REG - Johnson Matthey PLC - Interim Management Statement <Origin Href="QuoteRef">JMAT.L</Origin>

Johnson MattheyAnnouncement

06/09/2014 20:23

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RNS Number : 0425N
Johnson Matthey PLC
23 July 2014 
 
For release at 7.00 am on Wednesday 23rd July 2014 
 
Johnson Matthey Plc - Q1 Interim Management Statement 
 
Progress in First Quarter 
 
At today's Annual General Meeting to be held at 11.00 am, Tim Stevenson,
Chairman of Johnson Matthey, will make the following statement on the group's
trading in its first quarter covering the period from 1st April 2014 to date. 
Unless otherwise stated, figures quoted in this statement are for the quarter
ended 30th June 2014. 
 
"Johnson Matthey made progress in the first quarter of 2014/15 in the face of
previously described headwinds from the effect of foreign currency translation
and from the loss of commission revenue from Anglo American Platinum.  Sales
excluding precious metals (sales) were flat at £749 million (Q1 2013/14 £745
million) with growth in Emission Control Technologies offset by the expected
softening in Process Technologies and Precious Metal Products.  The group's
underlying operating profit fell by 11% to £103.6 million (Q1 2013/14 £116.1
million).  Underlying profit before tax was 10% lower at £95.0 million (Q1
2013/14 £106.0 million). 
 
Excluding the impact of foreign exchange movements of approximately £50
million and the loss of around £10 million in commission income from Anglo,
the group grew sales by 9%.  The effect of exchange on underlying operating
profit in the period was £8 million. 
 
The group's balance sheet remains strong with net debt of £771 million and net
debt (including post tax pension deficits) to EBITDA for the 12 months to 30th
June 2014 of 1.4 times. 
 
Emission Control Technologies (ECT) 
 
ECT's sales in the quarter were up 10% to £444 million (Q1 2013/14 £404
million) and underlying operating profit was also ahead of last year.  Sales
of light duty vehicle catalysts increased by 6% to £263 million (Q1 2013/14
£248 million), ahead of the growth in the global car market, benefiting from
the slight recovery in Western European car sales and continued growing demand
in China.  In our heavy duty diesel (HDD) catalyst business, sales grew more
strongly and were up 16% at £181 million (Q1 2013/14 £156 million) with growth
across all regions.  In particular, the business benefited from good demand
for trucks in the US, the continued ramp up of Euro IV legislation in China
and the recently introduced legislation in Europe (Euro VI).  Our HDD sales in
Europe were supported by the higher sales value of Euro VI catalysts and also
by some continued pipeline filling of our customers' inventory of Euro VI
parts which we believe is now largely complete. 
 
Process Technologies 
 
As anticipated, Process Technologies had a softer first quarter as a result of
the timing of new projects and catalyst orders in its Chemicals businesses. 
The division's sales were down 17% to £119 million (Q1 2013/14 £144 million)
and underlying operating profit was also lower.  The Oil and Gas businesses
performed well, supported by good demand for refinery catalysts and additives,
although this was more than offset by lower catalyst sales and the continued
slower pace of licensing activity in the Chemicals businesses.  Two new
licences, one for a substitute natural gas plant and one for an oleochemicals
based process, were secured in the period.  With catalyst orders in the
Chemicals businesses expected to increase, we currently anticipate that the
division's first half performance will be broadly in line with that of the
first half of last year and we continue to expect that the division will make
progress in 2014/15. 
 
Precious Metal Products 
 
The performance of Precious Metal Products in the first quarter was impacted
by around £10 million as a result of the change in our Anglo Platinum
contracts.  Overall, sales in the division fell by 8% to £101 million (Q1
2013/14 £110 million) and underlying operating profit also reduced.  In the
division's Services businesses, platinum group metal (pgm) refining volumes
were steady although our gold and silver refining business saw continued
weakness, particularly for refining of secondary material.  Sales in the
division's Manufacturing businesses were ahead of last year, partly as a
result of stronger demand in Europe for Noble Metals' products. 
 
Fine Chemicals 
 
Sales in Fine Chemicals were broadly in line at £78 million (Q1 2013/14 £81
million) and operating profit was ahead.  The Active Pharmaceutical Ingredient
(API) Manufacturing business grew its sales of APIs for ADHD treatments and
bulk opiates.  However, demand for speciality opiates was down.  The Catalysis
and Chiral Technologies business continued to make progress but demand in
North America in Research Chemicals remained subdued. 
 
New Businesses 
 
Sales in New Businesses were steady at £18 million (Q1 2013/14 £20 million). 
Our Battery Technologies business made progress and expects to complete the
previously announced acquisition of certain battery material manufacturing
assets from A123 in the second quarter.  As planned, operating costs for the
division were broadly in line with those in the same period last year. 
 
Outlook 
 
Looking ahead, demand for the group's products is robust and we continue to
anticipate good underlying performance in the business.  Our guidance for the
year as a whole remains unchanged, despite the further strengthening of
sterling.  We currently expect that the group's performance in 2014/15 will be
broadly in line with 2013/14 as continued growth across the group will be
offset by the adverse impact of both the loss of commission revenue from Anglo
Platinum, approximately £30 million compared with 2013/14, and by the effect
of foreign currency translation, which could reduce reported underlying
operating profit by over £25 million if current rates prevail." 
 
Conference Call for Analysts and Investors 
 
Den Jones, Group Finance Director, will host a conference call at 8.00 am
today, Wednesday 23rd July 2014, to discuss this Interim Management
Statement. 
 
The dial-in number for UK callers is 0800 678 1161; for overseas callers the
number is +44 1296 311 600; and the passcode is 253556#.  Please dial in at
least 5 to 10 minutes prior to the start of the conference call to allow time
for registration. 
 
 Enquiries:  Sally Jones Director, IR and Corporate Communications 020 7269 8407 Howard Lee The HeadLand Consultancy 020 7367 5225 www.matthey.com  
 
 
 Sally Jones      Director, IR and Corporate Communications  020 7269 8407  
 Howard Lee       The HeadLand Consultancy                   020 7367 5225  
 www.matthey.com                                                            
 
 
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