Johnson Matthey PLC Capital Markets Day Statement (3636R)
September 21 2017 - 2:01AM
UK Regulatory
TIDMJMAT
RNS Number : 3636R
Johnson Matthey PLC
21 September 2017
Johnson Matthey Capital Markets Day Statement
Today, Johnson Matthey will hold a capital markets day in which
it will outline its strategy for growth and value creation, at a
group level and across its sectors. This growth is underpinned by
its leading positions in high margin, technology driven growth
markets. The company expects to deliver sustained growth in Clean
Air, break out growth in Battery Materials and Health, and above
market growth in Efficient Natural Resources. In the medium term,
this will generate attractive returns:
-- Expanding group ROIC to 20%
-- Delivering mid to high single digit EPS CAGR
-- And continuing a progressive dividend policy
Overall our Clean Air business will deliver growth in the next
ten years. It is expected to achieve strong single digit sales
growth in the next two to three years from share gains already
achieved in Europe light duty and from upcoming tighter
legislation. In subsequent years, sales growth is expected to
moderate as expansion in Asia, together with maintaining JM's
strong position in heavy duty in North America, is partially offset
by the move away from light duty diesel engines in Europe and by
the increasing penetration globally of battery electric light duty
vehicles.
The strategy for Efficient Natural Resources outlines how JM's
technology leadership in the sector can deliver above market sales
growth and improving operating margins from a focus on
efficiency.
The programme of increased investment in the Health sector,
which began in 2014, continues to build a deeper, broader pipeline
of new products based on JM's expertise in active pharmaceutical
ingredients. Building scale in this way will drive double digit
sales growth and substantial margin expansion in this attractive
sector beginning in 2019/20.
In New Markets, JM is focused on battery material technology and
has plans to make an initial investment of up to GBP200 million,
starting in 2018, to build capacity to drive growth in a market
which could be more than $30 billion sales when battery electric
vehicle penetration increases to around 10%.
Guidance is confirmed for the year ending 31st March 2018 and at
constant currency with sales growth expected to be c6% with
improving operating performance offset by non-cash items. Guidance
on foreign exchange is unchanged; it is expected to benefit
operating profit by GBP13 million with estimated restructuring
benefits in this financial year unchanged at GBP10 million.
The group presentation will describe a further GBP50 million of
savings, mainly from procurement, over the three years beginning in
financial year 2018/19. Most of the savings will be reinvested with
the balance for margin expansion. This is in addition to the GBP25
million of cost savings announced in June 2017.
Commenting on the capital markets day, Robert MacLeod, Chief
Executive, said:
'Johnson Matthey has strong market leading businesses capable of
sustained growth and value creation over the short, medium and long
term.
'We will enhance our leadership in the high margin, technology
driven growth markets we operate in through focused investment and
efficiency throughout the group. We are world class chemists. We
have the expertise to solve our customers' complex and increasingly
challenging problems by scaling up fundamental chemistry to provide
commercial solutions which drive our growth.
'This will create value and a cleaner and healthier world.
Through the strategy we will describe at our capital markets day
today, we aim to be one of the best performing, most trusted and
admired specialty chemical companies in the world.'
Ends
Enquiries:
Investor Relations Head of Investor Relations 020 7269 8235
Simon McGough Head of Investor Relations 020 7269 8426
Sarah Armstrong Investor Relations Analyst 020 7269 8444
Katharine Burrow
Director of Corporate
Media Communications 020 7269 8407
Sally Jones Tulchan Communications 020 7353 4200
David Allchurch/Latika
Shah
www.matthey.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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