Johnson Matthey has announced a number of measures to minimize the impact of COVID-19 on its businesses and amongst them, the decision to lower its employee count by cutting around 2,500 jobs globally over the three year period seems to be the haredest one.

 

Robert MacLeod, CEO, Johnson Matthey, said in his address, "COVID-19 has brought unprecedented challenges to the world and Johnson Matthey. During this pandemic, we have tried to balance the needs of all of our stakeholders but our first priority remains the health and safety of our people, customers, suppliers and communities where we operate. I would like to say a heartfelt thank you to all of our employees for their dedication and efforts over the past few months. 

 

Our business is resilient and diverse, serving a range of end markets and geographies. We made good progress in 2019/20 and delivered operating performance slightly ahead of market expectations, excluding the effects of COVID-19 which adversely impacted underlying operating profit by around £60 million. We took immediate and decisive action to protect our business, and to maintain good liquidity and a strong balance sheet. Looking forward, we are accelerating our strategy to drive greater efficiency across the business, building upon the investments we have made in new manufacturing facilities and in our systems and processes. We have delivered nearly £120 million of our previously announced cost savings. However, we recognise the need to be even more efficient in order to maintain our competitiveness and in addition some of our end markets have been affected by COVID-19. Therefore, we are targeting additional annualised cost savings of at least £80 million by the end of 2022/23. We regret that this will lead to some job losses, which we estimate to be around 2,500 globally over the three year period.

 

Given the ongoing uncertainty, we are unable to provide financial guidance for 2020/21. In Clean Air, our customers are gradually ramping up their plants but visibility on the path of recovery remains low. Efficient Natural Resources is later cycle and we anticipate an impact as lower demand begins to affect the industries it serves. Health is relatively unaffected by the macroeconomic environment and should benefit from new customer contracts. In Battery Materials, the commercialisation of eLNO remains on track. Notwithstanding the strong financial position of the group, in light of the current uncertainty and to balance the needs of all stakeholders, the board is proposing a final dividend for the year of 

31.125 pence, representing half the level of the 2018/19 final dividend.

 

These developments do not change the global trends that will drive our longer term growth. Addressing climate change remains a priority and commitments to net zero are gathering pace across the world. Our continued investment in strategic growth projects and leading sustainable technologies uniquely positions us to address this and other key global trends, delivering significant value for our shareholders and society.