest rate swaps,
forward precious metal price contracts and currency swaps is estimated by
discounting the future contractual cash flows using forward exchange rates,
interest rates and prices at the balance sheet date.
The fair value of trade and other receivables measured at fair value is the
face value of the receivable less the estimated costs of converting the
receivable into cash.
The fair value of money market funds is calculated by multiplying the net
asset value per share by the investment held at the balance sheet date.
There were no transfers of any financial instrument between the levels of the
fair value hierarchy during the current or prior years.
2025 2024 Fair value Note
£m £m hierarchy
Level
Financial instruments measured at fair value
Non-current
Investments at fair value through other comprehensive income(1) 38 40 1 -
Derivative financial instruments - assets(2) 4 49 2 18
Borrowings - (3) 2 20
Derivative financial instruments - liabilities(2) (9) (10) 2 18
Current
Trade receivables(3) 158 178 2 17
Other receivables(4) 1 3 2 17
Cash and cash equivalents - money market funds 435 334 2 -
Cash and cash equivalents - cash and deposits 23 12 2 -
Derivative financial instruments - assets(2) 55 53 2 18
Derivative financial instruments - liabilities(2) (14) (11) 2 18
Financial instruments not measured at fair value
Non-current
Borrowings (1,301) (1,336) - 20
Lease liabilities (40) (24) - 12
Trade and other receivables 58 60 - 17
Other payables (6) (2) - 19
Current
Amounts receivable under precious metal sale and repurchase agreements 300 398 - 17
Amounts payable under precious metal sale and repurchase agreements (687) (797) - 19
Cash and cash equivalents - cash and deposits 440 196 - -
Cash and cash equivalents - bank overdrafts (24) (12) - -
Borrowings (333) (110) - 20
Lease liabilities (6) (8) - 12
Trade and other receivables 862 926 - 17
Trade and other payables (1,210) (1,235) - 19
(1) Investments at fair value through other comprehensive income are quoted
bonds purchased to fund pension deficits (£35 million) and investments held
at fair value through other comprehensive income (£3 million).
(2) Includes forward foreign exchange contracts, forward precious metal price
contracts and currency and interest rate swaps.
(3) Trade receivables held in a part of the group with a business model to
hold trade receivables for collection or sale. The remainder of the group
operates a hold to collect business model and receives the face value, plus
relevant interest, of its trade receivables from the counterparty without
otherwise exchanging or disposing of such instruments.
(4) Other receivables with cash flows that do not represent solely the payment
of principal and interest.
The fair value of financial instruments, excluding accrued interest, is
approximately equal to book value except for:
2025 2024
Carrying Fair Carrying Fair
amount value amount value
£m £m £m £m
US Dollar Bonds 2025, 2027, 2028, 2029, 2030, 2031 and 2034 (592) (571) (507) (474)
Euro Bonds 2025, 2028, 2030, 2031, 2032, 2034 and 2036 (539) (520) (348) (320)
Sterling Bonds 2024, 2025 and 2029 (80) (74) (145) (137)
KfW US Dollar Loan 2024 - - (40) (38)
The fair values are calculated using level 2 inputs by discounting future cash
flows to net present values using appropriate market interest rates prevailing
at the year end.
29 Share-based payments
The total expense recognised during the year in respect of equity-settled
share-based payments was £18 million (2024: £17 million).
The group currently operates various share-based payment schemes; a
Performance share plan (PSP), a Restricted share plan (RSP), a Deferred bonus
scheme and a Share Incentive Plan (SIP). Further details of the directors'
remuneration under share-based payment plans are given in the Remuneration
Report.
PSP
From 2017, shares are awarded to certain of the group's executive directors
and senior managers under the PSP based on a percentage of salary and are
subject to performance targets over a three-year period. The performance
targets are based on underlying EPS growth, Relative and Total Shareholder
Return, Return on Capital Employed and strategic and sustainability targets.
Subject to the performance conditions being met the shares will vest after
which the directors will be required to hold any vested shares until the fifth
anniversary of the award. The Remuneration Committee is entitled to claw back
the awards to the executive directors in cases of misstatement or misconduct.
RSP
From 2023, shares are awarded to employees in exceptional circumstances to
recruit, retain and recognise individuals. Awards under the RSP are not
subject to performance targets. The shares are subject only to the condition
that the employee remains employed by the group on the vesting date (ranging
from one to three years after the award date).
Deferred bonus
A proportion of the bonus payable to executive directors and senior managers
is awarded as shares and deferred for three years. The Remuneration Committee
is entitled to claw back the deferred element in cases of misstatement or
misconduct or other relevant reason as determined by it.
All employee share incentive plan (SIP) - UK and overseas
Under the SIP, all employees with at least one year of service with the group
and who are employed by a participating group company are entitled to
contribute up to 2.5% of base pay each month, subject to a £125 per month
limit. The SIP trustees buy shares (partnership shares) at market value each
month with the employees' contributions. For each partnership share purchased,
the group purchases two shares (matching shares) which are awarded to the
employee.
In the UK SIP, if the employee sells or transfers partnership shares within
three years of the date of award, the linked matching shares are forfeited.
In the overseas SIP, partnership shares and matching shares are subject to a
three-year holding period and cannot be sold or transferred during that time.
During the year, 410,706 (2024: 374,840) matching shares under the SIP were
awarded to employees. These are nil cost awards on which performance
conditions are substantially completed at the date of grant and, consequently,
the fair value of these awards is based on the market value of the shares at
that date.
Activity in the year in relation to these share plans is shown below:
Year ended 31(st) March 2025 Year ended 31(st) March 2024
PSP RSP Deferred Bonus PSP RSP Deferred Bonus
Outstanding at the start of the year 2,339,767 489,379 324,719 1,728,934 996,190 211,310
Awarded during the year 1,249,978 76,925 133,185 1,349,149 53,614 145,794
Forfeited during the year (349,590) (34,667) - (204,808) (49,890) -
Released during the year (425,034) (304,255) (103,938) (533,508) (510,535) (32,385)
Outstanding at the end of the year 2,815,121 227,382 353,966 2,339,767 489,379 324,719
Year ended 31(st) March 2025
PSP Exceptional PSP(1) Exceptional RSP(2) Exceptional RSP(2) Exceptional RSP(2) Deferred Bonus
Fair value of shares awarded (pence) 1,389.6 1,293.0 1,389.6 1,457.9 1,529.6 1,325.0
Share price at the date of award (pence) 1,603.0 1,444.0 1,603.0 1,603.0 1,603.0 1,603.0
Dividend rate 4.80% 5.60% 4.80% 4.80% 4.80% 4.80%
Year ended 31(st) March 2024
PSP Exceptional RSP Exceptional RSP Exceptional RSP Deferred Bonus
Fair value of shares awarded (pence) 1,634.9 1,634.9 1,685.7 1,738.0 1,585.7
Share price at the date of award (pence) 1,792.0 1,792.0 1,792.0 1,792.0 1,792.0
Dividend rate 3.07% 3.07% 3.07% 3.07% 3.07%
(1) The group awarded an exceptional PSP scheme on 11(th) February 2025 of
duration two years.
(2) The group awarded three exceptional RSP schemes on 1(st) August 2024 of
duration one, two and three years.
The fair value of shares awarded was calculated using a modified Black Scholes
model based on the share price at the date of award adjusted for the present
value of the expected dividends that will not be received at an expected
dividend rate.
At 31(st) March 2025, the weighted average remaining contracted life of the
awarded PSP shares is 1.5 years (2024: 1.7 years) and 0.6 years (2024: 0.6
years) for the awarded RSP shares.
30 Commitments
Capital commitments - future capital expenditure contracted but not provided Group Parent company
2025 2024 2025 2024
£m £m £m £m
Property, plant and equipment 155 68 131 28
Other intangible assets 28 14 28 14
At 31(st) March 2025, precious metal leases were £202 million (2024: £197
million) at year end prices.
31 Contingent liabilities
The group is involved in various disputes and claims which arise from time to
time in the course of its business including, for example, in relation to
commercial matters, product quality or liability, employee matters and tax
audits. The group is also involved from time to time in the course of its
business in legal proceedings and actions, engagement with regulatory
authorities and in dispute resolution processes. These are reviewed on a
regular basis and, where possible, an estimate is made of the potential
financial impact on the group. In appropriate cases a provision is recognised
based on advice, best estimates and management judgement. Where it is too
early to determine the likely outcome of these matters, no provision is made.
Whilst the group cannot predict the outcome of any current or future such
matters with any certainty, it currently believes the likelihood of any
material liabilities to be low, and that such liabilities, if any, will not
have a material adverse effect on its consolidated income, financial position
or cash flows.
Following the sale of its Health business in May 2022, the purchaser of the
Health business, Veranova Bidco LP, has issued a claim against the group in
connection with: i) certain alleged representations said to have been made
during the course of the negotiation of the sale and purchase agreement dated
16(th) December 2021 ("SPA"); and, ii) certain warranties given in the SPA at
the time of signing. Having reviewed the claim with its advisers, the group is
of the opinion that it has a defensible position in respect of these
allegations and is vigorously defending its position. The outcome of the legal
proceedings relating to this matter is not certain, since the issues of
liability and quantum will be for determination by the court at trial.
Accordingly, the group is unable to make a reliable estimate of the possible
financial impact at this stage, if any.
32 Transactions with related parties
The group has a related party relationship with its associates, its
post-employment benefit plans (note 24) and its key management personnel
(below). Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on consolidation and are
not disclosed in this note.
During the year the group had sales of £9 million (2024: £17 million) with
Veranova. The amounts owed by Veranova were £1 million at 31(st) March 2025
(2024: £1 million).
The key management of the group and parent company consist of the Board of
Directors and the members of the Group Leadership Team (GLT). During the year
ended 31(st) March 2025, the GLT had an average of 11 members (2024:
13 members). The only transactions with any key management personnel were
compensation charged in the year which was:
2025 2024
£m £m
Short term employee benefits 8 9
Share-based payments 2 1
Non-executive directors' fees and benefits 1 1
Total compensation of key management personnel 11 11
There were no balances outstanding as at 31(st) March 2025 (2024: £nil).
Information on directors' remuneration is given in the Remuneration Report.
Guarantees of subsidiaries' liabilities are disclosed in note 46.
33 Non-GAAP measures
The group uses various measures to manage its business which are not defined
by generally accepted accounting principles (GAAP). The group's management
believes these measures provide valuable additional information to users of
the accounts in understanding the group's performance. Certain of these
measures are financial Key Performance Indicators which measure progress
against our strategy.
All non-GAAP measures are on a continuing operations basis.
Definitions
Measure Definition Purpose
Sales(1) Revenue excluding cost of precious metals to customers and the precious metal Provides a better measure of the growth of the group as revenue can be heavily
content of products sold to customers. distorted by year on year fluctuations in the market prices of precious metals
and, in many cases, the value of precious metals is passed directly on to
customers.
Underlying operating profit(2) Operating profit excluding non-underlying items. Provides a measure of operating profitability that is comparable over time.
Underlying operating profit margin(1, 2) Underlying operating profit divided by sales. Provides a measure of how we convert our sales into underlying operating
profit and the efficiency of our business.
Underlying profit before tax(2) Profit before tax excluding non-underlying items. Provides a measure of profitability that is comparable over time.
Underlying profit for the year(2) Profit for the year excluding non-underlying items and related tax effects. Provides a measure of profitability that is comparable over time.
Underlying earnings per share(1, 2) Underlying profit for the year divided by the weighted average number of Our principal measure used to assess the overall profitability of the group.
shares in issue.
Return on capital employed (ROCE)(1,3) Annualised underlying operating profit divided by the average equity plus Provides a measure of the group's efficiency in allocating the capital under
average net debt. The average is calculated using the opening balance for the its control to profitable investments.
financial year and the closing balance.
Average working capital days (excluding precious metals)(1) Monthly average of non-precious metal related inventories, trade and other Provides a measure of efficiency in the business with lower days driving
receivables and trade and other payables (including any classified as held for higher returns and a healthier liquidity position for the group.
sale) divided by sales for the last three months multiplied by 90 days.
Free cash flow Net cash flow from operating activities after net interest paid, net purchases Provides a measure of the cash the group generates through its operations and
of non-current assets and investments, proceeds from disposal of businesses, divestments, less capital expenditure.
dividends received from joint ventures and associates and the principal
element of lease payments.
Net debt (including post tax pension deficits) to underlying EBITDA Net debt, including post tax pension deficits and quoted bonds purchased to Provides a measure of the group's ability to repay its debt. The group has a
fund the UK pension (excluded when the UK pension plan is in surplus) divided long-term target of net debt (including post tax pension deficits) to
by underlying EBITDA for the same period. underlying EBITDA of between 1.5 and 2.0 times, although in any given year it
may fall outside this range depending on future plans.
(1) Key Performance Indicator.
(2) Underlying profit measures are before profit or loss on disposal of
businesses, amortisation of acquired intangibles, major impairment and
restructuring charges, share of profits or losses from non-strategic equity
investments and, where relevant, related tax effects. These items have been
excluded by management as they are not deemed to be relevant to an
understanding of the underlying performance of the business.
(3) Return on capital employed is a new key performance indicator in the year
end accounts. This was included as a performance measure in the 2024
Performance Share Plan award. Inclusion of this measure incentivises delivery
of the transformation programme across JM and aligns with investor focus on
our ability to return value on investments.
Underlying profit measures exclude the following non-underlying items which
are shown separately on the face of the income statement:
· Profit / (loss) on disposal of businesses: The group recognised £482
million profit on the disposal of businesses (2024: £9 million loss), see
note 26.
· Amortisation of acquired intangibles: Amortisation and impairment of
intangible assets which arose on the acquisition of businesses totalled £4
million (2024: £4 million).
· Major impairment and restructuring charges: The group recognised £329
million in major impairment and restructuring charges (2024: £148 million),
see note 6.
· Share of profits / (losses) of associates: The group recognised £3 million
for its share of profits of associates (2024: £3 million loss), see note 15.
Reconciliations to GAAP measures
Sales
2025 2024
£m £m
Revenue (note 3) 11,674 12,843
Less: cost of precious metals to customers (note 3) (8,204) (8,939)
Sales 3,470 3,904
Underlying profit measures
Year ended 31(st) March 2025
Operating profit Profit before tax Tax expense Profit for the year
£m £m £m £m
Underlying 389 334 (71) 263
Profit on disposal of businesses 482 482 (67) 415
Amortisation of acquired intangibles (4) (4) 1 (3)
Major impairment and restructuring charges (329) (329) 10 (319)
Share of profits of associates - 3 - 3
Non-underlying tax provisions - - 14 14
Reported 538 486 (113) 373
Year ended 31(st) March 2024
Operating profit Profit before tax Tax expense Profit for the year
£m £m £m £m
Underlying 410 328 (68) 260
Loss on disposal of businesses (9) (9) - (9)
Amortisation of acquired intangibles (4) (4) 1 (3)
Major impairment and restructuring charges (148) (148) 15 (133)
Share of losses of associates - (3) - (3)
Non-underlying tax provisions - - (4) (4)
Reported 249 164 (56) 108
Underlying earnings per share
2025 2024
Underlying profit for the year (£ million) 263 260
Weighted average number of shares in issue (number) 175,966,787 183,392,681
Underlying earnings per share (pence) 149.2 141.3
Return on Capital Employed (ROCE)
2025 2024
£m £m
Underlying operating profit 389 410
Average net debt 875 987
Average equity 2,338 2,459
Average capital employed 3,213 3,446
ROCE 12.1% 11.9%
Average working capital days (excluding precious metals) - unaudited
2025 2024
£m £m
Inventories 1,011 1,211
Trade and other receivables 1,532 1,718
Trade and other payables (1,984) (2,209)
559 720
Working capital balances classified as held for sale - 44
Total working capital 559 764
Less: Precious metal working capital (111) (174)
Working capital (excluding precious metals) 448 590
Average working capital days (excluding precious metals) 62 60
Free cash flow
2025 2024
£m £m
Net cash inflow from operating activities 381 592
Interest received 78 62
Interest paid (148) (137)
Purchases of property, plant and equipment (315) (301)
Purchases of intangible assets (58) (67)
Proceeds from redemption of investments held at fair value through other 3 -
comprehensive income
Government grant income - 5
Proceeds from sale of businesses 587 41
Proceeds from sale of non-current assets 2 5
Principal element of lease payments (9) (11)
Free cash flow 521 189
Net debt (including post tax pension deficits) to underlying EBITDA
2025 2024
£m £m
Cash and deposits 463 208
Money market funds 435 334
Bank overdrafts (24) (12)
Cash and cash equivalents 874 530
Derivative financial instruments - Cross currency and interest rate swaps - 4 15
non-current assets
Derivative financial instruments - Cross currency and interest rate swaps - 13 -
current assets
Derivative financial instruments - Cross currency and interest rate swaps - (1) -
current liabilities
Derivative financial instruments - Cross currency and interest rate swaps - (9) (10)
non-current liabilities
Borrowings - current (333) (110)
Borrowings - non-current (1,301) (1,339)
Lease liabilities - current (6) (8)
Lease liabilities - non-current (40) (24)
Lease liabilities - current - transferred to liabilities classified as held - (1)
for sale
Lease liabilities - non-current - transferred to liabilities classified as - (4)
held for sale
Net debt (799) (951)
Increase / (decrease) in cash and cash equivalents 345 (102)
Less: (Increase) / decrease in borrowings (213) 150
Less: Principal element of lease payments 9 11
Decrease in net debt resulting from cash flows 141 59
New leases, remeasurements and modifications (22) (11)
Other lease movements 1 1
Disposals 5 11
Exchange differences on net debt 11 13
Other non-cash movements 16 (1)
Movement in net debt 152 72
Net debt at beginning of year (951) (1,023)
Net debt at end of year (799) (951)
Net debt (799) (951)
Add: Pension deficits (20) (22)
Add: Related deferred tax 3 3
Net debt (including post tax pension deficits) (816) (970)
Underlying operating profit 389 410
Add back: Depreciation and amortisation excluding amortisation of acquired 183 188
intangibles
Underlying EBITDA 572 598
Net debt (including post tax pension deficits) to underlying EBITDA 1.4 1.6
2025 2024
£m £m
Underlying EBITDA 572 598
Depreciation and amortisation (187) (192)
Profit / (loss) on disposal of businesses 482 (9)
Major impairment and restructuring charges (329) (148)
Finance costs (142) (146)
Investment income 87 64
Share of profits / (losses) of associates 3 (3)
Income tax expense (113) (56)
Profit for the year 373 108
34 Events after the balance sheet date
On 22(nd) May 2025, the group announced the sale of its Catalyst Technologies
business to Honeywell International Inc. at an enterprise value of £1.8
billion on a cash and debt-free basis. The sale is expected to deliver net
sale proceeds of £1.6 billion to the group, subject to customary closing
adjustments. We anticipate a significant cash return to shareholders of £1.4
billion of net sale proceeds following completion of the sale. We expect the
agreed sale of the Catalyst Technologies business to Honeywell International
Inc. to complete by the first half of calendar year 2026.
As outlined in our judgements in note 1, the criteria to be classified as held
for sale were not met at the balance sheet date and so the Catalyst
Technologies business has not been classified as held for sale and a
discontinued operation within these consolidated accounts. Refer to page X
for further information on the strategic implications of this sale.
.36 Property, plant and equipment
Land Leasehold Plant and Assets in Total
and buildings improvements machinery the course of
construction
£m £m £m £m £m
Cost
At 31(st) March 2024 130 2 721 240 1,093
Additions - - 10 196 206
Transfers from assets in the course of construction - - 31 (31) -
Transfers to other intangible assets (note 38) - - (3) (18) (21)
Reclassification - - 2 2 4
Disposals - - (2) - (2)
At 31(st) March 2025 130 2 759 389 1,280
Accumulated depreciation and impairment
At 31(st) March 2024 89 2 553 - 644
Charge for the year 2 - 31 - 33
Impairment losses - - 4 - 4
Reclassification - - 4 - 4
Disposals - - (2) - (2)
At 31(st) March 2025 91 2 590 - 683
Carrying amount at 31(st) March 2025 39 - 169 389 597
Carrying amount at 31(st) March 2024 41 - 168 240 449
Carrying amount at 1(st) April 2023 43 - 149 158 350
Finance costs capitalised were £5 million (2024: £3 million) and the
capitalisation rate used to determine the amount of finance costs eligible for
capitalisation was 3.8% (2024: 3.3%).
37 Goodwill
As at 31(st) March 2025 and 31(st) March 2024, the cost of goodwill was £123
million with an accumulated impairment of £10 million resulting in a carrying
amount of £113 million.
The parent company's goodwill balance of £113 million relates to the Catalyst
Technologies cash-generating unit. Refer to note 5 for further information on
the impairment testing performed.
38 Other intangible assets
Computer Patents, trademarks Acquired research and technology Development Total
software and licences expenditure
£m £m £m £m £m
Cost
At 31(st) March 2024 477 9 - 13 499
Additions 51 - - - 51
Transfers from property, plant and equipment (note 36) 21 - - - 21
Reclassification 1 (1) - - -
At 31(st) March 2025 550 8 - 13 571
Accumulated amortisation and impairment
At 31(st) March 2024 221 4 - 17 242
Charge for the year(1) 44 1 - (4) 41
Impairment losses 28 - - - 28
At 31(st) March 2025 293 5 - 13 311
Carrying amount at 31(st) March 2025 257 3 - - 260
Carrying amount at 31(st) March 2024 256 5 - (4) 257
Carrying amount at 1(st) April 2023 246 4 1 (4) 247
(1) The reversal of depreciation is to correct a historical brought forward
error where the development expenditure has a negative net book value.
39 Investments in subsidiaries
Cost of Accumulated Carrying
investments in impairment amount
subsidiaries
£m £m £m
At 31(st) March 2024 2,370 (262) 2,108
Additions 1 - 1
Disposals (9) - (9)
At 31(st) March 2025 2,362 (262) 2,100
The parent company's subsidiaries are shown in note 48.
40 Trade and other receivables
2025 2024
£m £m
Current
Trade receivables 127 110
Contract receivables 22 33
Amounts receivable from subsidiaries 1,587 1,655
Prepayments 29 36
Value added tax and other sales tax receivable 33 35
Amounts receivable under precious metal sale and repurchase agreements 282 417
Other receivables 57 49
Trade and other receivables 2,137 2,335
Non-current
Amounts receivable from subsidiaries 1,091 653
Advance payments to customers 32 29
Other receivables 1,123 682
Of the parent company's amounts receivable from subsidiaries, £140 million is
impaired (2024: £140 million). Future expected credit losses on intercompany
receivables are immaterial.
Trade receivables and contract receivables are net of expected credit losses.
41 Derivative financial instruments
The parent company non-current derivative financial instrument assets and
liabilities are consistent with the group balances - see note 18.
2025 2024
£m £m
Current assets
Forward foreign exchange contracts designated as cash flow hedges 9 10
Forward precious metal price contracts designated as cash flow hedges 31 41
Forward foreign exchange contracts and currency swaps at fair value through 5 6
profit or loss
Cross currency and interest rate swaps 13 -
Derivative financial instruments 58 57
Current liabilities
Forward foreign exchange contracts designated as cash flow hedges (4) (8)
Forward foreign exchange contracts and currency swaps at fair value through (11) (4)
profit or loss
Foreign exchange swaps designated as hedges of a net investment in foreign - (2)
operations
Cross currency and interest rate swaps (1) -
Derivative financial instruments (16) (14)
Note, to simplify the primary statements we have represented the prior year
comparative balances in the Statement of Financial Position to include 'Other
financial assets and liabilities' and 'Interest rate swaps' within the
singular line 'Derivative financial instruments'.
42 Post-employment benefits
The parent company is the sponsoring employer of the group's UK defined
benefit pension plan and the UK post-retirement medical benefits plan. There
is no contractual agreement or stated policy for charging the net defined
benefit cost for the plans to the individual group entities. The parent
company recognises the net defined benefit cost for these plans and
information is disclosed in note 24.
43 Inventories
2025 2024
£m £m
Raw materials and consumables 32 44
Work in progress 270 374
Finished goods and goods for resale 70 64
Inventories 372 482
Write-downs of inventories amounted to £nil (2024: £nil). These were
recognised as an expense during the year ended 31(st) March 2025 and included
in cost of sales in the income statement.
44 Trade and other payables
2025 2024
£m £m
Current
Trade payables 272 258
Contract liabilities 12 33
Amounts payable to subsidiaries 3,546 2,865
Accruals 189 169
Amounts payable under precious metal sale and repurchase agreements 654 810
Other payables 133 100
Trade and other payables 4,806 4,235
Non-current
Amounts payable to subsidiaries 5 4
Other payables 1 1
Trade and other payables 6 5
45 Borrowings
The parent company's non-current borrowings are consistent with the group
balances with the exception of the cross currency interest rate swaps of £nil
(2024: £3 million) which are designated as fair value hedges instead of net
investment hedges - see note 20.
2025 2024
£m £m
Current
3.57% £65 million Bonds 2024 - (65)
3.565% $50 million KfW loan 2024 - (40)
3.14% $130 million Bonds 2025 (100) -
1.40% €77 million Bonds 2025 (63) -
2.54% £45 million Bonds 2025 (45) -
3.79% $130 million Bonds 2025 (100) -
Borrowings (308) (105)
46 Provisions
Restructuring Other Total
provisions provisions
£m £m £m
At 31(st) March 2024 23 54 77
Charge for the year - 5 5
Net sale of metal - (7) (7)
Utilised (16) - (16)
At 31(st) March 2025 7 52 59
2025 2024
£m £m
Current 57 76
Non-current 2 1
Total provisions 59 77
The restructuring provisions are part of the parent company's efficiency
initiatives and are expected to be utilised within one year.
The other provisions include provisions to buy metal to cover short positions
created by the parent company selling metal to cover price risk on metal owned
by subsidiaries. Amounts provided reflect management's best estimate of the
expenditure required to settle the obligations at the balance sheet date and
are expected to be utilised within one year.
The parent company also guarantees some of its subsidiaries' borrowings and
its exposure at 31(st) March 2025 was £20 million (2024: £2 million).
47 Share capital and other reserves
Share capital and dividends
The parent company's disclosures relating to share capital, dividends and
purchase of treasury shares are consistent with the group disclosures. Refer
to note 25 for further information.
Other reserves
Hedging reserve
Capital Forward Cross Forward Total
redemption currency currency metal other
reserve contracts swaps contracts reserves
£m £m £m £m £m
At 1(st) April 2023 13 (3) 1 60 71
Cash flow hedges ─ gains / (losses) taken to equity - 8 (4) 27 31
Cash flow hedges ─ transferred to revenue (income statement) - 4 - (31) (27)
Cash flow hedges ─ transferred to cost of sales (income statement) - (5) - - (5)
Cash flow hedges ─ transferred to foreign exchange (income statement) - - 2 - 2
Tax on items taken directly to or transferred from equity - (6) - 6 -
At 31(st) March 2024 13 (2) (1) 62 72
Cash flow hedges ─ gains / (losses) taken to equity - 7 1 (2) 6
Cash flow hedges ─ transferred to revenue (income statement) - (3) - (41) (44)
Cash flow hedges ─ transferred to cost of sales (income statement) - (2) - - (2)
Cash flow hedges ─ transferred to foreign exchange (income statement) - - 2 - 2
Cancelled ordinary shares from share buyback 18 - - - 18
Tax on items taken directly to or transferred from equity - - - 10 10
At 31(st) March 2025 31 - 2 29 62
48 Related undertakings
A full list of related undertakings at 31(st) March 2025 (comprising
subsidiaries, joint ventures and associates) is set out below. Those held
directly by the parent company are marked with an asterisk (*) and those held
jointly by the parent company and a subsidiary are marked with a cross ((+)).
All the companies are wholly owned unless otherwise stated. All the related
undertakings are involved in the principal activities of the group. Unless
otherwise stated, the share class of each related undertaking comprises
ordinary shares only. As permitted by section 479A of the Companies Act 2006,
the Company intends to take advantage of the audit exemption in relation to
the individual accounts of the companies marked with a hash ((#)).
Entity Registered address
( )
( )
(+) Johnson Matthey Argentina S.A. Tucumán 1, Piso 4, C1049AAA, Buenos Aires, Argentina
(+) Johnson Matthey Belgium Pegasuslaan 5 1831 Machelen (Brab.), Belgium
( ) The Argent Insurance Co. Limited Rosebank Centre, 5th Floor, 11 Bermudiana Road,
( ) Pembroke HM 08, Bermuda
( ) Johnson Matthey Brasil Ltda Rua Olimpiadas, 205 - 4º andar, Sala 438, Edifício Continental
( ) Square, Vila Olímpia, São Paulo, CEP 04.551-000, Brazil
( ) Johnson Matthey Canada, Inc 340 Albert Street, Suite 1400. Ottawa, Ontario, Canada, K1R 0A5
( ) Johnson Matthey Argillon (Shanghai) Emission Ground Floor, Building 2, No. 298 Rongle East Road,
( ) Control Technologies Ltd Songjiang Industrial Zone, Shanghai 201613, China
( ) Johnson Matthey Battery Materials (Changzhou) A10 Building, No.2 Xinzhu Road, Xinbei District, Changzhou, China
( ) Co., Ltd
( ) Johnson Matthey Chemical Process Technologies Room 1066, Building 1, No 215 Lian He Bei Lu, Fengxian District,
( ) (Shanghai) Company Limited Shanghai, China
( ) Johnson Matthey (China) Trade Co., Ltd 2nd Floor, Office Block, Building No. 7, No 298 Rongle East Road,
( ) Songjiang District, Shanghai, China
( ) Johnson Matthey Clean Energy Technologies Unit 01, 14th Floor, Building A, No. 2 Workers' Stadium North Road
( ) (Beijing) Co., Ltd Jia, Chaoyang District, Beijing, China
( ) Johnson Matthey (Shanghai) Catalyst Co., Ltd 586 Dongxing Road, Songjiang Industrial Zone, Shanghai, 201613,
( ) China
( ) Johnson Matthey (Shanghai) Chemicals Limited 588 and 598 Dongxing Road, Songjiang Industry Zone, Shanghai,
( ) 201613, China
( ) Johnson Matthey (Shanghai) Hydrogen JT7575, Room 108, Floor 1, Building 1, No 6988 Jiasong North
( ) Technologies Co., Ltd Road, Anting Town, Jiading District, Shanghai, PRC
( ) Johnson Matthey (Shanghai) Trading Limited Room 1615B, No. 118 Xinling Road, China (Shanghai), China
( ) Johnson Matthey (Tianjin) Chemical Co., Ltd Room 2007, No. 16, Third Avenue, Tianjin Economic-Technological
( ) (in liquidation) Development Zone, Tianjin, China
( ) Johnson Matthey (Zhangjiagang) Environmental No. 9 Dongxin Road, Jiangsu Yangtze River International Chemical
( ) Protection Technology Co., Ltd Industrial Park, Jiangsu Province, Jiangsu, 215634, China
( ) Johnson Matthey (Zhangjiagang) Precious Metal No. 48, the west of Beijing Road, Yangtze River International
( ) Technology Co. Ltd Chemical Industrial Park, Jiangsu, China
( ) Johnson Matthey A/S c/o DLA Piper Denmark, Oslo Plads 2, DK-2100 Copenhagen,
( ) Denmark
(* ) JMEPS Trustees Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(* ) Johnson Matthey Battery Materials Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(* ) Johnson Matthey Davy Technologies Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(* ) Johnson Matthey Hydrogen Technologies Limited(1) 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(# ) Johnson Matthey Investments Limited (01004368) 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(+) Johnson Matthey (Nominees) Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(* ) Johnson Matthey Precious Metals Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
( ) Johnson Matthey South Africa Holdings Limited 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(#) Johnson Matthey Tianjin Holdings Limited (5391061) 5th Floor, 2 Gresham Street, London EC2V 7AD, United Kingdom
(*#) Johnson Matthey UK Holdings Limited (14090567) 5th Floor, 2 Gresham Street, London, EC2V 7AD, United Kingdom
(+#) Matthey Finance Limited (301279) 5th Floor, 2 Gresham Street, London, EC2V 7AD, United Kingdom
(*#) Matthey Holdings Limited (03130188) 5th Floor, 2 Gresham Street, London, EC2V 7AD, United Kingdom
( ) Johnson Matthey Battery Materials Finland Oy c/o Asianajotoimisto, Krogerus Oy, Unioninkatu 22, Helsinki, 00130,
( ) Finland
( ) Johnson Matthey SAS Immeuble B, 41 rue Delizy, 93500 Pantin, France
( ) Johnson Matthey Catalysts (Germany) GmbH Bahnhofstrasse 43, 96257 Redwitz an der Rodach, Germany
( ) Johnson Matthey Chemicals GmbH Wardstrasse 17, D-46446 Emmerich am Rhein, Germany
( ) Johnson Matthey Deutschland GmbH Otto-Volger-Strasse 9b, 65843, Sulzbach, Taunus, Germany
( ) Johnson Matthey Pacific Limited(2) Unit 4-6, 8/F, 909 Cheung Sha Wan Road, Cheung Sha Wan,
( ) ( ) Kowloon, Hong Kong
(+) Johnson Matthey Chemicals India Private Limited Plot No 6A, MIDC Industrial Estate, Taloja, Maharashtra,
410208 India
( ) Johnson Matthey India Private Limited Regus Business Centre, 5th Floor, Caddie Commercial Tower -
( ) Aerocity, New Delhi, 110037, India
( ) Johnson Matthey Italia S.r.l. Torino, Corso Trapani 16, Italy
( ) Johnson Matthey Fuel Cells Japan Limited 5123-3 Kitsuregawa, Sakura-shi, Tochigi, Japan
( ) Johnson Matthey Japan Godo Kaisha 5123-3 Kitsuregawa, Sakura-shi, Tochigi, Japan
( ) Johnson Matthey Global Business Services Lithuania UAB Konstitucijos prospektas 18B, Vilnius, LT- 09308, Lithuania
(*) Johnson Matthey Sdn. Bhd. Suite 13.03, 13th Floor, Menara Tan & Tan, 207 Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
( ) Johnson Matthey Services Sdn. Bhd. Suite 13.03, 13th Floor, Menara Tan & Tan, 207 Jalan Tun Razak,
50400 Kuala Lumpur, Malaysia
( )
( ) Johnson Matthey de Mexico, S. de R.L. de C.V. c/o Cacheaux, Cavazos and Newton, No. 437 Col. Colinas del
Cimatario, Queretaro, CP 76090, Mexico
( )
( ) Johnson Matthey Servicios, S. de R.L. de C.V. c/o Cacheaux, Cavazos and Newton, No. 437 Col. Colinas del
Cimatario, Queretaro, CP 76090, Mexico
( )
( ) Intercat Europe B.V. Robert Schumandomein 2, Begane Grond & 2de Verdieping,
( ) 6229 ES, Maastricht, The Netherlands
( ) Johnson Matthey International Management Services B.V. Javastraat 12, 3016 CE, Rotterdam, The Netherlands
( ) Johnson Matthey Netherlands 2 B.V. Javastraat 12, 3016 CE, Rotterdam, The Netherlands
( ) Matthey Finance B.V.(1) 5th Floor, 2 Gresham Street, London, EC2V 7AD, United Kingdom
( ) Johnson Matthey DOOEL Skopje Technological Industrial Development Zone Bunardzik, Ilinden,
Republic of North Macedonia
( )
( ) Johnson Matthey Poland Spółka z ograniczoną ul. Alberta Einsteina 6, 44-109, Gliwice, Poland
( ) odpowiedzialnością
( ) Johnson Matthey Battery Materials Poland Spółka ul. Alberta Einsteina 6, 44-109, Gliwice, Poland
( ) z ograniczoną odpowiedzialnością
(+) Macfarlan Smith Portugal, Lda Largo de São Carlos 3, 1200-410, Lisbon, Portugal
( ) Johnson Matthey Arabia for Business Services LLC 2975, Prince Ahmad Ibn Abdulaziz, 8124 Al Woroud District, 12253,
Riyadh, Kingdom of Saudi Arabia
( )
(*) Johnson Matthey General Partner (Scotland) c/o DWF LLP, 103 Waterloo Street, Glasgow G2 7BW,
Limited United Kingdom
( )
(*) Johnson Matthey (Scotland) Limited Partnership(3) c/o DWF LLP, 103 Waterloo Street, Glasgow G2 7BW,
United Kingdom
( )
Johnson Matthey Singapore Private Limited 9 Raffles Place, 13-03 Republic Plaza, Singapore, 048619
( ) Johnson Matthey Davy Technologies International 5th Floor, 2 Gresham Street, London, EC2V 7AD, United Kingdom
Limited (liquidated 12(th) April 2023 - restored
to register 25(th) October 2024)
( )
Johnson Matthey (Proprietary) Limited c/o Thomson Wilks Attorneys, 1st Floor Inanda Greens Business Park
54 Weirda, Weirda Valley, Sandton Gauteng, 2196, Republic of
South Africa
Johnson Matthey Research South Africa c/o Thomson Wilks Attorneys, 1st Floor Inanda Greens Business Park
54 Weirda, Weirda Valley, Sandton Gauteng, 2196, Republic of
South Africa
(Proprietary) Limited
Johnson Matthey Salts (Proprietary) Limited c/o Thomson Wilks Attorneys, 1st Floor Inanda Greens Business Park
54 Weirda, Weirda Valley, Sandton Gauteng, 2196, Republic of
South Africa
Johnson Matthey Catalysts Korea Limited (Jung-dong) 802-11, 33 Dongbaek 3-ro 11 beon-gil, Giheung-gu,
Yongin-si,Gyeonggi-do, Republic of Korea
Johnson Matthey Korea Limited (Taepeyongro-1ga), S8020, 8F, 136 Sejong-daero, Jung-gu, Seoul,
Republic of Korea
Johnson Matthey AB Victor Hasselblads Gata 8, 421 31 Västra Frölunda, Göteborg, Sweden
Johnson Matthey Formox AB SE-284 80, Perstorp, Sweden
Johnson Matthey & Brandenberger AG c/o PRÜFAG, Wirtschaftsprüfung AG, Badenerstrasse 144, 8004
Zürich, Switzerland
Johnson Matthey Finance Zurich GmbH Glatttalstrasse 18, 8052 Zurich, Switzerland
(in liquidation)
LiFePO4+C Licensing AG Hertensteinstrasse 51, 6004 Lucerne, Switzerland
Johnson Matthey Services (Trinidad and Queen's Park Place, 17-20 Queens Park West, Port of Spain,
Tobago) Limited Trinidad and Tobago
Stepac Ambalaj Malzemeleri Sanayi Ve Ticaret Güzeloba Mah. Rauf Denktaş Cad., No.56/101, Muratpaşa /Antalya,
Turkey
Anonim Sirketi (in liquidation)
Johnson Matthey Catalyst Technologies - International Trading Building LLC, Al Bateen, West 35, Abu Dhabi
LLC - S.P.C. United Arab Emirates
Johnson Matthey Holdings, Inc. 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Johnson Matthey Hydrogen Technologies, Inc. 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Johnson Matthey Inc.(4) 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Johnson Matthey Process Technologies, Inc. 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Johnson Matthey Stationary Emissions 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Control LLC
Johnson Matthey USA Holdings Inc. 435 Devon Park Drive, Suite 600, Wayne PA 19087, USA
Red Maple LLC (50.0%)(5) Corporation Service Company, 251 Little Falls Drive,
Wilmington DE 19808, USA
Veranova Parent Holdco L.P. (30.0%)(5) 1209 Orange Street, New Castle County, Wilmington, Delaware,
19801, USA
In some jurisdictions in which the group operates, share classes are not
defined and in these instances, for the purpose of disclosure, these holdings
have been classified as ordinary shares.
(1) Ordinary and preference shares
(2) Ordinary and non-cumulative redeemable preference shares
(3) Limited partnership, no share capital
(4) Ordinary and series A preferred stock
(5) Joint venture / Associate
( )
( )
( )
( )
( )
Directors' Responsibility Statement
Statement of directors' responsibilities in respect of the Annual Report and
Accounts 2025
The directors are responsible for preparing the Annual Report and Accounts and
the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each
financial year. Under that law, the directors have prepared the group
financial statements in accordance with UK-adopted international accounting
standards and the parent company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising FRS 101, 'Reduced Disclosure Framework', and
applicable law).
Under company law, directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the group and parent company and of the profit or loss of the group for
that period. In preparing the financial statements, the directors are required
to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting standards
have been followed for the group financial statements and United Kingdom
Accounting Standards, comprising FRS 101 have been followed for the parent
company financial statements, subject to any material departures disclosed and
explained in the financial statements;
• make judgements and accounting estimates that are reasonable and
prudent; and
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the group and parent company will continue in
business.
The directors are responsible for safeguarding the assets of the group and
parent company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records
that are sufficient to show and explain the group's and parent company's
transactions and disclose with reasonable accuracy at any time the financial
position of the group and parent company, and enable them to ensure that the
financial statements and the Directors' remuneration report comply with the
Companies Act 2006.
The directors are responsible for the maintenance and integrity of the parent
company's website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors' confirmations
The directors consider that the Annual Report and Accounts 2025, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the group's and parent company's position
and performance, business model and strategy.
Each of the directors, whose names and functions are listed in the Governance
section of the Annual Report and Accounts 2025, confirm that, to the best of
their knowledge:
• the group and parent company financial statements, which have been
prepared in accordance with UK adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position and
profit of the group;
• the parent company financial statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS 101, give
a true and fair view of the assets, liabilities and financial position of the
parent company; and
• the Strategic report includes a fair review of the development and
performance of the business and the position of the group and parent company,
together with a description of the principal risks and uncertainties that it
faces.
In the case of each director in office at the date the Directors' report is
approved:
• so far as the director is aware, there is no relevant audit
information of which the group's and parent company's auditors are unaware;
and
• they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit information
and to establish that the group's and parent company's auditors are aware of
that information.
The Directors' report and responsibilities statement was approved on 3(rd)
June 2025 and is signed on behalf of the board by:
Simon Price
General Counsel and Company Secretary
Principal Risks
Risk Description How we mitigate the risk
Business failure through cyber-attack or other IT incident • Core systems continue to be updated to reduce reliance on legacy
systems.
JM faces risks related to its Information and Operational Technology (IT/OT),
including failure to adapt to evolving business needs, system disruptions or • Horizon scanning across the network in place to identify emerging
major cyber-security incidents. These issues could impact business continuity, cyber risks.
data integrity and compliance. As with all organisations, JM faces an evolving
and volatile threat environment that comprises both geopolitical and criminal • IT operating model changes have been implemented to better support
threat actors. JM's future needs.
• Ongoing cybersecurity awareness training helps employees recognise and
prevent vulnerabilities.
• Cyber risk champions have been recruited across the organisation to
strengthen risk management efforts.
• A programme of continuous improvement is in place to ensure JM
maintains resilience against an evolving threat environment.
• System monitoring and other controls are in place to ensure anomalies
are promptly identified and remediated across our systems.
Risk Description How we mitigate the risk
Failure to deliver business value from capital expenditure • Creation of board-level Investment Committee to enhance oversight,
prioritise capital allocation and ensure effective execution of all capital
JM's growth depends on the effective allocation and execution of capital projects.
expenditure. Delays, cost overruns, poor investment decisions or ineffective
management could undermine expected value, leading to inefficient resource • We have embedded project frameworks, with business-wide compliance as
use, reduced competitiveness and failure to meet market and customer needs. a key value driver and a foundation of governance.
• Delivering the 3rd Century Refining (3CR) project under robust
governance.
• Learnings from previous capital projects continue to be incorporated,
ensuring historical weak points are addressed in the front end planning of new
investments.
Risk Description How we mitigate the risk
Failure in one or more of JM's critical operational assets • Critical asset investment continues to be prioritised across the
business based on risk exposure.
Failure of one or more critical operational assets could disrupt JM's supply
chains, performance and reputation. This risk includes ageing infrastructure • Continuously improving competency at JM sites to effectively manage
as well as the growing impact of climate change, such as extreme weather engineering risks associated with aged assets consistently.
events and natural disasters.
• Strengthening the risk management process to ensure risks are
identified, controlled and mitigated in a consistent manner across JM.
Managing any outages as efficiently as possible to minimise downtime.
• Maintenance standards continue to be improved to ensure consistency
across sites.
• Climate-related physical risk assessments have been conducted at key
sites in line with TCFD recommendations to strengthen resilience against
environmental risks.
Risk Description How we mitigate the risk
Breach to security or control of platinum group metals in our processes • We maintain a robust security management system and security standards
to protect our metal holdings.
JM faces security risks due to the high value of its products, site locations
and supply chain dependencies. These risks include internal theft, organised • On-site security capabilities have been improved through partnerships
crime and challenges in metal reconciliation, which vary across different with leading technology and security providers.
parts of the business.
• Increased focus on security risks at a leadership level driving
greater awareness and accountability.
• Metal control improvement plans are in place across business units.
• Long-term strategic planning around the metal requirements of the
group is undertaken to ensure appropriate positioning for the future.
Risk Description How we mitigate the risk
Disruption to our supplier ecosystem and the supply of purchased goods and • Global category management approach implemented aligning business
services requirements with supplier strategies.
JM relies on a global network of suppliers for key materials and services, • Developing standardised supplier performance management processes,
some of which are highly specialised with limited alternative sources. including due diligence, sustainability assessments, audits and ongoing
Emerging industries like hydrogen and sustainable aviation fuel (SAF) have performance and risk monitoring.
immature supply chains for raw materials, making them particularly vulnerable
to disruptions. • Strengthening and consolidating strategic relationships with selected
suppliers.
• Improving supplier contracting and JM Customer & Industry
End-to-End (E2E) Audits to ensure compliance and stability.
Risk Description How we mitigate the risk
A significant geopolitical or macroeconomic event impacting JM's operations • Executing JM's tariff strategy globally, encompassing all countries
that JM operates within.
JM's global footprint exposes the business to potential disruptions from
geopolitical and macroeconomic events, including conflicts, trade disputes, • Active advocacy within US, Europe and other jurisdictions through
sanctions, pandemics, financial crises and economic instability in key government dialogues to promote strategic partnership on PGMs and enhance
markets. supply chain resilience.
• Ongoing direct engagement with policymakers to secure support for
technologies and processes that our customers are advancing, including:
FT-SAF, LCH and green hydrogen.
• Continuing to use a 'China-for-China' approach in decision-making and
de-risking supply chains through localisation and supplier diversification.
Risk Description How we mitigate the risk
Development of offering that do not meet the future needs of customers • Leveraging our strong relationships with customers and suppliers to
identify current and future needs that can be addressed through JM's
A failure to develop competitive solutions - such as products, licensing and innovation portfolio.
technical services - that align with evolving customer needs and market
trends. This includes challenges in identifying customer expectations, • A common set of scenarios used to understand, identify and prioritise
translating them into effective R&D and scaling new technologies for opportunities in emerging markets.
industrial use.
• Enhanced by technology scanning and engagement in collaborative
R&D projects with external partners.
• Applying differentiated portfolio management and investment approaches
to support both mature and growth businesses appropriately. This includes the
use of New Product Introduction processes to ensure effective execution to
value from R&D investments.
• Promoting cross functional secondments to drive talent development and
promote knowledge sharing between technical and commercial teams.
Risk Description How we mitigate the risk
A low-performing culture undermines our strategy • Education of all people managers so they clearly understand what is
expected of them, monitoring their effectiveness through employee survey
A low-performing organisation characterised by an insufficiently engaged and feedback, People Manager Expectations and Engagement Survey twice a year.
inclusive workforce, or a misalignment of skills and talent, would impact our
ability to execute our strategy successfully. • Heightened focus on performance management by giving clear feedback,
differentiating performance and taking actions to address performance gaps.
• Focused investment in commercial skills and engineering
• training - focusing available investment in our two strategic areas.
• Implementation of our Ignite leadership programme, supporting leaders
to focus on the key leadership expectations to drive strategy execution at
pace.
Risk Description How we mitigate the risk
Market Factors, customer demand and margin sustainability • Strengthened investment governance through a board-level Investment
Committee, phased investment approach and targeted de-risking of growth
JM may not accurately predict changes in customer demand, regulation, or businesses via partnerships and joint ventures, with a strong focus on cash
market trends, particularly as industries move away from fossil fuels. There management and disciplined capital allocation.
is also a risk of missing new opportunities or responding to change too slowly
or quickly. • Ongoing monitoring of leading market indicators to ensure investment
is directed towards the most promising and highest return opportunities.
• Reinforcing sustainable growth in Catalyst Technologies through
enhanced market visibility, strategic partnerships and focused business
development.
• Implementation of JM Global Services (JMGS) across many operating
countries, alongside continuous improvement initiatives, is enhancing
operational efficiency and supporting margin sustainability.
Risk Description How we mitigate the risk
A significant work-related EHS incident • A strong health and safety culture is maintained through clear
policies, training and regular audits.
A major work-related EHS (Environmental, Health and Safety) incident - such as
a fire, explosion or toxic gas release - could result from process safety • We have adopted a regional delivery model with 2(nd) line of defence
failures or regulatory non-compliance, threatening JM's operations, product assurance capabilities to strengthen oversight.
portfolios and reputation.
• Process safety hazards continue to be managed through deep-dive
reviews.
• Environmental, regulatory and reputational risks are continuously
monitored, with mitigation plans in place.
• Implementation of product stewardship inventory management software to
allow us to assess substances of concern and meet our regulatory needs.
Risk Description How we mitigate the risk
Unsuccessful delivery of key business transformation programmes • Major transformation programmes are staffed with experienced leaders
and subject matter experts.
• Ongoing coaching and support ensure alignment with the JM
JM's transformation involves multiple programmes aimed at driving growth, Transformation Standard.
efficiency and competitiveness across its businesses. There is a risk that
failure to successfully execute these programmes could delay expected • Robust change management and communication plans support key cross-JM
benefits, disrupt customer services or lead to a loss of key talent. initiatives like JM Global Solutions.
• Resource conflicts in overlapping programmes are proactively
identified and addressed with programme leads.
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