Johnson Matthey has reported a 2% increase in revenue during the first half, reaching £7.0 billion. However, that was largely down to higher precious metal prices, with sales excluding precious metals down 20% to £1.7bn. Underlying operating profits fell 42% to £151m, almost entirely driven by a substantial decline in automotive catalysts.

 

The company's profit also plummeted due to major impairment and restructuring charges of £78 million during the first half

 

Further the company's board announced an interim dividend of 20p per share, down 18% year-on-year.

 

Robert MacLeod, Chief Executive, commented, "The COVID-19 pandemic has created great uncertainty for businesses and society globally. Our priority has been the safety of our people, customers, suppliers and the communities in which we operate. It has been a challenging period but the steps we have taken in recent years to create a more simple, agile and efficient business, coupled with the dedication of all my colleagues across the whole of Johnson Matthey, have enabled us to navigate it well. I am pleased that we delivered operating performance ahead of market expectations, as well as good cash generation, and made further progress on transforming the group.

 

In Clean Air, following the temporary disruption earlier in the year, we are currently seeing a strong recovery in demand across all regions, especially in China. Efficient Natural Resources saw an impact from weaker demand in some end markets, although we are seeing positive momentum in licensing with new wins and are strongly positioned for the energy transition. Health is benefiting from new customer contracts which will also drive future growth. We are making good progress with the commercialisation of eLNO® and, given our increasing confidence from customer testing, are now proceeding with the front end engineering design for our second commercial plant. 

 

Across the group we have made structural improvements to our operating model to drive efficiency and increase capability, and are already starting to see the benefits. Our actions include executing on our targeted annualised cost savings of c.£225 million by the end of 2022/23; optimising our global manufacturing footprint in Clean Air and delivering significant working capital benefits by fundamentally changing our metal operating model. Consistent with our ongoing strategy to create a simpler and more efficient portfolio, we completed the disposal of two of our smaller non-core activities.

 

Activity in autos and other key markets has improved since the beginning of the COVID-19 pandemic and we expect a materially stronger second half in comparison to the first half of this year. However, the path of recovery remains uncertain and we are not providing quantitative guidance for the group overall for the year ending 31st March 2021. In light of the market backdrop, but also reflecting the group’s performance and the importance of dividends to shareholders, the board has approved an interim dividend of 20.0 pence per share.

 

I am excited by our medium term growth prospects driven by accelerating global trends and we are purpose led to reduce the impact of climate change. We are investing for our future and remain focused on executing our growth opportunities including battery materials, fuel cells and our hydrogen production technologies."

 

Activity in autos and other key markets has improved since the COVID-19 pandemic began earlier this year and the company expects a materially stronger second half in comparison to the first half of this year. However, the path of recovery remains uncertain and we are not providing quantitative guidance for the group overall for the year ending 31st March 2021. We continue to drive efficiency and are making good progress against our targeted annualised cost savings of c.£225 million. From these initiatives, we are on track to deliver expected benefits of £59 million in the year ending 31st March 2021, with costs in the year of c.£90 million. To support our medium term growth, we are continuing to invest in our strategic growth projects.

 

The company also announced the appointment of Karen Hayzen-Smith, currently Group Financial Controller, as interim Chief Financial Officer with immediate effect.