Johnson Matthey continues to demonstrate strategic execution, with underlying operating profit increasing by 11% excluding the £85 million impact from lower precious metal (PGM) prices. Including the PGM price impact, there is an 8% decrease. Despite this, the company is making significant strides in executing its strategy and has announced new strategic milestones up to 2025/26.
The company remains well-positioned to adapt to market dynamics, boasting a robust portfolio. Notably, the Clean Air cash target has been upgraded to at least £4.5 billion in the decade leading to 2030/31. Additionally, there is strong growth and new project wins in Catalyst Technologies, while investment in Hydrogen Technologies is being adjusted to align with the market’s pace.
Johnson Matthey is experiencing further improvement in underlying operating margin, particularly in Clean Air and Catalyst Technologies. Transformation efforts are underway to enhance efficiency and establish a stronger growth platform, with a target of achieving £200 million in cost savings by the end of 2024/25.
Remarkable progress has been made in reducing Scope 1+2 CO2e emissions, surpassing the initial target of 10% reduction with a notable 30% decrease since 2019/20. Moreover, Value Businesses divestments have yielded net proceeds exceeding £500 million, with plans to return £250 million to shareholders through a share buyback program.
Liam Condon, Chief Executive Officer, expressed confidence in the company’s trajectory, noting the successful execution of Johnson Matthey’s strategy thus far. He emphasized the positive momentum and growth in underlying operating profit despite challenges posed by lower PGM prices. Condon highlighted the company’s commitment to strategic milestones, paving the way for continued growth and value creation.
Looking ahead to the fiscal year ending March 31, 2025, Johnson Matthey anticipates at least mid-single-digit growth in underlying operating performance, excluding Value Businesses. Clean Air is expected to see modest growth with continued margin expansion, while Catalyst Technologies is poised for further strong growth with mid-teens margins. Hydrogen Technologies are forecasted to achieve modest sales growth, accompanied by a significantly reduced operating loss in line with market development pace.
Despite potential adverse impacts from precious metal prices and foreign exchange rates, Johnson Matthey remains optimistic about its future performance and shareholder returns. The company proposes a final ordinary dividend of 55.0 pence per share, maintaining the total ordinary dividend at 77.0 pence per share, subject to shareholder approval at the Annual General Meeting on July 18, 2024.
