Johnson Matthey half year results, 27 Nov 2024 07:00

27 November 2024, 07:00

Source - LSE Regulatory

RNS Number : 7629N

Johnson Matthey PLC

27 November 2024

Half year results for the
six months ended 30^th September 2024

27^th November 2024

Catalysing the net zero transition to drive sustainable value creation

Continued strategic execution and transformation progress
·	A resilient performance with underlying operating profit excluding divestments down 4% - in line with our expectations - against a challenging macroeconomic backdrop
·	Improved margins in Clean Air and Catalyst Technologies, and on track for targets
·	Transformation programme continuing at pace - cumulative cost savings of £155 million delivered to date and on track to achieve £200 million by the end of 2024/25
·	Making progress against our strategic milestones: three large scale project wins in Catalyst Technologies' sustainable technologies portfolio and PGM refinery investment on track
·	Strong balance sheet - net debt to EBITDA of 1.4 times: focused on driving improved cash
·	£250 million share buyback programme - £205 million completed as at 22^nd November 2024
·	Full year outlook maintained, with performance more weighted to the second half driven by greater benefits from transformation and a stronger performance in PGM Services

		Reported results			Underlying results¹^,²
		Half year ended 30^th September		% change	Half year ended 30^th September		% change	% change, ex-divestments³, constant FX rates
		2024	2023	% change	2024	2023	% change	% change, ex-divestments³, constant FX rates
Revenue	£m	5,632	6,531	-14
Sales excl. precious metals⁴	£m				1,722	1,967	-12	-3
Operating profit	£m	575	136	+323	156	180	-13	-4
Profit before tax	£m	554	82	+576	133	139	-4
Profit after tax	£m	484	63	+668	104	108	-4
Basic earnings per share	pence	266.8	34.7	+669	57.4	59.1	-3
Interim dividend per share	pence	22.0	22.0	-
Free cash flow	£m				347	78
Cash from operating activities	£m	-22	236
Net debt	£m	783	1,044

Liam Condon, Chief Executive Officer, commented:

We delivered a resilient performance - in line with our expectations - and have continued to execute on our strategy in the first half, against a challenging macroeconomic backdrop. Our performance was supported by our transformation programme which is progressing well. For the full year, we are maintaining guidance with our confidence in the second half underpinned by further transformation benefits.

We are strongly focused on cash generation, with our established businesses driving cash to support the disciplined development of our growth businesses and further shareholder returns. Johnson Matthey has an important role to play in the global transition to net zero and our portfolio means we are well positioned to adapt to the evolving pace of this transition. We continue to secure important project wins in sustainable technologies, whilst building our capability and transforming at pace.

Group outlook for the year ending 31^st March 2025 maintained

For 2024/25, excluding Value Businesses⁵, we continue to expect at least mid single digit growth in underlying operating performance at constant precious metal prices and constant currency. We expect our improved second half performance to reflect further transformation benefits as well as higher volumes and metal recoveries in PGM Services, where we have good visibility.

In Clean Air, in 2024/25, we expect modest growth in operating performance, with continued margin expansion driven by efficiency benefits. For the second half, we expect a sequential improvement in operating performance and margin.⁶

PGM Services' operating performance in 2024/25 is expected to be broadly stable, with limited impact from precious metal prices. We expect to deliver a significantly stronger second half, driven by higher sales from increased refining volumes, higher metal recoveries and higher product sales, and further efficiencies as we optimise our cost base⁶

In Catalyst Technologies we expect further strong growth in operating performance in 2024/25, with a mid-teens margin. Following a strong first half performance in Licensing, we expect our second half operating performance to be slightly below the first half.⁶

In Hydrogen Technologies we now expect lower sales in 2024/25 (previously modest growth). For the full year, despite a lower contribution from sales, we will deliver a significantly lower operating loss as we take further action to reduce costs.⁶

If PGM (platinum group metal) prices remain at their current level⁷ for the remainder of 2024/25, we expect an adverse impact of £3 million to full year operating profit compared with the prior year.⁸

At current foreign exchange rates⁹, translational foreign exchange movements for the year ending 31^st March 2025 are expected to adversely impact underlying operating profit by c.£10 million.

Dividend

The board has approved an interim dividend of 22.0 pence per share, maintained at the same level as the prior year (1H 2023/24: 22.0 pence per share). The interim dividend will be paid on
4^th February 2025, with an ex-dividend date of 5^th December 2024, to shareholders on the register on 6^th December 2024.

Enquiries:
Investor Relations
Martin Dunwoodie Louise Curran Chris Wood	Director of Investor Relations and Treasury Head of Investor Relations Senior Investor Relations Manager	+44 20 7269 8241 +44 20 7269 8235 +44 20 7269 8138
Media
Sinead Keller Harry Cameron	Group External Relations Director Teneo	+44 20 7269 8218 +44 7799 152148

Notes:
1.	Unless otherwise stated, sales and operating profit commentary refers to performance at constant exchange rates. Growth at constant rates excludes the translation impact of foreign exchange movements, with 1H 2024/25 results converted at 1H 2023/24 average rates. In 1H 2024/25, the translational impact of exchange rates on group sales and underlying operating profit was an adverse impact of £29 million and £5 million respectively.
2.	Underlying is before profit or loss on disposal of businesses, amortisation of acquired intangibles, share of profits or losses from non-strategic equity investments, major impairment and restructuring charges and, where relevant, related tax effects. For definitions and reconciliations of other non-GAAP measures, see pages 48 to 53.
3.	Divestment of Value Businesses which is now complete.
4.	Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers.
5.	Baseline is underlying operating profit excluding Value Businesses (£381 million in 2023/24).
6.	Outlook commentary for Clean Air, PGM Services, Catalyst Technologies and Hydrogen Technologies assumes constant precious metal prices and constant currency.
7.	Based on average precious metal prices in November 2024 (month to date).
8.	A US$100 per troy ounce change in the average annual platinum, palladium and rhodium metal prices each have an impact of approximately £0.5 million, £1 million and £0.5 million respectively on full year 2024/25 underlying operating profit in PGM Services. This assumes no foreign exchange movement.
9.	Based on average foreign exchange rates for November 2024 month to date (£:US$ 1.28, £:€ 1.20, £:RMB 9.19).

Performance summary for the six months ended 30^th September 2024

Underlying operating profit - excluding the impact of divestments - declined 4% in the period in a challenging macroeconomic environment. Our performance was supported by continued strong progress in our transformation programme. Average PGM prices have normalised and remained broadly stable in the half, with an adverse impact to underlying operating profit of £3 million.

Clean Air delivered a resilient performance, with operating profit up 2% and margin expanding
80 basis points to 10.4%. Whilst the top line was lower due to market weakness and historic platform losses, benefits from our transformation programme supported profitability. PGM Services' operating profit declined 35% primarily reflecting lower refining volumes, including metal recoveries, and PGM trading profit. Catalyst Technologies' operating profit grew 43% and margins improved 250 basis points to 14.9%, in line with our target of mid-teens by the end of 2024/25. The business benefited from strong Licensing performance, higher volumes in Catalysts, and further efficiencies. Hydrogen Technologies delivered a flat operating loss, despite lower sales.

On a reported basis, operating profit increased to £575 million (1H 2023/24: £136 million) reflecting a £484 million profit on disposal, principally Medical Device Components which completed on
1^st July 2024. We incurred £63 million of major impairment and restructuring charges, comprising an impairment charge of £23 million and restructuring charges of £40 million.

We have a strong balance sheet, with net debt of £783 million as at 30^th September 2024 compared to £951 million as at 31^st March 2024. Net debt to EBITDA was 1.4 times, which was slightly below our target range of 1.5 to 2.0 times. Free cash flow was £347 million, compared to £78 million in the first half of the prior year, largely reflecting net proceeds from the disposal of Medical Device Components, partly offset by working capital outflows.

Strategic summary

Our strategy to catalyse the net zero transition is based around four businesses: Clean Air, PGM Services and our energy transition businesses of Catalyst Technologies and Hydrogen Technologies. We are actively managing Clean Air to drive margin improvement and cash, and PGM Services is expected to deliver strong cash conversion over the medium to long-term. This enables us to develop and grow Catalyst Technologies, positioning us as a global leader in sustainable solutions. In Hydrogen Technologies, we are managing the business in line with the pace of market development. Our portfolio provides a competitive advantage as a trusted partner to support our customers in transitioning their businesses towards a net zero future. We are well positioned to successfully navigate this journey and create significant value for all our stakeholders.

As part of our transformation, we are continuing to drive commercial excellence, greater discipline in capital projects and further cost efficiencies across the group. In the first half, we delivered
£35 million cost savings, taking cumulative savings to £155 million. We are on track to deliver
£200 million by the end of 2024/25, which annualises at more than £250 million, resulting in further benefits of more than £50 million in 2025/26.

Our aim is to maintain a strong balance sheet with a target level of net debt to EBITDA of
1.5 to 2.0 times. We remain disciplined in our capital allocation: investing for growth and attractive returns, ensuring a reliable dividend and returning excess capital to shareholders. We continue to expect cumulative capital expenditure of up to £900 million over the three year period to 2026/27. Of this, c.£250 million relates to our new PGM refinery which is due to start commissioning by the end of 2025/26. Once this investment is complete, we expect capital expenditure to reduce. With respect to shareholder returns, on 3^rd July 2024 we commenced our £250 million share buyback programme, following the completion of the sale of Medical Device Components.

Going forward, with transformation related cost savings supporting higher margins, capex trending downwards and working capital improvements from our new efficient PGM refinery, we expect greater cash generation.

2025/26 strategic milestones overview
We are making good progress against our strategic milestones set out in May 2024: winning customers, building capability and transforming the business.

Customers:
·	On track to deliver at least £4.5 billion of cash in the decade to 2030/31¹ from Clean Air
·	Won 3 additional large scale projects in Catalyst Technologies' sustainable technologies portfolio (2025/26 target: 20)
·	Targeting 4 new Hydrogen Technologies partnerships with leading companies by end of 2025/26

Capability:
·	On track to start commissioning of new world-class PGM refinery by end of 2025/26
·	Expanded engineering capacity by 22% to serve licensing growth in Catalyst Technologies (2025/26 target: 30%²)

Transformation:
·	Targeting ICCA (International Council of Chemical Associations) process safety event severity rate of 0.80 by end of 2024/25 (0.88 in 2023/24)
·	Targeting employee engagement score of at least 7.4 by end of 2025/26 (7.2 in 2023/24)
·	Delivered £155 million transformation cost savings to date (2024/25 target: £200 million)
·	Implemented JM Global Solutions for cost effective business processes in the UK and US; on track for full implementation by end of 2024/25
·	Targeting 32% reduction in scope 1 and 2 CO₂e emissions by end of 2025/26 (2019/20 baseline)

Group Leadership Team changes
Given the progress made over the last two years in simplifying our business, including the completion of our divestment programme, we have streamlined our Group Leadership Team (GLT).³ We now have one GLT lead for both Clean Air and Hydrogen Technologies, providing a more efficient management structure. Anish Taneja, previously Chief Executive, Clean Air is now Chief Executive of Clean Air and Hydrogen Technologies. We have also combined several functions which are central to our transformation under one GLT role, to maximise synergies and ensure the appropriate support for the businesses. Alastair Judge is now Head of Strategy and Operations, having previously been Chief Executive, PGM Services. Louise Melikian, previously Chief Strategy and Corporate Development Officer, succeeds Alastair as Chief Executive of the PGM Services business.

Board changes
We announced on 1^st July 2024 that Stephen Oxley, Chief Financial Officer, had decided to leave JM to pursue another opportunity and would be stepping down from the board no later than 31^st March 2025. The process to appoint a successor is proceeding well and the board expects to make an appointment in early 2025, to enable a suitable handover period and orderly transition. A further announcement will be made as appropriate.

We recently announced the appointment of Sinead Lynch as an independent Non-Executive Director. This appointment is with effect from 1^st January 2025 and Sinead will also become a member of the Remuneration, Nomination and Societal Value Committees. Sinead brings a deep understanding of low carbon energy and sustainability, having spent 30 years in the energy sector at Royal Dutch Shell and BG Group.

Following a seven year tenure, Jane Griffiths will step down as Chair of the Societal Value Committee and from the board on 31^st December 2024. Rita Forst will succeed Jane as Chair of the Societal Value Committee from 1^st January 2025.

1.	Cash target from 1^st April 2021 to 31^st March 2031, pre-tax and post restructuring costs.
2.	Baseline: 31^st March 2024.
3.	All changes were effective from 1^st November 2024.

Summary of underlying operating results

Unless otherwise stated, commentary refers to performance at constant FX rates¹. Percentage changes in the tables are calculated on rounded numbers.

Sales (£ million)	Half year ended 30^th September		% change	% change, constant FX rates
Sales (£ million)	2024	2023	% change	% change, constant FX rates
Clean Air	1,165	1,286	-9	-7
PGM Services	207	230	-10	-9
Catalyst Technologies	336	282	+19	+20
Hydrogen Technologies	20	37	-46	-46
Eliminations	(42)	(58)
Sales excluding Value Businesses	1,686	1,777	-5	-3
Value Businesses²	36	190	-81	-81
Total sales	1,722	1,967	-12	-11

Underlying operating profit (£ million)	Half year ended 30^th September		% change	% change, constant FX rates
Underlying operating profit (£ million)	2024	2023	% change	% change, constant FX rates
Clean Air	121	124	-2	+2
PGM Services	51	78	-35	-35
Catalyst Technologies	50	35	+43	+43
Hydrogen Technologies	(26)	(26)	n/a	n/a
Corporate	(42)	(45)
Underlying operating profit excluding Value Businesses	154	166	-7	-4
Value Businesses²	2	14	-86	-86
Total underlying operating profit	156	180	-13	-11

Reconciliation of underlying operating profit to operating profit (£ million)	Half year ended 30^th September
	2024	2023
Underlying operating profit	156	180
Profit on disposal of businesses³	484	-
Major impairment and restructuring charges³	(63)	(42)
Amortisation of acquired intangibles	(2)	(2)
Operating profit	575	136

Notes:
1.	Growth at constant rates excludes the translation impact of foreign exchange movements, with 1H 2024/25 results converted at 1H 2023/24 average rates. In 1H 2024/25, the translational impact of exchange rates on group sales and underlying operating profit was an adverse impact of £29 million and £5 million respectively.
2.	Includes Battery Materials, Battery Systems, Diagnostic Services and Medical Device Components which are all now disposed.
3.	For further detail on these items please see page 17.

Business reviews

Clean Air

Resilient performance and improved margin despite a challenging market
·	Sales were down 7% reflecting a decline in global vehicle production across both light and heavy duty, as well as the impact of historic platform losses as guided
·	Despite lower sales, underlying operating profit increased 2% with margin up 80 basis points to 10.4%, reflecting ongoing operational excellence and transformation benefits

	Half year ended 30^th September		% change	% change, constant FX rates
	2024	2023
	£ million	£ million
Sales
Light duty diesel	530	532	-	+2
Light duty gasoline	244	280	-13	-11
Heavy duty diesel	391	474	-18	-16
Total sales	1,165	1,286	-9	-7

Underlying operating profit	121	124	-2	+2
Underlying operating profit margin	10.4%	9.6%
EBITDA margin	13.6%	12.5%
Reported operating profit	101	104

Clean Air provides catalysts for emission control after-treatment systems used in light and heavy duty vehicles powered by internal combustion engines.

Market commentary

In the half, global vehicle production declined across both light duty and heavy duty. In light duty - following a strong prior period which benefited from improved supply chains - there were declines across all key regions. This reflected a weak macroeconomic environment, particularly in Europe and China, and OEM de-stocking. In heavy duty, production in Europe and China declined as the market normalised following strong demand in the prior year and as a result of the weaker macroeconomic environment. In North America, Class 8 truck production is nearing the bottom of the cycle, with a further decline expected in 2025 before recovery in 2026 ahead of new EPA27 (Environmental Protection Agency) legislation.

Performance commentary

Sales were down 7%, with declines in light duty gasoline and heavy duty diesel, more than offsetting modest growth in light duty diesel. This reflected a challenging market as well as the impact of historic platform losses as previously guided. Pricing was modestly lower reflecting historic contract commitments, partly mitigated by our focus on commercial excellence.

Sales

Light duty diesel

Light duty diesel sales grew 2%, outperforming the global market that declined due to continued shifts in consumer behaviour towards gasoline, including hybrids which utilise gasoline engines. Our performance largely reflected strong growth in Asia, particularly India and South East Asia, driven by favourable product and customer mix.

In Europe, sales were resilient in a declining market driven by higher substrate pricing and favourable mix. In the Americas, we saw modest growth in a slightly declining market as some of our larger customers outperformed the market.

Light duty gasoline

Light duty gasoline sales were down 11%, underperforming the global market that saw a modest decline. This largely reflects our performance in China where some of our larger customers underperformed the market. In Europe and North America sales underperformed modestly declining markets reflecting the loss of platforms from previous years.

Heavy duty diesel

Heavy duty diesel sales were down 16%, underperforming the global market that declined modestly. Our performance was mainly driven by Europe where we saw some customer underperformance and lower substrate pricing.

In Asia, performance was driven by China where we experienced market share losses and the underperformance of some of our customers. In North America, we slightly underperformed in Class 8 due to the ramp down of a large customer platform. However, this was partly offset by good performance in Class 4-7 and South America. Sales from non-road platforms declined due to softness in agricultural end markets.

Underlying operating profit

Clean Air delivered a resilient performance as underlying operating profit grew 2% despite challenging market conditions and lower sales. The operating margin expanded
80 basis points to 10.4% reflecting benefits from our continued focus on cost discipline, commercial and operational excellence, and footprint rationalisation.

Business update

In Clean Air, as emissions legislation tightens globally, we continue to provide world-leading emissions control systems to reduce harmful emissions and support our customers. We are committed to being a lasting partner in this industry driving efficiency and significant cash generation to 2030/31 and beyond.

Our focus on efficiency has improved operating margins through initiatives across all cost drivers. We continue to drive further improvement and are accelerating the next phase of our transformation, including manufacturing, with a continued focus on driving efficiencies across production sites. Together with our wider efficiency initiatives, we expect these actions to drive margin expansion in the second half and we remain on track to deliver our target of mid-teens margins by 2025/26.

We continue to strengthen our commercial muscle to win targeted business. We are leveraging our enhanced customer offering - our leading technology, value-added services and commitment to being a lasting partner for our customers - to drive value-based pricing.

In the period our win rates for new platforms remained high, including in light duty gasoline where we are increasingly focused on hybrid and range extender platforms.

In Europe, Euro 7 standards will commence from November 2026 for light duty and May 2028 for heavy duty vehicles for new, main category vehicle types (legislation is applied to all main category vehicles 12 months later). In the US, the EPA rules on light and medium duty multi pollutant emission standards, which tackle both CO₂ and non-CO₂ criteria exhaust emissions, will be applied as a phased in approach from 2027. EPA and CARB (California Air Resources Board) heavy duty low NOx emissions standards, and revised US heavy duty transport CO₂ standards also start from 2027. China and India are expected to bring proposals for new
on-road vehicle emissions standards, with details estimated to be published in 2025.

With the slowdown in global BEV penetration and our focus on driving efficiency, we expect Clean Air to be 'stronger for longer' - delivering at least £4.5 billion of cash in the decade to 2030/31¹ and further cash flow beyond.

Notes:

Cash target from 1^st April 2021 to 31^st March 2031, pre-tax and post restructuring costs.

PGM Services

First half performance impacted by soft end markets
·	Sales declined 9% and underlying operating profit was down 35% primarily reflecting lower volumes across refining, including metal recoveries, and market-driven softness in our PGM trading business
·	Second half expected to be significantly stronger, with good visibility on higher volumes and cost efficiencies

	Half year ended 30^th September			% change	% change, constant FX rates
		2024	2023
		£ million	£ million
Sales
PGM Services		207	230	-10	-9

Underlying operating profit		51	78	-35	-35
Underlying operating profit margin		24.6%	33.9%
EBITDA margin		30.9%	40.0%
Reported operating profit		26	77

PGM Services is the world's largest recycler of platinum group metals (PGMs). This business is enabling the energy transition through developing new PGM applications and providing circular solutions as demand for scarce critical materials increases. PGM Services provides a strategic service to the group, supporting Clean Air, Catalyst Technologies and Hydrogen Technologies with security of metal supply, and the manufacture of value-add PGM products.

Performance commentary

Sales

In the half, sales were down 9% primarily driven by our refining and trading businesses.

In refining, we saw continued softness in the auto scrap recycling market as expected as well as lower metal recoveries linked to the timing of our asset renewal programme and scheduled downtime in our UK refinery. In our products business, sales were broadly flat.

Average PGM prices have normalised and remained broadly stable in the period, albeit at a lower absolute level compared to the first half of last year. PGM markets were also subject to soft volumes and lower price volatility, leading to lower sales for our metal trading business.

For the second half, we have good visibility of volumes. We have secured an increase in our refining volumes and expect increased metal recoveries. In addition, we expect higher sales from our products business - specifically our pharmaceutical and agrochemicals customers - reflecting normal seasonality.

Underlying operating profit

Underlying operating profit declined 35% primarily reflecting lower refining volumes, including metal recoveries, and PGM trading profit. The adverse impact from lower average PGM prices was £3 million in the half.

We expect to deliver a significantly stronger second half, driven by higher sales (increased refining volumes, higher metal recoveries and higher product sales) as well as efficiencies as we optimise our cost base.

Business update

Johnson Matthey is a world leader in PGMs. Our foundational PGM Services business has deep expertise and enables a PGM ecosystem across JM and for our customers.

PGMs are critical to many of the world's products, processes and technologies, and with their unique properties they will remain vital in the long-term, well beyond the internal combustion engine. In PGM products, we are developing new, high-value PGM applications, through our world-class R&D expertise and supported by our full-service customer offering. In the period, we further expanded our customer base with new business wins in pharmaceutical and agrochemical products.

As the world decarbonises and transitions towards a circular economy, demand for secondary (recycled) PGMs is expected to increase over the medium to long-term. To maintain our position as the world's largest recycler of PGMs, we are investing in our new world-class refinery. This will deliver significant safety, sustainability and efficiency improvements, including a one-off working capital benefit of more than £250 million. Our investment is on budget and we are on track to start commissioning by the end of 2025/26.

Across our business, we are structurally improving our operational efficiency and removing duplication. Beyond our group transformation programme, we have identified a pipeline of opportunities to streamline our operations, optimise our assets and right-size our support functions. Execution of the programme commenced in the first half and we expect to see the benefits progressively coming through in the second half and beyond.

With stable PGM prices anticipated, we expect this business to deliver at least low single digit CAGR in operating profit over the medium to long-term, and strong cash conversion.

Catalyst Technologies

Strong sales and profit growth, and continued momentum in sustainable technologies
·	Sales up 20% with double digit growth in Catalysts driven by higher first fill volumes, and strong performance in Licensing where sales more than doubled
·	Won three large scale projects in our sustainable technologies portfolio since 1^st April 2024, and on track against our strategic milestone
·	Underlying operating profit up 43% and margin up 250 basis points driven by a higher contribution from Licensing, increased volumes in Catalysts and efficiency benefits

	Half year ended 30^th September		% change	% change, constant FX rates
	2024	2023
	£ million	£ million
Sales
Catalysts	276	254	+9	+10
Licensing	60	28	+114	+114
Total sales	336	282	+19	+20

Underlying operating profit	50	35	+43	+43
Underlying operating profit margin	14.9%	12.4%
EBITDA margin	19.0%	16.7%
Reported operating profit	48	32

Catalyst Technologies is a key pillar of our strategy as we target high growth, high return opportunities in the decarbonisation of fuels and chemical value chains. We have leading positions in syngas - methanol, ammonia, hydrogen and formaldehyde - and a strong sustainable technologies portfolio. Our revenue streams are licensing process technology and supplying catalysts.

Performance commentary

Sales

Sales were up 20% reflecting double digit growth in Catalysts - which represents the majority of sales - whilst Licensing more than doubled. In particular, we delivered a good performance in China, with higher first fill volumes in Catalysts and growth in our existing Licensing portfolio. We have seen significant new plant builds in China in recent years, partly driven by significant growth across the biodegradable plastics value chain. In sustainable technologies we saw continued momentum, with strong sales growth and large scale project wins.

Catalysts: double digit growth driven by first fills

In Catalysts, sales increased 10%. Growth was driven by first fills with increased demand as new plants came onstream in China, including one of the world's largest methanol plants. Cyclical recovery in the methanol market also drove higher volumes in refills. These dynamics more than offset a weaker performance in the competitive additives market and a slowdown in formaldehyde following strong demand in the prior year.

Licensing: strong growth in both our existing portfolio and sustainable technologies

Licensing - which can be lumpy in nature - was up 114% year-on-year, primarily driven by our existing core portfolio. In our sustainable technologies portfolio, sales from low carbon hydrogen and sustainable fuels more than trebled, albeit off a low base.

Underlying operating profit
Underlying operated profit grew 43% and margin expanded 250 basis points to 14.9%. This was largely driven by a higher contribution from Licensing, increased volumes in Catalysts and efficiency benefits.

Business update
In Catalyst Technologies, we are growing our existing business alongside new opportunities in low carbon hydrogen, and sustainable fuels and chemicals. Our sustainable technologies portfolio is mainly based on syngas technology where we have market leading positions and a good track record, and will transform the scale and profitability of our business.

We have made good progress against our strategic milestone of 20 additional large scale project wins across our sustainable technologies portfolio by the end of 2025/26, with three wins since 1^st April 2024:

·	A large scale low carbon hydrogen project in Europe (as announced in May)
·	A waste-to-methanol project in Europe (as announced in May)
·	HIF Global's Paysandú e-methanol plant in Uruguay (as announced in May)

Together with previously announced project wins, we have won 13 large scale projects since 1^st April 2022. This includes DG Fuel's first sustainable aviation facility in Louisiana, US, where the project scope was recently increased to incorporate our HyCOgen^TM technology, in addition to FT CANS^TM technology. When combined, these technologies increase the production yield of synthetic crude from sustainable feedstocks. These 13 projects are worth more than £350 million in sales over five years, subject to project completion.

Our pipeline of sustainable technologies projects remains healthy with over 140 projects, demonstrating the strength of our technology offering and market positioning. To further strengthen our competitive position, we are partnering with market leaders to offer our customers end-to-end integrated solutions. In the period, we announced a blue ammonia partnership with thyssenkrupp Uhde; and a sustainable fuels partnership with Honeywell UOP which builds on our previously announced low carbon hydrogen partnership.

To support our Licensing growth, we recently opened new engineering hubs in Manchester, UK, and Mumbai, India. We increased our engineering capacity by 22% in the period (31^st March 2024 baseline), tracking well against our target of 30% by the end of 2025/26. To capture growth opportunities in Asia and access critical capabilities to support our global growth ambitions, we have created a business hub in Mumbai alongside our engineering centre.

We continue to transform our existing core business. Across our manufacturing operations, we are focused on improving efficiency, including debottlenecking plants. For example, we have restarted production at our expanded formaldehyde catalyst facility. Together with commercial excellence initiatives and procurement savings, this will drive continued margin improvement.

In Catalyst Technologies, we are targeting high single digit sales growth in the short-term, accelerating to mid-teens growth over the medium to long-term. With the combination of efficiencies and the mix shift towards Licensing, we are targeting mid-teens margins by the end of 2024/25 and high-teens by the end of 2027/28, with continued accretion beyond.

Hydrogen Technologies

Slowdown in market development driving lower sales - operating loss flat year-on-year
·	Sales of £20 million, down 46%, due to lower demand following a slowdown in market development and customer de-stocking
·	Underlying operating loss flat year-on-year, despite significantly lower sales, reflecting actions taken to reduce the cost base. Continue to expect breakeven by the end of 2025/26

	Half year ended 30^th September		% change	% change, constant FX rates
	2024	2023
	£ million	£ million
Sales
Hydrogen Technologies	20	37	-46	-46

Underlying operating loss	(26)	(26)	-	-
Underlying operating loss margin	n/a	n/a
Reported operating loss	(26)	(26)

In Hydrogen Technologies, we provide components across the value chain for fuel cells and electrolysers including catalyst coated membranes (CCMs) and membrane electrode assemblies (MEAs). Our ambition is to be the market leader in CCMs, which are the critical performance-defining components at the centre of fuel cells, focusing on PEM (proton exchange membrane) and AEM (anion exchange membrane) electrolysers.

Performance commentary

Sales

In the half, sales were down 46% to £20 million. We saw lower demand across both fuel cells and electrolysers as the pace of market development slowed and our customers
de-stocked. This largely reflects the slowing build-out of supply chains and infrastructure due to a lack of clarity around regulation and incentives. In our operations, we have continued to drive manufacturing excellence, and yields have improved at our UK plant in Swindon from which we serve the vast majority of our customer demand.

Underlying operating loss

Underlying operating loss of £26 million, flat year-on-year, despite a lower contribution from sales. As the pace of market development slowed, we took actions to reduce our cost base including restructuring the business, reducing headcount, and slowing our growth investments. Further benefits will come through in the second half as cost savings annualise and we take further action to reduce costs, resulting in a significantly lower operating loss compared to the first half.

Business update

Hydrogen will play an essential role in the net zero transition. With our leading technology, decades of expertise in fuel cells and deep understanding of PGM catalysis and recycling, Johnson Matthey is well positioned to benefit from this market in the long-term.

Currently, the global green hydrogen value chain is in an early stage of development and experiencing challenges as it scales, particularly around total cost of ownership as well as the development of regulation, incentives and infrastructure. This is being reflected in many of our customers' near-term demand forecasts, especially in Europe and the US.

In our Hydrogen Technologies business, we are actively managing the pace of investment in line with market development. Given the near-term market challenges, we have significantly reduced our capital expenditure and taken cost control actions, including reducing our headcount materially. Consequently, as previously announced, we continue to delay the start of production for our manufacturing site in the UK (Royston). In addition, we are prioritising our resource to focus on the most important opportunities, and continue to
take steps to de-risk the business.

We are focused on further diversifying our customer base, targeting four new strategic partnerships with leading companies by the end of 2025/26. We are seeing increasing interest from customers as they recognise the benefits of partnering, and we are progressing opportunities with a number of customers.

Against a backdrop of softening demand in the short-term, we now expect lower sales in 2024/25 compared to 2023/24 (previously modest sales growth). However, given the benefits from cost control actions, we will deliver a significantly lower operating loss in 2024/25 and continue to expect breakeven by the end of 2025/26.

Corporate

Corporate costs were £42 million, a decrease of £3 million from the prior period, largely reflecting benefits from transformation.

Financial review

Research and development (R&D)

R&D spend was £99 million in the half. This was down from £104 million in the prior period and represents c.5% of sales excluding precious metals. We are reducing our R&D spend in Clean Air and prioritising spend in our growth areas, including our sustainable technologies portfolio in Catalyst Technologies. We are also investing in our digital capabilities to accelerate innovation and provide further insights for our customers.

Foreign exchange

The calculation of growth at constant rates excludes the impact of foreign exchange movements arising from the translation of overseas subsidiaries' profit into sterling. The group does not hedge the impact of translation effects on the income statement. The principal overseas currencies, which represented 74% of the non-sterling denominated underlying operating profit in the half year ended 30^th September 2024, were:

	Share of 1H 2024/25 non-sterling denominated underlying operating profit	Average exchange rate Half year ended 30^th September		% change
		Average exchange rate Half year ended 30^th September
		2024	2023
US dollar	18%	1.28	1.26	+2
Euro	49%	1.18	1.16	+2
Chinese renminbi	7%	9.23	8.99	+3

For the half, the impact of exchange rates decreased sales by £29 million and underlying operating profit by £5 million.

If average exchange rates for November 2024 month to date (£:US$ 1.28, £:€ 1.20,
£:RMB 9.19) are maintained throughout the remainder of the year ending 31^st March 2025, foreign currency translation will have an adverse impact of c.£10 million on underlying operating profit. A one cent change in the average US dollar and a ten fen change in the average rate of the Chinese renminbi each have an impact of approximately £0.5 million on full year underlying operating profit whilst a one cent change in the average rate of the Euro has approximately a £1.5 million impact on full year underlying operating profit.

Efficiency savings

In the half, we delivered £35 million of savings through our group transformation programme and incurred cash costs of £35 million. Cumulative benefits from the programme to date are £155 million. We are on track to deliver £200 million by the end of 2024/25, which annualises at more than £250 million, resulting in further benefits of more than £50 million in 2025/26. On completion of the programme, we will focus on continuous improvement. Total associated costs to deliver the programme are around £130 million (including £30 million of capex), all of which are cash.

£ million	Savings delivered to 30^th September 2024	Associated costs incurred to 30^th September 2024
Transformation programme	155	110

Items outside underlying operating profit

Non-underlying income / (charge)	Half year ended 30^th September
	2024	2023
	£ million	£ million
Profit on disposal of businesses	484	-
Major impairment and restructuring charges	(63)	(42)
Amortisation of acquired intangibles	(2)	(2)
Total	419	(44)

There was a charge of £63 million relating to major impairment and restructuring costs, comprising impairment charges of £23 million and £40 million of cash restructuring costs. The impairment charge includes a £17 million impairment following a review of and subsequent changes to our IT operating model completed in June 2024. As a result of the review, certain IT assets have been impaired. The remaining impairment charge is to production related assets in Clean Air as the business continues to consolidate its existing capacity into new and more efficient plants. The restructuring costs were recognised in relation to our transformation programme and the consolidation of our Clean Air manufacturing footprint.

The £484 million profit on disposal of businesses largely relates to the disposal of our Medical Device Components business which completed on 1^st July 2024.

Finance charges

Net finance charges in the period amounted to £23 million, down from £41 million in the prior period. The decline of £18 million largely reflects an £8 million benefit from hedging instruments and a £9 million movement relating to interest on tax provisions.

Taxation

The tax charge on underlying profit before tax for the half year ended 30^th September 2024 was £29 million, an effective underlying tax rate of 21.9%, compared with 22.0% in the first half of 2023/24.

The effective tax rate on reported profit for the half year ended 30^th September 2024 was 12.4%. This represents a tax charge of £70 million, compared with £19 million in the first half of 2023/24. This increase largely reflects higher reported profit which includes the profit on disposal of Medical Device Components.

We expect the effective tax rate on underlying profit for the year ending 31^st March 2025 to be broadly similar to the first half.

Post-employment benefits

IFRS - accounting basis

At 30^th September 2024, the group's net post-employment benefit position, was a surplus of £144 million.

The cost of providing post-employment benefits in the period was £12 million, up from
£11 million in the same period last year.

Capital expenditure

Capital expenditure - excluding Value Businesses - was £170 million in the half, 1.9 times depreciation and amortisation (excluding amortisation of acquired intangibles). In the period, a key project was investment in our new world-class PGM refinery.

Strong balance sheet

Net debt as at 30^th September 2024 was £783 million, a decrease from £951 million at
31^st March 2024 and £1,044 million at 30^th September 2023. Net debt is £19 million higher when post tax pension deficits are included. The group's net debt (including post tax pension deficits) to EBITDA was 1.4 times (31^st March 2024: 1.6 times, 30^th September 2023:
1.7 times), which was slightly below our target range of 1.5 to 2.0 times.

We use short-term metal leases as part of our mix of funding for working capital, which are outside the scope of IFRS 16 as they qualify as short-term leases. Precious metal leases amounted to £197 million as at 30^th September 2024 (31^st March 2024: £197 million,
30^th September 2023: £186 million).

Free cash flow and working capital

Free cash flow was £347 million in the half (1H 2023/24: £78 million) largely reflecting net proceeds from the disposal of Medical Device Components, partly offset by working capital outflows mainly due to lower payables.

Cash from operating activities was negative £22 million in the half, compared with
£236 million in the prior period, mainly driven by movements in working capital.

Excluding precious metal, average working capital days to 30^th September 2024 was in line with the prior period at 57 days.

Going concern

The group maintains a strong balance sheet with around £1.6 billion of available cash and undrawn committed facilities. Cash generation was positive during the period, with free cash flow of £347 million. Net debt has significantly reduced since 31^st March 2024 to £783 million at 30^th September 2024.

As set out on page 29, the directors have reviewed the base case scenario forecasts for the group and have reasonable expectation that there are no material uncertainties about the group's ability to operate for at least twelve months from the approval date of these half yearly accounts. In arriving at this view, the base case scenario was stress tested to a severe but plausible downside case which assumes lower demand across our markets to account for further disruptions and recession.

Additionally, the group considered scenarios including the impact from metal price volatility, a slowdown in China and increase in the amount of metal that we would have to hold. Under all scenarios, the group has sufficient headroom against committed facilities and key financial covenants are not in breach during the going concern period. The directors have assessed various scenario forecasts and reasonably expect no significant uncertainties about the group's ability to operate for at least twelve months from the approval date of these half year accounts, supporting a going concern basis.

Risks and uncertainties

JM's principal risk landscape continues to be reviewed and updated to reflect our refreshed strategy and the challenges that come from operating within the current global environment and economic climate. JM is committed to improving its risk management approach and insights used to support various business decisions. The group's principal risks are listed below and remain largely as disclosed in our 2024 Annual Report.

1. Market factors, customer demand and margin sustainability - The risk is that we fail to correctly anticipate and/or make the right business decisions to address shifts in demand for our products and services (for example driven by regulation, customer needs, societal expectations) or shifts that lead to margin erosion. Such shifts may impact existing and new products and may create upside opportunity or downside exposure.

2. A significant geopolitical or macroeconomic event impacting JM's operations - JM has a global business footprint in terms of operations, customers and supply chains. There is a risk that we may face disruption in operations, supply chain and/or customer markets due to geopolitical or macroeconomic events (for example from risks such as conflicts, trade disputes, sanctions, pandemics, macroeconomic events or financial crises).

3. Failure to deliver business value from strategic capital projects - The success of our strategy, especially in growth areas, depends on our ability to effectively prioritise and deliver our strategic capital investment pipeline. There is a risk that we will be unable to meet production capacity expectations, breach budgeted costs or lose our competitive position in markets.

4. Development of offerings that do not meet future customer needs - There is a risk that we are unable to develop offerings that are competitive enough to meet our market ambitions and the needs of customers, particularly in highly dynamic and emerging markets. This includes our ability to identify and understand customer expectations, translating this into effective innovation programmes and developing our technologies at industrial production scale.

5. A significant work related EHS incident - The focus of this principal risk, related to environmental, health and safety (EHS) performance, is around catastrophic incidents (for example fire, explosion or toxic gas release) due to process safety or major compliance failure which would threaten our critical operations, product portfolios or our corporate reputation and therefore our 'licence to operate'.

6. Disruption to our supplier ecosystem and the supply of purchased goods and services - As a global business, we are dependent on suppliers worldwide to provide key materials and services. Given the speciality nature of our products, there are limited suppliers who supply certain critical raw materials. If there was significant disruption in their supply, we would be unable to manufacture our products to satisfy customer demand.

7. A low performing culture undermines our strategy - A low-performing culture, characterised by an insufficiently engaged and inclusive workforce, lacking commitment to taking accountability, keeping it simple and driving results could impact our ability to attract and retain key talent and therefore successfully execute our strategy.

8. Breach to precious metal security - There is a risk that we do not have sufficient metal available to meet business demands. Loss or theft due to a failure of metal controls (operations and finance) and/or security management systems associated with the protection of metal may result in financial loss and/or a failure to satisfy our customers, which could reduce our customers' confidence in JM and lead to potential legal action.

9. Failure in one or more of JM's critical operational assets - A critical asset failure may have a material effect on our supply chains, performance, share value and reputation. In addition to the failure of aged assets, we are exposed to the effects of climate change. We understand that more frequent extreme weather events and natural disasters may disrupt our operations and increase our costs.

10. Unsuccessful delivery of key business transformation programmes - JM's transformation is scoped to implement the strategy of catalysing the net zero transition for our customers in energy, chemicals and automotive. There are currently around 25 transformation programmes across group functions and the four core businesses, driving business growth, people growth and efficiency. Failure to successfully deliver these programmes may delay the expected benefits, disrupt services to customers or trigger a loss of key talent.

11. Business failure through cyber-attack or other IT incidents - A failure to adapt our information technology (IT) and operational technology (OT) to changing business requirements, the occurrence of significant disruption to our systems or a major cyber security incident may adversely affect our financial position, harm our reputation and could lead to regulatory penalties or non-compliance with laws.

Responsibility statement of the Directors in respect of the half yearly report

The half yearly report is the responsibility of the directors. Each of the directors as at the date of this responsibility statement, whose names and functions are set out below, confirms that to the best of their knowledge:

·	the condensed consolidated accounts have been prepared in accordance with UK adopted International Accounting Standard (IAS) 34 - 'Interim Financial Reporting'; and
·	the interim management report included in the Half-Yearly Report includes a fair review of the information required by:

	a)	DTR 4.2.7R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated accounts; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

	b)	DTR 4.2.8R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the company during that period; and any changes in the related party transactions described in the last annual report that could do so.

The names and functions of the directors of Johnson Matthey Plc are as follows:

Patrick Thomas			Chair of the Board and of the Nomination Committee
Liam Condon			Chief Executive Officer
Stephen Oxley			Chief Financial Officer
Barbara Jeremiah			Senior Independent Non-Executive Director
Rita Forst			Non-Executive Director
Jane Griffiths			Non-Executive Director and Chair of Societal Value Committee
Xiaozhi Liu			Non-Executive Director
John O'Higgins			Non-Executive Director and Chair of the Remuneration Committee
Doug Webb			Non-Executive Director and Chair of the Audit Committee

The responsibility statement was approved by the Board of Directors on 26^th November 2024 and is signed on its behalf by:

Patrick Thomas
Chair

Independent review report to Johnson Matthey Plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Johnson Matthey Plc's condensed consolidated interim financial statements (the "interim financial statements") in the half year results of Johnson Matthey Plc for the 6 month period ended 30^th September 2024 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements comprise:

· the Condensed Consolidated Statement of Financial Position as at 30^th September 2024;

· the Condensed Consolidated Income Statement and Condensed Consolidated Statement of Total Comprehensive Income for the period then ended;

· the Condensed Consolidated Statement of Cash Flows for the period then ended;

· the Condensed Consolidated Statement of Changes in Equity for the period then ended; and

· the explanatory notes to the interim financial statements.

The interim financial statements included in the half year results of Johnson Matthey Plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half year results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The half year results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the half year results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the half year results, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the half year results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

London

26^th November 2024

Condensed Consolidated Income Statement

for the six months ended 30^th September 2024


			Six months ended
			30.9.24	30.9.23
		Notes	£ million	£ million

Revenue		2, 3	5,632	6,531
Cost of sales			(5,223)	(6,084)
Gross profit			409	447
Distribution costs			(54)	(62)
Administrative expenses			(199)	(205)
Profit on disposal of businesses		4	484	-
Amortisation of acquired intangibles		4	(2)	(2)
Major impairment and restructuring charges		4	(63)	(42)
Operating profit		4	575	136
Finance costs			(72)	(71)
Investment income			49	30
Share of profits / (losses) of associates			2	(13)
Profit before tax			554	82
Tax expense		5	(70)	(19)
Profit for the period			484	63

			pence	pence

Earnings per ordinary share
	Basic	6	266.8	34.7
	Diluted	6	266.4	34.6

Condensed Consolidated Statement of Total Comprehensive Income

for the six months ended 30^th September 2024


			Six months ended
			30.9.24	30.9.23
		Notes	£ million	£ million

Profit for the period			484	63
Other comprehensive income / (expense)
Items that will not be reclassified to the income statement in subsequent years
	Remeasurements of post-employment benefit assets and liabilities	12	21	(75)
	Fair value losses on equity investments		(1)	(3)
	Tax on items that will not be reclassified to the income statement		(4)	19
Total items that will not be reclassified to the income statement			16	(59)
Items that may be reclassified to the income statement:
	Exchange differences on translation of foreign operations		(124)	(16)
	Amounts (charged) / credited to hedging reserve		(16)	2
	Fair value gains / (losses) on net investment hedges		22	(3)
	Tax on items that may be reclassified to the income statement		4	(1)
Total items that may be reclassified to the income statement (in subsequent years)			(114)	(18)
Other comprehensive expense for the period			(98)	(77)
Total comprehensive income / (expense) for the period			386	(14)

Condensed Consolidated Statement of Financial Position

as at 30^th September 2024


		30.9.24	31.3.24
	Notes	£ million	£ million

Assets
Non-current assets
Property, plant and equipment	8	1,485	1,436
Right-of-use assets		44	40
Goodwill		343	353
Other intangible assets	9	278	301
Investments in associates	10	69	71
Investments at fair value through other comprehensive income		40	40
Other receivables		97	104
Cross currency and interest rate swaps	17	-	15
Other financial assets		18	34
Deferred tax assets		128	128
Post-employment benefit net assets	12	182	153
Total non-current assets		2,684	2,675

Current assets
Inventories		1,153	1,211
Tax receivable		30	10
Trade and other receivables		1,588	1,718
Cash and cash equivalents	17	621	542
Cross currency and interest rate swaps	17	10	-
Other financial assets		49	53
Assets classified as held for sale		-	127
Total current assets		3,451	3,661
Total assets		6,135	6,336

Liabilities
Current liabilities
Trade and other payables		(2,070)	(2,209)
Lease liabilities	17	(8)	(8)
Taxation liabilities		(83)	(75)
Cash and cash equivalents ─ bank overdrafts	17	(15)	(12)
Borrowings and related swaps	17	(254)	(110)
Other financial liabilities		(21)	(11)
Provisions		(60)	(63)
Liabilities classified as held for sale		-	(35)
Total current liabilities		(2,511)	(2,523)

Non-current liabilities
Borrowings and related swaps	17	(1,100)	(1,339)
Lease liabilities	17	(27)	(24)
Deferred tax liabilities		(3)	(2)
Cross currency and interest rate swaps	17	(10)	(10)
Employee benefit obligations	12	(41)	(39)
Provisions		(21)	(17)
Trade and other payables		(2)	(2)
Total non-current liabilities		(1,204)	(1,433)
Total liabilities		(3,715)	(3,956)
Net assets		2,420	2,380

Equity
Share capital		207	215
Share premium		148	148
Treasury shares		(12)	(17)
Other reserves		(71)	36
Retained earnings		2,148	1,998
Total equity		2,420	2,380

Condensed Consolidated Statement of Cash Flows

for the six months ended 30^th September 2024


		Six months ended
		30.9.24	30.9.23
	Notes	£ million	£ million

Cash flows from operating activities
Profit before tax		554	82
Adjustments for:
Share of (profits) / losses of associates		(2)	13
Profit on disposal of businesses	11	(484)	-
Depreciation		68	72
Amortisation		28	23
Impairment losses		23	-
Profit on sale of non-current assets		(1)	-
Share-based payments		5	7
Decrease in inventories		43	169
Decrease in receivables		116	113
Decrease in payables		(307)	(217)
Increase in provisions		2	6
Contributions in excess of employee benefit obligations charge		(2)	(5)
Changes in fair value of financial instruments		12	(17)
Net finance costs		23	41
Disposal costs		(16)	-
Income tax paid		(84)	(51)
Net cash (outflow) / inflow from operating activities		(22)	236

Cash flows from investing activities
Interest received		44	19
Purchases of property, plant and equipment		(150)	(125)
Purchases of intangible assets		(21)	(33)
Government grant income received		-	1
Proceeds from sale of businesses		578	39
Net cash inflow / (outflow) from investing activities		451	(99)

Cash flows from financing activities
Purchase of treasury shares		(123)	-
Proceeds from borrowings		19	2
Repayment of borrowings		(66)	(151)
Dividends paid to equity shareholders	7	(101)	(101)
Interest paid		(77)	(53)
Principal element of lease payments		(5)	(6)
Net cash outflow from financing activities		(353)	(309)

Change in cash and cash equivalents		76	(172)
Exchange differences on cash and cash equivalents		-	(3)
Cash and cash equivalents at beginning of year		530	637
Cash and cash equivalents at end of period	17	606	462

Cash and deposits		165	193
Money market funds		456	300
Bank overdrafts		(15)	(31)
Cash and cash equivalents	17	606	462

Condensed Consolidated Statement of Changes in Equity

for the six months ended 30^th September 2024



	Share	Share	Treasury	Other	Retained	Total
	capital	premium	shares	reserves	earnings	equity
	£ million	£ million	£ million	£ million	£ million	£ million

At 1^st April 2023	215	148	(19)	118	2,077	2,539
Total comprehensive (expense) / income for the period	-	-	-	(21)	7	(14)
Dividends paid (note 7)	-	-	-	-	(101)	(101)
Share-based payments	-	-	-	-	12	12
Cost of shares transferred to employees	-	-	-	-	(3)	(3)
At 30^th September 2023	215	148	(19)	97	1,992	2,433
Total comprehensive (expense) / income for the period	-	-	-	(61)	51	(10)
Dividends paid (note 7)	-	-	-	-	(40)	(40)
Share-based payments	-	-	-	-	5	5
Cost of shares transferred to employees	-	-	2	-	(10)	(8)
At 31^st March 2024	215	148	(17)	36	1,998	2,380
Total comprehensive (expense) / income for the period	-	-	-	(115)	501	386
Dividends paid (note 7)	-	-	-	-	(101)	(101)
Purchase of treasury shares (note 7)	(8)	-	-	8	(251)	(251)
Share-based payments	-	-	-	-	9	9
Cost of shares transferred to employees	-	-	5	-	(8)	(3)
At 30^th September 2024	207	148	(12)	(71)	2,148	2,420


1	Basis of preparation and statement of compliance

These condensed consolidated interim financial statements for the half-year reporting period ended 30^th September 2024 (the 'condensed consolidated accounts') have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. The accounting policies, estimates and judgements applied in the condensed consolidated accounts are consistent with the accounting policies, estimates and judgements applied by the group in its consolidated accounts as at, and for the year ended, 31^st March 2024, with the exception of the adoption of amended accounting policies and standards as explained below.

These condensed consolidated accounts do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. They do not include all of the notes of the type normally included in an annual financial report. Accordingly, the condensed consolidated accounts should be read in conjunction with the annual report for the year ended 31^st March 2024, which has been prepared in accordance with UK-adopted International Accounting Standards (IAS) and with the requirements of the Companies Act 2006.

Information in respect of the year ended 31^st March 2024 is derived from the company's statutory accounts for that year which have been delivered to the Registrar of Companies. The auditor's report on those statutory accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain any statement under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

The condensed consolidated accounts are unaudited but have been reviewed by the auditors. They were approved by the board of directors on 26^th November 2024.

Going concern

The directors have reviewed the base case scenario, and the severe but plausible downside case scenario and have reasonable expectation that there are no material uncertainties that cast doubt about the group's ability to continue operating for at least twelve months from the date of approving these half-yearly accounts.

As at 30^th September 2024, the group maintains a strong balance sheet with around £1.6 billion of available cash and undrawn committed facilities. Cash generation was positive during the period with free cash flow of £347 million. Net debt has reduced by £168 million since 31^st March 2024 to £783 million, driven by proceeds from disposals. Net debt (including post tax pension deficits) to underlying EBITDA, was below our target range at 1.4 times.

While inflation has been decreasing and interest rates have started to fall, significant headwinds remain due to ongoing global auto sector weakness, persistent geopolitical tensions and political uncertainty in the US. Despite these challenges, the group demonstrated resilience during the period, with underlying operating profit (excluding the impact of divestments) only modestly down. For the purposes of assessing going concern, we have revisited our financial projections using the latest forecasts for our base case scenario. The base case scenario was stress tested to a severe but plausible downside case which reflects lower demand across our markets to account for significant disruption from external factors and a deep recession.

Additionally, the group considered scenarios including the impact from metal price volatility and increases in the amount of metal that we would have to hold, along with a slowdown in operations in China. We have also considered the impact of a refinery shutdown for a prolonged period. Whilst the combined impact would reduce profitability and EBITDA against our latest forecast, our balance sheet would remain strong.


1	Basis of preparation and statement of compliance (continued)

Going concern (continued)

The group has a robust funding position comprising a range of long-term debt and a £1 billion five year committed revolving credit facility maturing in March 2027 which was entirely undrawn at 30^th September 2024. There was £456 million of cash held in money market funds. Of the existing loans, around £340 million of term debt matures in the period to December 2025. In October 2024, the group refinanced around £300 million of term debt with a US Private Placement issuance, with funds scheduled for drawdown in December 2024. We have excluded this refinancing from our going concern modelling. As a long time, highly rated issuer in the US private placement market, the group expects to be able to access additional funding in its existing markets should it need to. The group also has a number of additional sources of funding available including uncommitted lease facilities that support precious metal funding. Whilst we would fully expect to be able to utilise the metal lease facilities, they are excluded from our going concern modelling.

Under all scenarios above, the group has sufficient headroom against committed facilities and key financial covenants are not in breach during the going concern period. There remain risks to the group including more extreme economic outcomes. Against these, the group has a range of levers which it could utilise to protect headroom including reducing capital expenditure and future dividend distributions.

The directors are therefore of the opinion that the group has adequate resources to fund its operations for at least twelve months from the date of approving these half year accounts and so determine that it is appropriate to prepare the accounts on a going concern basis.

Non-GAAP measures

The group uses various measures to manage its business which are not defined by generally accepted accounting principles (GAAP). The group's management believes these measures provide valuable additional information to users of the accounts in understanding the group's performance. The group's non-GAAP measures are defined and reconciled to GAAP measures in note 17.

Amended standards adopted by the group

The IASB has issued the following amendments, which have been endorsed by the UK Endorsement Board, for annual periods beginning on or after 1^st January 2024:

- Amendments to IAS 1, Presentation of Financial Statements;

- Amendments to IFRS 16, Leases;

- Amendments to IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments: Disclosures relating to Supplier Finance Arrangements

The new or amended standards and interpretations above that are effective for the year ended 31^st March 2025 have not had a material impact on the group. The group has not early adopted any standard, amendment or interpretation that was issued but is not yet effective.


2	Segmental information


	Revenue, sales and underlying operating profit by business

	Clean Air - provides catalysts for emission control after-treatment systems used in light and heavy duty vehicles powered by internal combustion engines. PGM Services - enables the energy transition through providing circular solutions as demand for scarce critical materials increases. Provides a strategic service to the group, supporting the other segments with security of metal supply, and manufactures value-add PGM products. Catalyst Technologies - licenses process technology and supplies catalysts to the chemical and energy sectors, enabling the decarbonisation of fuels and chemical value chains. Hydrogen Technologies - provides components across the value chain for fuel cells and electrolysers including catalyst coated membranes and membrane electrode assemblies. Value Businesses - a portfolio of businesses managed to drive shareholder value from activities considered to be non-core to the group. The disposal of the Value Businesses portfolio concluded during the period, with Battery Systems (sold on 30^th April 2024), Medical Device Components (sold on 1^st July 2024) and the land and buildings of our previous Battery Materials business in Poland (sold on 24^th July 2024). Refer to note 11 for further details. Additionally, included in our prior period comparatives is Diagnostic Services (sold on 29^th September 2023). The Group Leadership Team (the chief operating decision maker as defined by IFRS 8, Operating Segments) monitors the results of these operating businesses to assess performance and make decisions about the allocation of resources. Each operating business is represented by a member of the Group Leadership Team. These operating businesses represent the group's reportable segments and their principal activities are described on pages 18 to 25 of the 2024 Annual Report. The performance of the group's operating businesses is assessed on sales and underlying operating profit (see note 17). Sales between segments are made at market prices, taking into account the volumes involved.



2	Segmental information (continued)


	Six months ended 30^th September 2024

			Clean			PGM				Catalyst			Hydrogen			Value
			Air			Services				Technologies			Technologies			Businesses			Corporate				Eliminations			Total
			£ million			£ million				£ million			£ million			£ million			£ million				£ million			£ million

	Revenue from external customers		2,013			3,199				346			24			50			-				-			5,632
	Inter-segment revenue		-			776				9			-			-			-				(785)			-
	Revenue		2,013			3,975				355			24			50			-				(785)			5,632

	External sales¹		1,165			173				328			20			36			-				-			1,722
	Inter-segment sales		-			34				8			-			-			-				(42)			-
	Sales¹		1,165			207				336			20			36			-				(42)			1,722
	Underlying operating profit¹		121			51				50			(26)			2			(42)				-			156


	Six months ended 30^th September 2023


			Clean			PGM				Catalyst			Hydrogen			Value
			Air			Services				Technologies			Technologies			Businesses			Corporate				Eliminations			Total
			£ million			£ million				£ million			£ million			£ million			£ million				£ million			£ million

	Revenue from external customers		2,768			3,169				308			45			241			-				-			6,531
	Inter-segment revenue		-			1,364				11			-			-			-				(1,375)			-
	Revenue		2,768			4,533				319			45			241			-				(1,375)			6,531

	External sales¹		1,286			182				272			37			190			-				-			1,967
	Inter-segment sales		-			48				10			-			-			-				(58)			-
	Sales¹		1,286			230				282			37			190			-				(58)			1,967

	Underlying operating profit¹		124			78				35			(26)			14			(45)				-			180


	¹ Sales and underlying operating profit are non-GAAP measures (see note 17 for reconciliation to GAAP measures). Sales excludes the sale of precious metals. Underlying operating profit excludes profit or loss on disposal of businesses, amortisation of acquired intangibles and major impairment and restructuring charges.


2	Segmental information (continued)

	Net assets by business

	At 30^th September 2024

					Clean				PGM			Catalyst			Hydrogen				Value
					Air				Services			Technologies			Technologies				Businesses				Corporate			Total
					£ million				£ million			£ million			£ million				£ million				£ million			£ million

	Segmental net assets				1,440				140			783			270				6				312			2,951

	Net debt (see note 17)																									(783)
	Post-employment benefit net assets and liabilities																									141
	Deferred tax net assets																									125
	Provisions and non-current other payables																									(83)
	Investments in associates																									69

	Net assets																									2,420


	At 31^st March 2024


					Clean				PGM			Catalyst			Hydrogen				Value
					Air				Services			Technologies			Technologies				Businesses				Corporate			Total
					£ million				£ million			£ million			£ million				£ million				£ million			£ million

	Segmental net assets				1,351				38			718			271				178				449			3,005

	Net debt (see note 17)																									(946)
	Post-employment benefit net assets and liabilities																									114
	Deferred tax net assets																									126
	Provisions and non-current other payables																									(82)
	Investments in associates																									71
	Net assets held for sale																									92


	Net assets																									2,380




3	Revenue

	Products and services

	The group's principal products and services by operating business and sub-business are disclosed in the table below, together with information regarding performance obligations and revenue recognition. Revenue is recognised by the group as contractual performance obligations to customers are completed.

	Sub-business	Primary industry		Principal products and services													Performance obligations					Revenue recognition
	Clean Air
	Light Duty Catalysts	Automotive		Catalysts for cars and other light duty vehicles													Point in time					On despatch or delivery

	Heavy Duty Catalysts	Automotive		Catalysts for trucks, buses and non-road equipment													Point in time					On despatch or delivery

	PGM Services
	Platinum Group Metal Services	Various		Platinum Group Metal refining and recycling services													Over time					Based on output

				Platinum Group Metal trading													Point in time					On receipt of payment

				Other precious metal products													Point in time					On despatch or delivery

				Platinum Group Metal chemical, industrial products and catalyst													Point in time					On despatch or delivery

	Catalyst Technologies
	Catalysts	Chemicals / oil and gas / sustainable fuels		Speciality catalysts and additives													Point in time					On despatch or delivery

	Licensing	Chemicals / oil and gas / sustainable fuels		Process technology licences and engineering design services													Over time / point in time¹					Based on costs incurred or at a point in time¹

	Hydrogen Technologies
	Fuel Cells Technology	Various		Fuel cell catalyst coated membranes													Point in time					On despatch or delivery

	Electrolysis Technology	Various		Electrolyser catalyst coated membrane													Point in time					On despatch or delivery

	Value Businesses
	Other Markets (excluding Diagnostic Services)	Various		Precious metal pastes and enamels, battery systems and products found in devices used in medical procedures													Point in time					On despatch or delivery

	Diagnostic Services	Oil and gas		Detection, diagnostic and measurement solutions													Over time					Based on costs incurred

	¹ Revenue recognition depends on whether the licence is distinct in the context of the contract.

	Metal revenue: Metal revenue relates to the sales of precious metals to customers, either in pure form or contained within a product. Metal revenue arises in each of the reportable segments in the group. Metal revenue is affected by fluctuations in the market prices of precious metals and, in many cases, the value of precious metals is passed directly on to customers. Given the high value of these metals this makes up a significant proportion of revenue



3	Revenue (continued)

	Revenue from external customers by principal products and services

	Six months ended 30^th September 2024

								Clean			PGM			Catalyst				Hydrogen			Value
								Air			Services			Technologies				Technologies			Businesses				Total
								£ million			£ million			£ million				£ million			£ million				£ million


	Metal							848			3,026			18				4			14				3,910
	Heavy Duty Catalysts							364			-			-				-			-				364
	Light Duty Catalysts							774			-			-				-			-				774
	Platinum Group Metal Services							-			173			-				-			-				173
	Catalyst Technologies							-			-			328				-			-				328
	Fuel Cells Technology							-			-			-				20			-				20
	Battery Systems							-			-			-				-			15				15
	Medical Device Components							-			-			-				-			21				21
	Other							27			-			-				-			-				27


	Revenue							2,013			3,199			346				24			50				5,632



	Six months ended 30^th September 2023

							Clean				PGM			Catalyst				Hydrogen			Value
							Air				Services			Technologies				Technologies			Businesses				Total
							£ million				£ million			£ million				£ million			£ million				£ million


	Metal						1,482				2,987			36				8			51				4,564
	Heavy Duty Catalysts						454				-			-				-			-				454
	Light Duty Catalysts						812				-			-				-			-				812
	Platinum Group Metal Services						-				182			-				-			-				182
	Catalyst Technologies						-				-			272				-			-				272
	Fuel Cells Technology						-				-			-				37			-				37
	Battery Systems						-				-			-				-			106				106
	Diagnostic Services						-				-			-				-			37				37
	Medical Device Components						-				-			-				-			45				45
	Other						20				-			-				-			2				22


	Revenue

	Revenue						2,768				3,169			308				45			241				6,531





	The contract receivables balance at 30^th September 2024 is £38 million (31^st March 2024: £56 million).

3	Revenue (continued)

	Revenue from external customers by point in time and over time performance obligations

	Six months ended 30^th September 2024

								Clean			PGM			Catalyst				Hydrogen			Value
								Air			Services			Technologies				Technologies			Businesses				Total
								£ million			£ million			£ million				£ million			£ million				£ million


	Revenue recognised at a point in time							2,013			3,106			290				24			47				5,480
	Revenue recognised over time							-			93			56				-			3				152


	Revenue							2,013			3,199			346				24			50				5,632


	Six months ended 30^th September 2023

								Clean			PGM			Catalyst				Hydrogen			Value
								Air			Services			Technologies				Technologies			Businesses				Total
								£ million			£ million			£ million				£ million			£ million				£ million


	Revenue recognised at a point in time							2,768			3,081			255				45			213				6,362
	Revenue recognised over time							-			88			53				-			28				169


	Revenue							2,768			3,169			308				45			241				6,531

4	Operating profit
																				Six months ended
																				30.9.24				30.9.23
																				£ million				£ million
	Operating profit is arrived at after charging / (crediting):

	Research and development expenditure charged to the income statement																			99				104
	Less: External funding received - from governments																			(8)				(7)
	Net research and development expenditure charged to the income statement																			91				97

	Depreciation of:
	Property, plant and equipment																			64				66
	Right-of-use assets																			4				6

	Depreciation																			68				72

	Amortisation of:
	Acquired intangibles																			2				2
	Other intangible assets																			26				21

	Amortisation																			28				23

	Profit on disposal of businesses (note 11)																			(484)				-

	Property, plant and equipment																			5				-
	Other intangible assets																			17				-
	Inventories																			1				2
	Trade and other receivables																			-				10

	Impairment losses																			23				12

	Restructuring charges																			40				30
	Major impairment and restructuring charges																			63				42

Profit on disposal of businesses

On 30^th April 2024, the group completed the sale of Battery Systems, on 1^st July 2024, the group completed the sale of its Medical Device Components business. On 24^th July 2024, the group completed the sale of the land and buildings from our legacy Battery Materials business in Poland, see note 11.

Major impairment and restructuring charges

Major impairment and restructuring charges are shown separately on the face of the income statement and excluded from underlying operating profit, see note 17.

Major impairments - the group's impairment charge of £23 million includes a £17 million impairment to the group's intangible assets following a review of and subsequent changes to our IT operating model completed in June 2024. As a result of the review, certain IT assets have been impaired. The remaining impairment charge is to production related assets in Clean Air as the business continues to consolidate its existing capacity into new and more efficient plants.

Major restructuring - the group's transformation programme was launched in May 2022 and was designed to drive increased competitiveness, improved execution capability and create financial headroom to facilitate further investment in high growth areas. Restructuring charges of £40 million have been recognised of which £19 million relates to Johnson Matthey Global Solutions, IT transformation and running the transformation programme, with £9 million other redundancy and implementation costs. The remaining £12 million charge is related to Clean Air's ongoing plant consolidation initiatives, of which the majority is redundancy and exit costs.


5	Tax expense

The charge for taxation at the half year ended 30^th September 2024 is £70 million (1H 2023/24: £19 million), an effective tax rate of 12.4%. The tax charge on underlying profit before tax was £29 million, an effective tax rate of 21.9%, similar to the 22.0% in the half year ended 30^th September 2023.

The group is within the scope of the OECD Pillar Two model rules. The group is in scope by virtue of the parent company being tax resident in the UK. Pillar Two legislation has been enacted in the UK, as well as several other territories where the group operates, and became effective for the group from the start of this financial period.

The group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two model rules, as provided in the amendments to IAS 12 issued in May 2023.

Under the legislation, the group is liable to pay a top-up tax for the difference between its Global Anti-Base Erosion ('GloBE') effective tax rate per jurisdiction and the 15% minimum rate. We have undertaken an assessment of the group's potential to additional taxes under Pillar 2 and conclude that, for the year ended 31^st March 2025, the group is expected to meet the exemptions in the Transitional Country by Country Reporting ('CbCR') safe harbours in all tax jurisdictions in which it operates, except for Bermuda and North Macedonia. Income tax expense recognised in the consolidated statement of profit and loss for the six months ended 30^th September 2024 includes £1 million related to Pillar 2 income taxes. The group will keep the position under review for future periods.

We continue to monitor potential impacts as further guidance is published, as territories implement legislation to enact the rules, and as territories increase their domestic Corporate Tax rate in response to the OECD Pillar 2 rules.


6	Earnings per ordinary share

		Six months ended
		30.9.24	30.9.23
		pence	pence

	Basic	266.8	34.7
	Diluted	266.4	34.6

	Earnings per ordinary share have been calculated by dividing profit for the period by the weighted average number of shares in issue during the period.


		Six months ended
	Weighted average number of shares in issue	30.9.24	30.9.23

	Basic	181,728,079	183,213,834
	Dilution for long term incentive plans	273,281	907,731
	Diluted	182,001,360	184,121,565


7	Dividends

An interim dividend of 22.00 pence per ordinary share has been proposed by the board which will be paid on the 4^th February 2025 to shareholders on the register at the close of business on 6^th December 2024. The estimated amount to be paid is £38 million (1H 2023/24: £40 million) and has not been recognised in these accounts.

	Six months ended
	30.9.24	30.9.23
	£ million	£ million

2022/23 final ordinary dividend paid ─ 55.00 pence per share	-	101
2023/24 final ordinary dividend paid ─ 55.00 pence per share	101	-
Total dividends	101	101

On 3^rd July 2024, the company announced its intention to conduct a share buyback programme for up to a maximum consideration of £250 million. The first tranche of the share buyback programme of up to £125 million commenced on 3^rd July 2024 and completed on 23^rd September 2024. On 24^th September 2024, the company commenced the second tranche of up to £125 million, which will end no later than 24^th January 2025. As at 30^th September 2024, the company purchased 7,628,978 shares at a cost of £123 million. The residual balance of £127 million has been recognised within trade and other payables as at 30^th September 2024.


8	Property, plant and equipment

					Assets in
		Freehold land	Leasehold	Plant and	the course of
		and buildings	improvements	machinery	construction	Total
		£ million	£ million	£ million	£ million	£ million


	Cost
	At 1^st April 2024	591	23	2,143	515	3,272
	Additions	-	-	6	143	149
	Transfers from assets in the course of construction	1	-	29	(30)	-
	Disposals	-	-	(3)	-	(3)
	Exchange adjustments	(15)	(1)	(51)	(5)	(72)

	At 30^th September 2024	577	22	2,124	623	3,346


	Accumulated depreciation and impairment
	At 1^st April 2024	290	12	1,522	12	1,836
	Charge for the period	7	1	56	-	64
	Impairment losses	-	-	5	1	6
	Disposals	-	-	(3)	-	(3)
	Exchange adjustments	(6)	(1)	(35)	-	(42)

	At 30^th September 2024	291	12	1,545	13	1,861


	Carrying amount at 30^th September 2024	286	10	579	610	1,485

	Carrying amount at 1^st April 2024	301	11	621	503	1,436


9	Other intangible assets


		Customer contracts and relationships	Computer software	Patents trademarks and licences	Acquired research and technology	Development expenditure	Total
		£ million	£ million	£ million	£ million	£ million	£ million


	Cost
	At 1^st April 2024	103	536	32	30	134	835
	Additions	-	21	-	-	-	21
	Exchange adjustments	(2)	(1)	(1)	(1)	-	(5)

	At 30^th September 2024	101	556	31	29	134	851


	Accumulated amortisation and impairment
	At 1^st April 2024	91	252	28	30	133	534
	Charge for the period	2	25	1	-	-	28
	Impairment losses (note 4)	-	17	-	-	-	17
	Exchange adjustments	(2)	(1)	(2)	(1)	-	(6)

	At 30^th September 2024	91	293	27	29	133	573

	Carrying amount at 30^th September 2024	10	263	4	-	1	278

	Carrying amount at 1^st April 2024	12	284	4	-	1	301


10	Investments in associates

As part of the disposal of our Health business, we received £75 million in the form of shares which constitutes approximately 30% equity interest in the re-branded business (Veranova). The group determined that it has significant influence and therefore has equity accounted this stake as an investment in associate.

			Associates
			£ million


	At 1^st April 2024		71
	Group's share of profits for the period		2
	Exchange adjustments		(4)
	At 30^th September 2024		69

11		Disposals

Medical Device Components

On 1^st July 2024, the group completed the sale of its Medical Device Components business for an enterprise value of £555 million (£559 million on a debt free basis after working capital adjustments). The business was disclosed as a disposal group held for sale as at 31^st March 2024.

Battery Systems

On 30^th April 2024, the group completed the sale of its Battery Systems business for an enterprise value of £14 million (£21 million on a debt free basis after working capital adjustments). The business was disclosed as a disposal group held for sale as at 31^st March 2024.

Battery Materials Poland

On 24^th July 2024, the group completed the sale of the land and buildings of our previous Battery Materials business in Poland for £26 million. This was disclosed as assets held for sale as at 31^st March 2024.

			2024			2023
			Medical Device Components	Other disposals	Total	Total
	30^th September		£ million	£ million	£ million	£ million
	Proceeds
	Cash consideration		555	30	585	47
	Cash and cash equivalents disposed		(10)	-	(10)	(3)
	Net cash consideration		545	30	575	44
	Disposal costs paid		(11)	(5)	(16)	(2)
	Net cash inflow		534	25	559	42

	Assets and liabilities disposed

	Non-current assets
	Property, plant and equipment		24	25	49	10
	Right-of-use assets		4	-	4	9
	Goodwill		3	-	3	-

	Current assets
	Inventories		8	20	28	5
	Trade and other receivables		18	20	38	32
	Cash and cash equivalents		10	-	10	3
	Deferred tax		-	3	3	3

	Current liabilities
	Trade and other payables		(6)	(20)	(26)	(9)
	Current income tax liabilities		(1)	(1)	(2)	-
	Lease liabilities		(4)	-	(4)	-

	Non-current liabilities
	Lease liabilities		-	(1)	(1)	(11)
	Provisions		(1)	(1)	(2)	-

	Net assets disposed		55	45	100	42


11		Disposals (continued)

			2024			2023
			Medical Device Components	Other disposals	Total	Total
	30^th September		£ million	£ million	£ million	£ million
	Cash consideration		555	30	585	47
	Deferred consideration		-	17	17	4
	Working capital adjustments at time of disposal		4	-	4	4
	Less: carrying amount of net assets sold		(55)	(45)	(100)	(42)
	Less: disposal costs		(16)	(8)	(24)	(8)
	Cumulative currency translation gain recycled from other comprehensive income		-	2	2	(1)
	Profit recognised in the income statement		488	(4)	484	4

Disposal proceeds

During the period we received £3 million of proceeds relating to the Diagnostic Services disposal in the prior year. This was recognised within profit on disposal in the prior year.


12	Post-employment benefits

Background

The group operates a number of post-employment benefit plans around the world, the forms and benefits of which vary with conditions and practices in the countries concerned. The major defined benefit plans are pension plans and post-retirement medical plans in the UK and the US.

Financial assumptions
The financial assumptions for the major plans are as follows:

	30.9.24		31.3.24
	UK plan	US plans	UK plan	US plans
	%	%	%	%
First year's rate of increase in salaries	3.40	-	3.50	-
Ultimate rate of increase in salaries	3.40	-	3.50	-
Rate of increase in pensions in payment	2.80	-	2.90	-
Discount rate	5.10	4.90	4.90	5.20
Inflation	-	2.20	-	2.20
- UK Retail Prices Index (RPI)	3.00	-	3.10	-
- UK Consumer Prices Index (CPI)	2.65	-	2.75	-
Current medical benefits cost trend rate	8.95	-	8.95	-
Ultimate medical benefits cost trend rate	5.40	-	5.40	-

The financial assumptions for the other plans are reviewed and updated annually.

	Financial information
	Movements in the net post-employment benefit assets and liabilities, including reimbursement rights, were:
			UK	UK	UK post-				US post-
			pension -	pension -	retirement				retirement
			legacy	cash balance	medical		US		medical
			section	section	benefits		pensions		benefits		Other		Total
			£ million	£ million	£ million		£ million		£ million		£ million		£ million

	At 1^st April 2024		115	35	(6)		2		(10)		(19)		117
	Current service cost - in
	operating profit		-	(9)	-		-		-		-		(9)
	Administrative expenses - in
	operating profit		(2)	-	-		(1)		-		-		(3)
	Interest		3	1	-		-		-		-		4
	Remeasurements		21	4	-		(4)		-		-		21
	Company contributions		-	12	-		1		-		-		13
	Exchange		-	-	-		1		-		-		1
	At 30^th September 2024		137	43	(6)		(1)		(10)		(19)		144
12		Post-employment benefits (continued)

		Financial information (continued)
		The post-employment benefit assets and liabilities are included in the balance sheet as follows:
						30.9.24		30.9.24		31.3.24		31.3.24
						Post-				Post-
						employment		Employee		employment		Employee
						benefit		benefit net		benefit		benefit net
						net assets		obligations		net assets		obligations
						£ million		£ million		£ million		£ million

		UK pension - legacy section				137		-		115		-
		UK pension - cash balance section				43		-		35		-
		UK post-retirement medical benefits				-		(6)		-		(6)
		US pensions				-		(1)		2		-
		US post-retirement medical benefits				-		(10)		-		(10)
		Other				2		(21)		1		(20)
		Total post-employment plans				182		(38)		153		(36)
		Other long-term employee benefits						(3)				(3)
		Total long-term employee benefit obligations						(41)				(39)


13	Fair values

Fair value hierarchy

Fair values are measured using a hierarchy where the inputs are:

· Level 1 ─ quoted prices in active markets for identical assets or liabilities.

· Level 2 ─ not level 1 but are observable for that asset or liability either directly or indirectly.

· Level 3 ─ not based on observable market data (unobservable).

Fair value of financial instruments

Certain of the group's financial instruments are held at fair value. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the balance sheet date.

The fair value of forward foreign exchange contracts, interest rate swaps, forward precious metal price contracts and currency swaps is estimated by discounting the future contractual cash flows using forward exchange rates, interest rates and prices at the balance sheet date.

The fair value of trade and other receivables measured at fair value is the face value of the receivable less the estimated costs of converting the receivable into cash.

The fair value of money market funds is calculated by multiplying the net asset value per share by the investment held at the balance sheet date.

There were no transfers of any financial instrument between the levels of the fair value hierarchy during the current or prior periods.

13	Fair values (continued)
									Fair value
					30.9.24		31.3.24		hierarchy
					£ million		£ million		level

	Financial instruments measured at fair value

	Non-current
	Investments at fair value through other comprehensive income¹				40		40		1
	Cross currency and interest rate swaps - assets				-		15		2
	Other financial assets²				18		34		2
	Cross currency and interest rate swaps - liabilities				(10)		(10)		2
	Borrowings and related swaps				-		(3)		2

	Current
	Trade receivables³				156		178		2
	Other receivables⁴				1		3		2
	Cash and cash equivalents - money market funds				456		334		2
	Cash and cash equivalents - cash and deposits				5		12		2
	Cross currency and interest rate swaps				10		-		2
	Other financial assets²				49		53		2
	Other financial liabilities²				(21)		(11)		2


									Fair value
					30.9.24		31.3.24		hierarchy
					£ million		£ million		level

	Financial instruments not measured at fair value

	Non-current
	Borrowings and related swaps				(1,100)		(1,336)		-
	Lease liabilities				(27)		(24)		-
	Other receivables				55		60		-
	Trade and other payables				(2)		(2)		-

	Current
	Amounts receivable under precious metal sale and repurchase agreements				358		398		-
	Amounts payable under precious metal sale and repurchase agreements				(719)		(797)		-
	Cash and cash equivalents - cash and deposits				160		196		-
	Cash and cash equivalents - bank overdrafts				(15)		(12)		-
	Borrowings and related swaps				(254)		(110)		-
	Lease liabilities				(8)		(8)		-
	Trade and other receivables				833		926		-
	Trade and other payables				(1,210)		(1,235)		-

	¹ Investments at fair value through other comprehensive income are quoted bonds purchased to fund pension deficit (£36 million) and an investment held at fair value through other comprehensive income (£4 million).

	² Other financial assets includes forward foreign exchange contracts (£14 million), forward precious metal price contracts (£51 million) and currency swaps (£2 million). Other financial liabilities includes forward foreign exchange contracts (£7 million) and currency swaps (£14 million).

	³ Trade receivables held in a part of the group with a business model to hold trade receivables for collection or sale. The remainder of the group operates a hold to collect business model and receives the face value, plus relevant interest, of its trade receivables from the counterparty without otherwise exchanging or disposing of such instruments.


	⁴ Other receivables with cash flows that do not represent solely the payment of principal and interest.


13		Fair values (continued)

		The fair value of financial instruments, excluding accrued interest, is approximately equal to book value except for:

			30.9.24			31.3.24
			Carrying	Fair		Carrying		Fair
			amount	value		amount		value
			£ million	£ million		£ million		£ million

		US Dollar Bonds 2025, 2027, 2028, 2029 and 2030	(477)	(455)		(507)		(474)
		Euro Bonds 2025, 2028, 2030 and 2032	(340)	(319)		(348)		(320)
		Sterling Bonds 2024, 2025 and 2029	(80)	(74)		(145)		(137)
		KfW US Dollar Loan 2024	(37)	(37)		(40)		(38)

The fair values are calculated using level 2 inputs by discounting future cash flows to net present values using appropriate market interest rates prevailing at the period end.


14	Precious metal leases

At 30^th September 2024, precious metal leases were £197 million at closing prices (31^st March 2024: £197 million). Precious metal leases do not fall under the scope of IFRS 16.


15	Transactions with related parties

There have been no material changes in related party relationships in the six months ended 30^th September 2024. During the half year ended 30^th September 2024, the group had sales with associates totalling £2 million (1H 2023/24: £11 million). The amounts owed by Veranova were £1 million at 30^th September 2024 (1H 2023/24: £nil). No other related party transactions have occurred which have materially affected the financial position or performance of the group during the period.


16	Contingent liabilities

The group is involved in various disputes and claims which arise from time to time in the course of its business including, for example, in relation to commercial matters, product quality or liability, employee matters and tax audits. The group is also involved from time to time in the course of its business in legal proceedings and actions, engagement with regulatory authorities and in dispute resolution processes. These are reviewed on a regular basis and, where possible, an estimate is made of the potential financial impact on the group. In appropriate cases a provision is recognised based on advice, best estimates and management judgement. Where it is too early to determine the likely outcome of these matters, no provision is made. Whilst the group cannot predict the outcome of any current or future such matters with any certainty, it currently believes the likelihood of any material liabilities to be low, and that such liabilities, if any, will not have a material adverse effect on its consolidated income, financial position or cash flows.

Following the sale of its Health business in May 2022, the purchaser of the Health business, Veranova Bidco LP, has issued a claim against the group in connection with: i) certain alleged representations said to have been made during the course of the negotiation of the sale and purchase agreement dated 16^th December 2021 ("SPA"); and, ii) certain warranties given in the SPA at the time of signing. Having reviewed the claim with its advisers, the group is of the opinion that it has a defensible position in respect of these allegations and is vigorously defending its position. The outcome of the legal proceedings relating to this matter is not certain, since the issues of liability and quantum will be for determination by the court at trial. Accordingly, the group is unable to make a reliable estimate of the possible financial impact at this stage, if any.


17	Non-GAAP measures

The group uses various measures to manage its business which are not defined by generally accepted accounting principles (GAAP). The group's management believes these measures provide valuable additional information to users of the accounts in understanding the group's performance. Certain of these measures are financial Key Performance Indicators which measure progress against our strategy.

All non-GAAP measures are on a continuing operations basis.

17	Non-GAAP measures (continued)

Definitions

Measure	Definition	Purpose
Sales¹	Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers.	Provides a better measure of the growth of the group as revenue can be heavily distorted by year on year fluctuations in the market prices of precious metals and, in many cases, the value of precious metals is passed directly on to customers.
Underlying operating profit²	Operating profit excluding non-underlying items.	Provides a measure of operating profitability that is comparable over time.
Underlying operating profit margin^1,2	Underlying operating profit divided by sales.	Provides a measure of how we convert our sales into underlying operating profit and the efficiency of our business.
Underlying profit before tax²	Profit before tax excluding non-underlying items.	Provides a measure of profitability that is comparable over time.
Underlying profit for the year²	Profit for the year excluding non-underlying items and related tax effects.	Provides a measure of profitability that is comparable over time.
Underlying earnings per share^1,2	Underlying profit for the year divided by the weighted average number of shares in issue.	Our principal measure used to assess the overall profitability of the group.
Return on capital employed (ROCE)^1,3	Annualised underlying operating profit divided by the average equity plus average net debt. The average is calculated using the opening balance for the financial year and the closing balance.	Provides a measure of the group's efficiency in allocating the capital under its control to profitable investments.
Average working capital days (excluding precious metals)¹	Monthly average of non-precious metal related inventories, trade and other receivables and trade and other payables (including any classified as held for sale) divided by sales for the last three months multiplied by 90 days.	Provides a measure of efficiency in the business with lower days driving higher returns and a healthier liquidity position for the group.
Free cash flow	Net cash flow from operating activities after net interest paid, net purchases of non-current assets and investments, proceeds from disposal of businesses, dividends received from joint ventures and associates and the principal element of lease payments.	Provides a measure of the cash the group generates through its operations, less capital expenditure.
Net debt (including post tax pension deficits) to underlying EBITDA	Net debt, including post tax pension deficits and quoted bonds purchased to fund the UK pension (excluded when the UK pension plan is in surplus) divided by underlying EBITDA for the same period.	Provides a measure of the group's ability to repay its debt. The group has a long-term target of net debt (including post tax pension deficits) to underlying EBITDA of between 1.5 and 2.0 times, although in any given year it may fall outside this range depending on future plans.

¹ Key Performance Indicator.

² Underlying profit measures are before profit or loss on disposal of businesses, amortisation of acquired intangibles, major impairment and restructuring charges, share of profits or losses from non-strategic equity investments and, where relevant, related tax effects. These items have been excluded by management as they are not deemed to be relevant to an understanding of the underlying performance of the business.

³ Return on capital employed is a new key performance indicator in the half year accounts. This was included as a performance measure in the 2024 Performance Share Plan award. Inclusion of this measure incentives delivery of the transformation programme across JM and aligns with investor focus on our ability to return value on investments.

17	Non-GAAP measures (continued)

Reconciliations to GAAP measures

Sales
See note 2.

Underlying profit measures
		Operating		Profit		Tax	Profit for
		profit		before tax		expense	the period
Six months ended 30^th September 2024		£ million		£ million		£ million	£ million

Underlying		156		133		(29)	104
Amortisation of acquired intangibles		(2)		(2)		-	(2)
Profit on disposal of businesses¹		484		484		(70)	414
Major impairment and restructuring charges¹		(63)		(63)		15	(48)
Share of profits of associates		-		2		-	2
Change in non-underlying tax provisions		-		-		14	14
Reported		575		554		(70)	484

¹ For further detail please see note 4.

		Operating		Profit		Tax	Profit for
		profit		before tax		expense	the period
Six months ended 30^th September 2023		£ million		£ million		£ million	£ million

Underlying		180		139		(31)	108
Amortisation of acquired intangibles		(2)		(2)		-	(2)
Profit on disposal of businesses		-		-		(3)	(3)
Major impairment and restructuring charges		(42)		(42)		13	(29)
Share of losses of associates		-		(13)		2	(11)
Reported		136		82		(19)	63



Underlying earnings per share						Six months ended
						30.9.24	30.9.23

Underlying profit for the period (£ million)						104	108
Weighted average number of shares in issue (million)						181.7	183.2
Underlying earnings per share (pence)						57.4	59.1


17	Non-GAAP measures (continued)

Return on Capital Employed (ROCE)
			Six months			Year		Six months
			ended			ended		ended
			30.9.24			31.3.24		30.9.23
			£ million			£ million		£ million

Underlying operating profit for this period			156			410		180
Underlying operating profit for prior year			410			-		465
Less: Underlying operating profit for prior first half			(180)			-		(222)
Annualised underlying operating profit			386			410		423

Average net debt			867			987		1,034
Average equity			2,400			2,459		2,486
Average capital employed			3,267			3,446		3,520

ROCE			11.8%			11.9%		12.0%

Average working capital days (excluding precious metals)			Six months			Year		Six months
			ended			ended		ended
			30.9.24			31.3.24		30.9.23
			£ million			£ million		£ million

Inventories			1,153			1,211		1,517
Trade and other receivables			1,588			1,718		1,759
Trade and other payables			(2,070)			(2,209)		(2,263)
			671			720		1,013
Working capital balances classified as held for sale			-			44		-
Total working capital			671			764		1,013
Less: Precious metal working capital			(163)			(174)		(371)
Working capital (excluding precious metals)			508			590		642

Average working capital days (excluding precious metals)			57			60		57

Free cash flow
						Six months ended
						30.9.24		30.9.23
						£ million		£ million
Net cash (outflow) / inflow from operating activities						(22)		236
Interest received						44		19
Interest paid						(77)		(53)
Purchases of property, plant and equipment						(150)		(125)
Purchases of intangible assets						(21)		(33)
Government grant income						-		1
Proceeds from sale of businesses						578		39
Principal element of lease payments						(5)		(6)
Free cash flow						347		78


17	Non-GAAP measures (continued)

Net debt (including post tax pension deficits) to underlying EBITDA
			30.9.24		31.3.24		30.9.23
			£ million		£ million		£ million

Cash and deposits			165		208		193
Money market funds			456		334		300
Bank overdrafts			(15)		(12)		(31)
Cash and cash equivalents			606		530		462
Cross currency and interest rate swaps - current assets			10		-		-
Cross currency and interest rate swaps - non-current assets			-		15		19
Cross currency and interest rate swaps - non-current liabilities			(10)		(10)		(16)
Borrowings and related swaps - current			(254)		(110)		(71)
Borrowings and related swaps - non-current			(1,100)		(1,339)		(1,398)
Lease liabilities - current			(8)		(8)		(9)
Lease liabilities - non-current			(27)		(24)		(31)
Lease liabilities - current - transferred to liabilities classified as held for sale			-		(1)		-
Lease liabilities - non-current - transferred to liabilities classified as held for sale			-		(4)		-
Net debt			(783)		(951)		(1,044)

Increase / (decrease) in cash and cash equivalents			76		(102)		(172)
Less: Decrease in borrowings			47		150		149
Less: Principal element of lease payments			5		11		6
Decrease / (increase) in net debt resulting from cash flows			128		59		(17)
New leases, remeasurements and modifications			(9)		(11)		(7)
Other lease movements			(3)		1		-
Disposal of businesses			5		11		10
Exchange differences on net debt			43		13		2
Other non-cash movements			4		(1)		(9)
Movement in net debt			168		72		(21)
Net debt at beginning of year			(951)		(1,023)		(1,023)
Net debt at end of year			(783)		(951)		(1,044)

Net debt			(783)		(951)		(1,044)
Add: Pension deficits			(22)		(22)		(21)
Add: Related deferred tax			3		3		3
Net debt (including post tax pension deficits)			(802)		(970)		(1,062)

Underlying EBITDA for this period			250				273
Underlying EBITDA for prior year			598				647
Less: Underlying EBITDA for prior half year			(273)				(309)
Annualised underlying EBITDA			575		598		611

Net debt (including post tax pension deficits) to underlying EBITDA			1.4		1.6		1.7


17	Non-GAAP measures (continued)

			30.9.24		31.3.24		30.9.23
			£ million		£ million		£ million

Underlying EBITDA			250		598		273
Depreciation and amortisation			(96)		(192)		(95)
Profit / (loss) on disposal of businesses			484		(9)		-
Major impairment and restructuring charges			(63)		(148)		(42)
Finance costs			(72)		(146)		(71)
Finance income			49		64		30
Share of profits / (losses) of associates			2		(3)		(13)
Income tax expense			(70)		(56)		(19)
Profit for the period			484		108		63


2024

27^th November
Announcement of results for the half year ending 30^th September 2024

5^th December
Ex dividend date

6^th December
Interim dividend record date

2025

4^th February
Payment of interim dividend

22^nd May
Announcement of results for the year ending 31^st March 2025

17^th July
134^th Annual General Meeting (AGM)


Cautionary Statement
This announcement contains forward looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and businesses in which the group operates. It is believed that the expectations reflected in this announcement are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated.





Johnson Matthey Plc
Registered Office: 5th Floor, 25 Farringdon Street, London EC4A 4AB
Telephone: +44 (0) 20 7269 8400
Fax: +44 (0) 20 7269 8433
Internet address: www.matthey.com
E-mail: jmpr@matthey.com

Registered in England ─ Number 33774
LEI code: 2138001AVBSD1HSC6Z10

Registrars
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Telephone: 0371 384 2344 (in the UK) *
+44 (0) 121 415 7047 (outside the UK)
Internet address: www.shareview.co.uk

* Lines are open 8.30am to 5.30pm Monday to Friday excluding public holidays in England and Wales.

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.

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END

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