Johnson Matthey

Presentation of Results

for the year ended 31st March 1999

10th June 1999

Johnson Matthey

OVERVIEW

• Profit £1 million ahead at £131.2 million

• Dividend up 7%

• Strong performances from Catalysts & Chemicals, Precious Metals and Colours & Coatings

• Electronic Materials hit by adverse market conditions

• Continued focus on costs

STRATEGY

• Catalysts & Chemicals– focus for growth

• Electronic Materials– a separate US entity

– opportunities to enhance shareholder value

Johnson Matthey

SUMMARY RESULTS 1999

£m 1998

£m%

Turnover 3,385 3,268 + 4

Operating profit* 147.1 139.2 + 6

Interest ( 5.9) (9.0)

Profit before tax* 131.2 130.2 + 1

EPS* 44.3p 44.3p -

EPS (FRS 3) 46.1p 48.2p - 4

Dividend 19.0p 17.8p + 7

* Excluding exceptional items

1

OPERATING PROFIT

Catalysts & Chemicals

Precious Metals

Electronic Materials

Colours & Coatings

Corporate Costs

Discontinued

%

74.2

37.3

22.1

24.8

(11.6)

158.4

1999£m

147.1

0.3

64.7

33.2

40.1

9.4

(9.7)

147.4

1998£m

139.2

1.5

+15

+12

- 45

+56

+ 7

+ 6

RETURN ON SALES 1999

Sales Salesexcl. PM

ROS ROSexcl. PM

£m £m % %

Catalysts & Chemicals 677 408 11 18

Precious Metals 2,041 96 2 39

Electronic Materials 415 400 5 6

Colours & Coatings 251 243 10 10

3,384 1,147 4 13

Discontinued Operations 2 2

3,385 1,149

GEOGRAPHICAL SPLITOPERATING PROFIT

1998£139.2m

1999£147.1m

Europe

Rest of World

South East AsiaNorth America

79.2

12.4

2.5

72.4

59.0

12.1

3.6

45.1

EXCEPTIONAL ITEMS £m

Closure of Australia Autocat facility (2.4)

Withdrawal from Plating and Bushings (2.5)

Ballard share sale 3.0

Operating profit exceptional charge (1.9)

Sale of UK Minerals 1.6

Sale of surplus properties 0.3

Pre-tax exceptional charge -

Tax saving on FIDs 3.9

Post-tax exceptional credit 3.9

TAXATION

1999£m

1998£m

Underlying tax 35.8 33.9

ACT saving on FIDs (3.9) (8.7)

Average tax rate 24% 19%

Underlying tax rate 27% 26%

31.9 25.2

RETURN ON INVESTMENT 1999

£m 1998

£m

Operating profit

Average assets employed:

534

Cumulative goodwill

Net borrowings

Total investment

Pre-tax ROA

Post-tax ROA

15.8%

11.5%

16.8%

12.4%

147.1 139.2

Equity and minorities 482

171 164

223 184

928 830

FREE CASH FLOW

Cash flow from operations 176.0 156.4

Interest / Tax / Dividends (88.6) (62.9)

Capital expenditure (gross) (90.6) (72.4)

Sale of fixed assets / Investments 29.2 7.7

Free cash flow 26.0 28.8

1999£m

1998£m

CHANGE IN BORROWINGS

Free cash flow 26.0 28.8

Acquisitions / disposals (4.3) (44.1)

Shares issued / purchased (1.6) 2.8

Borrowings / leases acquired (gross) - (84.4)

20.1 (96.9)

Exchange (16.6) 15.5

Movement in debt 3.5 (81.4)

1999£m

1998£m

Net debt 222 225

Equity and minorities 567 499

Capital employed 789 724

Debt / Equity and minorities 39% 45%

Interest cover 9x 15x

GEARING

1999

£m

1998£m

Johnson Matthey

CATALYSTS & CHEMICALS DIVISION

0

200

400

600

800

0

30

60

90+15%+21%

1998 19991998 1999

559559

67767764.764.7

74.274.2

£m

Operating ProfitSales

£m

AUTOCATALYSTS

• Strong growth in both Europe and North America

• Tighter standards lead to volume growth

• New high technology products help to protect margins

• Opportunities in heavy duty diesel

• Acquisition strengthens service to US customers

321 54

POTENTIAL JM SUPPLY TO FUELCELL CAR

1.1. Fuel ProcessorFuel Processor Converts fuel to HConverts fuel to H22 rich gas. rich gas. Catalyst coating. Catalyst coating.

2.2. CO Clean-upCO Clean-up Removes CO from HRemoves CO from H22 rich gas. Catalyst coating. rich gas. Catalyst coating.

3.3. Fuel Cell StackFuel Cell Stack Combines hydrogen with oxygenCombines hydrogen with oxygen Membrane electrode Membrane electrode to make water and electrical power.to make water and electrical power. assembly. 150 MEA/car. assembly. 150 MEA/car.

4.4. After burnerAfter burner Burns unused gas. Heats reformer.Burns unused gas. Heats reformer. Catalyst coating. Catalyst coating.

5.5. AftertreatmentAftertreatment Final emission control.Final emission control. Catalyst coating. Catalyst coating.

Function JM Interest

PHARMACEUTICAL MATERIALS

• Continued strong growth

• Sales of organics double, led by methylphenidate

• Good pipeline of new products

• Continued investment in expansion

CHEMICALS

• A successful year led by pgm chemicals and refining

• Investment in process catalysts

PRECIOUS METALS DIVISION

1998 19990

20

40

60

1998 1999

+12%-3%

2,0942,0942,0412,041

33.233.237.337.3

£m £m

0

500

1,000

1,500

2,000

2,500

Operating ProfitSales

PRECIOUS METALS DIVISION

• Higher pgm prices

• Good demand

• Improved fabricated metal business

• Gold activity benefits from dishoarding in first half

• Primary gold refining remains strong

0

100

200

300

400

500

600

Platinum

Palladium

April 97 April 98 April 99

PLATINUM & PALLADIUM PRICES $/oz

ELECTRONIC MATERIALS DIVISION

0

50

100

150

200

250

300

350

400

450

0

10

20

30

40

50

-45%-5%

1998 19991998 1999

438438 41541540.140.1

22.122.1

£m £m

Operating ProfitSales

WAFER FABRICATION MATERIALS

• Hit by destocking and price competition for much of year

• Early signs of recovery in final quarter

INTERCONNECT PRODUCTS AND SERVICES

• Good year for Semiconductor Packages

• Assembly Products hit by shift to lower cost PCs

• Laminate Products suffered price competition

• New HDI technology promises improved margins

+56%-8%£m £m

COLOURS & COATINGS DIVISION

* adjusted to reflect 100% ownership

0

50

100

150

200

0

5

10

15

20

1998 19991998 1999

251251

15.9*15.9*

24.824.8

273*273*

Operating ProfitSales

250 25

300 30

COLOURS & COATINGS DIVISION

• Strong sales to automotive glass market

• Good growth in Pigments

• Successful year for Tile and Zircon

• Tableware hit by poor market

OUTLOOK

• Strategy for Electronics

• Opportunities for core businesses

• Good flow of new products

• Rigorous attention to costs

Johnson Matthey