REG - Johnson Matthey PLC - Intent to exit Battery Materials, trading update

Johnson MattheyAnnouncement

11/11/2021 07:00

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RNS Number : 0153S  Johnson Matthey PLC  11 November 2021

11(th) November 2021

 

Johnson Matthey Plc

(the Company)

Johnson Matthey announces intention to exit Battery Materials and provides
trading update

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Johnson Matthey, a global leader in sustainable technologies, has been working
to commercialise its range of high nickel cathode materials, principally for
the automotive industry.

 

Following a detailed review and ahead of reaching a number of critical
investment milestones, we have concluded that the potential returns from our
Battery Materials business will not be adequate to justify further investment.

 

Whilst demand for battery materials is accelerating, so is competition from
alternative technologies and other manufacturers. Consequently this is rapidly
turning into a high volume, commoditised market.

 

In recent months, as JM has been exploring strategic partnerships, it has also
become clear that our capital intensity is too high compared with other more
established large scale, low cost producers.

 

The Board has therefore decided to pursue the sale of all or parts of this
business with the ultimate intention of exiting. We will move swiftly to
determine the best outcome for all of our stakeholders and intend to make a
further announcement as soon as possible.

 

JM is making good progress in its other growth areas, such as in hydrogen
technologies, circularity and the decarbonisation of the chemicals value
chain. These are attractive opportunities which we will now accelerate with
greater focus and investment. In addition, in a world that increasingly needs
solutions to address the challenges faced by climate change, we will continue
to pursue opportunities across other areas that are closely aligned to our
core capabilities.

 

Robert MacLeod, Chief Executive said:

 

"While the testing of our eLNO battery materials with customers is going well,
the marketplace is rapidly evolving with increasing commoditisation and lower
returns. We have concluded that we will not achieve the returns necessary to
justify further investment.

 

"This decision will allow us to accelerate our investment and focus on more
attractive growth areas, especially where we have leadership positions such as
in hydrogen technologies, circularity and the decarbonisation of the chemicals
value chain."

 

Johnson Matthey will announce its first half results on 24th November, which
are in-line with market expectations. The trading outlook for the full year
ending 31st March 2022, assuming current precious metal prices and foreign
exchange rates, is towards the lower end of market expectations. This is
primarily due to the wide-spread supply chain shortages affecting the
automotive industry and the consequential impact on precious metals prices,
together with acute labour shortages in the US that are adversely impacting
our Health business, which is subject to strategic review.

 

 

NOTE

1. Vara consensus for full year underlying operating profit in 2021/2022 is
£581 million (range: £550 million to £636 million)

2. The Battery Materials business consists of 430 permanent employees, of whom
the majority are in the UK. The net assets of the business as of 31(st)
October 2021 were approximately £340 million

 

 

The person responsible for the release of this announcement is Nick Cooper,
General Counsel and Company Secretary of Johnson Matthey Plc.

 

ENDS

 

 Enquiries:
 Investor Relations

 Martin Dunwoodie    Director of Investor Relations      020 7269 8241

 Louise Curran       Senior Investor Relations Manager   020 7269 8235

 Jane Crosby         Investor Relations Manager          020 7269 8242

 Media

 Harry Cameron       Tulchan Communications              07799 152148

 Barney Wyld         Group Corporate Affairs Director    07485 337498

 

Johnson Matthey Plc is listed on the London Stock Exchange (JMAT)

Registered in England & Wales number: 00033774

Legal Entity Identifier number: 2138001AVBSD1HSC6Z10

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