Johnson Matthey Plc Business Report FY ended Mar. 2017
Business Overview |
(in million GBP) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | Rate of change (%) | Factors | |
| Sales | ||||
| Net Sales | 12,031.0 | 10,713.9 | 12.3 | - |
| Operating Profit | 493.2 | 418.9 | 17.7 | - |
| Sales by Division | ||||
| Emission Control Technologies | 3,779.5 | 3,262.8 | 15.8 | 1) |
| Precious Metal Products | 7,206.1 | 6,454.1 | 11.7 | 2) |
| New Businesses | 198.7 | 159.1 | 24.9 | 3) |
Factors
1) Emission Control Technologies
-The Company’s Emission Control Technologies division had revenue of GBP 3,779.5 million, an increase of 15.8% from the previous year. Excluding the sales of precious metals, sales in the division increased by approximately 16% from the previous year.
-Sales of LDV catalysts increased by 18% over the previous year to GBP 1,400 million. The increase in sales was caused by growth in all regions, due to the need to satisfy Euro 6b legislation in Europe, increased demand for vehicles in China, and positive product and customer mix in North America.
-Sales of HDD catalysts increased by 13% over the previous fiscal year to GBP 824 million. Sales grew in Europe and Asia, due to overall growth in the truck markets in those regions, while sales declined in North America to be strong demand for catalysts for smaller trucks.
2) Precious Metal Products
-In the fiscal year ended March 31, 2017, the Company’s Precious Metal Products division had revenues of GBP 7,206.1 million, an increase of 11.7% from the previous year.
-Sales in the Noble Metals business unit increased by 16% from the previous year to GBP 152 million. Sales growth in Noble Metals reflects slightly higher sales of medical device components and increased sales of pgm products for a range of industrial applications.
-The Advanced Glass Technologies business unit’s sales decreased by 20% to GBP 85 million. Sales growth in our Advanced Glass Technologies business was driven by higher automotive production, particularly in China, leading to increased demand for our black obscuration enamels used in car windscreens.
3) New Businesses
-The Company’s New Businesses division had sales of GBP 198.7 million in the fiscal year ended March 31, 2016, an increase of 24.9% over the previous year.
-The Battery Technologies business unit had sales of GBP 153 million, an increase of 17.7% from the previous year.
-Sales for the Fuel Cells business unit increased to GBP 12 million, an increase of 20.0% from the previous year.
Outlook
-The Company expects its results for the fiscal year ending March 31, 2018 to show improvement compared to the results for the fiscal year ended March 31, 2017.
-The Emission Control Technologies division is expected to show slight growth in the fiscal year ended March 31, 2017. Continued growth in vehicle production in Asia and Europe along with increased demand for trucks in Western Europe will be partially offset by lower demand for heavy duty diesel catalysts for large trucks in North America.
-Sales in the Precious Metal Products are expected to slightly decline due to lower prices for platinum group metals. The division's manufacturing businesses are expected to have increased sales due to improved demand.
-The New Businesses division is expected to break even by the fiscal year ending March, 2018.
R&D Expenditure |
(in million GBP) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Overall | 200.7 | 188.0 | 169.9 |
| Distribution of R&D Expenditure | (%) |
| Division | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 |
| Emission Control Technologies | 40 | 40 | 42 |
| Process Technologies | 17 | 18 | 20 |
| Precious Metal Products | 5 | 5 | 6 |
| Fine Chemicals | 14 | 12 | 10 |
| New Businesses | 8 | 8 | 5 |
| Central Research | 16 | 17 | 17 |
| Total | 100 | 100 | 100 |
R&D Structure
-The Company has approximately 1,450 employees working in research and development.
| Distribution of R&D Employees | (%) |
| Division | FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 |
| Emission Control Technologies | 39 | 37 | 37 |
| Process Technologies | 17 | 20 | 19 |
| Precious Metal Products | 10 | 7 | 7 |
| Fine Chemicals | 8 | 9 | 7 |
| New Businesses | 9 | 7 | 9 |
| Central Research | 17 | 20 | 21 |
| Total | 100 | 100 | 100 |
-The Company has increased its testing capabilities for its Emission Control Technologies components in the U.K., China and Japan.
R&D Facilities
-The Emission Control Technologies division has research and development facilities in the following eight countries:
- Brazil
- China
- Germany
- Japan
- Korea
- Sweden
- UK
- U.S.
-The Company continued to work with customers ahead of the introduction of China 6 legislation from 2020 and completed the expansion of our research and development facilities there.
-The Battery Technologies business unit has research and development facilities dedicated towards battery materials in the UK and Germany. In addition, the business unit has systems design and development facilities in the UK and Poland.
-The Fuel Cells business unit has R&D capability in Sonning Common, U.K.
Product Development
Nickel-rich cathode material battery platform
-The Company’s Battery Technologies business has licensed the CAM-7 platform of nickel-rich cathode material technologies for lithium-ion batteries. The platform is suited for high energy density applications such as battery electric vehicles and plug-in hybrid vehicles. The license will enable the Company to accelerate development of nickel rich products for the automotive market.
Capital Expenditure |
(in million GBP) |
| FY ended Mar. 31, 2017 | FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | |
| Emission Control Technologies | 88.5 | 68.9 | 69.2 |
| Process Technologies | 27.4 | 37.0 | 49.7 |
| Precious Metal Products | 29.4 | 39.8 | 31.6 |
| Fine Chemicals | 61.2 | 54.5 | 35.7 |
| New Businesses | 18.3 | 7.4 | 6.5 |
| Corporate Capital Expenditure | 39.9 | 49.4 | 19.1 |
| Total | 264.7 | 257.0 | 211.8 |
Investment in UK
Emission Control Technologies
-In the fiscal year ended March 31, 2016, the Company completed the expansion of light duty diesel manufacturing capacity in the UK.
-The principal investments were to increase ECT manufacturing capacity and technology in Europe and China to meet demand from business wins, vehicle production growth and new legislation.
Investment Outside UK
Emission Control Technologies
-During the fiscal year ended March 31, 2016, the Company began a program to expand its heavy duty diesel manufacturing capacity in Germany.
-The Company is in the process of expanding its manufacturing facilities in China for both light duty and heavy duty technologies in preparation for stricter emission regulations that are expected by the end of the decade.
Outlook
-The Company expects that its capital expenditure for the fiscal year ending March 31, 2018 will be similar to that of the fiscal year ended March 31, 2017.