Johnson Matthey PLC Intent to exit Battery Materials, trading update (0153S)
November 11 2021 - 1:00AM
UK Regulatory
TIDMJMAT
RNS Number : 0153S
Johnson Matthey PLC
11 November 2021
11(th) November 2021
Johnson Matthey Plc
(the Company)
Johnson Matthey announces intention to exit Battery Materials
and provides trading update
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Johnson Matthey, a global leader in sustainable technologies,
has been working to commercialise its range of high nickel cathode
materials, principally for the automotive industry.
Following a detailed review and ahead of reaching a number of
critical investment milestones, we have concluded that the
potential returns from our Battery Materials business will not be
adequate to justify further investment.
Whilst demand for battery materials is accelerating, so is
competition from alternative technologies and other manufacturers.
Consequently this is rapidly turning into a high volume,
commoditised market.
In recent months, as JM has been exploring strategic
partnerships, it has also become clear that our capital intensity
is too high compared with other more established large scale, low
cost producers.
The Board has therefore decided to pursue the sale of all or
parts of this business with the ultimate intention of exiting. We
will move swiftly to determine the best outcome for all of our
stakeholders and intend to make a further announcement as soon as
possible.
JM is making good progress in its other growth areas, such as in
hydrogen technologies, circularity and the decarbonisation of the
chemicals value chain. These are attractive opportunities which we
will now accelerate with greater focus and investment. In addition,
in a world that increasingly needs solutions to address the
challenges faced by climate change, we will continue to pursue
opportunities across other areas that are closely aligned to our
core capabilities.
Robert MacLeod, Chief Executive said:
"While the testing of our eLNO battery materials with customers
is going well, the marketplace is rapidly evolving with increasing
commoditisation and lower returns. We have concluded that we will
not achieve the returns necessary to justify further
investment.
"This decision will allow us to accelerate our investment and
focus on more attractive growth areas, especially where we have
leadership positions such as in hydrogen technologies, circularity
and the decarbonisation of the chemicals value chain."
Johnson Matthey will announce its first half results on 24th
November, which are in-line with market expectations. The trading
outlook for the full year ending 31st March 2022, assuming current
precious metal prices and foreign exchange rates, is towards the
lower end of market expectations. This is primarily due to the
wide-spread supply chain shortages affecting the automotive
industry and the consequential impact on precious metals prices,
together with acute labour shortages in the US that are adversely
impacting our Health business, which is subject to strategic
review.
NOTE
1. Vara consensus for full year underlying operating profit in
2021/2022 is GBP581 million (range: GBP550 million to GBP636
million)
2. The Battery Materials business consists of 430 permanent
employees, of whom the majority are in the UK. The net assets of
the business as of 31(st) October 2021 were approximately GBP340
million
The person responsible for the release of this announcement is
Nick Cooper, General Counsel and Company Secretary of Johnson
Matthey Plc.
ENDS
Enquiries:
Investor Relations
Martin Dunwoodie Director of Investor Relations 020 7269 8241
Senior Investor Relations
Louise Curran Manager 020 7269 8235
Jane Crosby Investor Relations Manager 020 7269 8242
Media
Harry Cameron Tulchan Communications 07799 152148
Barney Wyld Group Corporate Affairs Director 07485 337498
Johnson Matthey Plc is listed on the London Stock Exchange
(JMAT)
Registered in England & Wales number: 00033774
Legal Entity Identifier number: 2138001AVBSD1HSC6Z10
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END
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