Interim Management Statement

RNS Number : 1700G

Johnson Matthey PLC

27 January 2010

 



For release at 7.00 am on Wednesday 27th January 2010

Johnson Matthey Plc

Interim Management Statement

Johnson Matthey is hosting an analysts' presentation today at The London Stock Exchange.  At the meeting Neil Carson, Chief Executive of Johnson Matthey, will provide the following statement on trading in the company's third quarter ended 31st December 2009.  

"Johnson Matthey performed well in the third quarter as we saw the beginnings of recovery in many of our key markets. During the same period last year the group's trading conditions deteriorated significantly. In the comparable period this year our markets have been more stable. As a result the group's sales excluding precious metals for the third quarter were 9% ahead of the same period last year. Operating profit before amortisation of acquired intangibles was 10% up on the third quarter of 2008/09.  

Underlying profit before tax (before amortisation of acquired intangibles) was 20% higher than the third quarter last year as the group continued to benefit from reduced interest costs due to lower borrowings and low interest rates.  Net borrowings fell in the quarter as cash generation in the period continued to be strong.  

Third quarter sales excluding precious metals for Environmental Technologies Division were 22% ahead of last year and slightly ahead of those in the second quarter. Operational leverage and good cost control resulted in operating profit being more than 30% ahead of the same period last year.  Emission Control Technologies' light duty vehicle sales in the third quarter continued to benefit from governments' incentive schemes and a recovery in consumer confidence, with sales ahead of last year in North America, Europe and Asia, where China continues to go from strength to strength.  Together, global car production was 20% ahead of the third quarter of last year and 22% up on the last quarter.  Heavy duty diesel sales in North America were slightly ahead of last year due to a delayed but small pre-buy ahead of the new US 2010 legislation that came into effect at the beginning of this month. This resulted in comparative sales of HDD catalysts for the group being ahead for the first time this year.  Process Technologies performed well in the third quarter with steady growth in sales of ammonia and methanol catalysts and Davy Process Technology licensed a further oxo alcohol plant and a substitute natural gas (SNG) plant in China.  

Precious Metal Products Division's sales and profits were, as expected, lower than this time last year.  However, platinum group metal (pgm) prices have steadily improved in the quarter, with average platinum prices of $1,397/oz, up 13% compared with the last quarter.  Demand for our fabricated products and precious and base metal catalysts and chemicals has been steady and is now showing some signs of recovery.  

Fine Chemicals Division's sales were slightly lower than in the third quarter of last year but operating profit was in line with last year's performance.  Sales of active pharmaceutical ingredients were broadly in line with the same period last year but sales of research chemicals were slightly lower as demand remained sluggish.  

In the fourth quarter, Environmental Technologies Division is expected to continue to make progress. Light duty vehicle production is anticipated to remain stable but the impact of the removal of government incentive schemes continues to be uncertain. The short term prospects for the heavy duty diesel market, on the other hand, remain subdued.  If higher pgm prices are maintained, Precious Metal Products Division will benefit from increased commission income and higher profits from the refining and recycling business. The Fine Chemicals Division is performing in line with our expectations overall but its results will be slightly impacted by the rationalisation of our poorly performing speciality contract research and manufacturing services business.  

Overall, the results for the full year for the group are expected to be slightly ahead of current market  consensus expectations 1."  

Notes:

1    The company's survey of nine analysts' forecasts (as at 26th January 2010) for profit before tax, 
      excluding amortisation of acquired intangibles, restructuring charges and profit on disposal of 
      businesses, indicates that they are in a range from £229 million to £273 million with a consensus of 
      £242 million.  

2    There will be a brief conference call for analysts and investors at 7.30 am on Wednesday 27th January 
      2010. To participate, please contact The Headland Consultancy (Dudley White / Tom Gough) on 
      020 7367 5222.  

Enquiries: Ian Godwin Director, IR and Corporate Communications 020 7269 8410 Robert MacLeod Group Finance Director 020 7269 8484 Howard Lee The HeadLand Consultancy 020 7367 5225 www.matthey.com

 

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