TIDMJMAT

RNS Number : 7114Q

Johnson Matthey PLC

23 June 2020

23(rd) June 2020

Johnson Matthey Plc

(the "Company")

Annual Report and Accounts

The Company announces that it has today published the 2020 Annual Report and Accounts and Notice of Annual General Meeting. Both documents are available on the Company's website, matthey.com .

In accordance with Listing Rule 9.6.1, copies of both documents, together with the Form of Proxy, have been submitted to the National Storage Mechanism and will shortly be available for viewing at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

The information in the Appendix below should be read in conjunction with the Company's preliminary results for the year ended 31(st) March 2020, issued on 11(th) June 2020. That information, together with the Appendix below, is provided in accordance with Rule 6.3.5R of the Disclosure Guidance and Transparency Rules in full unedited text. This announcement is not a substitute for reading the full Annual Report and Accounts. Page and note references in the text below refer to those in the 2020 Annual Report and Accounts.

APPIX

Risks and uncertainties

Principal risks are critically assessed to ensure that JM meets the challenges facing the business and strategic objectives. The COVID-19 pandemic, which has altered the external environment, has impacted the risks JM manages including supplier disruption, rise in mandatory / voluntary work from home and a shift in customer behaviours. JM has taken decisive action to protect its people, support its communities across the globe and manage the continuity of the business to deliver its vision for a cleaner, healthier world.

Specifically, in this context, managing today's financial performance is imperative as it further underpins the future success of JM. The board and GMC are continually assessing the potential impact of COVID-19 on the business with the assumption that the global economy, JM's customers and suppliers will be affected for far longer than the next few months and that some changes may well be permanent. This is explored further within the Viability section on page 75. Also, in the same way as governments around the world are planning their COVID-19 exit strategies, JM is too. This means, first and foremost, continuing to keep all people safe, then focusing on the choices and actions to put JM in the best position to deliver the long term future strategy.

To understand the current risk universe for JM, GMC risk sponsors have assessed changes to their risks, prioritising principal risks as required, with updated plans to mitigate them. This has been enabled by the risk management process facilitated by the Corporate Assurance function and additionally through the COVID-19 Group Incident Management Team.

It further contributed to discussions by the board and GMC to ensure JM's operational posture reflects the current environment.

The following key changes, additions and updates on JM's principal risks and uncertainties in 2019/20 have been considered:

-- The 'Existing market outlook' risk has been reassessed to include both the short term market risk that can be foreseen and reacted to and longer term 'black swan' events where the quality of response is the important factor. COVID-19 has increased the volatility and uncertainty of our outlook in our existing markets but over time we would expect both of these elements to reduce with revised market understanding.

-- The 'Future growth' risk has been refined to focus on the main elements that drive our growth (identifying opportunities, developing the products and services required and building the capability to deliver). This has provided clearer ownership, accountability and monitoring of differing risk exposures in strategic investments and / or delivery of expected business cases. We have improved our visibility and awareness of our Fuel Cells business' risks and uncertainties as it executes its ambitious growth plans.

-- The assessment criteria for the 'Environment, health and safety' risk has been enhanced to drive stronger alignment with the Environment, health and safety (EHS) strategy and maintaining strong focus on JM's aspiration of zero harm. The risk has also been updated to reflect greater environmental actions. COVID-19 has created unprecedented challenges in the working environment around us. As the health, safety and wellbeing of our employees is vital, JM reacted quickly to take relevant actions such as implementing global travel restrictions, restricting attendance / organisation of large events, increasing remote working at scale and enhancing process safety measures. JM has further instigated frequent employee communications and engagement around the importance of safety in the context of COVID-19 and issued additional guidance for process safety measures. JM has also leveraged its global presence to learn from our colleagues in China. It enabled an early start of our COVID-19 preparations around the globe to implement measured responses to the pandemic across all of JM facilities.

-- Climate change is incorporated into our risk management process as a driver of certain principal risks, especially 'Future growth', 'Environment, health and safety', 'Supply failure' and 'Failure of operations'. We recognise that effective management of climate change risks are crucial to deliver our growth strategy and inspire confidence from our stakeholders. The rate and extent of change of our key markets in response to climate change is the subject of extensive scenario planning and we are further analysing the validity of a stand alone risk for this area.

-- Metal liquidity and supply - JM continues to refine and enhance the Precious Metal Management (PMM) team's approach to both the financial processes which govern metal management, and operational processes. Significant advances have been made in reducing the amount of working capital absorbed by metal prior to the impact of COVID-19, as well as strengthened governance including additional specialist resources to the PMM team. While the pandemic disruption has been a factor that JM considered in metal supply, it has not had an immediate impact on our supply positions. We continue to monitor the situation with our suppliers including potential shortages of supply created by mine closures.

-- Battery Materials - recognising the significant strategic potential of the Battery Materials business in developing and bringing to market eLNO, JM is creating a leading risk and governance capability to focus on managing programme and business risks. The priority is to ensure that business and programme risks receive appropriate management attention and are addressed quickly and effectively in this complex environment.

-- Within the 'Applications, systems and cyber' risk, key cyber security technologies have been deployed to increase our ability to predict, prevent, detect and respond to cyber threats. These have been fine tuned for the increased risk of attack associated with COVID-19 as we anticipate a continued increase in volume and scale of financially motivated cyber attacks where the pandemic is used as a cover. We have increased the level of communication and awareness activities to ensure our employees are more alert. We continue to track external threats working with governments, law enforcement and industry specialists as appropriate.

-- Brexit - JM is continuing to monitor and assess the potential impact of the UK's exit from the European Union on current operations and strategy. Plans are well developed, and JM is confident that the acute demands of managing the COVID-19 response will not reduce the ability to respond to changes caused by Brexit.

The following table sets out the principal risks and uncertainties facing the group and the mitigating actions we have in place. It also details any profile changes for each principal risk during the course of the year.

Strategic risks are listed first followed by operational risks. Each risk has a GMC sponsor who is responsible for the risk and to ensure controls are adequate and prioritised effectively. Each principal risk is also linked to one or more of our strategic enablers - 'Efficiency and excellence', 'Sustainable business', 'Innovation' and 'Values-driven culture'.

Key

   E      Efficiency and excellence 
   S      Sustainable business 
   I      Innovation 
   V      Values driven culture 
 
   1 Existing market                                                                                              ESIV 
   outlook 
                           --------------------------------------------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Execution of the strategic planning process to assess     annual 
   The impact of changing            and understand external trends and assessment of the      report 
   assumptions in our key            associated impacts across our sectors (including the      We continue to monitor 
   markets is either                 balance, scale and focus of investments).                 global macroeconomic 
   unplanned                                                                                   factors and we are 
   or unforeseen and we                                                                        improving 
   are not agile enough         *    Regular review of our portfolio is undertaken to          our sensitivity 
   to respond to them.               ensure that each part of the business is providing        analysis 
   This risk includes                value to the group. In turbulent times the resilience     through the strategic 
   potential                         of this portfolio demonstrates their benefits.            planning and budgeting 
   impact of legislative                                                                       process. The agility 
   changes (e.g. those                                                                         of this process has 
   caused by Brexit),           *    Integration of strategic risk within the strategic        allowed us to re-plan 
   other                             planning process to challenge implicit assumptions        quickly and 
   market movements                  and drive proactively the consideration of different      efficiently. 
   outside                           market outcomes.                                          COVID-19 has changed 
   of our predictions,                                                                         our market outlook 
   the extended impact                                                                         through 
   of global pandemics          *    Monitoring of key viability and liquidity metrics         supply disruption, 
   such as COVID-19 and              (including balance sheet strength) as part of             plant 
   emerging trends such              budgeting and going concern testing.                      shutdowns and changing 
   as the imposition of                                                                        consumer demands. 
   tariffs as well as                                                                          We have so far seen 
   regional                     *    Technology road mapping to understand our response        significant impact to 
   and global slowdowns              options to evolution in our markets and associated        our business throughout 
   to which our business             scientific and technological requirements.                Q1 2020/21 driven by 
   may be sensitive.                                                                           COVID-19. Other than 
   GMC sponsor: Christian                                                                      the health, safety and 
   Günther                 *    Monitoring of changes to key drivers (including GDP       wellbeing of our 
                                     and market assumptions), scenario planning and            employees, 
                                     adjusting business plans accordingly.                     we have specifically 
                                                                                               focused our actions 
                                                                                               in managing cash flow, 
                                                                                               reducing cost and 
                                                                                               working 
                                                                                               capital to ensure JM 
                                                                                               remains robust, with 
                                                                                               sufficient liquidity. 
                                                                                               COVID-19 has increased 
                                                                                               the volatility and 
                                                                                               uncertainty 
                                                                                               of our outlook in 
                                                                                               existing 
                                                                                               markets but over time 
                                                                                               we would expect 
                                                                                               volatility 
                                                                                               to reduce and with 
                                                                                               revised 
                                                                                               market understanding 
                                                                                               uncertainty to decline. 
                                                                                               While putting our own 
                                                                                               business strength and 
                                                                                               continuity first, we 
                                                                                               have also been 
                                                                                               assessing 
                                                                                               opportunities created 
                                                                                               by these market 
                                                                                               conditions. 
                           ---------------------------------------------------------------  -------------------------- 
   2 Future growth                                                                                                ESIV 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    A clear strategy, which is continuously reviewed in       annual 
   Failure to deliver                the light of new information, and a business review       report 
   planned                           process to track execution of that strategy               This risk has been 
   growth and value                  (Transformation Office).                                  refined 
   creation                                                                                    to focus on the main 
   through ineffective                                                                         elements that drive 
   execution of strategic       *    Ongoing reviews and monitoring of new technologies        our growth (identifying 
   initiatives and                   and market competitiveness.                               opportunities, 
   investments.                                                                                developing 
   GMC sponsor: Robert                                                                         the products and 
   MacLeod                      *    Targeted investment in research and development,          services 
                                     capital projects and people with the specific skills      required and building 
                                     necessary to deliver effectively and support the          the capability to 
                                     realisation of our strategy.                              deliver). 
                                                                                               We have reviewed our 
                                                                                               growth choices, timing 
                                *    Proactive engagement with current and potential           of investments and 
                                     customers as well as industry bodies, for example the     execution 
                                     Hydrogen Council, to understand future needs and          risks in light of 
                                     potential product / market evolution.                     COVID-19. 
                                                                                               Specifically, we have 
                                                                                               conducted detailed 
                                *    Regular reviews of all strategic capital projects by      assessments 
                                     dedicated group capital projects team.                    of the impact on 
                                                                                               projects 
                                                                                               delivery and start up 
                                                                                               due to limitations on 
                                                                                               resource and equipment 
                                                                                               availability. We 
                                                                                               continue 
                                                                                               to ensure that our 
                                                                                               future 
                                                                                               growth is aligned with 
                                                                                               global macro trends 
                                                                                               (including climate 
                                                                                               change) 
                                                                                               such as fuel cell 
                                                                                               technology. 
                           ---------------------------------------------------------------  -------------------------- 
   3 Competitive                                                                                                  ESIV 
   advantage 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key Mitigations                                                  Changes since 2019 
   and impact                   *    Strong customer relationships due to JM's technical       annual 
   Failure to maintain               proposition, good market reputation and a high level      report 
   our competitive                   of technical service.                                     We are delivering and 
   advantage                                                                                   tracking our major 
   in existing markets                                                                         capability 
   and, as a result, not        *    Regular engagement with customers at multiple levels      building programmes 
   meeting customers'                and performing satisfaction surveys.                      including commercial, 
   evolving                                                                                    procurement and digital 
   needs as effectively                                                                        transformation. 
   and profitably as our        *    Regular strategy reviews including a review of our        We have processes in 
   competitors.                      competitive position and competitors' moves.              place to enable 
   GMC sponsor: Maurits                                                                        effective 
   van Tol                                                                                     decisions to allocate 
                                *    Research and development as well as capital               innovation resource 
                                     management process ensuring resources are prioritised     and capital. Through 
                                     against the areas of greatest opportunity.                our innovation 
                                                                                               excellence 
                                                                                               programme, we 
                                *    Strong innovation portfolio with new technology           continuously 
                                     platform and product development process.                 improve the processes 
                                                                                               that further expand 
                                                                                               JM's product, 
                                                                                               application 
                                                                                               and technology toolbox. 
                                                                                               COVID-19 has provided 
                                                                                               both challenges and 
                                                                                               opportunities to our 
                                                                                               business. We have 
                                                                                               therefore 
                                                                                               also been focused with 
                                                                                               our response on 
                                                                                               emerging 
                                                                                               opportunities that 
                                                                                               would 
                                                                                               transform our business 
                                                                                               at pace. 
                           ---------------------------------------------------------------  -------------------------- 
   4 Environment, health and safety (EHS)                                                                          ESV 
------------------------------------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Embedded health and safety culture, including clear       annual 
   As per similar high               policies and standards, continual training and            report 
   hazard manufacturing              awareness activities and audits.                          The health and safety 
   companies, our                                                                              of our employees 
   business                                                                                    continues 
   operations are subject       *    Continue to operate process safety reviews on             to be our absolute 
   to a wide range of                applicable sites.                                         priority 
   challenging                                                                                 across the business. 
   health, safety and                                                                          We have made progress 
   environmental                *    Investigations carried out to determine the root          in embedding our 
   laws, standards and               cause of incidents and accidents and the development      policies 
   regulations from                  of remediation plans.                                     across the business 
   government                                                                                  and continue our 
   and non-governmental                                                                        execution 
   bodies around the            *    Reporting and management of environmental data.           of all EHS improvement 
   world.                                                                                      plans in a controlled 
   If we fail to operate                                                                       manner, with rigorous 
   safely, we could                                                                            and regular tracking 
   injure                                                                                      which has resulted in 
   our people or breach                                                                        improved leading and 
   applicable laws which                                                                       lagging indicators 
   could adversely impact                                                                      across 
   our employees. This                                                                         the group. 
   could result in lost                                                                        This risk has been 
   production time and                                                                         updated 
   potentially attract                                                                         to clearly articulate 
   negative interest from                                                                      the way we are managing 
   the media and                                                                               our health and safety 
   regulator.                                                                                  exposure, and 
   GMC sponsor: Robert                                                                         specifically 
   MacLeod                                                                                     to encompass all 
                                                                                               relevant 
                                                                                               areas such as our 
                                                                                               environmental 
                                                                                               impact. 
                                                                                               COVID-19 has impacted 
                                                                                               the ways of working 
                                                                                               for many of our 
                                                                                               employees. 
                                                                                               We have deployed new 
                                                                                               EHS policies and 
                                                                                               guidelines 
                                                                                               to protect our 
                                                                                               employees 
                                                                                               and we have further 
                                                                                               developed our wellbeing 
                                                                                               support programme. 
                           ---------------------------------------------------------------  -------------------------- 
   5 Supply failure                                                                                               ESIV 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Supplier relationship management through                  annual 
   The nature of JM's                formalisation of regular reviews to discuss their         report 
   operations                        constraints and quality management processes.             We have made progress 
   means there are                                                                             in the implementation 
   limited                                                                                     of our procurement 
   suppliers from which         *    Where deemed appropriate, we carry strategic stocks       strategy 
   to source certain                 of raw materials and monitor those levels regularly       and sharpened our 
   strategic                         in the context of the external environment.               understanding 
   raw materials                                                                               of supply chain across 
   including                                                                                   the sectors including 
   precious metals. Any         *    Strategic materials and key suppliers potentially         our capital projects 
   significant breakdown             susceptible to COVID-19 related supply disruption in      supply chain. 
   in the supply of these            and across geographies identified and hyper care          We have committed, 
   materials would lead              plans in place to ensure continuity and future            through 
   to an inability to                strength of our supply chain.                             Q1 of 2020/21, to 
   manufacture                                                                                 support 
   and satisfy customer                                                                        suppliers, particularly 
   demand. The impact of        *    Groupwide co-ordination of sourcing and sharing of        our smaller suppliers 
   COVID-19 has reduced              resources to ensure personal protective equipment         who may suffer hardship 
   customer demand and               (PPE) continuity of supply and operations to protect      as a result of 
   increased its                     our people.                                               COVID-19. 
   volatility                                                                                  We are also placing 
   while simultaneously                                                                        greater emphasis on 
   impacting the entire         *    Improving resilience on supply chain logistics, goods     the customer and 
   supply chain. It has              security in particular.                                   consumer 
   changed the nature of                                                                       impact of our supply 
   this risk as it                                                                             chain and potential 
   requires                     *    Regular investigation of alternative materials as         supply failure (e.g. 
   JM to respond at pace             part of research and development.                         to a major OEM). 
   to the changing                                                                             We have reduced the 
   external                                                                                    precious metal backlogs 
   environment.                 *    Prioritised ramp up plans in place to ensure agile        in our refineries, 
   GMC sponsor: Jane                 response to resumption in demand.                         providing 
   Toogood                                                                                     access to precious 
   (metal) and Anna Manz                                                                       metal 
   (other sourcing)             *    Continued investment in our pgm refining business to      meaning that we are 
                                     ensure access to recycled precious metals.                currently able to 
                                                                                               continue 
                                                                                               servicing critical 
                                *    Ongoing market research to understand and monitor the     customers. 
                                     impact of short term events on longer term supply of 
                                     metal. 
                           ---------------------------------------------------------------  -------------------------- 
   6. People                                                                                                        EV 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Values and behaviours embedded in all internal            annual 
   To successfully                   processes including hiring and performance reviews.       report 
   execute                                                                                     We are continuing to 
   our strategy and                                                                            invest in our 
   deliver                      *    Culture focused sessions arranged with leadership and     leadership 
   growth, we need to                development of culture statement roadmap.                 by clarifying the 
   ensure                                                                                      capabilities 
   that we have the                                                                            and behaviours required 
   breadth                      *    Ongoing leadership development and wellbeing              through the development 
   and depth of                      programmes.                                               at all levels of the 
   leadership                                                                                  organisation. 
   and the appropriate                                                                         We have undertaken a 
   skills and                   *    Global employee engagement survey conducted every two     further employment 
   capabilities                      years followed by development and delivery of             engagement 
   to drive a motivated,             targeted action plans.                                    survey and are 
   inclusive and engaged                                                                       implementing 
   workforce.                                                                                  action plans relevant 
   GMC sponsor: Annette         *    Pulse surveys carried out to test the progress being      to local sites, as well 
   Kelleher                          made in specific areas and course correct as              as global programmes 
                                     necessary.                                                focused on 
                                                                                               communication, 
                                                                                               development and ways 
                                                                                               of working. 
                                                                                               We have in place 
                                                                                               several 
                                                                                               mitigating actions in 
                                                                                               response to COVID-19. 
                                                                                               These include 
                                                                                               prioritising 
                                                                                               our employees' safety 
                                                                                               and health, social 
                                                                                               distancing 
                                                                                               and enabling a 
                                                                                               significant 
                                                                                               number of colleagues 
                                                                                               to work from home as 
                                                                                               well as necessary 
                                                                                               crisis 
                                                                                               cover. In the short 
                                                                                               term, while our leaders 
                                                                                               navigate the COVID-19 
                                                                                               situation, we have put 
                                                                                               our leadership 
                                                                                               development 
                                                                                               programmes on hold and 
                                                                                               increased our focus 
                                                                                               on their resilience 
                                                                                               and wellbeing. 
                                                                                               We have a series of 
                                                                                               leadership engagement 
                                                                                               and employee 
                                                                                               communications 
                                                                                               planned on a regular 
                                                                                               basis to support 
                                                                                               colleagues 
                                                                                               in times of uncertainty 
                                                                                               and maintain motivation 
                                                                                               across the group. 
                           ---------------------------------------------------------------  -------------------------- 
   7. Security of metal / highly regulated                                                                           E 
    substances 
------------------------------------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Continue execution of the security roadmap which sets     annual 
   The group has                     out the three year plan to further strengthen the         report 
   significant                       function.                                                 Our level of control 
   quantities of high                                                                          will increase through 
   value                                                                                       the delivery of the 
   precious metals or           *    Implementation and application of the Group Security      security roadmap, which 
   highly                            policies across all sites.                                includes implementation 
   regulated substances                                                                        of control measures 
   on site and in                                                                              across our critical 
   transit.                     *    Execution of security assessments and audits.             sites. 
   Loss or theft due to                                                                        In light of COVID-19, 
   a failure of the                                                                            we have accelerated 
   security                     *    Threat evaluation and horizon scanning regularly          certain aspects of the 
   management systems                carried out.                                              security plan and are 
   associated                                                                                  ensuring full and 
   with the protection                                                                         comprehensive 
   of metal or highly           *    Insurance coverage in place.                              security cover. 
   regulated 
   substances may result 
   in financial loss and        *    Ongoing security awareness campaigns and training 
   / or a failure to                 including rigorous follow up of thefts and continuous 
   satisfy                           learnings. 
   our customers which 
   could reduce our 
   customers' 
   confidence in JM and 
   potential legal 
   action. 
   GMC sponsor: Jane 
   Toogood 
                           ---------------------------------------------------------------  -------------------------- 
   8. Intellectual property management                                                                             ESI 
------------------------------------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Portfolio management of intellectual property and         annual 
   Failure to adequately             technology enabled governance.                            report 
   manage our own, and                                                                         The intellectual 
   third party,                                                                                property 
   intellectual                 *    Continued training and awareness of Information           landscapes for the 
   property, knowledge               Classification Policy.                                    technologies 
   and information could                                                                       in which JM operates 
   lead to a loss in                                                                           remains inherently 
   business                     *    Implementation of business intellectual property          challenging 
   advantage, loss of                management strategies.                                    as, for example, 
   freedom                                                                                     sustainable 
   to operate and                                                                              technology development 
   reputational                 *    Intellectual property lawyers used to provide             is a very dynamic 
   damage associated with            specialist guidance including in the use of               space. 
   litigation.                       intellectual property as a business tool.                 We have made progress 
   GMC sponsor: Maurits                                                                        implementing mitigating 
   van Tol                                                                                     actions, notably 
                                                                                               rolling 
                                                                                               out the information 
                                                                                               security policies 
                                                                                               including 
                                                                                               information 
                                                                                               classification, 
                                                                                               a robust stage gating 
                                                                                               process and in 
                                                                                               developing 
                                                                                               intellectual property 
                                                                                               strategies on a per 
                                                                                               sector / business basis 
                                                                                               as appropriate. 
                           ---------------------------------------------------------------  -------------------------- 
   9. Failure of                                                                                                    ES 
   operations 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Continuous implementation of Group Business               annual 
   We will experience                Continuity Policy and Manual, and manufacturing           report 
   interruptions                     excellence programme across all sites.                    The Group Business 
   which result in delays                                                                      Continuity 
   in the manufacturing                                                                        Policy and Manual are 
   and supply of our            *    Regular maintenance of critical machinery and             embedded across all 
   products.                         continued investment in infrastructure.                   sites, personal process 
   This may result in                                                                          safety performance has 
   lost                                                                                        been further enhanced. 
   sales and / or profit        *    Continue to develop comprehensive response plans with     In addition we have 
   affecting our                     annual testing.                                           successfully 
   financial                                                                                   implemented 
   performance and                                                                             our Group Incident 
   reputation.                                                                                 Management 
   GMC sponsor: Joan                                                                           Team to manage our 
   Braca                                                                                       response 
                                                                                               to the current global 
                                                                                               pandemic and 
                                                                                               implemented 
                                                                                               a number of COVID-19 
                                                                                               specific measures 
                                                                                               including 
                                                                                               a groupwide pandemic 
                                                                                               response plan, site 
                                                                                               operational procedures 
                                                                                               (focusing on social 
                                                                                               distancing measures), 
                                                                                               a groupwide alert level 
                                                                                               status matrix and a 
                                                                                               comprehensive site 
                                                                                               pandemic 
                                                                                               response measures 
                                                                                               playbook. 
                           ---------------------------------------------------------------  -------------------------- 
   10. Ethics and                                                                                                   SV 
   compliance 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                  *    Implementation of a refreshed Code of Ethics               annual 
   Failure to comply with           supported by continued training and tone from the top,     report 
   ethical and regulatory           set by senior leadership.                                  We have launched 
   compliance standards                                                                        several 
   leading to                                                                                  refreshed key policies 
   reputational                *    Assurance programme in place to monitor business unit      (Gifts, Hospitality 
   damage, possible                 and sector compliance with key controls.                   and Charitable 
   criminal                                                                                    Donations, 
   / legal exposure for                                                                        Anti-bribery and 
   the company or for          *    Ethics panel and 'speak up' facility available and         Corruption) 
   individuals.                     any issues fully investigated, and any recommended         with aligned training. 
   GMC sponsor: Robert              actions implemented.                                       We have also developed 
   MacLeod                                                                                     a more detailed action 
                                                                                               plan to address all 
                               *    Use of internal and external subject matter experts        identified risks. 
                                    to identify risks, set standards and provide advice        We have increased the 
                                    and training.                                              level of awareness 
                                                                                               activities 
                                                                                               to ensure our employees 
                               *    Annual ethical working practice certification by all       are aware of the 
                                    management with any issues raised investigated.            heightened 
                                                                                               risk due to the 
                                                                                               additional 
                                                                                               financial pressures 
                                                                                               that people and 
                                                                                               companies 
                                                                                               may be suffering due 
                                                                                               to the impact of 
                                                                                               COVID-19 
                                                                                               pandemic. 
                           ---------------------------------------------------------------  -------------------------- 
   11. Business                                                                                                   ESIV 
   transition 
                           ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Strategic Transformation Office set up to ensure          annual 
   Failure to manage and             appropriate governance across key initiatives to          report 
   deliver change in a               coordinate and drive delivery of change in a              We have implemented 
   controlled manner to              controlled manner.                                        strategic oversight 
   achieve expected                                                                            of the key change 
   business                                                                                    initiatives 
   benefits.                    *    Monitoring of JM wide risks and interdependencies of      by the creation of a 
   GMC sponsor: Robert               the change.                                               Chief Transformation 
   MacLeod                                                                                     Officer role. This role 
                                                                                               orchestrates cross 
                                *    Support from subject matter experts in the execution      group 
                                     of business change.                                       initiatives and 
                                                                                               supports 
                                                                                               leaders to drive 
                                *    Independent assurance on key change programmes.           forward 
                                                                                               the delivery of the 
                                                                                               expected benefits 
                                *    Implementation of project management framework across     creating 
                                     all key initiatives.                                      an agile and efficient 
                                                                                               business, providing 
                                                                                               flexibility to 
                                                                                               consistently 
                                                                                               deliver to our people, 
                                                                                               customers and 
                                                                                               stakeholders. 
                                                                                               Key programme themes 
                                                                                               are manufacturing 
                                                                                               footprints 
                                                                                               and target operating 
                                                                                               model reviews, customer 
                                                                                               and growth, innovation, 
                                                                                               people and culture. 
                                                                                               There has been minimal 
                                                                                               direct impact on these 
                                                                                               programmes due to 
                                                                                               COVID-19 
                                                                                               and there is 
                                                                                               opportunity 
                                                                                               to accelerate in some 
                                                                                               areas to drive 
                                                                                               efficiency 
                                                                                               going forward. 
                                                                                               We have introduced and 
                                                                                               embedded change in 
                                                                                               managing 
                                                                                               strategic capital 
                                                                                               projects 
                                                                                               and our procurement 
                                                                                               excellence programme 
                                                                                               has become part of 
                                                                                               business 
                                                                                               as usual activities. 
                                                                                               Although we have 
                                                                                               continued 
                                                                                               to implement our global 
                                                                                               ERP solution (Unify) 
                                                                                               with a number of sites 
                                                                                               going live during 2019 
                                                                                               in the Clean Air 
                                                                                               Sector, 
                                                                                               we have paused 
                                                                                               deployment 
                                                                                               in the US to prioritise 
                                                                                               resource in light of 
                                                                                               COVID-19. 
                           ---------------------------------------------------------------  -------------------------- 
   12. Product quality                                                                                            ESIV 
-------------------------  ---------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Monitoring and reporting of quality performance,          annual 
   Our products are used             taking corrective action where required.                  report 
   in a wide range of                                                                          The regulatory 
   applications,                                                                               environment 
   processes and systems.       *    Continue to develop robust manufacturing and              continues to tighten, 
   The quality of these              preventative maintenance systems supported by             and our customers are 
   products is crucial               standardised processes.                                   experiencing greater 
   to ensuring they                                                                            scrutiny and in-use 
   function                                                                                    testing. 
   as intended and meet         *    Global quality management systems embedded and            We have progressed our 
   the established                   supported with training and regular communications.       thinking in 
   quality                                                                                     understanding 
   criteria. Should a                                                                          continuous improvement 
   product                      *    Embed quality-by-design into new product introduction     opportunities and how 
   fail to perform as                and product change management processes.                  we apply inherently 
   expected                                                                                    different quality 
   or have quality                                                                             management 
   defects,                                                                                    systems across our 
   we could cause harm                                                                         sectors. 
   to consumers or expose                                                                      In the context of post 
   ourselves to liability                                                                      COVID-19 potential 
   claims. This could                                                                          surges 
   lead                                                                                        in demand, we have 
   to loss of future                                                                           enhanced 
   business,                                                                                   our planning to ensure 
   reputational damage                                                                         product quality is 
   and loss of licence                                                                         maintained 
   to operate.                                                                                 whilst we react and 
   GMC Sponsor: Robert                                                                         manage potential 
   MacLeod                                                                                     impacts 
                                                                                               to our supply base. 
                           ---------------------------------------------------------------  -------------------------- 
   13. Applications, systems and cyber                                                                             SIV 
------------------------------------------------------------------------------------------  -------------------------- 
   Risks, opportunities       Key mitigations                                                  Changes since 2019 
   and impact                   *    Key cyber security technologies have been deployed to     annual 
   Risks that our                    increase our ability to predict, prevent, detect and      report 
   applications                      respond to cyber threats. These have been tuned for       We have continued to 
   and systems security              the increased risk of attack associated with              invest heavily in our 
   is inadequate or fails            COVID-19.                                                 cyber security and IT 
   to adapt to changing                                                                        general controls 
   business requirements                                                                       providing 
   and / or external            *    Continued delivery of our Cyber Security and              better visibility and 
   threats.                          Infrastructure Improvement Programme (CSIIP) to           governance 
   The impact of these               increase our organisational resilience and we have        to support a more 
   may adversely affect              prioritised this investment in the context of             efficient 
   our financial position            COVID-19. Controls have been increased in areas where     business. 
   and could harm our                we perceive the risk to be heightened.                    CSIIP programme 
   reputation.                                                                                 deliverables 
   JM's response to                                                                            have been met in a 
   COVID-19                     *    Implementation of key policies and standards across       controlled 
   has increased employee            JM.                                                       manner, meeting the 
   remote working and                                                                          milestones set. Risk 
   presented                                                                                   mitigations have been 
   new demands on               *    Continued support and assurance from third party          adjusted in light of 
   applications,                     specialists.                                              COVID-19. 
   systems and cyber                                                                           We have increased the 
   security.                                                                                   level of communication 
   This has resulted in                                                                        and awareness 
   increased risks in the                                                                      activities 
   operational management                                                                      to ensure our employees 
   of IT systems and                                                                           are more alert to the 
   cyber                                                                                       increased external risk 
   risks as malicious                                                                          associated with the 
   actors                                                                                      exploitation of the 
   look to exploit the                                                                         COVID-19 pandemic. We 
   pandemic.                                                                                   continue to track 
   GMC sponsor: Anna Manz                                                                      external 
                                                                                               threats working with 
                                                                                               governments, law 
                                                                                               enforcement 
                                                                                               and industry 
                                                                                               specialists 
                                                                                               as appropriate. 
                           ---------------------------------------------------------------  -------------------------- 
 

Responsibility statement of the directors in respect of the Annual Report and Accounts

Each of the directors as at the date of the Annual Report and Accounts, whose names and functions are set out below:

   --        Patrick Thomas, Chair 
   --        Robert MacLeod, Chief Executive 
   --        Anna Manz, Chief Financial Officer 
   --        Alan Ferguson, Non-Executive Director 
   --        Jane Griffiths, Non-Executive Director 
   --        Xiaozhi Liu, Non-Executive Director 
   --        Chris Mottershead, Non-Executive Director 
   --        John O'Higgins, Non-Executive Director 
   --        Doug Webb, Non-Executive Director 

states that to the best of his or her knowledge:

-- the group and parent company accounts, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and

-- the management report (which comprises the Strategic Report and the Directors' Report) includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

ENDS

Johnson Matthey Plc is listed on the London Stock Exchange (JMAT)

Registered in England & Wales number: 00033774

Legal Entity Identifier number: 2138001AVBSD1HSC6Z10

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

ACSKKBBNABKDOAB

(END) Dow Jones Newswires

June 23, 2020 02:00 ET (06:00 GMT)

Johnson Matthey (LSE:JMAT)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Johnson Matthey Charts.
Johnson Matthey (LSE:JMAT)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Johnson Matthey Charts.