Interim Management Statement

RNS Number : 5100A

Johnson Matthey PLC

02 February 2011

 



For release at 7.00 am on Wednesday 2^nd February 2011

Johnson Matthey Plc

Third Quarter Interim Management Statement

Johnson Matthey today provides its third quarter Interim Management Statement covering the period from 1^st October 2010 to date.  

Performance

The group's performance in the third quarter was strong as demand in our key markets remained robust.  Sales excluding precious metals (sales) were 22% ahead of the same period last year and slightly up on the second quarter of this year.  Operational leverage and higher precious metal prices resulted in underlying operating profit (before amortisation of acquired intangibles) being 31% up on the third quarter of 2009/10.  

Underlying profit before tax was 34% higher than in the third quarter of last year but, in line with our normal seasonality, underlying profit before tax was slightly lower than in the second quarter of this year.  

Net debt increased in the quarter as working capital grew as a consequence of the strong growth in sales and higher precious metal prices.  The group's balance sheet remains strong.  

Environmental Technologies Division's third quarter sales were 21% ahead of the same period of last year and 6% higher than those in the second quarter of this year.  Operating profit was 14% ahead of the same period last year and, given our normal seasonality, was slightly lower than the second quarter of this year.  The division's sales were boosted by higher substrate costs related to increased fitment of diesel particulate filters in Europe and growth in the heavy duty diesel market.  Emission Control Technologies' sales in the quarter were up 22% compared with last year driven by further growth in global light duty vehicle sales, particularly in China, and the steady recovery of heavy duty vehicle sales.  Global car production was 5% ahead of both the third quarter of last year and last quarter.  Heavy duty diesel truck production in North America was up 29% on last year and was 23% ahead of the second quarter.  On 31^st January 2011, we entered into statutory formal consultation with our employees in Brussels about the potential closure of the Emission Control Technologies manufacturing plant there.  

Our Process Technologies business also performed well in the quarter. Sales were up by 15% on the same period last year with particularly good growth in methanol catalysts.  Davy Process Technology also continues to perform very well and in the quarter licensed a further SNG plant and a methanol plant, both in China, and two NDA plants, one in Indonesia and the other in Malaysia.  We completed the acquisition of Intercat, Inc. on 1^st November and the integration of the business is progressing well.  

Precious Metal Products Division's sales in the third quarter were significantly higher than this time last year, up 32%, and in line with those in the second quarter of this year.  Operating profit grew strongly and was 63% higher than in the same period last year and 12% higher than last quarter.  Demand for our manufactured products and catalysts has continued to grow steadily, up 28% compared with last year.  The results for our Platinum Marketing and Distribution business and our Pgm Refining and Recycling business were very strong, benefiting from the significantly higher platinum group metal (pgm) prices.  Average platinum and palladium prices compared with the second quarter were up 10% at $1,704/oz and 37% at $681/oz respectively.  Compared with the same period last year, platinum prices were up 22% and palladium prices were 94% higher.  

Fine Chemicals Division's sales were 10% ahead of the third quarter of last year and operating profit was slightly ahead.  Sales of active pharmaceutical ingredients remained good, particularly in North America, and the performance of our Pharmaceutical Services business continued to improve.  Our Research Chemicals business benefited from the gradual recovery in demand from the pharmaceutical research sector in both North America and Europe.  

Outlook

The group's trading is expected to remain strong for the remainder of the year and underlying performance for the full year is therefore expected to be slightly ahead of our previous expectations.  

Our Environmental Technologies Division is expected to follow its normal seasonal pattern, with the fourth quarter being its strongest, and performance in the second half of the year is anticipated to be ahead of the first half of the year.  Global light duty vehicle production is forecast to remain stable and the heavy duty diesel market is expected to continue its steady, but gradual recovery.  Demand in our Process Technologies business in the fourth quarter is expected to be strong.  Precious Metal Products Division will benefit from the sustained higher pgm prices and good demand for its manufactured products.  The results for this division in the second half of the year are therefore now expected to be significantly ahead of the first half of the year.  The performance of the Fine Chemicals Division is in line with our expectations.  

Notes:

¹ There will be a conference call for analysts and investors at 8.00am on Wednesday 2^nd February 2011.  To participate, please contact The HeadLand Consultancy (Fiona Davis-Coleman / Tom Gough) on 020 7367 5222.  

² Johnson Matthey is holding an investor event in London on the afternoon of Wednesday 2^nd February at which it will present an overview of its group business strategy.  No material new information will be disclosed in the presentations, the slides from which will be available on the company website (www.matthey .com) during the afternoon.  

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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