REG - Johnson Matthey PLC - Johnson Matthey half year results
23/11/2022 07:00
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RNS Number : 2777H Johnson Matthey PLC 23 November 2022
Half year results for the
six months ended 30(th) September 2022
23(rd) November 2022
Catalysing the net zero transition to drive value creation
Strong foundations and increasing confidence in growth opportunities
· Results in line with expectations
· Transformation progressing across the group
· Good progress on execution of strategy and on track with all milestones
· Significant increase in demand for sustainable technology to address energy
crisis and climate change
Reported results Underlying results (continuing)¹(,)²
Half year ended % Half year ended % % change, constant FX rates
30(th) September
change
30(th) September
change
2022 2021² 2022 2021²
Revenue £m 7,328 8,503 -14
Sales excluding £m 2,045 1,856 +10 +5
precious metals⁴
Operating profit £m 211 24 n/a 222 297 -25 -30
Profit / (loss) before tax £m 188 (4) n/a 201 269 -25
(continuing)
Profit / (loss) after tax (continuing) £m 150 (24) n/a 161 226 -29
Basic earnings / (loss) per share (continuing) pence 82.0 (12.4) n/a 88.2 117.1 -25
Interim dividend pence 22.0 22.0 -
per share
Underlying performance - continuing operations¹(,)²(,)³
· Sales of £2.0 billion, up 5%, with higher prices to partially recover cost
inflation, partly offset by lower average PGM prices
· Underlying operating profit of £222 million, down 30%, reflecting supply
chain constraints in Clean Air, lower average PGM prices and a lag in
recovering cost inflation
· Underlying earnings per share of 88.2p, down 25% due to lower underlying
operating profit
· Free cash flow of £133 million, compared to £190 million in the prior year
largely reflecting lower underlying operating profit and working capital
movements
· Strong balance sheet with net debt of £963 million; net debt to EBITDA of 1.5
times
Reported results²
· Revenue down 14%, driven by lower average PGM prices
· Operating profit of £211 million, up materially, largely due to the absence
of a one-off impairment in the prior period relating to Battery Materials
· Profit before tax of £188 million, compared to a loss of £4 million in the
prior period, reflecting higher operating profit due to the absence of the
Battery Materials impairment
· Reported earnings per share (continuing) of 82.0 pence
· Cash inflow from operating activities of £145 million (1H 2021/22: £412
million)
· Interim dividend of 22.0 pence per share stable year-on-year
Liam Condon, Chief Executive, commented:
We are focused on effectively navigating the near-term macroeconomic
challenges affecting our business, including significant cost inflation which
we partially recovered in the half. We are confident of delivering a stronger
performance in the second half as we apply the enhanced commercial focus and
efficiencies that I outlined back in May.
Over the past six months, there have been further positive developments in the
transition to net zero. Legislation such as the Inflation Reduction Act in the
US, as well as the urgent need for sources of clean energy in Europe, are
driving demand for sustainable technology solutions. We are in a strong
position to benefit and enable our customers to decarbonise and meet their net
zero goals.
As we move to a faster paced, more customer focused culture, we are already
making good progress in achieving our strategic milestones. You can expect to
see further progress in the coming months and I am more convinced than ever of
the tremendous opportunities ahead for Johnson Matthey.
Outlook for the year ending 31(st) March 2023
The external environment is challenging, with continued political and economic
uncertainty. We currently expect operating performance for the full year to be
within the consensus range⁵. The outlook is based upon current foreign
exchange rates prevailing for the rest of 2022/23⁶.
In Clean Air, supply chain disruption has eased through the first half and,
whilst there is still uncertainty, we expect that automotive production
volumes will improve further through the second half. For the year 2022/23,
external data⁷ currently suggests auto production will be 4% higher than
2021/22, with volumes in the second half expected to be 4% higher than the
first half. There is a lag in negotiating inflation claims with OEMs, which
affected our first half profits. We are focused on further recovery of cost
inflation, which we expect to benefit the second half, supported by benefits
from our transformation programme. With continued volume recovery, we expect
Clean Air operating performance in the second half to be above the first half.
PGM Services performance is driven by precious metals prices, both the
absolute level and volatility, along with recycling volumes. Whilst precious
metals prices are high relative to historic levels, they remain lower than the
prior year. If they were to remain at their current level⁸ for the rest of
this year, we would expect the adverse impact on full year operating
performance to be c.£40 million⁹ compared with the prior year. At current
metal prices, and with increased efficiencies and further measures to recover
cost inflation, we expect PGM Services operating performance in the second
half to be stronger than the first.
In Catalyst Technologies, whilst cost inflation was not fully recovered in the
first half, we are focused on further increasing prices. As reported
previously, the profit impact of lost business with Russia is mainly in
Catalyst Technologies and in 2022/23 we expect this to be c.£10 million. This
is expected to be one-off and compensated by new business from next year but
will result in full year operating performance for Catalyst Technologies being
lower than the prior year.
In Hydrogen Technologies we are investing to scale the business, to capture
the significant opportunities that the rapidly growing hydrogen market
presents. Consequently, we continue to expect a larger operating loss in
2022/23 than the prior year.
Longer term, we are already seeing signs that geopolitical developments are
driving a significant acceleration towards a net zero carbon economy, and we
are investing to capture the growth opportunities from our sustainable
technology portfolio.
Dividend
The board approved an interim dividend of 22.0 pence per share, maintained at
the same level as the prior year (1H 2021/22: 22.0 pence per share). The
interim dividend will be paid on
1(st) February 2023, with an ex-dividend date of 8(th) December 2022, to
shareholders on the register on 9(th) December 2022.
Enquiries:
Investor Relations
Martin Dunwoodie Director of Investor Relations +44 20 7269 8241
Louise Curran Senior Investor Relations Manager +44 20 7269 8235
Carla Fabiano Senior Investor Relations Manager +44 20 7269 8004
Media
Barney Wyld Group Corporate Affairs Director +44 20 7269 8001
Harry Cameron Tulchan Communications +44 7799 152148
Notes:
1. Underlying is before profit or loss on disposal of businesses, gain or loss on
significant legal proceedings together with associated legal costs,
amortisation of acquired intangibles, share of profits or losses from
non-strategic equity investments, major impairment and restructuring charges
and, where relevant, related tax effects. For definitions and reconciliations
of other non-GAAP measures, see pages 47 to 52.
2. 1H 2021/22 is restated to reflect the group's new reporting structure as well
as the classification of Health as a discontinued operation.
3. Unless otherwise stated, sales and operating profit commentary refers to
performance at constant exchange rates. Growth at constant rates excludes the
translation impact of foreign exchange movements, with 1H 2021/22 results
converted at 1H 2022/23 average rates. In 1H 2022/23, the translational impact
of exchange rates on group sales and underlying operating profit was a benefit
of £97 million and £18 million respectively.
4. Revenue excluding sales of precious metals to customers and the precious metal
content of products sold to customers.
5. Vara consensus for full year group underlying operating profit in 2022/23 was
£487 million
(range: £458 million to £516 million) as at 21(st) November 2022. 2021/22
group underlying operating profit on an adjusted basis was £553 million
(adjusted for disposal of Health).
6. At current foreign exchange rates (£:US$ 1.16, £:€ 1.15, £:RMB 8.35)
translational foreign exchange movements for the year ending 31(st) March 2023
are expected to benefit underlying operating profit by around c.£40 million,
which is included in the outlook on page 3.
7. As forecast by external consultants - IHS (November 2022).
8. Based on average precious metal prices in November 2022 (month to date).
9. c.£40 million adverse impact represents a gross PGM price impact before any
foreign exchange movement.
A US$100 change in the average annual platinum, palladium and rhodium metal
prices each have an impact of approximately £1 million, £1.5 million and £1
million respectively on full year underlying operating profit. This assumes no
foreign exchange movement.
Chief Executive update
In May we published our strategy to drive value creation centred around a more
focused product portfolio enabled by our core competencies. These comprise our
expertise in platinum group metal (PGM) chemistry, catalysis, and process
technology. We are executing our strategy to exploit our market leading
technologies, with a strengthened commercial focus and a leaner, faster paced,
more agile organisation.
Since outlining our strategy the macroeconomic environment has deteriorated.
Against this backdrop, cost inflation - particularly energy, raw materials and
labour - has been challenging and impacted our first half results. We
experienced c.£80 million cost inflation, of which
c.£40 million was recovered in the period from customers. We have been
working hard to mitigate inflation through our sharpened commercial focus and
actions to increase efficiency. Whilst we have made some early progress
through the first half, there is a lag in recovering costs and we expect
further progress through the second half. Our business has strong foundations,
underpinned by our strong balance sheet and, in combination with the actions
we are taking, we are confident we will navigate these cyclical challenges.
Growth markets accelerating and opportunities more tangible
Recent geopolitical events are accelerating and expanding our key growth
markets, creating significant opportunities for our decarbonisation solutions.
In the US, the Inflation Reduction Act enacted in August is the largest
climate package in US history changing the landscape for clean energy. The Act
includes c.US$400 billion of incentives that will reduce the cost of clean
energy projects, increasing investment and demand. This will benefit our
Hydrogen Technologies business in particular, but is also highly relevant for
our Catalyst Technologies and PGM Services businesses. Russia's invasion of
Ukraine and other macroeconomic pressures have highlighted threats to energy
security and the dependency on fossil fuels, driving an urgent need to
accelerate the energy transition. In China, we are seeing significant growth
in the demand for fuel cells, driven by the country's ambition to reach net
zero emissions.
Good progress on executing our strategy
We have made good progress against our strategic milestones set out in May:
Customers:
· In advanced talks to secure large scale strategic partnerships in Hydrogen
Technologies
· Euro 7 business wins well on track. On track to £4bn+ cash¹ for Clean Air
· Won 3 additional large scale projects in Catalyst Technologies (targeting
>10 across Catalyst Technologies and Hydrogen Technologies by 2023/24)
Investments:
· Progressing PGM Services refining capacity expansion in China
· Construction of Hydrogen Technologies CCM plant in the UK² on time and on
budget
· Targeted capacity expansion (fuel cells catalyst, formaldehyde catalyst) on
track
· Continuing to divest non-core assets - agreed divestment of Piezo Products
within Medical Device Components (Value Businesses)
People: Stronger link between performance and compensation
Sustainability:
· On track for reduction in scope 1+2 CO(2)e (carbon dioxide equivalent)
emissions from a 2019/20 baseline (target c.10%)
· Helped customers reduce CO(2)e emissions by 678,000 tonnes p.a. through use of
our products (target >1mt p.a.)
1. At least £4 billion of cash under our range of scenarios from 1(st) April
2021 to 31(st) March 2031. Cash target
pre-tax and post restructuring costs. 2. To expand total capacity from 2GW to
5GW.
1. Customers: winning new business to drive growth
Clean Air - We are continuing to develop world leading catalysts to support
our customers as tighter emission regulations come into force across the
world. Earlier this month the EU Commission submitted its Euro 7 proposal to
the European Parliament. It proposes tighter emission regulations,
particularly in heavy duty, while the use of wider real world driving
conditions will also benefit light duty diesel and gasoline. We expect these
emission standards to be implemented from 2025 for light duty and 2027 for
heavy duty, which will drive an uplift in value for our emission control
catalysts.
We are winning business linked to Euro 7 and equivalent legislation globally.
We are well on track with our targeted Euro 7 business, including securing all
of Mercedes Benz's light duty diesel business in Europe. We remain on track to
deliver our cash generation target of at least £4 billion to 2030/31.
Catalyst Technologies - Our Catalyst Technologies business is strengthening
its focus on the syngas value chain, growing the existing business alongside
newer opportunities in low carbon hydrogen, sustainable fuels and low carbon
solutions. These growth opportunities will transform the scale of our
business.
In these new growth areas, we recently secured three project wins in North
America which are expected to generate sales of c.£75 million over five
years, subject to project completion. The projects include the first large
scale low carbon hydrogen project in North America, with our technology
enabling the capture of over 95% of the produced carbon. We also won two
sustainable fuels projects. These new business wins are in the context of
Catalyst Technologies sales of c.£450 million in 2021/22 and a pipeline of
more than 100 projects in new growth markets.
PGM Services - In October, we signed our first fuel cell recycling contract in
China with Unilia, one of the world's leading providers of fuel cell stack
technology, to refine and recycle the PGM content from Unilia's automotive
fuel cells.
Hydrogen Technologies - In Hydrogen Technologies we aim to be the market
leader in high value performance components for fuel cells, and PEM (proton
exchange membrane) and AEM (anion exchange membrane) electrolysers, creating
very significant growth in the medium-longer term. We have strong competitive
advantage and long-standing experience. Our customers have told us they value
our technology leadership and PGM expertise, particularly our ability to
access, supply and recycle these critical metals needed in our products. We
also have existing manufacturing capacity today and, underpinned by our strong
balance sheet, we have plans to scale quickly to meet increasing customer
demand. This makes us a partner of choice, and we are in advanced talks to
secure strategic partnerships and expect to announce further progress in the
coming months.
In August we signed a Memorandum of Understanding (MoU) with Sinopec Capital,
the largest oil and petrochemical products supplier and second largest oil and
gas producer in China. The agreement aims to explore joint possibilities
across low carbon hydrogen, electrolysers, fuel cells, other decarbonisation
technologies and a circular economy in China.
2. Investments: scaling to capture future growth
We are committed to investing for growth and generating attractive returns. As
part of our plans to invest £1 billion in capital expenditure over the next
three years to 2024/25, we announced in July an £80 million gigafactory in
the UK to scale up the manufacture of hydrogen fuel cell components. This
investment, which is backed by the UK government, is
customer-backed and will have 3GW capacity. The plant is currently on time and
on budget, and we expect to commence production in the first half of calendar
2024. Our investment supports our target of generating more than £200 million
in sales in Hydrogen Technologies by the end of 2024/25.
In PGM Services, our refineries need significant investment which will set
them up for decades of operation and substantial cash generation. This
investment will increase the resilience, efficiency and long-term
sustainability of our assets and allow us to maintain our competitive
advantage. We are investing in our refining capacity in China to build a full
refinery offering, ensuring we are well positioned as the market evolves. We
expect our capacity expansion in China to be operational by the end of
2022/23. We are also investing in the UK to upgrade our refining assets.
Alongside this, we are expanding our fuel cells catalyst capacity to support
our Hydrogen Technologies business as it scales up.
To further simplify our portfolio, we are continuing to divest non-core
assets. Today, we announce the agreement to sell Piezo Products, part of
Medical Device Components within Value Businesses. The business will be sold
to Hoerbiger with completion expected by the end of 2022/23. In addition,
following our announcement to exit Battery Materials last year we have taken
the decision to cease work on battery materials recycling.
3. People
In line with the pillars of our strategy - focus, simplify, execute - we are
developing a stronger performance culture that is disciplined in the execution
of our strategy and delivers consistent results. The successful delivery of
our strategy depends heavily on our talented people and we are proud of their
commitment to JM and our ambitions.
We have continued to focus our portfolio and alongside this we are reducing
complexity across the organisation, from which we are targeting at least £150
million in annualised cost savings by 2024/25. Associated costs to deliver the
programme are around £100 million, all of which are cash. As part of our
transformation, we are finalising our target operating model and streamlining
our group functions. We are also reducing management layers, targeting a c.15%
reduction in senior management headcount. In combination with other measures,
we expect to deliver c.£35 million of savings in 2022/23.
As we strive for better execution, we are strengthening performance management
and incentivisation across the organisation with appropriate evaluation,
compensation and grading systems. In parallel, we are also keeping close track
of our employee engagement scores.
4. Sustainability
Sustainability is an integral part of JM and embedded within our strategy. We
are committed to achieving net zero by 2040, underpinned by a series of 2030
targets categorised under three key pillars: 1) products and services, 2)
operations and 3) people.
Within operations, we aim to reduce our Scope 1 and 2 GHG emissions by 33% by
2030, against a 2019/20 baseline. As part of our strategy update in May, we
committed to a 10% reduction in our Scope 1 and 2 GHG emissions by the end of
2023/24 and we are on track. We are also helping customers reduce their own
GHG emissions by more than 1 million tonnes per annum through the use of our
products by the end of 2023/24. As at 30(th) September, our customers have
avoided 678,000 tonnes p.a. of GHG emissions using our products and solutions.
1.
Customers: winning new business to drive growth
Clean Air - We are continuing to develop world leading catalysts to support
our customers as tighter emission regulations come into force across the
world. Earlier this month the EU Commission submitted its Euro 7 proposal to
the European Parliament. It proposes tighter emission regulations,
particularly in heavy duty, while the use of wider real world driving
conditions will also benefit light duty diesel and gasoline. We expect these
emission standards to be implemented from 2025 for light duty and 2027 for
heavy duty, which will drive an uplift in value for our emission control
catalysts.
We are winning business linked to Euro 7 and equivalent legislation globally.
We are well on track with our targeted Euro 7 business, including securing all
of Mercedes Benz's light duty diesel business in Europe. We remain on track to
deliver our cash generation target of at least £4 billion to 2030/31.
Catalyst Technologies - Our Catalyst Technologies business is strengthening
its focus on the syngas value chain, growing the existing business alongside
newer opportunities in low carbon hydrogen, sustainable fuels and low carbon
solutions. These growth opportunities will transform the scale of our
business.
In these new growth areas, we recently secured three project wins in North
America which are expected to generate sales of c.£75 million over five
years, subject to project completion. The projects include the first large
scale low carbon hydrogen project in North America, with our technology
enabling the capture of over 95% of the produced carbon. We also won two
sustainable fuels projects. These new business wins are in the context of
Catalyst Technologies sales of c.£450 million in 2021/22 and a pipeline of
more than 100 projects in new growth markets.
PGM Services - In October, we signed our first fuel cell recycling contract in
China with Unilia, one of the world's leading providers of fuel cell stack
technology, to refine and recycle the PGM content from Unilia's automotive
fuel cells.
Hydrogen Technologies - In Hydrogen Technologies we aim to be the market
leader in high value performance components for fuel cells, and PEM (proton
exchange membrane) and AEM (anion exchange membrane) electrolysers, creating
very significant growth in the medium-longer term. We have strong competitive
advantage and long-standing experience. Our customers have told us they value
our technology leadership and PGM expertise, particularly our ability to
access, supply and recycle these critical metals needed in our products. We
also have existing manufacturing capacity today and, underpinned by our strong
balance sheet, we have plans to scale quickly to meet increasing customer
demand. This makes us a partner of choice, and we are in advanced talks to
secure strategic partnerships and expect to announce further progress in the
coming months.
In August we signed a Memorandum of Understanding (MoU) with Sinopec Capital,
the largest oil and petrochemical products supplier and second largest oil and
gas producer in China. The agreement aims to explore joint possibilities
across low carbon hydrogen, electrolysers, fuel cells, other decarbonisation
technologies and a circular economy in China.
2.
Investments: scaling to capture future growth
We are committed to investing for growth and generating attractive returns. As
part of our plans to invest £1 billion in capital expenditure over the next
three years to 2024/25, we announced in July an £80 million gigafactory in
the UK to scale up the manufacture of hydrogen fuel cell components. This
investment, which is backed by the UK government, is
customer-backed and will have 3GW capacity. The plant is currently on time and
on budget, and we expect to commence production in the first half of calendar
2024. Our investment supports our target of generating more than £200 million
in sales in Hydrogen Technologies by the end of 2024/25.
In PGM Services, our refineries need significant investment which will set
them up for decades of operation and substantial cash generation. This
investment will increase the resilience, efficiency and long-term
sustainability of our assets and allow us to maintain our competitive
advantage. We are investing in our refining capacity in China to build a full
refinery offering, ensuring we are well positioned as the market evolves. We
expect our capacity expansion in China to be operational by the end of
2022/23. We are also investing in the UK to upgrade our refining assets.
Alongside this, we are expanding our fuel cells catalyst capacity to support
our Hydrogen Technologies business as it scales up.
To further simplify our portfolio, we are continuing to divest non-core
assets. Today, we announce the agreement to sell Piezo Products, part of
Medical Device Components within Value Businesses. The business will be sold
to Hoerbiger with completion expected by the end of 2022/23. In addition,
following our announcement to exit Battery Materials last year we have taken
the decision to cease work on battery materials recycling.
3.
People
In line with the pillars of our strategy - focus, simplify, execute - we are
developing a stronger performance culture that is disciplined in the execution
of our strategy and delivers consistent results. The successful delivery of
our strategy depends heavily on our talented people and we are proud of their
commitment to JM and our ambitions.
We have continued to focus our portfolio and alongside this we are reducing
complexity across the organisation, from which we are targeting at least £150
million in annualised cost savings by 2024/25. Associated costs to deliver the
programme are around £100 million, all of which are cash. As part of our
transformation, we are finalising our target operating model and streamlining
our group functions. We are also reducing management layers, targeting a c.15%
reduction in senior management headcount. In combination with other measures,
we expect to deliver c.£35 million of savings in 2022/23.
As we strive for better execution, we are strengthening performance management
and incentivisation across the organisation with appropriate evaluation,
compensation and grading systems. In parallel, we are also keeping close track
of our employee engagement scores.
4. Sustainability
Sustainability is an integral part of JM and embedded within our strategy. We
are committed to achieving net zero by 2040, underpinned by a series of 2030
targets categorised under three key pillars: 1) products and services, 2)
operations and 3) people.
Within operations, we aim to reduce our Scope 1 and 2 GHG emissions by 33% by
2030, against a 2019/20 baseline. As part of our strategy update in May, we
committed to a 10% reduction in our Scope 1 and 2 GHG emissions by the end of
2023/24 and we are on track. We are also helping customers reduce their own
GHG emissions by more than 1 million tonnes per annum through the use of our
products by the end of 2023/24. As at 30(th) September, our customers have
avoided 678,000 tonnes p.a. of GHG emissions using our products and solutions.
Summary of underlying operating results from continuing operations
Unless otherwise stated, commentary refers to performance at constant rates¹.
Percentage changes in the tables are calculated on rounded numbers.
Sales Half year ended % change % change,
30(th) September
constant FX rates
(£ million)
2022 2021²
Clean Air 1,278 1,196 +7 +2
PGM Services 282 300 -6 -11
Catalyst Technologies 275 223 +23 +18
Hydrogen Technologies 23 10 +130 +130
Value Businesses³(,)⁴ 235 181 +30 +26
Eliminations (48) (54)
Sales (continuing) 2,045 1,856 +10 +5
Underlying operating profit Half year ended % change % change,
(£ million)
30(th) September
constant FX rates
2022 2021²
Clean Air 108 150 -28 -32
PGM Services 125 167 -25 -29
Catalyst Technologies 21 30 -30 -32
Hydrogen Technologies (24) (12) n/a n/a
Value Businesses³(,)⁵ 21 1 n/a n/a
Corporate (29) (39)
Underlying operating profit (continuing) 222 297 -25 -30
Reconciliation of underlying operating profit Half year ended
to operating profit
30(th) September
(£ million)
2022 2021²
Underlying operating profit (continuing) 222 297
Amortisation of acquired intangibles (2) (3)
Major impairment and restructuring charges⁶ (9) (314)
Gain on significant legal proceedings - 44
Operating profit (continuing) 211 24
Notes:
1. Growth at constant rates excludes the translation impact of foreign exchange
movements, with 1H 2021/22 results converted at 1H 2022/23 average rates. In
1H 2022/23, the translational impact of exchange rates on group sales and
underlying operating profit was a benefit of £97 million and £18 million
respectively.
2. 1H 2021/22 is restated to reflect the group's new reporting structure as well
as the classification of Health as a discontinued operation.
3. Includes Battery Systems, Medical Device Components, Diagnostic Services,
Battery Materials (divestment agreed) and Advanced Glass Technologies
(divestment completed).
4. Sales relating to divestments: Advanced Glass Technologies (1H 2021/22: £37
million, 1H 2022/23: £7 million) and Battery Materials (1H 2021/22: £6
million, 1H 2022/23: £13 million).
5. Operating profit or loss related to divestments: Advanced Glass Technologies
(1H 2021/22: £10 million,
1H 2022/23: nil) and Battery Materials (1H 2021/22: -£17 million, 1H 2022/23:
nil).
6. For further detail on these items please see page 17.
Operating results by sector
Clean Air
Sales slightly up. Operating profit impacted by partial recovery of cost
inflation
· Sales were up 2% with better pricing offsetting a marginal decline in volumes,
which were impacted by supply chain constraints mainly due to COVID lockdowns
in China, the ongoing semi-conductor chip shortage and disruption from the war
in Ukraine.
· Experienced a quarter-on-quarter improvement through the first half
· Underlying operating profit decreased 32% and margins declined by 4 percentage
points primarily reflecting increased input costs (principally energy) which
were only partially recovered in the half
Half year ended % change % change, constant FX rates
30(th) September
2022 2021
£ million £ million
Sales
Light duty diesel 515 498 +3 +1
Light duty gasoline 299 270 +11 +3
Heavy duty diesel 464 428 +8 +1
Total sales 1,278 1,196 +7 +2
Underlying operating profit 108 150 -28 -32
Underlying margin 8.5% 12.5%
Reported operating profit 109 149
Clean Air provides catalysts for emission control after-treatment systems used
in light and heavy duty vehicles powered by internal combustion engines.
Sales were up 2%, with better pricing offsetting a decline in volumes. Volumes
were marginally lower reflecting supply chain disruption mainly due to COVID
lockdowns in China which impacted heavy duty production, whilst auto
production was constrained by semiconductor chip shortages and disruption from
the war in Ukraine. These disruptions eased through the period, and we
experienced a quarter-on-quarter improvement.
Light duty catalysts - diesel and gasoline
Light duty diesel
In light duty diesel sales were broadly flat, in line with the overall market.
In the Americas we benefited from both a strong underlying market and good
customer performance. This was offset by a decline in Europe, which represents
around 60% of our total light duty diesel sales. We experienced lower platform
performance in this region due to semi-conductor chip supply constraints, as
some automotive OEMs prioritised commercial vehicles over the passenger car
platforms that we serve.
Light duty gasoline
Sales of light duty gasoline were up 3% in the period, underperforming the
overall global market. Our growth was driven by a stronger market in the
Americas as well as good growth in Asia partly following COVID lockdowns in
the prior year in Malaysia. In Europe, sales were broadly flat held back by
previous platform losses in the region.
Heavy duty diesel catalysts
Heavy duty diesel sales were up 1%, strongly outperforming the global market.
We saw good performance in Europe and America offset by a decline in Asia. In
Europe, there was strong market growth due to pent up demand and we
outperformed the market due to our customers' good platform performance. In
the Americas, heavy duty sales continue to benefit from the cyclical recovery
in the US Class 8 truck cycle. Sales in Asia were materially down, due to
lower vehicle production in China as a result of COVID lockdowns, especially
during the first quarter.
Underlying operating profit
Underlying operating profit declined 32% to £108 million and margins
decreased to 8.5%. Whilst the business benefited from better pricing and
efficiency savings, it was impacted by significant cost inflation (principally
energy) which was not fully recovered in the period. There is a lag in
negotiating inflation claims with automotive OEMs resulting in Clean Air's
first half profit and margin being significantly below last year. We are
focused on further recovery of cost inflation, which we expect to benefit the
second half, alongside benefits from our transformation programme.
On track to deliver at least £4 billion of cash in the decade to 2030/31
We are on track to deliver on our cash generation target of at least £4
billion by 2030/31¹, having delivered £800 million in the first year of this
guidance (2021/22). We expect lower cashflow this year versus last, which
benefited from a working capital unwind due to COVID lockdowns in China as
well as metal price tailwinds.
Notes:
1. At least £4 billion of cash under our range of scenarios from 1(st) April
2021 to 31(st) March 2031. Cash target
pre-tax and post restructuring costs.
PGM Services
Performance impacted by lower average PGM prices and reduced refinery volumes
· Sales performance reflects lower average PGM prices and reduced refinery
volumes due to lower auto scrap levels as a result of a buoyant used car
market
· Underlying operating profit was down driven by lower average PGM prices and
reduced refinery volumes, as well as increased energy costs
Half year ended % change % change, constant FX rates
30(th) September
2022 2021
£ million £ million
Sales
PGM Services 282 300 -6 -11
Underlying operating profit 125 167 -25 -29
Underlying margin 44.3% 55.7%
Reported operating profit 125 167
PGM Services is the world's largest secondary recycler of platinum group
metals (PGMs). This business has an important role in enabling the energy
transition through providing circular solutions as demand for scarce critical
materials increases. PGM Services provides a strategic service to the group,
supporting Clean Air, Catalyst Technologies and Hydrogen Technologies with
security of metal supply in a volatile market, and manufactures value added
PGM products
In PGM Services, sales declined 11% against a strong prior period. This was
primarily due to lower average PGM prices, particularly rhodium where the
average price declined c.30% compared to the same period last year. In our
refineries, intake volumes were down because of lower auto scrap levels
resulting from a buoyant used car market. Our metals trading service performed
well although sales in the half were lower due to reduced market volatility.
PGM Services' product sales were down, primarily due to phasing of customer
orders and the COVID lockdown in China.
Underlying operating profit
Underlying operating profit declined 29% impacted by lower average PGM prices
(c.£30 million impact¹) and reduced refining volumes, as well as increased
energy costs.
Notes:
1. Gross PGM price impact was c.£30 million, which was partly offset by foreign
exchange benefits. Foreign exchange benefit reflects the pricing of PGMs in US
dollars.
Catalyst Technologies
High growth in sales but cost inflation impacted profits
· Sales up 18% driven by growth in catalyst refills and licensing income
· Strong period for licensing, with 7 new licences won, 2 of which are within
sustainable solutions. Secured additional licence win in sustainable fuels in
November.
· Underlying operating profit declined 32%, impacted by the loss of business in
Russia and cost inflation, which was only partially recovered in the period
Half year ended % change % change, constant FX rates
30(th) September
2022 2021
£ million £ million
Sales
Catalyst Technologies 275 223 +23 +18
Underlying operating profit 21 30 -30 -32
Underlying margin 7.6% 13.5%
Reported operating profit 17 72
Catalyst Technologies is focused on enabling the decarbonisation of chemical
and fuels value chains and we have leading positions in syngas: methanol,
ammonia, hydrogen and formaldehyde. Catalyst Technologies has three key
segments: industrial and consumer, traditional fuels and sustainable solutions
that help catalyse the transition to net zero. Our revenue streams comprise
licensing and engineering income, first fill and refill catalysts.
Industrial and Consumer: strong growth in refill catalysts and licensing
Industrial and consumer includes our methanol, ammonia and formaldehyde
offerings as well as the majority of our licensing business.
We experienced double digit sales growth, mainly driven by catalyst refills
and licensing. Refills grew supported by both higher volumes and pricing in
response to cost inflation. Ammonia was weaker, reflecting lower demand due to
higher natural gas prices. This was a strong half for licensing. We continue
to benefit from our leading technologies with good growth in income and five
additional licences won in the segment.
Following the ongoing war in Ukraine, we exited our activities in Russia
resulting in the loss of catalyst sales and higher margin licensing income in
the region.
Traditional fuels: good growth in gas purification
Traditional fuels includes our refining additives, hydrogen and natural gas
purification offerings. Growth in this segment was driven by natural gas
purification. There was strong demand across all regions supported by higher
natural gas prices.
Sustainable solutions: growing pipeline
We are unlocking new, growth markets with our technology in low carbon
hydrogen, sustainable fuels and low carbon solutions. In the first half we won
two licences which include the first large scale low carbon hydrogen licence
granted in North America and a commercial scale sustainable fuel project also
in North America. In addition, we secured a further sustainable fuel project
win in November with Strategic Biofuels.
Underlying operating profit
Underlying operating profit declined 32% to £21 million and the margin
contracted
5.9 percentage points. This was impacted by the loss of business in Russia of
c.£5 million and a lag in pricing to recover cost inflation.
Hydrogen Technologies
Strong sales growth and continued investment to meet customer demand
· Sales more than doubled driven by higher commercial production for new and
existing customers in fuel cells, early sales in electrolysers and increased
volumes as manufacturing constraints eased
· Underlying operating loss reflects the continued investment in scale up,
customer trials and business development, partly offset by benefits from
increased sales volumes
Half year ended % change % change, constant FX rates
30(th) September
2022 2021
£ million £ million
Sales
Hydrogen Technologies 23 10 +130 +130
Underlying operating loss (24) (12) n/a n/a
Underlying margin n/a n/a
Reported operating loss (24) (12)
In Hydrogen Technologies, we provide catalyst coated membranes that are a
critical component of fuel cells and electrolysers.
In Hydrogen Technologies, sales in the half more than doubled to £23 million
primarily driven by growth in fuel cells where we delivered higher commercial
volumes for new and existing fuel cell customers. In electrolysers, we are
commercialising new products and generated early sales from samples and pilot
projects through testing of key components with leading electrolyser
manufacturers. Sales also benefited from higher manufacturing output, as
constraints eased following the greater use of capacity in the prior period to
qualify new customer products.
As we focus on scale up, work is ongoing to expand our manufacturing capacity
in the UK. In the UK, construction of our 3GW plant in Royston is on time and
on budget with production expected to commence in the first half of calendar
year 2024. This investment supports our target of more than £200 million
sales in Hydrogen Technologies by the end of 2024/25.
Underlying operating loss
Underlying operating loss of £24 million primarily reflects increased
investment in scale up, customer trials and business development, partly
offset by benefits from increased sales volumes.
Value Businesses
Strong sales and profit growth - driving value from non-core business
· Strong sales and profit growth driven by good business performance from better
underlying activity, and actions taken to improve performance and drive value
· Agreed sale of Piezo Products, part of Medical Device Components, with
completion expected by the end of 2022/23
Half year ended % change % change, constant FX rates
30(th) September
2022 2021
£ million £ million
Sales
Value Businesses¹ 235 181 +30 +26
Underlying operating profit² 21 1 n/a n/a
Underlying margin 8.9% 0.6%
Reported operating profit / (loss) 15 (313)
Value Businesses is managed to drive shareholder value from activities
considered to be
non-core to JM, and comprises Battery Systems, Medical Device Components and
Diagnostic Services. Our reported financial results in the prior year also
include Battery Materials (divestment agreed) and Advanced Glass Technologies
(divestment completed).
Overall, sales in Value Businesses were up 26% in the period. Excluding the
impact of Advanced Glass Technologies and Battery Materials, sales were up
52%. We saw strong sales performance in Battery Systems driven by e-bike
applications largely due to increased volumes and sales of higher value
products following significant project wins. Medical Device Components also
performed well, driven by project wins as well as higher effective production
capacity following investments to upgrade assets and drive efficiency.
Diagnostic Services continued to benefit from a recovery in demand as
COVID-related travel disruption eased and a higher oil price drove increased
customer activity.
Underlying operating profit
Underlying operating profit of £21 million, an improvement of £20 million on
the prior year, reflects good business performance from better underlying
activity, and actions taken to improve performance and drive value.
Excluding the results of Advanced Glass Technologies and Battery Materials
from the prior year, underlying operating profit was £21 million², an
improvement of £13 million on a like-for-like basis.
Corporate
Corporate costs were £29 million, a decrease of £10 million from the prior
period, largely reflecting lower pension charges as well as some functional
efficiencies.
Notes:
1. Sales relating to divestments: Advanced Glass Technologies (1H 2021/22: £37
million, 1H 2022/23: £7 million) and Battery Materials (1H 2021/22: £6
million, 1H 2022/23: £13 million).
2. Operating profit or loss related to divestments: Advanced Glass Technologies
(1H 2021/22: £10 million,
1H 2022/23: nil) and Battery Materials (1H 2021/22: -£17 million, 1H 2022/23:
nil).
Financial review - continuing operations
Research and development (R&D)
R&D spend was £106 million in the half. This was broadly in line with the
prior year spend of £103 million and represents c.5% of sales excluding
precious metals. As we simplify our portfolio, we have re-focused spend to
support our growth areas such as Hydrogen Technologies.
Foreign exchange
The calculation of growth at constant rates excludes the impact of foreign
exchange movements arising from the translation of overseas subsidiaries'
profit into sterling. The group does not hedge the impact of translation
effects on the income statement. The principal overseas currencies, which
represented 76% of the non-sterling denominated underlying operating profit in
the half year ended 30(th) September 2022, were:
Share of 1H 2022/23 Average exchange rate % change
non-sterling denominated
underlying operating profit Half year ended
30(th) September
2022 2021
US dollar 34% 1.21 1.39 -12%
Euro 9% 1.17 1.16 1%
Chinese renminbi 34% 8.18 8.95 -9%
For the half, the impact of exchange rates increased sales by £97 million and
underlying operating profit by £18 million.
If current exchange rates (£:US$ 1.16, £:€ 1.15, £:RMB 8.35) are
maintained throughout the year ending 31(st) March 2023, foreign currency
translation will have a positive impact of approximately c.£40 million on
underlying operating profit. A one cent change in the average US dollar and
euro exchange rates and a ten fen change in the average rate of the Chinese
renminbi each have an impact of approximately £1 million on full year
underlying operating profit.
Efficiency savings
We have now commenced our new group transformation programme as part of which
we expect to deliver further efficiencies of at least £150 million by
2024/25. Associated costs to deliver the programme are around £100 million,
all of which are cash. In 2022/23, we expect to deliver c.£35 million of
savings.
Items outside underlying operating profit
Non-underlying (charge) / income As at As at
30(th) September
30(th) September 2021
(£ million)
2022
Amortisation of acquired intangibles (2) (3)
Major impairments and restructuring (9) (314)
Gain on significant legal proceedings - 44
Total (11) (273)
Major impairment and restructuring costs
The group incurred £5 million in respect of the transformation initiatives
announced in May 2022, largely comprising of redundancy costs, and a further
£4 million for other business exit related costs.
In the prior period, the group incurred impairment charges of £314 million in
relation to the group's decision to pursue the sale of all or parts of Battery
Materials, the charge was based on our estimate of the recoverable amount at
that time. The process to dispose of the remaining assets in Battery Materials
is ongoing.
Finance charges
Net finance charges in the period amounted to £21 million, down from £28
million in the first half of 2021/22. This reflects higher interest income, a
lower average cost of borrowing and reduced metal leases during the period.
Taxation
The tax charge on underlying profit before tax for the half year ended 30(th)
September 2022 was £40 million, an effective underlying tax rate of 19.9%,
up from 16.0% in the first half of 2021/22.
The effective tax rate on reported profit for the half year ended 30(th)
September 2022 was 20.3%. This represents a tax charge of £38 million,
compared with £20 million in the prior period, largely reduced because of the
tax effect of impairments to the Battery Materials business.
We currently expect the effective tax rate on underlying profit for the year
ending 31(st) March 2023 to be around 19%.
Post-employment benefits
IFRS - accounting basis
At 30(th) September 2022, the group's net post-employment benefit position,
was a surplus of £172 million.
The cost of providing post-employment benefits in the period was £16 million,
down from
£24 million in the same period last year.
Capital expenditure
Capital expenditure was £130 million in the half, 1.4 times depreciation and
amortisation (excluding amortisation of acquired intangibles). In the period,
key projects included:
· Hydrogen Technologies - investing to increase manufacturing capacity in the UK
· PGM Services - investing in the resilience, efficiency and long-term
sustainability of our refinery assets
Strong balance sheet
Net debt as at 30(th) September 2022 was £963 million, an increase from £856
million at 31(st) March 2022 and £691 million at 30(th) September 2021. Net
debt is £32 million higher at
£995 million when post tax pension deficits are included. The group's net
debt (including post tax pension deficits) to EBITDA was 1.5 times (30(th)
September 2021: 0.9 times), in line with our target range of 1.5 to 2.0 times.
We use short-term metal leases as part of our mix of funding for working
capital, which are outside the scope of IFRS 16 as they qualify as short-term
leases. Precious metal leases amounted to £129 million as at 30(th)
September 2022 (31(st) March 2022: £140 million, 30(th) September 2021: £223
million).
Free cash flow and working capital
Free cash flow was £133 million in the half, compared to £190 million in the
prior period, largely reflecting lower underlying operating profit, increased
working capital and the absence of a legal settlement received in the prior
year. This was partly offset by proceeds from disposals.
Excluding precious metal, average working capital days to 30(th) September
2022 increased to 35 days compared to 30 days to 30(th) September 2021.
Going concern
The group maintains a strong balance sheet with around £1.7 billion of
available cash and undrawn committed facilities. Cash generation was positive
during the period with free cash flow of £133 million. Net debt increased
since 31(st) March 2022 to £963 million primarily due to unfavourable foreign
exchange retranslation impacts driven by a weaker pound sterling. The
directors have reviewed a range of scenario forecasts for the group and have
reasonable expectation that there are no material uncertainties that cast
doubt about the group's ability to continue operating for at least twelve
months from the date of approving these half-yearly accounts. In arriving at
this view, the base case scenario was stress tested to a severe but plausible
downside case which assumes lower demand across our markets to account for
further ongoing disruptions and a deep recession. Additionally, the group
considered scenarios including the impact from metal price volatility, higher
inflation, energy blackout impacts and increases in the amount of metal that
we would have to hold. Under all scenarios, the group has sufficient headroom
against committed facilities and key financial covenants are not in breach
during the going concern period. The directors are therefore of the opinion
that the group has adequate resources to fund its operations for the period of
twelve months following the date of this announcement and so determine that it
is appropriate to prepare the accounts on a going concern basis.
Risks and uncertainties
JM's principal risk landscape has been updated to reflect our refreshed
strategy and the challenges we are facing within the environment in which we
operate. Two new risks (2 and 3 below) have been added, highlighting the
impact of the geopolitical risks and the level of reliance placed on capital
execution to deliver growth expectations. Three risks have been removed from
our principal risks due to the progress made in managing these risks to
satisfactory levels (namely intellectual property, ethics and compliance, and
customer contract liability) and will continue to be monitored as part of
business-as-usual processes.
JM continues to make improvements to its risk management approach and insights
used to support various business decisions.
1. Commoditisation of sustainable technology - Failure to correctly anticipate
market trends driving commoditisation of sustainable technology. With shifts
being slower or faster than anticipated, we may fail to make the right and
timely decision to respond to these shifts. This risk, combined with a failure
to identify other new markets relevant for JM, may adversely impact revenue,
cash flow and profitability, including our position as technology and cost
leader.
2. Lack of preparedness to respond to specific geopolitical events impacting
JM's operations - Due to the nature of JM's global footprint, there is a risk
that we may face disruption in operations, supply chain and/or customer
markets due to geopolitical events such as conflicts, trade disputes,
sanctions, pandemics, inflation and economic recession in specific countries
or regions where we operate or where our supply chains are reliant.
3. Inefficient delivery of strategic capex - Inability to meet operational
growth expectations due to inefficient execution of capital investment
projects, driven mainly by lack of specialist resources and failures in change
management.
4. Development and/or production of non-competitive products - Inability to
meet customers' evolving needs, at least as effectively and profitably as our
competitors, could reduce our brand value. Performance failure or quality
defects could harm consumers or result in liability claims, which could lead
to loss of future business and/or our licence to operate as well as
reputational damage.
5. A significant work related EHS incident Failure to operate safely,
resulting in injury or breach to applicable laws/regulations, which could lead
to negative effects on our people, our reputation and/or the environment. This
could also mean the loss of production time as well as attracting negative
interest from the media and regulators, leading to significant fines and
penalties.
6. Disruption to inbound (non-platinum group metals) goods or services As a
manufacturing business, we are dependent on global suppliers to provide key
resources and services. Given the types of products, there are limited
suppliers from which we can source certain critical raw materials. If there
was a significant disruption in their supply, we would be unable to
manufacture our products and satisfy customer demand. There is also a growing
risk regarding energy, and we are not immune to the risk of energy shortages
in the geographies in which we operate, which could impact gas or electricity
supplies to our sites and indirectly through our suppliers.
7. Inability to attract and or retain talent - As a result of the continued
uncertain macroeconomic environment, with ongoing workforce disruption and
changing workforce dynamics in light of COVID, there is a risk that we may not
attract and/or retain the critical skills and capabilities which could
adversely impact our ability to deliver our strategic objectives.
8. Significant disruption to platinum group metals value chain - There is a
risk that we have insufficient metal available for our manufacturing
businesses and customer metal commitments. Metal price volatility affects how
much our trading business earns. Our refining business earnings also depend on
metal prices; a fall in these prices reduces revenue and operating profit. In
addition, a failure of our security management systems may result in a loss of
or theft of precious metal, which could lead to financial loss and / or
failure to satisfy our customers. This could reduce customer confidence or
result in legal action.
9. Failure in one or more of our critical operational assets - A failure in a
critical asset at our sites may have a material effect on our supply chain,
performance, share value and reputation. Also, more frequent extreme weather
events and natural disasters may disrupt our operations and increase our costs
10. Unsuccessful delivery of key business transformation programmes - If we
fail to deliver key business changes, this will damage our ability to
effectively execute our strategy. The expected benefits of the transformation
programme include long-term operating profit growth, reduced costs,
efficiencies while moving to a high performance business culture.
11. Business failure through cyber-attack or other IT incidents - The
occurrence of a significant disruption to our IT systems or a major cyber/data
security incident may adversely affect our operations, financial position,
harm our reputation and could lead to regulatory penalties.
Responsibility statement of the Directors in respect of the half yearly report
The half yearly report is the responsibility of the directors. Each of the
directors as at the date of this responsibility statement, whose names and
functions are set out below, confirms that to the best of their knowledge:
· the condensed consolidated accounts have been prepared in accordance with UK
adopted International Accounting Standard (IAS) 34 - 'Interim Financial
Reporting'; and
· the interim management report included in the Half-Yearly Report includes a
fair review of the information required by:
a) DTR 4.2.7R of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the
condensed consolidated accounts; and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
b) DTR 4.2.8R of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have materially
affected the financial position or performance of the company during that
period; and any changes in the related party transactions described in the
last annual report that could do so.
The names and functions of the directors of Johnson Matthey Plc are as
follows:
Patrick Thomas Chair of the Board and of the Nomination Committee
Liam Condon Chief Executive
Stephen Oxley Chief Financial Officer
John O'Higgins Senior Independent Non-Executive Director
Rita Forst Non-Executive Director
Jane Griffiths Non-Executive Director and Chair of Societal Value Committee
Xiaozhi Liu Non-Executive Director
Chris Mottershead Non-Executive Director and Chair of the Remuneration Committee
Doug Webb Non-Executive Director and Chair of the Audit Committee
The responsibility statement was approved by the Board of Directors on 23(rd)
November 2022 and is signed on its behalf by:
Patrick Thomas
Chair
Independent Review Report
to Johnson Matthey
Plc
Report on the condensed consolidated accounts
Our conclusion
We have reviewed Johnson Matthey Plc's condensed consolidated accounts (the
"interim financial statements") in the half year results of Johnson Matthey
Plc for the 6 month period ended 30 September 2022 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Balance Sheet as at 30(th)
September 2022;
· the Condensed Consolidated Income Statement and Condensed
Consolidated Statement of Total Comprehensive Income for the period then
ended;
· the Condensed Consolidated Cash Flow Statement for the period then
ended;
· the Condensed Consolidated Statement of Changes in Equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the half year results of Johnson
Matthey Plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the half year results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with this ISRE. However, future events or
conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half year results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the half year results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the half year results, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the half year results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
23(rd) November 2022
Condensed Consolidated Income Statement
for the six months ended 30(th) September 2022
Six months ended
30.9.22 30.9.21
Notes £ million £ million*
Revenue 2, 3 7,328 8,503
Cost of sales (6,841) (7,969)
Gross profit 487 534
Distribution costs (57) (52)
Administrative expenses (208) (185)
Amortisation of acquired intangibles 4 (2) (3)
Gain on significant legal proceedings 4 - 44
Major impairment and restructuring charges 4 (9) (314)
Operating profit 211 24
Finance costs (48) (37)
Finance income 27 9
Share of losses of joint ventures and associates (2) -
Profit / (loss) before tax from continuing operations 188 (4)
Tax expense 5 (38) (20)
Profit / (loss) for the period from continuing operations 150 (24)
Profit / (loss) after tax from discontinued operations 10 10 (4)
Profit / (loss) for the period 160 (28)
pence pence
Earnings / (loss) per ordinary share
Basic 6 87.5 (14.8)
Diluted 6 87.1 (14.8)
pence pence
Earnings / (loss) per ordinary share from continuing operations
Basic 6 82.0 (12.4)
Diluted 6 81.7 (12.4)
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
Condensed Consolidated Statement of Total Comprehensive Income
for the six months ended 30(th) September 2022
Six months ended
30.9.22 30.9.21
Notes £ million £ million*
Profit / (loss) for the period 160 (28)
Other comprehensive income
Items that will not be reclassified to the income statement
Remeasurements of post-employment benefit assets and liabilities 12 (115) 59
Fair value (losses) / gains on equity investments (4) 1
Tax on items that will not be reclassified to the income statement 28 (5)
(91) 55
Items that may be reclassified to the income statement:
Exchange differences on translation of foreign operations 187 36
Exchange differences on translation of discontinued operations 10 (32) 4
Amounts (charged) / credited to hedging reserve (12) 13
Fair value losses on net investment hedges (22) (2)
Tax on items that may be reclassified to the income statement 4 (3)
125 48
Other comprehensive income for the period 34 103
Total comprehensive income for the period 194 75
Total comprehensive income for the period arises from:
Continuing operations 216 75
Discontinued operations 10 (22) -
194 75
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
Condensed Consolidated Balance Sheet
as at 30(th) September 2022
30.9.22 31.3.22
Notes £ million £ million
Assets
Non-current assets
Property, plant and equipment 8 1,344 1,238
Right-of-use assets 62 61
Goodwill 379 366
Other intangible assets 9 276 267
Investments in joint ventures and associates 82 2
Investments at fair value through other comprehensive income 58 45
Other receivables 87 42
Interest rate swaps 17 31 11
Deferred tax assets 116 98
Post-employment benefit net assets 12 231 352
Total non-current assets 2,666 2,482
Current assets
Inventories 1,781 1,549
Current tax assets 19 18
Trade and other receivables 1,881 1,796
Cash and cash equivalents 17 414 391
Interest rate swaps 17 - 1
Other financial assets 52 27
Assets classified as held for sale 10 48 402
Total current assets 4,195 4,184
Total assets 6,861 6,666
Liabilities
Current liabilities
Trade and other payables (2,567) (2,563)
Lease liabilities 17 (12) (10)
Current tax liabilities (86) (97)
Cash and cash equivalents ─ bank overdrafts 17 (45) (37)
Borrowings and related swaps 17 (183) (265)
Other financial liabilities (84) (44)
Provisions (45) (56)
Liabilities classified as held for sale 10 (10) (80)
Total current liabilities (3,032) (3,152)
Non-current liabilities
Borrowings and related swaps 17 (1,113) (899)
Lease liabilities 17 (41) (40)
Deferred tax liabilities (18) (18)
Interest rate swaps 17 (14) (2)
Employee benefit obligations 12 (59) (72)
Other financial liabilities (3) (12)
Provisions (36) (28)
Other payables (2) (2)
Total non-current liabilities (1,286) (1,073)
Total liabilities (4,318) (4,225)
Net assets 2,543 2,441
Equity
Share capital 215 218
Share premium 148 148
Shares held in employee share ownership trust (ESOT) (20) (24)
Other reserves 174 50
Retained earnings 2,026 2,049
Total equity 2,543 2,441
Condensed Consolidated Cash Flow Statement
for the six months ended 30(th) September 2022
Six months ended
30.9.22 30.9.21
Notes £ million* £ million*
Cash flows from operating activities
Profit / (loss) before tax from continuing operations 188 (4)
Loss before tax from discontinued operations 10 (5) (5)
Adjustments for:
Share of losses of joint ventures and associates 2 -
Depreciation 73 77
Amortisation 16 22
Impairment losses - 314
Share-based payments 8 9
Increase in inventories (169) (179)
Decrease in receivables 41 532
Increase / (decrease) in payables 26 (339)
Decrease in provisions (8) (8)
Contributions less than / (in excess of) employee benefit obligations (3) 5
charge
Changes in fair value of financial instruments (9) 8
Net finance costs 21 29
Income tax paid (36) (49)
Net cash inflow from operating activities 145 412
Cash flows from investing activities
Interest received 11 6
Purchases of property, plant and equipment (111) (141)
Purchases of intangible assets (26) (43)
Proceeds from sale of non-current assets - 2
Net proceeds from sale of businesses 166 -
Net cash inflow / (outflow) from investing activities 40 (176)
Cash flows from financing activities
Purchase of treasury shares (45) -
Proceeds from borrowings 272 63
Repayment of borrowings (259) -
Dividends paid to equity shareholders 7 (100) (96)
Interest paid (38) (40)
Principal element of lease payments (6) (7)
Net cash outflow from financing activities (176) (80)
Net increase in cash and cash equivalents 9 156
Exchange differences on cash and cash equivalents 14 3
Cash and cash equivalents at beginning of year 346 545
Cash and cash equivalents at end of period 17 369 704
Cash and deposits 161 223
Money market funds 253 523
Bank overdrafts (45) (42)
Cash and cash equivalents 17 369 704
* For cash flows of discontinued operations see note 10.
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30(th) September 2022
Share Shares
Share premium held in Other Retained Total
capital account ESOT reserves earnings equity
£ million £ million £ million £ million £ million £ million
At 1(st) April 2021 221 148 (29) - 2,345 2,685
Total comprehensive income for the period - - - 49 26 75
Dividends paid (note 7) - - - - (96) (96)
Share-based payments - - - - 12 12
Cost of shares transferred to employees - - 5 - (8) (3)
At 30(th) September 2021 221 148 (24) 49 2,279 2,673
Total comprehensive (expense) / income for the period - - - (2) 15 13
Dividends paid (note 7) - - - - (43) (43)
Purchase of treasury shares (3) - - 3 (200) (200)
Share-based payments - - - - 3 3
Cost of shares transferred to employees - - - - (5) (5)
At 31(st) March 2022 218 148 (24) 50 2,049 2,441
Total comprehensive income for the period - - - 121 73 194
Dividends paid (note 7) - - - - (100) (100)
Purchase of treasury shares (3) - - 3 - -
Share-based payments - - - - 12 12
Cost of shares transferred to employees - - 4 - (8) (4)
At 30(th) September 2022 215 148 (20) 174 2,026 2,543
1 Basis of preparation and statement of compliance
This condensed consolidated interim financial report for the half-year
reporting period ended 30(th) September 2022 has been prepared in accordance
with the UK-adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of
the UK's Financial Conduct Authority. The accounting policies applied are
consistent with the accounting policies applied by the group in its
consolidated accounts as at, and for the year ended, 31(st) March 2022, with
the exception of the adoption of amended accounting policies and standards as
explained below.
These condensed consolidated accounts do not constitute statutory accounts
within the meaning of Section 435 of the Companies Act 2006. The interim
report does not include all of the notes of the type normally included in an
annual financial report. Accordingly, this report is to be read in conjunction
with the annual report for the year ended 31(st) March 2022, which has been
prepared in accordance with UK-adopted International Accounting Standards
(IAS) and with the requirements of the Companies Act 2006.
Information in respect of the year ended 31(st) March 2022 is derived from the
company's statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditor's report on those statutory accounts was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying its report and did not
contain any statement under Section 498 (2) or Section 498 (3) of the
Companies Act 2006.
The half-yearly accounts are unaudited but have been reviewed by the auditors.
They were approved by the board of directors on 22(nd) November 2022.
Going concern
The directors have reviewed a range of scenario forecasts for the group and
have reasonable expectation that there are no material uncertainties that cast
doubt about the group's ability to continue operating for at least twelve
months from the date of approving these half-yearly accounts.
As at 30(th) September 2022, the group maintains a strong balance sheet with
around £1.7 billion of available cash and undrawn committed facilities. Free
cash flow was around £133 million, however net debt increased since 31(st)
March 2022 to £963 million primarily due to unfavourable foreign exchange
retranslation impacts driven by a weaker pound sterling. Net debt (including
post tax pension deficits) to EBITDA, was at the lower end of our target range
at 1.5 times.
Although impacted by the significant headwinds faced in the current
macroeconomic environment such as high inflation, the impacts of Russia's war
in Ukraine, and many major economies predicted to enter recessions, the
group's performance during the period was resilient, both in terms of
underlying operating profit and cash flow. For the purposes of assessing going
concern, we have revisited our financial projections using the latest
forecasts for our base case scenario. The base case scenario was stress tested
to a severe but plausible downside case which reflects lower demand across our
markets to account for further ongoing disruptions and a deep recession.
Additionally, the group considered scenarios including the impact from metal
price volatility, higher inflation, energy blackout impacts and increases in
the amount of metal that we would have to hold. Whilst the combined impact
would reduce profitability and EBITDA against our latest forecast, our balance
sheet remains strong.
The group has a robust funding position comprising a range of long-term debt
and a £1 billion five year committed revolving credit facility maturing in
March 2027 which was entirely undrawn at 30(th) September 2022. There was
£253 million of cash held in money market funds. Of the existing loans,
around £165 million of term debt matures in the period to December 2023 which
has been included in our going concern modelling. As a long time, highly
rated issuer in the US private placement market and having recently raised a
UK Export Financing facility, the group expects to be able to access
additional funding in its existing markets should it need to. The group also
has a number of additional sources of funding available including uncommitted
lease facilities that support precious metal funding. Whilst we would fully
expect to be able to utilise the metal lease facilities, they are excluded
from our going concern modelling.
1 Basis of preparation and statement of compliance (continued)
Going concern (continued)
Under all scenarios above, the group has sufficient headroom against committed
facilities and key financial covenants are not in breach during the going
concern period. There remain risks to the group including more extreme
economic outcomes. Against these, the group has a range of levers which it
could utilise to protect headroom including reducing capital expenditure and
future dividend distributions.
The directors are therefore of the opinion that the group has adequate
resources to fund its operations for the period of twelve months following the
date of this announcement and so determine that it is appropriate to prepare
the accounts on a going concern basis.
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. The group's non-GAAP
measures are defined and reconciled to GAAP measures in note 17.
Amended standards adopted by the group
The IASB has issued the following amendments, which have been endorsed by the
UK Endorsement Board, for annual periods beginning on or after 1 January 2022:
- Annual improvements to IFRS Standards 2018-2020;
- Amendments to IAS 16, Property, Plant and Equipment: Proceeds
before intended use;
- Amendments to IAS 37, Onerous Contracts - Cost of Fulfilling a
Contract; and
- Amendments to IFRS 3, Reference to the Conceptual Framework.
These changes have not had a material impact on the group. The group has not
early adopted any standard, interpretation or amendment that was issued but is
not yet effective.
New significant accounting policies adopted by the group
Investments in joint ventures and associates
A joint venture is a joint arrangement whereby investees are able to exercise
joint control of the arrangement.
Associates are entities over which the group exercises significant influence
when it has the power to participate in the financial and operating policy
decisions of the entity but it does not have the power to control or jointly
control the entity.
Investments in joint ventures and associates are accounted for using the
equity method of accounting and are initially recognised at cost. Thereafter
the investments are adjusted to recognise the group's share of the
post-acquisition profits or losses after tax of the investee in the income
statement, and the group's share of movements in other comprehensive income of
the investee in other comprehensive income. Dividends received or receivable
from associates are recognised as a reduction in the carrying amount of the
investment. The carrying value of the investments are reviewed for impairment
triggers on a regular basis.
Where the group's share of losses in an equity-accounted investment equals or
exceeds its interest in the entity, the group does not recognise further
losses unless it has incurred obligations to do so.
Unrealised gains and losses on transactions between the group and its
associates are eliminated to the extent of the group's interest in these joint
ventures and associates.
2 Segmental information
Revenue, sales and underlying operating profit by sector
As announced in our preliminary full year results in May 2022, we have changed
our reporting structure for the year ending 31(st) March 2023. The new
reporting structure provides greater transparency and reflects how we manage
our business. Efficient Natural Resources was split into two separate segments
(PGM Services and Catalyst Technologies), and Hydrogen Technologies and Value
Businesses are now separate operating segments (previously included within
Other Markets). Excluding Corporate, the group has five reporting segments,
aligned to the needs of our customers and the global challenges we are
tackling.
Clean Air - provides catalysts for emission control after-treatment systems
used in light and heavy duty vehicles powered by internal combustion engines.
PGM Services - enables the energy transition through providing circular
solutions as demand for scarce critical materials increases. Provides a
strategic service to the group, supporting the other segments with security of
metal supply.
Catalyst Technologies - enabling the decarbonisation of chemical value chains.
Hydrogen Technologies - providing catalyst coated membranes that are a
critical component for fuel cells and electrolysers.
Value Businesses - a portfolio of businesses managed to drive shareholder
value from activities considered to be non-core to JM. This includes Battery
Systems, Medical Device Components, Diagnostic Services and Battery Materials.
Refer to note 11 for further information on the disposal of Battery Materials.
Advanced Glass Technologies was sold on 31(st) January 2022 and is included
within the prior period balances.
The Group Leadership Team (the chief operating decision maker as defined by
IFRS 8, Operating Segments) monitors the results of these operating sectors to
assess performance and make decisions about the allocation of resources. Each
operating sector is represented by a member of the Group Leadership Team.
These operating sectors represent the group's reportable segments and their
principal activities are described on pages 24 to 27 of the 2022 Annual
Report. The performance of the group's operating sectors is assessed on sales
and underlying operating profit (see note 17). Sales between segments are made
at market prices, taking into account the volumes involved.
Health was sold during the financial period and its results are therefore
presented within discontinued operations (see note 10).
2 Segmental information (continued)
Six months ended 30(th) September 2022
Total from
Clean PGM Catalyst Hydrogen Value continuing
Air Services Technologies Technologies Businesses Corporate Eliminations operations
£ million £ million £ million £ million £ million £ million £ million £ million
Revenue from external customers 2,995 3,682 342 27 282 - - 7,328
Inter-segment revenue - 1,679 7 - - - (1,686) -
Revenue 2,995 5,361 349 27 282 - (1,686) 7,328
External sales(1) 1,278 240 269 23 235 - - 2,045
Inter-segment sales - 42 6 - - - (48) -
Sales(1) 1,278 282 275 23 235 - (48) 2,045
Underlying operating profit(1) 108 125 21 (24) 21 (29) - 222
Six months ended 30(th) September 2021*
Total from
PGM Catalyst Hydrogen Value continuing
Clean Services Technologies Technologies Businesses Eliminations operations
Air (restated) (restated) (restated) (restated) Corporate (restated) (restated)
£ million £ million £ million £ million £ million £ million £ million £ million
Revenue from external customers 3,748 4,221 293 12 229 - - 8,503
Inter-segment revenue 1 2,613 4 - - - (2,618) -
Revenue 3,749 6,834 297 12 229 - (2,618) 8,503
External sales(1) 1,195 252 218 10 181 - - 1,856
Inter-segment sales 1 48 5 - (54) -
Sales(1) 1,196 300 223 10 181 - (54) 1,856
Underlying operating profit(1) 150 167 30 (12) 1 (39) - 297
* The comparative period is restated to reflect the group's updated reporting
segments. Also restated to reflect classification of the Health segment as
discontinued operations (see note 10).
(1) Sales and underlying operating profit are non-GAAP measures (see note 17
for reconciliation to GAAP measures). Sales excludes the sale of precious
metals. Underlying operating profit excludes profit or loss on disposal of
businesses, gain or loss on significant legal proceedings, together with
associated legal costs, amortisation of acquired intangibles and major
impairment and restructuring charges.
2 Segmental information (continued)
Net assets by sector
At 30(th) September 2022
Clean PGM Catalyst Hydrogen Value
Air Services Technologies Technologies Businesses Corporate Total
£ million £ million £ million £ million £ million £ million £ million
Segmental net assets 2,222 (664) 799 70 202 570 3,199
Net debt (see note 17) (963)
Post-employment benefit net assets and liabilities 172
Deferred tax net assets 98
Provisions and non-current other payables (83)
Investments in joint ventures and associates 82
Net assets held for sale (see note 10) 38
Net assets 2,543
At 31(st) March 2022*
PGM Catalyst Hydrogen Value
Clean Services Technologies Technologies Businesses
Air (restated) (restated) (restated) (restated) Corporate Total
£ million £ million £ million £ million £ million £ million £ million
Segmental net assets 2,108 (702) 743 51 169 330 2,699
Net debt (see note 17) (856)
Post-employment benefit net assets and liabilities 280
Deferred tax net assets 80
Provisions and non-current other payables (86)
Investments in joint ventures and associates 2
Net assets held for sale 322
Net assets 2,441
* The comparative period is restated to reflect the group's updated reporting
segments. The overall group total is as previously reported.
3 Revenue
Products and services
The group's principal products and services by operating business and
sub-business are disclosed in the table below, together with information
regarding performance obligations and revenue recognition. Revenue is
recognised by the group as contractual performance obligations to customers
are completed.
Sub-business Primary industry Principal products and services Performance obligations Revenue recognition
Clean Air
Light Duty Catalysts Automotive Catalysts for cars and other light duty vehicles Point in time On despatch or delivery
Heavy Duty Catalysts Automotive Catalysts for trucks, buses and non-road equipment Point in time On despatch or delivery
PGM Services
Platinum Group Metal Services Various Platinum Group Metal refining and recycling services Over time Based on output
Other precious metal products Point in time On
despatc
h or
deliver
y
Platinum Group Metal chemical and industrial products Point in time On
despatc
h or
deliver
y
Advanced catalysts Point in time On
despatc
h or
deliver
y
Catalyst Technologies
Catalyst Technologies Chemicals / oil and gas Speciality catalysts and additives Point in time On despatch or delivery
Process technology licences Over time Based
on
costs
incurre
d or
straigh
t-line
over
the
licence
term(1)
Hydrogen Technologies
Fuel Cells Automotive Fuel cell technologies Point in time On despatch or delivery
Value Businesses
Other Markets (excluding Diagnostic Services) Various Precious metal pastes and enamels, battery systems and products found in Point in time On despatch or delivery
devices used in medical procedures
Diagnostic Services Oil and gas Detection, diagnostic and measurement solutions Over time Based on costs incurred
(1) Revenue recognition depends on whether the licence is distinct in the
context of the contract.
3 Revenue (continued)
Revenue from external customers by principal products and services
Six months ended 30(th) September 2022
Continuing operations
Clean PGM Catalyst Hydrogen Value
Air Services Technologies Technologies Businesses Total
£ million £ million £ million £ million £ million £ million
Metal 1,717 3,442 73 4 47 5,283
Heavy Duty Catalysts 447 - - - - 447
Light Duty Catalysts 814 - - - - 814
Platinum Group Metal Services - 240 - - - 240
Catalyst Technologies - - 269 - - 269
Fuel Cells - - - 23 - 23
Battery Systems - - - - 135 135
Diagnostic Services - - - - 34 34
Medical Device Components - - - - 46 46
Other 17 - - - 20 37
Revenue 2,995 3,682 342 27 282 7,328
Six months ended 30(th) September 2021*
Continuing operations
PGM Catalyst Hydrogen Value
Clean Services Technologies Technologies Businesses Total
Air (restated) (restated) (restated) (restated) (restated)
£ million £ million £ million £ million £ million £ million
Metal 2,553 3,969 75 2 48 6,647
Heavy Duty Catalysts 413 - - - - 413
Light Duty Catalysts 768 - - - - 768
Platinum Group Metal Services - 252 - - - 252
Catalyst Technologies - - 218 - - 218
Fuel Cells - - - 10 - 10
Battery Materials - - - - 6 6
Battery Systems - - - - 77 77
Advanced Glass Technologies - - - - 36 36
Diagnostic Services - - - - 26 26
Medical Device Components - - - - 36 36
Other 14 - - - - 14
Revenue 3,748 4,221 293 12 229 8,503
* The comparative period is restated to reflect the group's updating reporting
segments. Also restated to reflect classification of Health segment as
discontinued operations (see note 10).
The contract receivables balance at 30(th) September 2022 is £75 million
(31(st) March 2022: £88 million).
3 Revenue (continued)
Revenue from external customers by point in time and over time performance
obligations
Six months ended 30(th) September 2022
Continuing operations
Clean PGM Catalyst Hydrogen Value
Air Services Technologies Technologies Businesses Total
£ million £ million £ million £ million £ million £ million
Revenue recognised at a point in time 2,995 3,541 270 27 264 7,097
Revenue recognised over time - 141 72 - 18 231
Revenue 2,995 3,682 342 27 282 7,328
Six months ended 30(th) September 2021
Continuing operations
Clean PGM Catalyst Hydrogen Value
Air Services Technologies Technologies Businesses Total
£ million £ million £ million £ million £ million £ million
Revenue recognised at a point in time 3,748 4,073 248 12 222 8,303
Revenue recognised over time - 148 45 - 7 200
Revenue 3,748 4,221 293 12 229 8,503
4 Operating profit
Six months ended
30.9.22 30.9.21
£ million £ million*
Operating profit is arrived at after charging / (crediting):
Total research and development expenditure 106 103
Less: Development expenditure capitalised - (15)
Research and development expenditure charged to the income statement 106 88
Less: External funding received - from governments (7) (6)
Net research and development expenditure charged to the income statement 99 82
Depreciation of:
Property, plant and equipment 67 60
Right-of-use assets 6 6
Depreciation 73 66
Amortisation of:
Acquired intangibles 2 3
Other intangible assets 14 18
Amortisation 16 21
Gain on significant legal proceedings - (44)
Major impairment and restructuring charges:
Property, plant and equipment - 216
Right-of-use assets - 5
Other intangible assets - 78
Trade and other receivables - 15
Impairment losses - 314
Restructuring charges 9 -
Major impairment and restructuring charges 9 314
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
Major impairment and restructuring charges
Major impairment and restructuring charges are shown separately on the face of
the income statement and excluded from underlying operating profit, see note
17.
Restructuring charges - the group incurred £5 million in respect of the
transformation initiatives announced in May 2022, largely comprising of
redundancy costs, and £4 million for other business exit related costs.
In the prior period, the group incurred impairment charges of £314 million in
relation to the group's decision to pursue the sale of all or parts of Battery
Materials, the charge was based on our estimate of the recoverable amount at
that time. The process to dispose of the remaining assets in Battery Materials
is ongoing.
5 Tax expense
The charge for taxation at the half year ended 30(th) September 2022 is £38
million (1H 2021/22 restated: £20 million), an effective tax rate of
20.3%. The tax charge on underlying profit before tax was £40 million, an
effective tax rate of 19.9%, an increase from 16.0% in the half year ended
30(th) September 2021. The tax rate on underlying profit for the year ending
31(st) March 2023 is estimated to be 19% (2021/22: 17%). The tax charge for
the prior year has been restated above to reflect the classification of the
Health business as discontinued operations.
6 Earnings / (loss) per ordinary share
Six months ended
30.9.22 30.9.21
pence pence
Basic 87.5 (14.8)
Diluted 87.1 (14.8)
Basic from continuing operations 82.0 (12.4)
Diluted from continuing operations 81.7 (12.4)
Earnings / (loss) per ordinary share have been calculated by dividing profit /
(loss) for the period by the weighted average number of shares in issue during
the period.
See note 10 for the earnings per ordinary share from discontinued operations.
Six months ended
Weighted average number of shares in issue 30.9.22 30.9.21
Basic 183,006,485 192,829,279
Dilution for long term incentive plans 665,316 687,371
Diluted 183,671,801 193,516,650
7 Dividends
An interim dividend of 22.00 pence (1H 2021/22 22.00 pence) per ordinary share
has been proposed by the board which will be paid on 1(st) February 2023 to
shareholders on the register at the close of business on 9(th) December 2022.
The estimated amount to be paid is £42 million (1H 2021/22 £42 million) and
has not been recognised in these accounts.
Six months ended
30.9.22 30.9.21
£ million £ million
2020/21 final ordinary dividend paid ─ 50.00 pence per share - 96
2021/22 final ordinary dividend paid ─ 55.00 pence per share 100 -
Total dividends 100 96
8 Property, plant and equipment
Assets in
Freehold land Leasehold Plant and the course of
and buildings improvements machinery construction Total
£ million £ million £ million £ million £ million
Cost
At 1(st) April 2022 570 27 2,055 304 2,956
Additions 3 - 14 88 105
Transfers from assets in the course of construction 17 1 59 (77) -
Transferred to assets classified as held for sale (note 10) - - (11) - (11)
Disposals - - (11) - (11)
Exchange adjustments 30 4 123 14 171
At 30(th) September 2022 620 32 2,229 329 3,210
Accumulated depreciation and impairment
At 1(st) April 2022 265 14 1,424 15 1,718
Charge for the period 8 1 58 - 67
Transferred to assets classified as held for sale (note 10) - - (9) - (9)
Disposals - - (11) - (11)
Exchange adjustments 13 2 86 - 101
At 30(th) September 2022 286 17 1,548 15 1,866
Carrying amount at 30(th) September 2022 334 15 681 314 1,344
Carrying amount at 1(st) April 2022 305 13 631 289 1,238
Assets classified as held for sale relate to Piezo Products, see note 10.
9 Other intangible assets
Customer Patents, Acquired
contracts and Computer trademarks research and Development
relationships software and licences technology expenditure Total
£ million £ million £ million £ million £ million £ million
Cost
At 1(st) April 2022 132 419 47 37 135 770
Additions - 23 2 - - 25
Transferred to assets classified as held for sale (note 10) (13) - - - - (13)
Disposals - - (6) - - (6)
Exchange adjustments 4 1 2 1 - 8
At 30(th) September 2022 123 443 45 38 135 784
Accumulated amortisation and impairment
At 1(st) April 2022 112 178 44 36 133 503
Charge for the period 2 14 - - - 16
Transferred to assets classified as held for sale (note 10) (13) - - - - (13)
Disposals - - (6) - - (6)
Exchange adjustments 4 1 2 1 - 8
At 30(th) September 2022 105 193 40 37 133 508
Carrying amount at 30(th) September 2022 18 250 5 1 2 276
Carrying amount at 1(st) April 2022 20 241 3 1 2 267
Assets classified as held for sale relate to Piezo Products, see note 10.
10 Discontinued operations and assets and liabilities classified as held for sale
The group strategically drives for efficiency and disciplined capital
allocation to enhance returns, as such we continue to actively manage our
portfolio. In line with this strategy and to focus on our core businesses,
during the period we completed the sale of our Health and Battery Materials UK
businesses. Refer to note 11 for further information on these disposals.
The Health segment is classified as a discontinued operation and presented
separately in the consolidated income statement. The Health segment was not
previously classified as held-for-sale or as a discontinued operation for the
period to 30(th) September 2021, although was in the financial statements for
the year to 31(st) March 2022. The comparative income statement and statement
of total comprehensive income has been restated to show the discontinued
operations separately from continuing operations.
Financial information relating to the Health discontinued operations for the
period to disposal date (1(st) June 2022) is set out below. The 30% equity
interest in the business is equity accounted as an investment in associate.
Six months ended
30.9.22 30.9.21
£ million £ million
Revenue 35 83
Expenses (40) (88)
Loss before tax from discontinued operations (5) (5)
Tax credit 1 1
Loss after tax from discontinued operations (4) (4)
Profit on disposal of discontinued operations after tax (see note 11)* 14 -
Profit / (loss) from discontinued operations 10 (4)
Exchange differences on translation of discontinued operations (32) 4
Other comprehensive income from discontinued operations (32) 4
Total comprehensive income from discontinued operations (22) -
Net cash inflow from operating activities 13 14
Net cash outflow from investing activities (5) (13)
Net cash outflow from financing activities - (2)
Net increase / (decrease) in cash generated by the discontinued operations 8 (1)
pence pence
Profit / (loss) per ordinary share from discontinued operations
Basic profit / (loss) per ordinary share from discontinued operations 5.4 (2.4)
Diluted profit / (loss) per ordinary share from discontinued operations 5.4 (2.4)
* The profit on disposal of discontinued operations after tax includes a tax
credit of £3 million.
As at 30(th) September 2022, Piezo Products and remaining Battery Materials
assets are classified as held for sale. Assets held for sale as at 30(th)
September 2022 are £48 million, comprised of £28 million property, plant and
equipment,
£4 million goodwill, £7 million inventories and £9 million trade and other
receivables. Liabilities classified as held for sale as at
30(th) September 2022 are £10 million comprised of £6 million trade and
other payables and £4 million employee benefit obligations.
11 Disposals
Health
On 1(st) June 2022, the group completed the sale of its Health business for a
gross consideration of £325 million. This gross consideration is comprised of
£150 million cash, a £50 million vendor loan note (which we have recorded as
an other receivable), £75 million in the form of shares which constitutes a
30% equity interest in the business (which we have equity accounted for as an
investment in associate) and £50 million in contingent consideration (which
we have recognised at a fair value of £nil). After adjusting for working
capital and an additional £3 million cash receipt due to cash in business
upon disposal, the net consideration was £272 million. The business was
disclosed as a disposal group held for sale as at 31(st) March 2022.
Battery Materials
On 26(th) May 2022, the group completed the sale of part of its Battery
Materials UK business for a cash consideration of
£20 million. The business was disclosed as a disposal group held for sale as
at 31(st) March 2022.
Health Battery Materials Total
30(th) September 2022 £ million £ million £ million
Proceeds
Cash consideration 153 20 173
Cash and cash equivalents disposed (5) - (5)
Net cash consideration 148 20 168
Disposal costs paid (1) (1) (2)
Net cash inflow 147 19 166
Assets and liabilities disposed
Non-current assets
Property, plant and equipment 105 14 119
Right-of-use assets 1 - 1
Other intangible assets 42 10 52
Deferred income tax assets 13 - 13
Current assets
Inventories 142 - 142
Trade and other receivables 60 - 60
Cash and cash equivalents 5 - 5
Current liabilities
Trade and other payables (71) - (71)
Lease liabilities (1) (5) (6)
Provisions (1) - (1)
Non-current liabilities
Lease liabilities (2) - (2)
Provisions (1) - (1)
Net assets disposed 292 19 311
Cash consideration 153 20 173
Non-cash consideration 119 - 119
Less: carrying amount of net assets sold (292) (19) (311)
Less: disposal costs (1) (1) (2)
Cumulative currency translation gain recycled from other comprehensive income 32 - 32
Profit recognised in the income statement 11 - 11
12 Post-employment benefits
Background
The group operates a number of post-employment benefit plans around the world,
the forms and benefits of which vary with conditions and practices in the
countries concerned. The major defined benefit plans are pension plans and
post-retirement medical plans in the UK and the US.
Financial assumptions
The financial assumptions for the major plans are as follows:
30.9.22 31.3.22
UK plan US plans UK plan US plans
% % % %
First year's rate of increase in salaries 4.75 4.00 3.85 3.00
Ultimate rate of increase in salaries 3.75 3.00 3.85 3.00
Rate of increase in pensions in payment 3.25 - 3.20 -
Discount rate 5.10 5.40 2.80 3.70
Inflation - 2.50 - 2.20
- UK Retail Prices Index (RPI) 3.50 - 3.60 -
- UK Consumer Prices Index (CPI) 3.00 - 3.10 -
Current medical benefits cost trend rate 5.40 - 5.40 -
Ultimate medical benefits cost trend rate 5.40 - 5.40 -
The financial assumptions for the other plans are reviewed and updated
annually.
Financial information
Movements in the net post-employment benefit assets and liabilities, including
reimbursement rights, were:
UK UK UK post- US post-
pension - pension - retirement retirement
legacy cash balance medical US medical
section section benefits pensions benefits Other Total
£ million £ million £ million £ million £ million £ million £ million
At 1(st) April 2022 351 (18) (9) (2) (13) (26) 283
Current service cost - in
operating profit (2) (11) - (3) - - (16)
Past service credit - in
operating profit (1) - - 4 - - 3
Administrative expenses - in
operating profit (2) - - (1) - - (3)
Interest 5 - - - - - 5
Remeasurements (125) 20 - (12) 2 - (115)
Company contributions 3 10 - 4 - 1 18
Benefits paid - - - - 1 - 1
Exchange - - - (2) (2) (1) (5)
At 30(th) September 2022 229 1 (9) (12) (12) (26) 171
12 Post-employment benefits (continued)
Financial information (continued)
The post-employment benefit assets and liabilities are included in the balance
sheet as follows:
30.9.22 30.9.22 31.3.22 31.3.22
Post- Post-
employment Employee employment Employee
benefit benefit net benefit benefit net
net assets obligations net assets obligations
£ million £ million £ million £ million
UK pension - legacy section 229 - 351 -
UK pension - cash balance section 1 - - (18)
UK post-retirement medical benefits - (9) - (9)
US pensions - (12) - (2)
US post-retirement medical benefits - (12) - (13)
Other 1 (27) 1 (27)
Total post-employment plans 231 (60) 352 (69)
Other long-term employee benefits (3) (3)
Post-employment plan obligations classified as held for sale 4
Total long-term employee benefit obligations (59) (72)
13 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 periods.
13 Fair values (continued)
Fair value
30.9.22 31.3.22 hierarchy
£ million £ million level
Financial instruments measured at fair value
Non-current
Investments at fair value through other comprehensive income(1) 58 45 1
Interest rate swaps - assets 31 11 2
Interest rate swaps - liabilities (14) (2) 2
Borrowings and related swaps (7) (2) 2
Other financial liabilities (3) (12) 2
Current
Trade receivables(3) 439 492 2
Other receivables(4) 63 44 2
Cash and cash equivalents - money market funds 253 137 2
Other financial assets(2) 52 27 2
Interest rate swaps - 1 2
Other financial liabilities(2) (84) (44) 2
Fair value
30.9.22 31.3.22 hierarchy
£ million £ million level
Financial instruments not measured at fair value
Non-current
Borrowings and related swaps (1,106) (897) -
Lease liabilities (41) (40) -
Current
Amounts receivable under precious metal sale and repurchase agreements 131 114 -
Amounts payable under precious metal sale and repurchase agreements (1,052) (793) -
Cash and cash equivalents - cash and deposits 161 254 -
Cash and cash equivalents - bank overdrafts (45) (37) -
Borrowings and related swaps (183) (265) -
Lease liabilities (12) (10) -
(1) Investments at fair value through other comprehensive income are quoted
bonds purchased to fund pension deficit (£45 million) and an investment held
at fair value through other comprehensive income (£13 million).
(2) Other financial assets includes forward foreign exchange contracts (£7
million) and currency swaps (£45 million). Other financial liabilities
includes forward foreign exchange contracts (£47 million), forward precious
metal price contracts (£9 million) and currency swaps (£28 million).
(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.
13 Fair values (continued)
The fair value of financial instruments, excluding accrued interest, is
approximately equal to book value except for:
30.9.22 31.3.22
Carrying Fair Carrying Fair
amount value amount value
£ million £ million £ million £ million
US Dollar Bonds 2023, 2025, 2027, 2028, 2029 and 2030 (720) (675) (688) (662)
Euro Bonds 2023, 2025, 2028, 2030 and 2032 (384) (347) (176) (179)
Sterling Bonds 2024, 2025 and 2029 (145) (132) (110) (107)
KfW US Dollar Loan 2024 (45) (43) (38) (36)
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 period end.
14 Precious metal leases
The group leases precious metals to fund temporary peaks in metal requirements
provided market conditions allow. These leases are from banks for specified
periods (less than 12 months) and the group pays a fee which is expensed on a
straight-line basis over the lease term in finance costs. The group holds
sufficient precious metal inventories to meet all the obligations under these
lease arrangements as they fall due. At 30(th) September 2022, precious
metal leases were £129 million at closing prices (31(st) March 2022:
£140 million). Precious metal leases are not accounted for under IFRS 16 as
they qualify as short term leases.
15 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.
As previously disclosed, the group has been informed by a customer of failures
in certain engine systems for which the group supplied a particular coated
substrate as a component for that customer's emissions after-treatment
systems. The reported failures have not been demonstrated to be due to the
coated substrate supplied by the group. The group has not been contacted by
any regulatory authority about these engine system failures. Having reviewed
its contractual obligations and the information currently available to it, the
group believes it has defensible warranty positions in respect of this matter.
If required, it will vigorously assert its available contractual protections
and defences. The outcome of any discussions relating to this matter is not
certain, nor is the group able to make a reliable estimate of the possible
financial impact at this stage, if any.
The group works with all its customers to ensure appropriate product quality
and we have not received claims in respect of our emissions after treatment
components from this or any other customer. Our vision is for a world that's
cleaner and healthier; today and for future generations. We are committed to
enabling improving air quality and we work constructively with our customers
to achieve this.
16 Transactions with related parties
There have been no material changes in related party relationships in the six
months ended 30(th) September 2022 and no related party transactions have
taken place which have materially affected the financial position or
performance of the group during that period.
17 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.
17 Non-GAAP measures (continued)
Definitions
Measure Definition Purpose
Sales(1) Revenue excluding sales 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 Invested Capital (ROIC)(1) Annualised underlying operating profit divided by the 12 month average equity, Provides a measure of the group's efficiency in allocating the capital under
excluding post tax pension net assets, plus average net debt for the same its control to profitable investments.
period.
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,
of less capital expenditure.
non-current assets and investments, proceeds from disposal of businesses,
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, gain or loss on significant legal proceedings, together with
associated legal costs, 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.
17 Non-GAAP measures (continued)
Reconciliations to GAAP measures
Sales
See note 2.
Underlying profit measures
Operating Profit Tax Profit for
profit before tax expense the period
Six months ended 30(th) September 2022 £ million £ million £ million £ million
Underlying 222 201 (40) 161
Amortisation of acquired intangibles (2) (2) - (2)
Major impairment and restructuring charges(1) (9) (9) 2 (7)
Share of losses of joint ventures and associates - (2) - (2)
Reported 211 188 (38) 150
(1) For further detail please see note 4.
Operating Profit Tax Profit for
profit before tax expense the period
Six months ended 30(th) September 2021* £ million £ million £ million £ million
Underlying 297 269 (43) 226
Gain on significant legal proceedings 44 44 (4) 40
Amortisation of acquired intangibles (3) (3) - (3)
Major impairment (314) (314) 27 (287)
Reported 24 (4) (20) (24)
Underlying earnings per share Six months ended
30.9.22 30.9.21*
Underlying profit for the period (£ million) 161 226
Weighted average number of shares in issue (million) 183.0 192.8
Underlying earnings per share (pence) 88.2 117.1
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
17 Non-GAAP measures (continued)
Return on Invested Capital (ROIC)
Period Year Period
ended ended ended
30.9.22 31.3.22 30.9.21
£ million £ million* £ million*
Annualised underlying operating profit 479 553 634
Average net debt 979 877 1,069
Average equity 2,471 2,467 2,467
Average capital employed 3,450 3,344 3,536
Less: Average pension net assets (291) (221) (206)
Less: Average related deferred taxation 71 48 37
Average capital employed (excluding post tax pension net assets) 3,230 3,171 3,367
ROIC (excluding post tax pension net assets) 14.7% 17.4% 18.8%
ROIC 13.9% 16.5% 17.9%
Average working capital days (excluding precious metals) Six months Year Six months
ended ended ended
30.9.22 31.3.22 30.9.21
£ million £ million* £ million*
Inventories 1,781 1,549 1,879
Trade and other receivables 1,881 1,796 1,847
Trade and other payables (2,567) (2,563) (2,994)
1,095 782 732
Working capital balances classified as held for sale 10 - 163
Less: Working capital balances relating to discontinued operations - - (138)
Total working capital 1,105 782 757
Less: Precious metal working capital (502) (562) (356)
Add: Precious metal working capital relating to discontinued operations - - 11
Working capital (excluding precious metals) 603 220 412
Average working capital days (excluding precious metals) 35 36 30
Free cash flow from continuing operations
Six months ended
30.9.22 30.9.21
£ million £ million*
Net cash inflow from operating activities 145 412
Interest received 11 6
Interest paid (38) (40)
Purchases of property, plant and equipment (111) (141)
Purchases of intangible assets (26) (43)
Proceeds from sale of non-current assets - 2
Proceeds from sale of businesses 166 -
Principal element of lease payments (6) (7)
Less: Net cash (inflow) / outflow from discontinued operations (8) 1
Free cash flow 133 190
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
17 Non-GAAP measures (continued)
Net debt (including post-tax pension deficits) to underlying EBITDA
30.9.22 31.3.22 30.9.21
£ million £ million* £ million*
Cash and deposits 161 254 223
Money market funds 253 137 523
Bank overdrafts (45) (37) (42)
Bank overdrafts transferred to liabilities classified as held for sale - (8) -
Cash and cash equivalents 369 346 704
Less: Cash and cash equivalents - bank overdrafts from discontinued operations - 8 5
Cash and cash equivalents from continuing operations 369 354 709
Interest rate swaps - current assets - 1 3
Interest rate swaps - non-current assets 31 11 17
Interest rate swaps - non-current liabilities (14) (2) -
Borrowings and related swaps - current (183) (265) (309)
Borrowings and related swaps - non-current (1,113) (899) (1,054)
Lease liabilities - current (12) (10) (11)
Lease liabilities - non-current (41) (40) (48)
Lease liabilities - current - transferred to liabilities classified as held - (2) -
for sale
Lease liabilities - non-current - transferred to liabilities classified as - (7) (1)
held for sale
Less: Lease liabilities relating to discontinued operations - 3 3
Net debt (963) (856) (691)
Increase / (decrease) in cash and cash equivalents 9 (205) 156
Less: (Increase) / decrease in cash and cash equivalents from discontinued (8) 3 1
operations
Less: (Increase) / decrease in borrowings (13) 131 (63)
Less: Principal element of lease payments 6 14 7
Less: Principal element of lease payments from discontinued operations - (1) -
(Decrease) / increase in net debt resulting from cash flows (6) (58) 101
New leases, remeasurements and modifications (6) (9) (4)
Less: New leases, remeasurements and modifications from discontinued 6 3 2
operations
Exchange differences on net debt (117) (24) (20)
Other non-cash movements 16 2 -
Movement in net debt (107) (86) 79
Net debt at beginning of year (856) (770) (770)
Net debt at end of year (963) (856) (691)
Net debt (963) (856) (691)
Add: Pension deficits (39) (29) (47)
Add: Related deferred tax 7 4 8
Net debt (including post tax pension deficits) (995) (881) (730)
Underlying EBITDA for this period 309 382
Underlying EBITDA for prior year 724 633
Less: Underlying EBITDA for prior half year (382) (209)
Annualised underlying EBITDA 651 724 806
Net debt (including post tax pension deficits) to underlying EBITDA 1.5 1.2 0.9
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
17 Non-GAAP measures (continued)
30.9.22 31.3.22 30.9.21
£ million £ million* £ million*
Underlying EBITDA 309 724 382
Depreciation and amortisation (89) (177) (88)
Gains and losses on significant legal proceedings - 42 44
Major impairment and restructuring charges (9) (440) (314)
Profit on disposal of businesses - 106 -
Finance costs (48) (101) (37)
Finance income 27 41 9
Share of losses of joint ventures and associates (2) - -
Income tax expense (38) (79) (20)
Profit for the period from continuing operations 150 116 (24)
* Restated to reflect classification of the Health segment as discontinued
operations (see note 10).
2022
8(th) December
Ex dividend date
9(th) December
Interim dividend record date
2023
1(st) February
Payment of interim dividend
26(th) May
Announcement of results for the year ending 31(st) March 2023
21(st) July
132(nd) Annual General Meeting (AGM)
Cautionary Statement
This announcement contains forward looking statements that are subject to risk
factors associated with, amongst other things, the economic and business
circumstances occurring from time to time in the countries and businesses in
which the group operates. It is believed that the expectations reflected in
this announcement are reasonable but they may be affected by a wide range of
variables which could cause actual results to differ materially from those
currently anticipated.
Johnson Matthey Plc
Registered Office: 5th Floor, 25 Farringdon Street, London EC4A 4AB
Telephone: +44 (0) 20 7269 8400
Fax: +44 (0) 20 7269 8433
Internet address: www.matthey.com
E-mail: jmpr@matthey.com
Registered in England ─ Number 33774
LEI code: 2138001AVBSD1HSC6Z10
Registrars
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Telephone: 0371 384 2344 (in the UK) *
+44 (0) 121 415 7047 (outside the UK)
Internet address: www.shareview.co.uk
* Lines are open 8.30am to 5.30pm Monday to Friday excluding public holidays
in England and Wales.
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