Final Results

Johnson,Matthey PLC 7 June 2001 Preliminary Results for the year ended 31st March 2001 An excellent year with strong growth in all divisions. Major investment will underpin future growth. Results * Profit before tax excluding exceptional items up 25% to £180.3 million * Operating profit up 20% to £175.0 million. All three divisions delivering strong organic growth * Earnings per share excluding exceptional items up 22% to 58.1 pence * Dividend for the year increased by 15% to 23.3 pence * Strong balance sheet with net cash of £139.9 million Business developments * Major investment programme continues in autocatalyst, chemicals, pharmaceutical materials and fuel cells * Site identified for fuel cell manufacturing at Swindon * Growth in Precious Metals supported by buoyant market demand for platinum group metals * Investment in growth markets producing good results in Colours & Coatings * Surplus cash to be used to buy back shares * Pursuing acquisitions to add to core businesses Commenting on the results, Chris Clark, Chief Executive of Johnson Matthey said: 'The group grew strongly last year and our businesses continue to perform well. As a result, we are investing significantly in the development of our technology and also in increased capacity, particularly for Catalysts & Chemicals. We are confident that the current year will again demonstrate the organic growth potential in Johnson Matthey. ' Enquiries: Chris Clark, Chief Executive, Johnson Matthey 020 7269 8435 John Sheldrick, Group Finance Director, Johnson Matthey 020 7269 8438 Howard Lee / Laura Hickman, Gavin Anderson & Co 020 7457 2345 Review of the year ended 31st March 2001 Introduction Johnson Matthey delivered excellent results in 2000/01 with profits well ahead of last year. All three divisions achieved strong organic growth with double digit rises in operating profit. The group has increased its investment in new production facilities and in research and development, to meet the expected growth in demand for new products. Financial Highlights In the year to 31st March 2001 Johnson Matthey's profit before tax and exceptional items rose by 25% to £180.3 million. Earnings per share excluding exceptionals rose by 22% to 58.1 pence. Sales increased by 53% to £5.9 billion boosted by significantly higher prices for platinum and palladium. Sales excluding the value of precious metals for the continuing businesses rose by 16% to £977 million. Operating profit rose by 20% to £175.0 million. The group made £5.3 million of net interest income in the period compared with a net charge of £2.4 million last year. This turnaround is a result of the interest earned on the cash received from the sale of Electronic Materials (EMD), which was completed in August 1999. Dividend The board is recommending to shareholders a final dividend of 16.3 pence making a total dividend for the year of 23.3 pence, an increase of 15%. The proposed dividend would be covered 2.5 times by earnings. Operations Catalysts & Chemicals Division increased sales by 76% over last year to £1,503 million. This growth reflected increased sales volume and the effect of higher precious metal prices particularly that of palladium. Sales excluding the value of precious metals rose by 14% to £565 million. The division's operating profit rose by 17% to £98.9 million. The Catalytic Systems business, which encompasses Johnson Matthey's global autocatalyst, heavy duty diesel and stationary source emission control businesses, performed very well, despite the widely publicised fall in vehicle sales in North America in the last five months of our financial year. Overall, global vehicle sales advanced by 1% but the autocatalyst market grew by around 6% benefiting from tightening standards and the geographical spread of regulations to control emissions. Johnson Matthey's global volumes grew 9% in the year as our strong technology and the benefits of our new production process combined to increase our market share. Sales of our market leading Continuously Regenerating Trap (CRT TM) and other heavy duty diesel products were also well up on last year as the result of increased retrofit activity around the world. This strong progress underlines the future growth opportunity represented by heavy duty diesel as emission standards tighten. There has been a great deal of activity in our Fuel Cells business, which during the period was organised into a stand alone business unit within the Catalysts & Chemicals Division. A major fuel cell testing and evaluation facility was installed at the Johnson Matthey Technology Centre at Sonning Common and is now fully operational. Good progress was also achieved in fuel cell product design and the development of robust manufacturing processes. Chemicals also had an excellent year. All parts of the business achieved strong revenue growth. Platinum group metals refining activities experienced strong demand benefiting from both high metal prices and increased intake from primary producers. Catalyst sales to pharmaceutical and chemical customers increased significantly. Sales of precious metal salts and other fine chemicals also grew strongly. Pharmaceutical Materials achieved good growth in platinum pharmaceuticals, particularly the major anti-cancer drug Carboplatin, which Johnson Matthey manufactures for Bristol Myers Squibb. Chiral methylphenidate, a new product introduced towards the end of the year, achieved good initial sales. As expected, sales of generic methylphenidate declined as a result of increased competition. Overall, operating profit was largely unchanged from last year. Precious Metals Division's (PMD's) sales climbed by 55% to £4.1 billion, driven by strong demand for platinum group metals and higher prices. Operating profit rose 26% to £57.4 million. Prices of platinum group metals rose sharply in 2000/01 with the average price for platinum up 42% and palladium 83% higher. For most of the year both metals were in short supply with overall demand for palladium continuing to exceed mine output and the shortfall largely being met from sales of Russian stocks. PMD's marketing and trading operations benefited from strong physical demand and buoyant prices. Its platinum fabrication businesses also achieved good sales growth in the year with strong industrial demand and continued rapid expansion in sales of products for medical devices. Trading profit from the Gold and Silver business was slightly down despite increased refining sales coming from Asia. The gold price was weak throughout the year and the refining market remains very competitive with pressure on margins. We rationalised our Canadian business in the year to improve profitability. A restructuring charge of £2.6 million has been taken through operating profit. Colours & Coatings Division increased its sales by 6% to £255 million. Sales of decorative products for the tile and glass industries grew strongly. Operating profit for the division increased by 15% to £32.2 million. The Structural Ceramics sector, which sells mainly to the tile industry, achieved strong sales growth in Europe and Asia. Margins continue to improve reflecting the benefit of the major investment in modern manufacturing capacity in Spain. The Glass sector also had a successful year with good sales of automotive glass enamels and silver pastes. Tableware continued to encounter difficult market conditions with sales to UK customers again declining. However operating profit increased as a result of the cost reduction programme undertaken during the year. Exceptional Items Overall, exceptional items and goodwill amortisation gave rise to a small net profit of £0.2 million on a pre-tax basis. An additional payment of £3.4 million was received from the sale of EMD. This profit has been partly offset by losses on disposal of other businesses and a £0.6 million exceptional charge relating to the integration costs of Precision Studios, a business acquired during the year. Goodwill amortisation amounted to £0.3 million for the year. Interest and Exchange Rates The £7.7 million improvement in interest compared with last year reflects the interest earned on the sale proceeds of EMD for a full twelve months compared with seven and a half months of last year. The overall net interest credit of £5.3 million includes the interest earned on the group's net cash and deposits less leasing costs for gold and silver, which were £1.4 million for the year compared with £2.2 million last year when average lease rates were higher. Exchange rates were generally favourable for Johnson Matthey's results. Just under half of the group's operating profit is earned in North America. The average rate for the US dollar for the year strengthened to $1.48/£ compared with $1.61/£ for last year, which increased profits by £7.6 million. However, the Euro weakened from Euro 1.56/£ to Euro 1.63/£ which, together with weakness in some other currencies, reduced the translation benefit to £6.4 million. Taxation The group's total tax charge rose by £7.0 million to £52.3 million. Excluding exceptionals, the average tax rate increased by just under 1% to 29.0% reflecting a change in the geographic mix of profits. Cash Flow Johnson Matthey's net cash inflow from operations was £156.5 million, which was 20% better than last year, despite an £82.0 million cash outflow to fund increased debtors. The rise in debtors reflected increased sales volumes and higher prices for palladium and platinum. However, the group managed to reduce inventories, despite the higher metal prices, which limited the overall increase in working capital to £58.0 million. Capital expenditure rose to £104.4 million, which is 65% up on last year's figure of £63.3 million (excluding the expenditure of £11.4 million by EMD), and represents two and a half times depreciation. The cash element of this expenditure in the year was £98.8 million (the remainder being accrued). We plan to further increase capital expenditure in 2001/02 with major investments in new technology and increased capacity to meet the growing demand for our new products. As a consequence of the high level of capital expenditure in 2000/01 net cash flow for the group was negative at £16.0 million. After taking into account the effects of exchange translation on the group's US dollar borrowings, net cash fell by £25.9 million to £139.9 million at 31st March 2001. Shareholders' funds increased by £95.6 million to £851.0 million. Business developments A year ago we announced that we were stepping up our investment programme to take advantage of the opportunities we saw for growth. In 2000/01 our capital expenditure rose to more than £100 million and we plan to increase the level of investment in 2001/02. Investment in research and development has also been increased, particularly in fuel cells. Total group expenditure was £42.3 million in the year with a further increase planned for 2001/02. Catalysts & Chemicals In March 2001 we opened our new £10 million European autocatalyst facility in Royston, UK. The 6,000 square metre plant uses Johnson Matthey's latest process technology to produce more advanced catalysts to the higher specifications required to meet current and future emissions standards. The new factory has initial capacity to produce 3.5 million units a year, which will be needed to meet the rapidly growing demand for our latest catalysts in Europe. The new factory in Royston is the first autocatalyst facility based entirely on our new manufacturing technology. We have stepped up our programme of investment in our existing facilities to introduce this new technology throughout the world as fast as we can. During the year we have put in new production capacity to meet rapidly growing demand for autocatalysts in Asia. In early November a new autocatalyst plant was opened in India's Harayana State, which more than doubled Johnson Matthey's production capacity in this important market. Our new autocatalyst facility in China will be officially opened later this month. The combination of our class leading technology with the benefits of our new manufacturing process is resulting in growth in our global market share. Tightening emissions standards around the world are also providing exciting opportunities for growth in our heavy duty diesel business. Johnson Matthey's CRT TM is already the market leader in voluntary retrofit programmes around the world as local authorities and transport operators strive to improve air quality in our cities. In Chemicals we are investing in the expansion and upgrading of our platinum group metals refining capacity in the UK and US. The cornerstone of this programme is an investment of £13.5 million over the next two years to upgrade our refineries at Brimsdown and Royston in the UK. This will increase capacity and enable the group to take on higher volumes of primary refining materials. A further major investment is planned in new technology to refine and recycle spent chemical catalysts. A new process catalyst plant was opened at Royston in October 2000 to manufacture the latest generations of supported chemical process catalysts for the fine and speciality chemicals industries. We continue to work in close partnership with our customers to develop new process catalysts, optimised to their requirements. Our investment in Fuel Cells continues apace. We have identified a site near Swindon in the UK and are seeking permits for a new Membrane Electrode Assembly (MEA) manufacturing facility. This new facility will be built on a modular basis to allow the phased expansion of MEA production to meet market demand. Pilot production facilities at existing locations will be expanded during the coming year to provide intermediate capacity. Johnson Matthey Fuel Cells has continued to work with target customers and has undertaken extensive market validation work to enable it to forecast demand for its products over the next three to five years. It has also made good progress in securing its strategic supply chain. The collaboration with James Cropper PLC to develop key components for MEAs announced last year has made excellent progress and supply agreements have been secured with a number of other raw material suppliers. The business is also expanding its fuel cell catalyst manufacturing capacity with a new production plant at West Deptford, USA. The move to a new fuel processor development and manufacturing facility at West Whiteland, USA will be completed in the next few months. In April 2001 we announced the acquisition of Pharm-Eco Laboratories, Inc. for a total price, including debt, of $46.9 million. Based on two sites near Boston in the US, Pharm-Eco provides contract research, process development and small scale synthesis services to the pharmaceutical industry. Its services are primarily focused on drug development through to phase 2 clinical trials. These services complement our existing Pharmaceutical Materials business, which manufactures active pharmaceutical ingredients for drugs that are already approved for market or are very near to receiving final approval. The acquisition presents Johnson Matthey with enhanced opportunities to bring new pharmaceutical manufacturing business to the West Deptford facility in the US, and considerably extends our existing portfolio of products and services for customers in the pharmaceutical industry. Precious Metals Johnson Matthey is the largest fabricator and distributor of the platinum group metals (pgms). We are the sole marketing agent for Anglo Platinum, the world's leading primary producer of pgms, a relationship that goes back over 70 years. Growth in our Precious Metals Division is driven by strong demand for the platinum group metals and their increasing use in a wide range of industrial applications. This growth is supported by Johnson Matthey's global market development activities and our commitment to investment in research and development of new applications for the pgms. Our platinum fabrication businesses have grown steadily over the last few years with investment in new products and processes. One of the major growth areas has been the manufacture of specialised components for medical devices such as catheters and stents, which are extensively used in non-invasive surgery. In February 2001 we acquired Shape Memory Applications, Inc. (SMA) in the United States for £3.6 million. SMA is a manufacturer of components for medical applications made of Nitinol, a nickel titanium alloy that has shape memory and super elastic properties. This acquisition will further strengthen our share of this growing market. Colours & Coatings Our strategy for the development of Colours & Coatings Division is producing good results. The majority of the division's activities are now focused on the growing markets for decorative products for tile and glass. As a consequence the division is now achieving good sales growth as well as improving margins, which rose significantly in 2000/01. Good progress has been made with our investment programme for the Tile business in Spain and Brazil and at our glass enamels facility in the Netherlands. All three will commence production during 2001. The benefits of the restructuring programme for our Tableware business are coming through. We further strengthened the business with the acquisition of Precision Studios from Waterford Wedgwood plc for £1.8 million in July 2000. The business, which manufactures ceramic decals, has been merged with the group's existing UK decals business onto one modern site. Balance Sheet / Share Buy Back At 31st March 2001 the group had net cash of £139.9 million and shareholders' funds of £851.0 million. This strong financial position means the group can comfortably fund its major capital expenditure programme together with the investment required for the emerging fuel cell business. In addition we will pursue a number of niche acquisition opportunities, particularly in Catalysts & Chemicals, which will be financed out of cash and additional borrowings. These investments should help to underpin the future growth of the group without changing the current focus. That level of future investment still leaves Johnson Matthey with some spare balance sheet capacity. Consequently, the company intends to use its surplus cash to buy back some of its shares, which would be earnings enhancing at the current price and would improve the efficient use of capital. Outlook The group grew strongly last year and our businesses continue to perform well. As a result, we are investing significantly in the development of our technology and also in increased capacity, particularly for Catalysts & Chemicals. We are confident that the current year will again demonstrate the organic growth potential in Johnson Matthey. Johnson Matthey Consolidated Profit and Loss Account for the year ended 31st March 2001 2001 2001 2001 2000 2000 Before Before except'l Except'l except'l items & items & items & goodwill goodwill goodwill amort'n amort'n Total amort'n Total NOTE £million £million £million £million £million Turnover 2 Continuing operations 5,903.7 - 5,903.7 3,769.0 3,769.0 Discontinued operations 4 - - - 97.0 97.0 ------- ------- ------- ------- ------- Group turnover 5,903.7 - 5,903.7 3,866.0 3,866.0 ------- ------- ------- ------- ------- Operating profit 2 Continuing operations before goodwill amortisation 175.0 - 175.0 146.5 146.5 Goodwill amortisation - (0.3) (0.3) - (0.2) ------- ------- ------- ------- ------- Continuing operations before exceptional items 175.0 (0.3) 174.7 146.5 146.3 Exceptional items 3 - (0.6) (0.6) - (9.8) ------- ------- ------- ------- ------- Total continuing operations 175.0 (0.9) 174.1 146.5 136.5 Discontinued operations 4 - - - (0.3) (0.3) ------- ------- ------- ------- ------- Group operating profit 175.0 (0.9) 174.1 146.2 136.2 Share of profit in associates - continuing 0.2 - 0.2 - - Share of profit in associates - discontinued 4 (0.2) - (0.2) - - ------- ------- ------- ------- ------- Total operating profit 175.0 (0.9) 174.1 146.2 136.2 Profit on sale - continuing operations Profit on disposal of surplus properties - - - - 1.1 Profit on sale - discontinued operations Sale of Electronic Materials 3 - 3.4 3.4 - 28.5 Sale of Organic Pigments 3 - (1.2) (1.2) - (6.2) Closure of Metawave Video Systems Ltd 3 - (1.1) (1.1) - - ------- ------- ------- ------- ------- Profit on ordinary activities before interest 175.0 0.2 175.2 146.2 159.6 Net interest 5.3 - 5.3 (2.4) (2.4) ------- ------- ------- ------- ------- Profit on ordinary activities before taxation 180.3 0.2 180.5 143.8 157.2 Taxation 5 (52.2) (0.1) (52.3) (40.4) (45.3) ------- ------- ------- ------- ------- Profit after taxation 128.1 0.1 128.2 103.4 111.9 Equity minority interests (0.6) - (0.6) (0.2) (0.2) ------- ------- ------- ------- ------- Profit attributable to shareholders 127.5 0.1 127.6 103.2 111.7 Dividends 6 (51.3) - (51.3) (44.3) (44.3) ------- ------- ------- ------- ------- Retained profit for the year 76.2 0.1 76.3 58.9 67.4 ------- ------- ------- ------- ------- pence pence pence pence Earnings per ordinary share Basic 7 58.1 58.1 47.5 51.4 Diluted 7 57.3 57.4 47.2 51.0 Dividend per ordinary share 6 23.3 23.3 20.3 20.3 Johnson Matthey Consolidated Balance Sheet as at 31st March 2001 2001 2000 £million £million Fixed assets Goodwill 8.6 5.1 Tangible fixed assets 386.8 311.3 Investments 1.0 1.0 ------- ------- 396.4 317.4 ------- ------- Current assets Stocks 278.8 253.2 Debtors: due within one year 415.7 333.5 Debtors: due after more than one year 103.9 97.9 Short term investments 15.9 16.3 Cash at bank and in hand 237.4 282.0 ------- ------- 1,051.7 982.9 Creditors: Amounts falling due within one year Borrowings and finance leases (19.8) (46.2) Precious metal leases (91.8) (60.6) Other creditors (367.8) (315.6) ------- ------- Net current assets 572.3 560.5 ------- ------- Total assets less current liabilities 968.7 877.9 Creditors: Amounts falling due after more than one year Borrowings and finance leases (77.7) (70.0) Other creditors (1.0) (0.2) Provisions for liabilities and charges (34.4) (47.8) ------- ------- Net assets 855.6 759.9 ------- ------- Capital and reserves Called up share capital 222.5 221.1 Share premium account 123.2 116.7 Associates' reserves - (0.1) Profit and loss account 505.3 417.7 ------- ------- Shareholders' funds 851.0 755.4 Equity minority interests 4.6 4.5 ------- ------- 855.6 759.9 ------- ------- Johnson Matthey Consolidated Cash Flow Statement for the year ended 31st March 2001 2001 2000 £million £million Reconciliation of operating profit to net cash inflow from operating activities Operating profit 174.1 136.2 Depreciation and amortisation charges 41.1 46.6 Profit on sale of tangible fixed assets and investments (0.7) (0.9) Decrease / (increase) in owned stocks 15.0 (26.7) Increase in debtors (82.0) (77.2) Increase in creditors and provisions 9.0 52.3 ------- ------- Net cash inflow from operating activities 156.5 130.3 ------- ------- Cash Flow Statement Net cash inflow from operating activities 156.5 130.3 Dividends received from associates 0.1 0.1 Returns on investments and servicing of finance 5.8 (2.5) Taxation (38.2) (33.5) Purchase of tangible fixed assets and investments (98.9) (74.8) Proceeds on sale of tangible fixed assets and investments 4.2 9.1 Acquisitions and disposals (5.6) 390.8 Equity dividends paid (46.5) (42.2) ------- ------- Net cash (outflow) / inflow before use of liquid resources and financing (22.6) 377.3 Management of liquid resources 157.8 (169.8) Financing Issue and purchase of share capital 7.9 8.0 Decrease in borrowings and finance leases falling due within one year (10.9) (126.9) Decrease in borrowings falling due after more than one year (1.2) (36.8) ------- ------- Net cash outflow from financing (4.2) (155.7) ------- ------- Increase in cash in the period 131.0 51.8 ------- ------- Reconciliation of net cash flow to movement in net funds Increase in cash in the period 131.0 51.8 Cash outflow from movement in borrowings and finance leases 12.1 163.7 Cash (inflow) / outflow from term deposits included in liquid resources (157.8) 169.8 ------- ------- Change in net funds / debt resulting from cash flows (14.7) 385.3 Borrowings disposed of with subsidiaries - 8.0 Borrowings acquired with subsidiaries (1.3) - Translation difference (9.9) (5.9) ------- ------- Movement in net funds / debt in year (25.9) 387.4 Net funds / (debt) at beginning of year 165.8 (221.6) ------- ------- Net funds at end of year 139.9 165.8 ------- ------- Johnson Matthey Total Recognised Gains and Losses for the year ended 31st March 2001 2001 2000 £million £million Profit attributable to shareholders 127.6 111.7 Currency translation differences on foreign currency net investments and related loans 10.0 (5.6) Taxation on translation differences on foreign currency loans 1.4 - ------- ------- Total recognised gains and losses relating to the year 139.0 106.1 ------- Prior year adjustment (9.0) ------- Total recognised gains and losses recognised since previous annual report 97.1 ------- Note of Historical Cost Profits and Losses for the year ended 31st March 2001 There were no material differences between reported profits and losses and historical cost profits and losses on ordinary activities before tax for 2001 and 2000. Movement in Shareholders' Funds for the year ended 31st March 2001 2001 2000 £million £million Profit attributable to shareholders 127.6 111.7 Dividends (51.3) (44.3) ------- ------- Retained profit for the year 76.3 67.4 Other recognised gains and losses relating to the year 11.4 (5.6) New share capital subscribed 7.9 15.7 Preference shares cancelled - (0.3) Goodwill written back on disposals - 125.4 ------- ------- Net addition to shareholders' funds 95.6 202.6 Opening shareholders' funds 755.4 552.8 ------- ------- Closing shareholders' funds 851.0 755.4 ------- ------- Johnson Matthey Notes to the Preliminary Financial Statements for the year ended 31st March 2001 1 Basis of preparation The financial information contained in this release does not constitute the company's statutory accounts for the years ended 31st March 2001 or 2000 but is derived from those accounts. Statutory accounts for 2000 have been delivered to the Registrar of Companies and those for 2001 will be delivered following the company's Annual General Meeting. The auditors' reports on those accounts were unqualified and did not contain any statement under sections 237(2) and 237(3) of the Companies Act 1985. The accounts for the year ended 31st March 2001 were approved by the Board of Directors on 4th June 2001. 2 Segmental information Turnover Operating profit Net operating assets 2001 2000 2001 2000 2001 2000 restated Activity analysis £million £million £million £million £million £million Catalysts & Chemicals 1,502.8 856.2 98.9 84.8 471.6 350.0 Precious Metals 4,145.7 2,671.6 57.4 45.4 44.7 76.5 Colours & Coatings 255.2 241.2 32.2 27.9 197.6 170.2 Corporate - - (13.3) (11.6) 1.8 (2.8) ------- ------- ------- ------- ------- ------- 5,903.7 3,769.0 175.2 146.5 715.7 593.9 Discontinued operations - 97.0 (0.2) (0.3) - 0.2 ------- ------- Total turnover 5,903.7 3,866.0 ------- ------- Goodwill amortisation (0.3) (0.2) Exceptional items included in total operating profit (note 3) (0.6) (9.8) ------- ------- ------- ------- 174.1 136.2 715.7 594.1 Other exceptional items 1.1 23.4 Net interest 5.3 (2.4) ------- ------- Profit on ordinary activities before taxation 180.5 157.2 ------- ------- Net cash and finance leases 139.9 165.8 ------- ------- Net assets 855.6 759.9 ------- ------- Turnover Operating profit Net operating assets 2001 2000 2001 2000 2001 2000 restated Geographical analysis by origin £million £million £million £million £million £million Europe 4,116.8 2,450.5 67.0 52.2 456.4 365.1 North America 1,585.2 1,052.0 81.4 69.3 170.0 126.0 Asia 1,094.4 887.2 13.8 8.8 65.7 57.0 Rest of the World 307.7 195.8 13.0 16.2 23.6 45.8 ------- ------- ------- ------- ------- ------- 7,104.1 4,585.5 175.2 146.5 715.7 593.9 Discontinued operations - 110.2 (0.2) (0.3) - 0.2 ------- ------- 7,104.1 4,695.7 Less inter-segment sales (1,200.4) (829.7) ------- ------- Total turnover 5,903.7 3,866.0 ------- ------- Goodwill amortisation (0.3) (0.2) Exceptional items included in total operating profit (note 3) (0.6) (9.8) ------- ------- ------- ------- 174.1 136.2 715.7 594.1 Other exceptional items 1.1 23.4 Net interest 5.3 (2.4) ------- ------- Profit on ordinary activities before taxation 180.5 157.2 ------- ------- Net cash and finance leases 139.9 165.8 ------- ------- Net assets 855.6 759.9 ------- ------- 3 Exceptional items An exceptional charge of £0.6 million (2000 £9.8 million) has been included in total operating profit. This comprises: 2001 2000 £million £million Cost of rationalising Precision Studios (0.6) - Cost of rationalising Tableware - (9.8) ------- ------- (0.6) (9.8) ------- ------- The sale of the group's Electronic Materials Division last year produced an additional profit of £3.4 million this year. The sale of the group's Organic Pigments businesses last year produced an additional disposal cost of £1.2 million this year. Metawave Video Systems Ltd, an associate, is in administration. The group has written off its investment in Metawave Video Systems Ltd, including capitalised goodwill, together with balances owed by Metawave Video Systems Ltd to the group as an exceptional charge amounting to £1.1 million. 4 Discontinued operations Turnover Operating profit 2001 2000 2001 2000 £million £million £million £million Electronic Materials - 91.6 - 0.1 Organic Pigments - 5.4 - (0.4) ------- ------- ------- ------- - 97.0 - (0.3) ------- ------- ------- ------- The group's discontinued associate is Metawave Video Systems Ltd, and the group's share of its loss is £0.2 million (2000 £ nil). 5 Taxation 2001 2000 £million £million United Kingdom 20.8 22.6 Overseas 31.3 17.8 Associates 0.1 - ------- ------- 52.2 40.4 Tax on cost of rationalising Precision Studios (0.2) - Tax on cost of rationalising Tableware - (2.9) Tax on profit on sale of Electronic Materials 1.0 9.9 Tax on loss on sale of Organic Pigments (0.4) (2.1) Tax on loss on closure of Metawave Video Systems Ltd (0.3) - ------- ------- 52.3 45.3 ------- ------- 6 Dividends A final dividend of 16.3 pence (2000 14.2 pence) per ordinary share is proposed for payment on 7th August 2001 to shareholders on the register at 15th June 2001. Together with the interim dividend of 7.0 pence (2000 6.1 pence) this would make a total dividend of 23.3 pence (2000 20.3 pence) giving a total payment of £51.3 million (2000 £44.3 million). 7 Earnings per ordinary share Profit for the year attributable to shareholders, less preference dividends, is £127.6 million (2000 £111.7 million). This is divided by the weighted average number of shares in issue calculated as 219,467,375 (2000 217,458,190) to give basic earnings per share of 58.1 pence (2000 51.4 pence). The calculation of diluted earnings per share is based on the weighted average number of shares in issue adjusted by the dilutive outstanding share options and long term incentive plan. These adjustments give rise to an increase in the weighted average number of shares in issue of 2,816,102 (2000 1,457,427), giving diluted earnings per share of 57.4 pence (2000 51.0 pence). Excluding exceptional items, the tax thereon and goodwill amortisation, basic earnings per share were 58.1 pence (2000 47.5 pence) and diluted earnings per share were 57.3 pence (2000 47.2 pence). 2001 2000 £million £million Attributable profit 127.6 111.7 Goodwill amortisation 0.3 0.2 Exceptional items (0.5) (13.6) Tax thereon 0.1 4.9 ------- ------- Adjusted profit 127.5 103.2 ------- ------- Earnings per share excluding exceptional items and goodwill amortisation Basic 58.1p 47.5p Diluted 57.3p 47.2p Johnson Matthey Financial Calendar 2001 15th June Final ordinary dividend record date 17th July 110th Annual General Meeting (AGM) 7th August Payment of final dividend subject to declaration at the AGM 29th November Announcement of results for six months ending 30th September 2001 Johnson Matthey Public Limited Company Registered Office: 2-4 Cockspur Street, Trafalgar Square, London SW1Y 5BQ Telephone: 020 7269 8400 Internet address: www.matthey.com E-mail: jmpr@matthey.com Registered in England No. 33774 Registrars Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA Telephone: 01903 502541

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