Johnson Matthey Business Report FY2008

Business Highlights

Business Overview (in million pounds)
  FY2008 FY2007 Rate of change(%) Factors
Net sales 7,847.8 7,498.7 4.7 -
Operating profit 298.5* 296.8* 0.6 -
Environmental Technologies
Net sales 2,226 2,290 2.8 1)
Operating profit 124.3* 147.3* (15.6)
*before amortisation of acquired intangibles

Environmental Technologies
-Within the Environmental Technologies Division, Emission Control Technologies' (ECT) sales excluding precious metals fell by 3% to 872 million pounds. Sales excluding precious metals grew by 10% in the first half of the year, followed by a drop of 16% in the second half.

-Its sales volumes of autocatalysts fell by more than 30% in the second half of the year, which was greater than the fall in global car production as a result of car companies and exhaust system suppliers reducing inventories of catalysts.

-The decline in sales of diesel particulate filters (DPFs) was less than that for flow through catalysts. Over the next 18 months the DPF market is set to double as all new diesel cars sold in the European Union will require fitment in January 2011.

-Sales excluding precious metals of emission control catalysts to markets other than light duty vehicles grew by 10% on a constant currency basis. These products include heavy duty diesel (HDD) catalysts for trucks, buses and non-road vehicles, and stationary emission control systems. Currently these applications account for 25% of the ECT division's sales excluding precious metals and expected to grow significantly over the next few years.

-Growth in 2008/09 was mainly the result of a good contribution from Argillon which was acquired in February 2008.


R&D Expenditure (in million pounds)
  FY2008 FY2007 FY2006
Overall 87.6 73.0 66.5

R&D Structure

-R&D facilities of Environmental Technologies are in the USA, UK, Germany, Sweden, Japan, South Korea and Brazil.

-The Johnson Matthey Technology Centre (JMTC) is the group's central resource for longer term research and employs over 180 world class scientists. It supports the research and development of new products and technology across all of its businesses and has expertise in catalysis, precious metals, materials science and many other fields in which the Company operates.

Investment Activities

Capital Expenditure by Segment (in million pounds)
  FY2008 FY2007
Environmental Technologies 160.2 82.4
Precious Metal Products 14.7 11.2
Fine Chemicals & Catalysts 23.4 19.8
Eliminations - -
Capital expenditure on discontinued operations N.A. 4.5
Corporate capital expenditure 5.2 1.9
Total 203.5 119.8

Investment Outside UK
-During the year the Company completed most of the construction of two new facilities, one in western Pennsylvania, USA, to manufacture the additional catalysts required to meet the new HDD legislation in North America which takes effect from 1st January 2010, and the other in Macedonia to manufacture catalysts for both light duty and heavy duty vehicles in Europe. Both of these facilities are expected to be operational by the autumn of 2009.