Business Overview

(in million GBP)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	Rate of change (%)	Factors
Sales
Net Sales	10,728.8	12,023.2	(10.8)	-
Operating Income	380.5	433.4	(12.2)	-
Sales by Division
Environmental Technologies Sales	2,925.1	3,123.6	(6.4)	1)
Precious Metal Products Sales	7,520.1	8,609.4	(12.7)	-

Factors
1)
Emission Control Technology: ECT
-Though the ECT unit's sales fell 1% to GBP 1,461 million, the segment's operating profit increased slightly due to process efficiency improvements throughout the entire segment.

<Light Duty Catalyst>
-Sales of light duty catalysts fell 3% to GBP 938 million. The sales of light duty catalysts represented 64% of ECT's total sales in FY ended March 31, 2013. 

Europe
-The sale of light duty catalysts in Europe decreased 8% to GBP 543 million. Sales were impacted by a slight decline in the proportion of diesel vehicles produced in Western Europe.

Asia
-Light duty catalysts sales grew 7% to GBP 214 million. The increase in sales was attributable towards strong growth in China and South East Asia, and offset by a significant decline in Japan.

North America
-Sales of light duty catalysts in North America in the FY ended March 31, 2013 were flat at GBP 181 million. This was primarily due to higher vehicle production in the region being offset by a trend towards smaller engines. Another negative impact occurred due to a customer of the Company losing market share.

<Heavy Duty Diesel Catalyst>
-In the FY ended March 31, 2013, sales of heavy duty catalysts grew 9% to GBP 477 million despite an overall decline in heavy duty diesel truck production in North America and Europe. This was mainly due to a greater contribution in sales to non-road applications in North America and growth in Brazil that is supplied from European operations.

<Battery Technologies>
-The Company's Battery Technologies unit was formed during the FY ended March 31, 2013 with the acquisition of Axeon. The business had sales of GBP 31 million and suffered a small loss in the FY ended March 31, 2013.

<Color Technologies>
-Sales in the Color Technologies business decreased by 6% to GBP 82 million. Sales of automotive products in the division remained flat due to growth in the US and Asia compensating for a decline in Europe.

Acquisitions

-On October 19, 2012, the Company acquired 100% of AG Holding Limited and its subsidiaries, specifically Axeon. Axeon is a company that specializes in the design, development and manufacturing of integrated battery modules. The acquisition of Axeon provides an opportunity for the Company to expand in the battery materials market.

-On August 21, 2012, the Company acquired Shanghai Changyin Electronic Material Science and Technology Co. Ltd., Shanghai Changyin manufactures silver paste. This acquisition allows the Company to expand into the growing market for silver paste for solar cell applications.

R&D Expenditure

(in million GBP)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Overall	136.0	128.6	109.8

R&D Structure

-The Company has more than 1,300 people working in research and development activities, of which 61 percent work in the Environmental Technology segment.

R&D Facilities

-The Company has group technology centers in Sonning Common and Billingham, UK.
-The Company has R&D centers in 8 countries:

• USA
• UK
• Germany
• Sweden
• Japan
• China
• South Korea
• Brazil

Capital Expenditure

(in million GBP)

	FY ended Mar. 31, 2013	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011
Environmental Technologies	117.4	97.1	90.1
Precious Metal Products	40.7	31.6	26.1
Fine Chemicals	20.4	15.8	16.0
Eliminations	-	-	-
Corporate capital expenditure	13.5	5.1	5.7
Total	192.0	149.6	137.9

Investment in UK

Environmental Technologies
<Emission Control Technology>
-One of the primary investment projects that the Company was involved with in the FY ended March 31, 2013 was the addition of further automotive catalyst manufacturing capacity in Royston in Europe. This was done in preparation for the upcoming legislation regarding light and heavy duty vehicles.

Investment Outside UK

Environmental Technologies
<Emission Control Technology>
-The Company announced that it held a ground breaking ceremony to mark the start of an expansion project at its emission control catalyst manufacturing plant in Macedonia. The expansion will be carried out in two phases and will cost a total of GBP 50 million. The expansion is expected to double the existing capacity of the plant and create more than 100 additional jobs. (From a press release on May 9, 2012)