Transforming
for growth
Annual Report and Accounts 2024
Our approach to reporting
We are committed to transparent sustainability
reporting and we support efforts to
standardise requirements.
GRI: this report has been prepared in
accordance with the Global Reporting Initiative
(GRI) Standards 2021.
SASB: the report aligns with the Sustainability
Accounting Standards Board (SASB) chemical
sector reporting requirements (version
2023-12).
TCFD: our Task Force on Climate-related
Financial Disclosures (TCFD) report is included
on pages 53-61, and complies with the TCFD
Guidance for All Sectors. It has taken into
consideration the Material and Buildings
Group guidance, as set out in section C of
‘Annex: Implementing the Recommendations
of the Task Force on Climate-related Financial
Disclosures’, October 2021. The numbers
included in this section cover the entire
Johnson Matthey group.
Non-financial limited assurance: ERM
Certification and Verification Services Limited
(ERM CVS) were engaged to provide limited
assurance of selected information as presented
on page 218. Please see ERM CVS’ Independent
Limited Assurance Report on pages 216-218
for more details.
Our products and services are where we believe
we can have most positive impact on society
and we have aligned our strategy with four of
the UN Sustainable Development Goals (SDGs).
The group uses various measures to manage its
business which are not defined by generally
accepted accounting principles (GAAP).
Certain non GAAP measures are included in
the Annual Report and these are reconciled to
their GAAP equivalent numbers in note 34 to
the Financial Statements.
Cautionary statement
The Strategic report and certain other sections
of this Annual Report contain forward-looking
statements that are subject to risk factors
associated with, among other things,
the economic and business circumstances
occurring from time to time in the countries
and sectors in which the company operates.
It is believed that the expectations reflected
in these statements are reasonable, but
they may be affected by a wide range of
variables which could cause actual results,
performance, operations, impacts, events or
circumstances to differ materially from those
currently anticipated.
We are transforming
into an industry-leading
energy transition company
For over 200 years Johnson Matthey has contributed
to solving some of the world’s toughest problems.
But now is the time to make our biggest impact yet.
The world’s leading energy, chemicals and
automotive companies depend on us to help
them decarbonise and reduce harmful emissions.
To fully play our part, we too are changing.
Strategic report
Purpose led, performance driven
01
JM at a glance
02
Transforming JM together
03
Chair’s statement
06
Themes that are changing our world
08
Our business model
10
Chief Executive Officer’s statement
12
Our strategy
14
Key performance indicators
16
Clean Air
18
Platinum Group Metal Services
20
Catalyst Technologies
22
Hydrogen Technologies
24
Chief Financial Officer’s statement
26
Financial performance review
28
Sustainability
34
Task Force on Climate-related
Financial Disclosures
53
Risk report
62
Going concern and viability
71
Non-financial and sustainability
information statement
72
Section 172 statement
74
Sustainability Performance Databook:
matthey.com/sustainability-databook
Click this link to see our glossary: matthey.com/ARA-glossary
Assurance report: matthey.com/assurance-statement
TCFD Compliance Table: matthey.com/tcfd-compliance-table
GRI Content Index: matthey.com/gri-content-index
PAI Statement: matthey.com/pai-statement
SASB Index: matthey.com/sasb-index
Find more information online
Governance
Chair’s introduction
75
Board statements
76
Board at a glance
77
Board of Directors
78
Our governance structure
80
Board outcomes
82
Board and committee effectiveness
84
Stakeholder engagement
86
Societal Value Committee report
89
Nomination Committee report
92
Audit Committee report
96
Remuneration Committee report
105
Remuneration at a glance
108
Remuneration Policy
109
Annual report on remuneration
118
Directors’ report
128
Responsibilities of directors
132
Independent auditors’ report to the
members of Johnson Matthey Plc
133
Financial statements
143
Other information
210
Cover image: JM R&D scientist Maria Rivas-Velazco working alongside a custom-made
collaborative robot, or ‘cobot’, to aid and accelerate chemical and material discovery.
Safety
23%
improvement in safety
(total recordable injury
and illness rate) from 2023
Revenue
£12.84bn
Transformation
£75m
savings in 2023/24
Purpose led, performance driven
2023/24 highlights
GHG emissions avoided
1.1 million
tonnes CO₂e
through customer use of
technologies enabled by JM products
A circular solution:
JM’s HyRefine™ technology
Clean Air
£274m
underlying profit
up 26% on previous year*
Pioneering clean air technology
for 50 years and beyond
Catalyst Technologies
+56%
underlying operating profit
(£75m)*
Delivering decarbonisation at
scale with low carbon hydrogen
Underlying profit
+11%
at constant FX and adjusting
for precious metal prices
A-
Climate change rating 2023
Our purpose
is to catalyse
the net zero
transition for
our customers
Sustainability
89%
sales from products contributing
to priority UN SDGs
*
At constant exchange rates.
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JM at a glance
Our businesses
Read more on pages 18-25
Clean Air
Designs and manufactures emission control catalysts to
reduce harmful pollutants, e.g. NOx, from vehicle exhausts
and a range of stationary sources.
Platinum Group Metal (PGM) Services
Supports customers with short and long-term metal
planning and supply management; refines and recycles
both used and mined PGMs; and processes metal into more
complex, value-added products for a vast array of uses.
Catalyst Technologies
Designs and licenses process technology, and designs and
manufactures catalysts for a wide range of processes used
in the energy and chemicals industries to create products
used in transportation fuels, fertilisers, wood products,
paints, coatings and polymers.
Hydrogen Technologies
Designs and manufactures the key performance-defining
components (catalyst-coated membranes) used at the
heart of fuel cells and electrolysers for the creation of
electrolytic (green) hydrogen.
These figures are rounded to the nearest whole number.
In 2022/23, Hydrogen Technologies represented less than 1% of total sales.
A global footprint
Supported by our values
We are a truly purpose-driven organisation – and our values provide the foundation for everything we do.
11,600+
employees worldwide
Revenue split (%)
China
12% of Group sales
8% of employees
Europe
40% of group sales
58% of employees
Rest of World
6% of Group sales
5% of employees
Rest of Asia
14% of Group sales
12% of employees
North America
28% of Group sales
17% of employees
Protecting
people and
the planet
Acting with
integrity
Innovating
and improving
Working
together
Owning
what
we do
Clean Air
Platinum Group Metal Services
Catalyst Technologies
Hydrogen Technologies1
Value Businesses
2023/24
41%
50%
49%
5%
5%
3%
1%
4%
42%
2022/23
These figures are rounded to the nearest whole number.
Johnson Matthey Annual Report and Accounts 2024
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Other information
for growth
Liam Condon
Chief Executive Officer
Transforming
Johnson Matthey
When I joined the company two years ago, it was primarily
known as a tier-two automotive catalyst supplier with a
history of innovation. But the leadership team and I
recognised that JM is well-positioned to be so much more
than that. It is a hub of scientific expertise, ambition and
experience in delivering solutions that create sustainable
value and contribute to a cleaner, healthier world.
We announced an ambitious change programme to enable
us to meet the challenges now faced by our customers.
We are executing on our transformation at pace across the
business, creating a more streamlined, efficient and
commercially focused organisation. We are strengthening
our capabilities, simplifying our operating model and driving
improved performance.
You can see more detail on pages 14-15, but you can also
read on the following pages how our dynamic leadership
team members are driving these changes. Our Business
Chief Executives reflect on the transformation in their
businesses on pages 18-25.
By reshaping our business, we are
positioning Johnson Matthey for
long-term growth at the heart of
the energy transition.
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As CFO I’m most proud of the
progress that we’re making
to centralise and standardise
our core processes into JM
Global Solutions.
JM is moving away from a series of
decentralised, disparate ways of
working to drive greater efficiency
and effectiveness in our processes,
working with our outsource partners
and our new Vilnius Hub. Our teams
are doing a tremendous job to enable
this to happen, including when their
own positions are uncertain. We are
already seeing the benefits of this
transformation in our results.
We have seen a real step-up in
leadership across our organisation,
providing direction and clear
feedback, as well as empowering
teams to do their best work.
One of my proudest achievements is the
‘Play to Win’ engagement approach that we
shaped with our business teams. There is now
a much better understanding throughout JM
of our strategy and what is required of each
of us to implement this. We are delighted
to see improvements in motivation and
engagement, especially as we know this is
rewarding for our employees and leads to
an overall better customer experience.
In China we have
successfully
demonstrated double-
digit growth post
transformation while
significantly improving
employee engagement.
At times we have had to
make difficult decisions, but as
a result we are leaner, fitter,
more agile, more efficient, and
more productive. We have
transformed and performed in
these challenging times in China,
and customers tell us that it is now
easier to do business with JM!
We continue to drive a
cultural change in R&D.
Not only are our teams laser focused
on driving impact aligned to JM
strategy, but we have also asked
people to change the way they
behave. A much more digital mindset
is allowing us to implement knowledge
sharing platforms that accelerate
innovation. And our customers have
already noticed; the new apps we use
internally for product characterisation
and pricing analyses are now providing
valuable insight to customers on
product performance.
Liz Rowsell
Chief
Technology
Officer
Mark Su
President,
China
Annette
Kelleher
Chief HR
Officer
Stephen
Oxley
Chief
Financial
Officer
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Peter Hill
Group Global
Services and
Transformation
Director
Simon Price
General Counsel
and Company
Secretary
I see more and more
colleagues challenging the
status quo – seeing
opportunity instead of
challenge – through a
growth mindset lens.
Our teams are seeing transformation
benefits in terms of cost but also
easier processes. It’s a reinforcing
loop: the determination and ambition
to perform better, in turn pushing us
to continue to outperform.
I am excited to see how the
new ‘Play to Win’ culture has
caught the imagination of
people across the company.
Teams in every business and function
are driving significant improvements
in performance and efficiency. The
Transformation Office helps shape and
direct this effort so that we can capture
the benefits as quickly as possible.
JM Global Solutions is a powerful new
capability that will drive Johnson
Matthey forward. By standardising
and automating common business
processes, we can free up our
commercial, technical and operations
teams to focus on customers.
Leading through change
has unlocked a new way
of working.
Being really sharp on what it is
each of us does and doesn’t do –
and where the accountabilities,
handovers and touchpoints are
between the businesses and the
functions – has been a gamechanger.
It has led to clarity and simplification,
and empowered all of us with a clear
understanding of what we each need
to do to deliver JM’s strategy and be
successful. The tide has turned!
Sustainability has always
been a strong motivator
for our people, and in the
last two years we have put
it at the heart of our new
corporate strategy.
In the same way that we are
committed to a ‘just transition’ to
net zero, we are also trying to ensure
a just transformation of the company.
The sustainability and communications
teams are instrumental, supporting
our employees and using the various
tools at our disposal to evolve towards
a ‘Play to Win’ culture and the right
operating environment.
Anne
Chassagnette
Chief
Sustainability
Officer
Louise
Melikian
Chief Strategy
and Corporate
Development
Officer
Further details on all members of the Group
Leadership Team (GLT) are available at
matthey.com/about-us/our-leadership/
group-leadership-team.
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Chair’s statement
An inflection
point for PGM
technology
Exactly 50 years ago,
the first commercially
produced catalytic
converters rolled off the
production line at Johnson
Matthey’s facilities
in Royston, UK and Devon,
Pennsylvania.
As it had already been doing for over
150 years, JM had used its deep knowledge
of precious metals to create technology
that would help solve one of the world’s
problems – this time to tackle appalling
air pollution. JM had then persuaded
regulators around the world of the
technology’s effectiveness.
Since then, several billion catalytic
converters have been produced, many
of them by JM, with countless lives saved
or significantly enhanced by their removal
of pollutants.
I believe we are now seeing another
inflection point for our unique technological
and metals know-how. Just as we continue
to innovate the latest generation of clean
air solutions, so we are harnessing the
transformative power of platinum group
metals (PGMs) to enable new solutions,
from fuel cell electric vehicles to the
production of sustainable aviation fuel.
PGMs will be key enablers of the clean
energy transition, and offer several benefits
over other metals that will also play major
roles (such as copper, nickel and lithium).
For example PGMs have a mature, global
supply chain which won’t require massive
expansion to meet the needs of the energy
transition and they offer a sustainable,
circular solution since they are already
recycled with very high efficiency.
Our strategy is purpose-driven: to catalyse
the net zero transition for our customers.
The energy transition will not be a linear
journey and is dependent on many factors
coming together including regulation and
incentives, infrastructure and supply chains.
In a complex world striving towards net
zero, where politics and practicality
interplay, JM is well placed to succeed by
understanding the markets, taking
opportunities, and being flexible enough
to allocate capital accordingly. Given the
strength of our portfolio, we are well
positioned to create significant value
for both shareholders and society.
“Just as we continue
to innovate the latest
generation of clean
air solutions, so we
are harnessing the
transformative power
of platinum group
metals to enable new
solutions, from fuel
cell electric vehicles
to the production
of sustainable
aviation fuel.”
Patrick Thomas
Chair
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In the last six months I have met
shareholders representing around 40%
of the ownership of JM, and all can see
the value of our combination of mature
business and future opportunities.
We have also streamlined the operations
of the board, which I believe has made
us more agile and efficient. We have
reduced the number of board and
committee meetings and focused
our committee membership.
Detailed results commentary online
Chair’s statement continued
A resilient portfolio
The divestment of our remaining non-core
businesses this year has brought welcome
clarity in our portfolio, in our uses of cash,
and in the many areas we can continue to
reduce costs and economise.
We have leading technology to enable
decarbonisation at scale, whilst also
benefiting from a strong core current
business that generates significant cash.
It is becoming clear that internal
combustion engines will continue to be
produced for many years to come. Our
ever-evolving catalytic converter technology
continues to be world-leading at removing
pollutants direct from the engine, and we
are now even more optimistic about the
Clean Air business’ cash generation
opportunities for at least the next decade,
and likely longer.
We have also had good business wins in
Catalyst Technologies, with groundbreaking
achievements. In Hydrogen Technologies
we are reducing investment and managing
our cost base to align with the pace of
market development.
The energy transition is to a large extent
driven by political vision and policy support,
and over the coming months we will pay
close attention to key elections coming
up in our markets – including the EU,
UK and the US.
We have developed strong links with
key politicians, policy makers, regulators
and others to explain the benefits of PGMs
and hydrogen, and continue to secure
government grants for future developments
in R&D and the green technology jobs
of the future.
The divestment of our
remaining non-core
businesses has brought
welcome clarity in our
portfolio, in our uses
of cash, and in the many
areas we can continue
to reduce costs and
economise.
Chris Mottershead retired in January 2024:
I am hugely grateful for his expertise,
enthusiasm and wisdom over the last nine
years. Having served for almost four years
as Senior Independent Director,
John O’Higgins took over the role of Chair
of the Remuneration Committee. As ever
I am grateful to John for his professionalism
and commitment to the board.
Barbara Jeremiah was appointed as Senior
Independent Director in July 2023, bringing
strong experience of metals as well as North
American markets.
I would like to thank our employees
for their hard work and dedication,
our customers on whom our day-to-day
energies are focused, and our shareholders
for their continued support. We are well
positioned to successfully navigate the
journey to net zero and create significant
value for both shareholders and society.
Patrick Thomas
Chair
Our purpose is
to catalyse the net
zero transition for
our customers,
and our strategy
is derived from
this purpose.
As a global society
we face big challenges.
Many of the world’s leading
energy, chemicals and
automotive companies
depend on Johnson
Matthey’s technology and
expertise to decarbonise,
reduce harmful emissions
and improve their
sustainability.
Strategic report
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Other information
Johnson Matthey Annual Report and Accounts 2024
7
Themes that
are changing
our world
Parts of the world continue to be rocked
by conflict, geopolitical turbulence, inflation
and cost of living crises. Societies and
governments are facing many, sometimes
conflicting, pressures. The energy transition
needs to be a fair one — but the very evident
impact of climate change means it is still
both essential and urgent.
Sustainable energy and fuels
Outlook
Many countries have targets to phase out
internal combustion engines, increase
zero-emission vehicles, and tackle emissions
in other forms of hard-to-abate transport
such as aviation and shipping.
Opportunities and challenges
The demand for sustainable fuels is
expected to grow significantly over the next
20 years. A wide range of technologies are
needed to meet this increasing demand,
including significant investment in clean
hydrogen technologies, production and
infrastructure. A number of mandates
around sustainable aviation fuel are also
being introduced, such as the US SAF Grand
challenge equivalent to 10% by 2030,
and the EU mandate for 6% SAF by 2030.
What we are doing
We have a range of solutions that are
already providing value to customers
around the world. Our LCH™ technology
enables the highest process efficiency
commercially available today for
low-carbon hydrogen production,
and this year was selected by bp and Kellas
Midstream, amongst others. FT CANS™,
HyCOgen™ and BioForming® S2A
technologies are core components of the
next generation of sustainable fuel facilities.
Our technologies continue to enable the
production of methanol and ammonia,
which amongst other uses will help
decarbonise shipping emissions.
Sustainable chemicals
Outlook
Carbon emissions from the chemical
sector are a common focus for regulation
because they are easy to find and measure.
The sector emitted nearly 1Gt of direct CO2
emissions in 2022. Customers are
increasingly demanding sustainable
products to meet consumer expectations.
Businesses across the industry are looking to
combine alternative, sustainable feedstocks
with catalyst technologies to make products
and processes less carbon-intensive.
Opportunities and challenges
The key levers to decarbonise the chemicals
industry include feedstock efficiency,
alternative feedstocks, use of sustainable
process energy supply, and application of
carbon capture and storage.
What we are doing
We have leading catalysts and process
technologies that can help the chemical
industry produce sustainable chemicals,
with leading positions in syngas and other
process technologies. Our CLEANPACE™
technology solutions can be retrofitted to
hydrogen and methanol assets to reduce
carbon emissions by up to 95%. We are also
one of the participants in the Flue2Chem
project, spearheaded by Unilever and the
Society of Chemical Industry (SCI) and
supported by Innovate UK. Flue2Chem aims
to take waste gas from foundation
industries such as metal, glass, paper and
chemicals, and generate an alternative
source of carbon for UK consumer products.
1. Source: International Energy Agency
$4 trillion
Of global investment needed in clean
energy to reach net zero by 20501
20 million
Tonnes of low-carbon hydrogen set to be produced in
2030 compared to under one million tonnes in 20221
Decarbonising modern life
There is wide recognition among governments, businesses and communities of the need
to tackle climate change by reducing greenhouse gas emissions. To achieve these targets
we have to make existing industrial processes more efficient, and move to alternative
feedstocks that are more sustainable.
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Themes that are changing our world continued
Creating a
circular economy
Cleaner air,
healthier people
An evolving
regulatory landscape
Geopolitical and
economic volatility
Global decarbonisation requires much
greater efficiency in recycling and reusing
key materials.
Outlook
There is a growing focus on circularity
and recycling across industries as
companies set stronger targets around
both Scope 3 emissions and waste, and
respond to stronger regulations around
recycled content.
Opportunities and challenges
Embedding circularity into how materials
are sourced and used is a crucial part of the
energy transition, particularly with scarce
resources such as platinum group metals
(PGMs). Customers are increasingly
demanding full life cycle offerings from
purchase to end-of-life recycling. PGMs
recycling can also be expanded into new
areas such as emerging technologies in
electrolytic hydrogen.
What we are doing
We are already the world’s largest PGM
recycler by volume, leading in final PGM
recycling to 99.95% purity. We can offer
PGMs with low carbon intensity up to 98%
lower carbon footprint for recycled PGM
compared to primary (mined) PGM. This
year our products used 69% recycled metal,
and we are constantly innovating to design
our new products with end-of-life recycling
in mind from the beginning. We are
applying our longstanding recycling
expertise to current and emerging
technologies, including fuel cell and
electrolyser stacks, as demonstrated
by our HyRefine™ technology.
As more people live in cities, air pollution
must be tackled effectively.
Outlook
Air pollution kills millions of people every
year. With increasing urbanisation and
a rise in the frequency and intensity
of heatwaves, which exacerbate pollution,
significant action is needed to reduce
harmful emissions.
Opportunities and challenges
The past 12 months have seen lots of
progress made in the energy transition
but also many challenges associated with
it – showing just how complex the task
of transitioning the world’s energy systems
is proving to be. While alternative fuel
sources such as batteries, biofuels and
hydrogen grow, it is becoming clearer
that automotive catalysts for internal
combustion engines will likely be needed
for years to come, including for emerging
economies that cannot yet afford high-cost
low-carbon solutions.
What we are doing
Today, one in three cars carries JM’s
emission control technology. And we
continue to invest and innovate to ensure
that our technologies help customers meet
new legislation. We have a strong global
manufacturing presence and world-class
labs and test centres that continue to
enhance autocatalyst performance while
innovating the use of our core technologies
for emissions controls in future applications.
Governments continue to recognise
their role in promoting investments
into sustainable technology.
Outlook
We are seeing a growing body of national
legislation and other incentives aimed at
tackling climate change, resource scarcity
and energy insecurity. The Inflation
Reduction Act in the USA, the EU Green
Deal Industrial Plan and the UK’s formal
commitment to reaching net zero by 2050
all look to incentivise the increased use of
sustainable technology.
Opportunities and challenges
Despite short-term uncertainty around
the exact structure of some incoming
regulations, the market is moving strongly
in our direction. Across the energy,
chemicals and transport sectors, the
transition will likely involve a mosaic of
different technologies and processes –
many of which we provide solutions for.
What we are doing
We work with our partners and peers to
create the industry voice to help shape
policy in a way that supports an ambitious
and just energy transition. We engage with
stakeholders across the regulatory
landscape and highlight how our products,
technologies and services can be best
deployed to help the world through the
energy system transformation.
Businesses and communities are
navigating an external landscape
defined by uncertainty.
Outlook
2023/24 saw an increase in geopolitical
volatility caused by the war in Ukraine,
ongoing tension between the US, EU
and China over issues of economic and
national security, the conflict in Israel/Gaza,
and a rise in the popularity of nationalistic
politics. Weak economies, global inflation,
tight monetary policy and restrictive
financial conditions have all impacted
growth. Although inflation is expected
to decline in the major Western economies,
the global economic outlook will remain
uncertain for some time.
Opportunities and challenges
As governments in all our markets seek
to drive economic growth, whether by
stimulating domestic spending or funding
the energy transition, new opportunities
are created for our products and process
technologies. Our challenge is to identify
the markets and customers which represent
the greatest opportunities for growth.
What we are doing
As well as strengthening our commercial
muscle, our ongoing transformation
is increasing JM’s resilience and positioning
us to take full advantage of the
opportunities created by the energy
transition. We are reducing our costs,
optimising our capital investments and
focusing on the markets with the greatest
potential for growth.
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Our business model: synergies in metals chemistry
We deliver through our four businesses…
By leveraging synergies and
competitive advantages…
c. 80%
PGMs used in our products are internally refined
Platinum Group Metal (PGM) Services
Aim: #1 global PGM refiner
See pages 18-19 for
where our catalysts are
being used
See pages 22-23 for
how we are leading
in today’s markets
See pages 20-21 on the PGM ecosystem
See more on pages
24-25 on how we are
developing the
hydrogen economy
Clean
Air
Aim: continue to
lead in autocatalyst
markets
Catalyst
Technologies
Aim: #1 in syngas-
based chemicals
and fuels
technology
Hydrogen
Technologies
Aim: market leader
in performance
components for
fuel cells and
electrolysers
Expertise in metal chemistry
Everything we do across our four businesses is
underpinned by our leadership in complex metal
chemistry, catalysis and process engineering.
Foundational PGM ecosystem
We have deep insights into PGM markets through our
Precious Metal Management team and our refining
operations. Around 80% of the PGMs we use are
sourced internally from our refineries. This shared
resource creates a resilient supply, lower exposure
to price risk and efficient working capital.
Mutual customers and partners
As our customers transition to net zero, we provide
a fully integrated and comprehensive offering
through collaboration across our business units.
Security of supply
Our customers count on us for a reliable supply of
PGMs and recycling services – we supply over 40%
of the PGMs sent to our Clean Air customers. This is
because we are a metal hub for PGMs, underpinned
by our status as the leading recycler of PGMs.
Shared technology and capabilities
We have more than 2,400 colleagues in R&D
and engineers across all our businesses –
with around 4,000 patents granted and around
2,000 applications pending.
A comprehensive sustainability offering
Every part of our business is committed to helping
our customers adapt processes and products to reach
the sustainability goals our society and planet are
depending on.
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Our business model continued
Addressing three markets…
To catalyse the net zero transition...
And create value for our stakeholders
Customers and strategic
partners
Our customer satisfaction score
has increased to 43 from 37.
Our customers highlight the
quality of our products, our
collaborative approach and
our technical expertise.
43
Net Promoter Score (NPS)
Society
Our catalytic converters have
been helping to improve air
quality since 1974.138,613
additional tonnes of NOx
were removed from tailpipes
in 2023/24.
1,150
Premature deaths prevented
in 2023/24
Suppliers
We partner with our suppliers
to embed the highest standards
to deliver for our customers.
39%
supplier spend (excl PGMs) has
EcoVadis medal for good ESG
performance
Communities
We work with a range of partners
on charitable giving and employee
volunteering schemes.
2,246
volunteering days in 2023/24
Employees
Our employee engagement
score improved from 6.9
in March 2023 to
7.2
in January 2024
Investors
Our performance-driven culture
and ‘Play to Win’ strategy create
sustainable value for investors
looking to support the net
zero transition.
77.0p
Dividend maintained at
the same level
Energy
Designing technologies for a
range of sustainable energy
sources, including hydrogen,
sustainable aviation fuel,
methanol and ammonia.
Chemicals
Process and catalyst
technologies that enable
the production of chemicals,
helping customers lower
their carbon and
environmental footprint.
Automotive
Emission control systems
that reduce NOx and other
particulates that harm people
and the environment.
JM helps store and transport renewable energy
by enabling the production of renewable
(green) hydrogen. Our solutions also help
produce low-carbon methanol and ammonia,
which can transport hydrogen efficiently and
will play a role in decarbonising the shipping
industry. We also provide processes and
catalysts to produce sustainable aviation fuels,
helping the industry reach its net zero target.
We develop catalysts that increase the
efficiency of chemical reactions, thus lowering
energy requirements and carbon emissions.
We also provide solutions to accelerate the
chemical industry’s transition to a more
sustainable future: by lowering the emissions
of existing industrial assets, and by providing
solutions for the manufacture of sustainable
chemicals and fuels, and the clean hydrogen
feedstock for these products.
As the transition to decarbonised
transportation will be gradual, we ensure
non-CO2 emissions from internal combustion
engines, including zero carbon hydrogen
engines, are minimised through our leading
autocatalyst solutions. We also have solutions
that enable zero emission mobility through
our fuel cells technology.
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Chief Executive Officer’s statement
A year of
progress at pace
At JM our strategy is
clear: we are a sustainable
technology company that
plays to win with leading
positions in key markets
that depend on innovation.
Our innovation allows
our customers in the
automotive, chemical
and energy industries
to decarbonise at pace
and helps ensure cleaner
air for all.
To achieve our purpose of catalysing the
net zero transition at scale, JM itself needs
to transform, become even more efficient
and build a stronger foundation for growth.
This year we have made significant progress
towards achieving this.
Winning in our markets
Our performance for the year has been
in line with expectations, with good
growth in underlying operating profit
when allowing for exchange rates and
metal prices. Overall results continue
to be impacted by lower platinum group
metal (PGM) prices.
The slowdown in global battery electric
vehicle (BEV) penetration means Clean Air
will be ‘stronger for longer’ – driving more
than £4.5 billion of cash by 2030/31 and
significant further cash flow beyond that.
Our cash generative ability has already
delivered £2 billion in Clean Air since
2021/22, which has been used for
investment in growth and
shareholder returns.
In Catalyst Technologies, we are seeing
significant end market demand across our new
growth areas including sustainable aviation
fuel and low carbon hydrogen. This year we
have seen important ‘first of a kind’ project
wins, including two large-scale low carbon
(blue) hydrogen projects. We also have a
portfolio of innovative technologies for creating
sustainable fuels, and during 2023/24 we
secured four sustainable fuels projects across
our Fischer Tropsch (FT) CANS™ technology
and sustainable methanol.
In Hydrogen Technologies, it is very clear
that green hydrogen will be essential in
tackling climate change and helping the
world to decarbonise. The global green
hydrogen value chain is still at an early
stage of development as the industry
navigates the challenge around scale up,
and is not yet growing at the pace we
expected. We have a disciplined approach
to investment and plan to grow our
Hydrogen Technologies business in line
with the pace of market development.
“We are becoming much
more commercially-
minded, and continue
to drive significant
efficiencies as we
‘right-size’ the
organisation.”
Liam Condon
Chief Executive Officer
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Chief Executive Officer’s statement continued
Platinum Group Metal (PGM) Services
is our foundational business and forms the
backbone of everything we do. Circularity
is an essential part of the energy transition
and our PGM expertise strengthens our
position in key markets through our ability
to offer a full-service business model.
We can deliver circular solutions for
customers ensuring a reliable supply
of lower carbon footprint PGMs.
Transforming for growth
The table on the right demonstrates
the progress we have made against our
strategic milestones. Across the group,
the transformation is well underway
to build a stronger and more efficient
platform for growth.
We have simplified our portfolio into four
core businesses and by the end of 2023/24
we agreed the divestment of all the other
non-core businesses. The Battery Systems
sale completed in April 2024, and Medical
Device Components is due to complete later
in the year. These divestments will deliver
net proceeds of more than £500 million,
significantly exceeding our target of more
than £300 million.
We are becoming a much more
commercially-minded organisation,
with a highly disciplined approach
to capital projects. We continue to drive
significant efficiencies as we ‘right-size’
the organisation including management
streamlining and efficiencies in both
our enabling functions and businesses.
These have delivered total cost savings
to date of approximately £120 million, with
targeted savings of £200 million by the end
of 2024/25. We are making good progress
in implementing our new outsourced
business process organisation JM Global
Solutions (JMGS) to simplify and increase
efficiency, with new service hubs in
Lithuania and India.
We have now developed new ambitious
strategic milestones, outlined on page 15,
focused on customers, capability
and transformation.
We have seen several changes to our Group
Leadership Team (GLT). Jane Toogood
and Christian Gunther left JM in the autumn
of 2023, and Nick Cooper at the end
of March 2024. I am very grateful to Jane,
Christian and Nick for their hard work
and support to JM.
Maurits van Tol, our former CTO,
has succeeded Jane as Chief Executive
of Catalyst Technologies last autumn.
Liz Rowsell has become our new CTO and
Louise Melikian has become our new Chief
Strategy and Corporate Development Officer.
In addition Simon Price was appointed as
General Counsel and Company Secretary
and Peter Hill has taken over as Group
Global Services and Transformation Director.
The fact that all of the appointments were
internal placements speaks for the
significant step-up in the quality and
diversity of succession planning at JM.
The company continues to experience
a lot of external change and internal
transformation, and the GLT and I are
acutely aware of the importance of
employee engagement in order for us to be
successful in volatile times. It is testament
both to our people’s resilience and their
capabilities that both our safety record
and employee engagement scores
have improved considerably this year.
I am extremely grateful to all our employees
for their hard work, commitment and
unwavering dedication to implement
our strategy and to look after our customers
and each other at all times.
Liam Condon
Chief Executive Officer
Strategic milestones
Two years ago we published a set of milestones for the end of 2023/24 that would
indicate whether we are delivering against our strategy.
See page 15 for our new commitments up to 2027.
Strategic milestones
Status
Customers
Hydrogen Technologies: win at least two large scale strategic
partnerships
Clean Air: win targeted Euro 7 business and deliver £4bn+
cash trajectory
Win >10 further large scale projects in Catalyst Technologies and
Hydrogen Technologies
Investments
Expand PGM Services refining capability in China
Hydrogen Technologies: complete construction of new CCM
plant in UK1
Targeted capacity expansion (fuel cells catalyst, formaldehyde catalyst)
Complete divestment of Value Businesses
People
Increase employee engagement score from 6.9 in 2022/23 to 7.2
in 2024/25
Sustainability
Achieve c. 10% reduction in Scope 1 and 2 emissions
Help reduce customers’ CO2e emissions by >1mt p.a. through use of
our products
1. To expand total capacity from 2GW to 5GW.
Achieved
On track
In progress
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Our strategy
We are playing to win in exciting growth markets where our core competencies and technology portfolio can have maximum impact
Our expertise in PGM chemistry, catalysis and process technology is the beating heart
of JM, and we are maximising synergies across our four business units to achieve a top
three position in all our markets.
Our transformation programme is enhancing simplification and execution across the
entire business. We are becoming a simpler, more agile and more cost-effective
organisation with leaner processes, less duplication and clear lines of accountability.
Across the year, we realised approximately £75 million of new savings, resulting in
£120 million in transformation savings relative to the actual financial year 2021/22 cost base.
Some notable achievements include:
• Launch of Johnson Matthey Global Solutions (JMGS), delivering a new way of supporting
core business services to support HR, Finance and Procurement teams through our new
JM service hub in Lithuania and a dedicated centre in India. JMGS rolled out to the US
in February 2024.
• Roll-out of the Johnson Matthey Production System (JMPS), delivering structured
improvement in our manufacturing operations.
• Closure of four Clean Air manufacturing facilities as we continue to consolidate in fewer,
more efficient and flexible sites.
• Resizing of our managerial structure to reflect the new size of the company, partly driven
by divestments and closure of underused assets.
• Accelerated progress of our procurement transformation, with a new operating model
and closer supplier relationships signified by our first global JM supplier convention;
and margin improvement savings of £34.4 million in 2023/24.
• Strengthening of our Engineering and Capital Project (ECP) delivery, including a new ECP
operating model that has streamlined the number of suppliers, allowing a clearer focus
on value.
Our priority actions for the year ahead include:
• Continued roll-out of the JMGS programme, launching in the UK in May 2024.
• Redesign of the IT Operating Model to support the future growth of JM.
• Fully deploy the new global Procurement organisation, co-ordinated with the JMGS
implementation, and supported by a new procurement digital platform.
• Right-sizing and upgrading of JM’s real estate footprint for future business needs,
including the expected sale of unused land in the US and the consolidation of existing
London offices into our new London Hub.
• Consolidate to a single global payroll provider.
• Deploy a common ERP landscape for PGM Services, replacing 13 legacy systems.
We agreed the divestment of all our Value Businesses this year, in line with the strategic
milestone set in 2022. We completed the sale of our Diagnostic Services business
in September 2023, and confirmed the sale of our Medical Device Components
and Battery Systems businesses in March 2024.
Over the three year period to 2026/27, we expect cumulative capital expenditure of up to
£900 million. This will be focused on supporting the core competencies essential for driving
our long-term growth and value creation. We are maintaining a strong balance sheet and
investing for growth and attractive returns, ensuring a reliable dividend and returning excess
cash to shareholders.
Our strategic priorities
Focus
Simplify
#1 global PGM refiner
Continue
to lead in
autocatalyst
markets
#1 in
syngas-
based
chemicals
and fuels
technology
Market
leader in
performance
components
for hydrogen
fuel cells and
electrolysers
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Our strategy continued
Following the successful delivery of our previous strategic milestones (page 13), we
have refreshed our targets for the next two years. Focusing on customers, capability and
transformation, our new milestones build on the results we have achieved over the last two
years to make sure JM remains well placed to deliver on our short and longer-term priorities.
Group Commercial Council
We continue to strengthen our commercial muscle through our Commercial Council.
This year we further embedded the voice of customer in our business, improving our
overall customer satisfaction (Net Promoter Score (NPS)) to 43, compared to 37 in
2022/23. All four businesses improved their NPS scores, with customers highlighting
the strengths in our technical expertise, product performance, collaboration and
supportive service. Our commercial teams are being upskilled, with the successful
roll-out of sales incentive plans and skills training delivering strong wins across
the businesses. We are further harnessing the power of a oneJM approach to our
customers, maximising our current partnerships through targeted cross-selling
and building new profitable business. Looking forward, we will increase our level
of ambition around new business wins through our oneJM approach and enhanced
customer-centricity across the company.
Our strategy is underpinned by a rigorous performance culture. By combining science
and purpose with a more commercial mindset, we are driving stronger execution,
unlocking near-term cost opportunities and positioning ourselves for long-term growth.
Execute
End of
2024/25
End of
2025/26
Long
term
Customers
Deliver at least £4.5 billion of cash in the decade
to 2030/311 from Clean Air
Win additional 20 large scale projects in Catalyst
Technologies’ sustainable technologies portfolio
Secure 4 new Hydrogen Technologies partnerships
with leading companies
Capability
Start commissioning of new world class PGM refinery
Expand engineering capacity by 30% to serve licensing
growth in Catalyst Technologies2
Transformation
Achieve ICCA (International Council of Chemical
Associations) process safety event severity rate
(PSESR) of 0.803
Increase employee engagement score to at least 7.44
Deliver £200 million transformation cost savings
Implement JM Global Solutions for cost effective
business processes
Deliver 32% reduction in scope 1 and 2 CO2e emissions5
1. Cash target from 1st April 2021 to 31st March 2031, pre tax and post restructuring costs.
2. Baseline – 31st March 2024.
3. Baseline – 2023/24 – PSESR of 0.88.
4. Baseline – 2023/24 employee engagement score of 7.2.
5. Baseline – 2019/20.
New strategic milestones
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Key performance indicators
Key performance indicators are from continuing operations.
Financial performance
Clean Air cash flow
£625m
Earnings per share
58.6p
Underlying earnings per share1
141.3p
Ordinary dividend per share
77.0p
Strong cash flow generation, with £2 billion
operating cash flow, pre-tax and post
restructuring costs, generated over the
last three years.
Reported earnings per share declined,
driven by lower operating profit
and higher interest charges.
Underlying earnings per share declined
by 21% as although underlying
performance at constant metal prices
and FX was good, the lower metal prices
impacted profit.
Revenue
£12,843m
Sales1 (excluding precious metals)
£3,904m
Operating profit
£249m
Underlying operating profit1
£410m
Revenue down, driven by lower precious
metal prices.
Sales down 4% at constant currency driven
by lower precious metal prices and reduced
volumes in Value Businesses. Growth at
constant currency and metal prices in Clean
Air, Catalyst Technologies and Hydrogen
Technologies, supported by broadly stable
PGM Services.
Operating profit declined 39%, impacted
by a number of one off items including
£148 million of major impairment and
restructuring charges.
Good underlying performance despite the
challenging market backdrop, with 11%
growth excluding the impact of metal price
(£85 million) and foreign exchange
(£21 million).
Dividend per share maintained
at the same level as prior year
despite lower operating profit.
KPI linked to remuneration policy
2023/24
2022/23
2021/22
£12,843m
£14,933m
£16,025m
£3,904m
£4,201m
£3,778m
2023/24
2022/23
2021/22
£410m
£465m
£553m
2023/24
2022/23
2021/22
£249m
£406m
£255m
2023/24
2022/23
2021/22
£625m
£638m
£772m
2023/24
2022/23
2021/22
58.6p
144.2p
60.9p
2023/24
2022/23
2021/22
77.0p
77.0p
77.0p
2023/24
2022/23
2021/22
141.3p
178.6p
213.2p
2023/24
2022/23
2021/22
1. Non-GAAP measures are defined and reconciled in note 34 of the financial statements, refer to pages 197-199.
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For more information on our ESG ratings please see our website
For more information on our sustainability targets please see page 35
Sustainability performance
KPI linked to remuneration policy
Key performance indicators continued
R&D spend contributing
to our four priority SDGs
92%
Total Scope 1 and 2 Greenhouse gas
(GHG) emissions (market-based)1
282,403 tCO2e
Total Scope 3 (Category 1) purchased
goods and services GHG emissions1
2,531,576 tCO2e
Sales contributing to our
four priority UN Sustainable
Development Goals (SDGs)
89%
GHG emissions avoided from using
JM technologies (compared
to conventional offerings)1
1,110,057 tCO2e
Recycled PGM content in
JM’s manufactured products
69%
Total recordable injury and illness
rate (employees and contractors)
0.36
Female representation across all
management levels
30%
This financial year we achieved a significant
milestone: over 1 million tonnes of GHG
emissions were avoided in customer
products aided by JM technologies or
services. See page 37 for more details.
As existing secondary routes decline e.g.
automotive market, and new technologies
have yet to establish these routes, we may
see declines in recyclable material rates
until routes for the new products,
e.g. hydrogen fuel cells, are developed.
See page 42 for more details.
A reduction in our total recordable injury
and illness rate (TRIIR) for employees
and contractors at the end of 2023/24.
This is a demonstration of the effectiveness
of employee engagement through the
Take 5 programme and our Global Safety
Day, supported by local campaigns to focus
on site-specific safety issues. See page 45
for more details.
Our female representation at all
management levels is 30%, an
improvement on last year, and another
step towards our target of 40% by 2030.
See page 47 for more details.
Through the year we made a detailed
analysis of our alignment to our four
priority UN SDGs. This has led to an
increase in aligned revenue.
We saw an increase in R&D spend against
our priority UN SDGs as we continue
to focus on UN SDGs aligned innovation,
both in-house and through partnerships.
Our total Scope 1 and 2 GHG emissions
has reduced this year, primarily due to
reductions in Scope 2 through significant
increase in renewable energy purchases.
Scope 3 purchased goods and services GHG
emissions has increased compared to the
previous year. This year’s increase reflects
changes in business demands.
89%
82%
84%
2023/24
2022/23
2021/22
92%
90%
88%
2023/24
2022/23
2021/22
282,403
344,910
395,251
2023/24
2022/23
2021/22
2,531,576
2,450,529
2,978,197
2023/24
2022/23
2021/22
1,110,057
841,721
475,995
2023/24
2022/23
2021/22
69%
69%
70%
2023/24
2022/23
2021/22
0.36
0.47
0.59
2023/24
2022/23
2021/22
30%
28%
27%
2023/24
2022/23
2021/22
1. Prior year rebaselined to remove divested businesses, please see page 210 for more information.
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This year marks the 50th anniversary of our
emissions control technologies, which have
saved many thousands of lives so far and will
continue to protect the health of many
millions more into the future. 2023/24 saw
us continue to execute on our strategy and
play to win by delivering on our financial
targets, reducing our costs and supporting
a high-performance culture. As we continue
to strengthen our business for the long term,
we are also actively leveraging our
technology to win growth opportunities
around and beyond automotive catalysts.
In parallel, we have adapted to our dynamic
market through continuously strengthening
our commercially-focused approach.
We are seeing a slight cooling of the battery
electrification market, which has led in turn
to an increase in near-term volume forecasts
for our products in some key markets.
This change, coupled with the agreed later
introduction date of Euro 7 legislation,
has begun to influence future bids and
contract acquisitions.
Due to bid outcomes from previous years,
we are prepared for a reduction in volumes
in 2024/25. This will be fully mitigated by our
costs transformation and the cooling of the
electrification market. Against this backdrop
we continue to win with customers, with
several large-scale business wins expanding
our presence in key markets.
Clean Air
Leading emission reduction technology,
for today and tomorrow
Transforming at pace
During 2023/24, we implemented positive change across all levels of the business.
This is delivering more value for customers today and positioning the company
to capitalise on new future growth areas.
“We are fully focused
on delivering our cash
generation target,
further strengthening
our commercial
capabilities, winning our
targeted business and
driving efficiencies.”
Anish Taneja, Chief Executive,
Clean Air
Pricing
We are offsetting commercial headwinds by optimising pricing
and reducing value leakage through the contract life cycle.
Manufacturing footprint
We completed the targeted closure of four facilities as part of our ongoing
work to consolidate our manufacturing base in fewer, more efficient and
flexible sites, with plans for further consolidation under consideration.
We worked with employees, customers, suppliers and communities
to ensure a smooth and safe transition.
Efficiencies
We are driving cost efficiencies throughout the business, from
procurement to production. In product management we are designing
to value, optimising our manufacturing processes to reduce input
requirements while improving performance. The transformation of our
procurement function is allowing us to implement significant savings
in both direct and indirect purchases. And we continue to improve our
manufacturing excellence, with the standardised JM Production System
(JMPS) that was piloted by Clean Air in 2020 now being rolled out across
the group.
High-performance culture
Through clear strategy, embedded leadership behaviours and a culture
of open and honest two-way feedback, our employees can excel and
innovate continuously to achieve our shared goals.
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Clean Air continued
Winning with
Cummins
This year we were awarded both the
North American and the Global Direct
Sourcing Supplier of the Year Award
from Cummins. These prestigious
awards not only recognise JM’s
outstanding customer-centric
approach and technical solutions,
but also signify our continued close
collaboration with a key partner
in the energy transition.
All of this is reflected in an increase in
customer satisfaction, with our net promoter
score (NPS) increasing by seven points to
24. Customers praised our collaborative
approach and technical excellence, while also
highlighting the need to be more consistently
responsive across our customer base.
We maintained a good safety record,
achieving top-quartile status for safety
performance when benchmarked against
peers in the chemical sector.
The successful closure of four factories
shows our commitment to operational
excellence and ensuring a zero-harm
environment for our employees, customers
and the wider community without
disrupting our customers’ operations.
Seizing the growth opportunities
of the energy transition
Our leading technology and expert teams
have a significant role to play in the move
to a low-carbon economy. Our strategy is
about more than delivering today — we are
also strengthening Clean Air for decades of
future growth around and beyond
automotive catalysts. We are applying our
expertise in new and developing growth
areas, such as emission controls for
hydrogen-fuelled combustion engines, and
solid oxide fuel cells.
Looking forward
We are focusing on delivering our cash
generation target, further strengthening
our commercial capabilities, winning our
targeted business and driving efficiencies.
Our development of world-leading catalysts
will continue to be supported by tightening
global emissions controls. In Europe,
a provisional agreement has been reached
on Euro 7 emissions standards. We estimate
the new standards will come into effect
from 2027 for light duty and 2028 for
heavy duty vehicles. Beyond Europe, we
expect more developments globally, with
the US already setting tighter standards
from 2027 onwards and China and India
expected to bring proposals in 2024/25.
With the continual improvement of our core
business, the external signals of a slowdown
in the battery electric vehicle (BEV) market,
and the growth opportunities around and
beyond automotive catalysts, we believe
the Clean Air business continues to have
a bright future.
Our performance in 2023/24
Clean Air is well on track to reach its
original target of generating at least
£4 billion of cash by 2030/31, with
£2 billion already delivered in the three
years to date. As a result we have upgraded
our target to at least £4.5 billion of cash
by 2030/31.
As well as continuing to deliver key business
wins, our performance this year was
underpinned by the ongoing execution of
our strategy to improve cost efficiencies,
consolidate our footprint, and strengthen
our commercial capabilities.
We are delivering against our strategic
milestones by winning profitable business
across a range of industries and markets.
Throughout the year, we won targeted
Euro 7 business and added several
large-scale business wins to those won
in 2022/23, growing our future share
of market. Our localised approach in China
is helping us tap into growing market
appetite across the region. Strategically
focused R&D activities helped strengthen
our performance by creating efficiencies
and improving customer experience.
Clean Air is playing to win with, around and beyond automotive catalysts
Leading
in the durable global
HD vehicle market
Increasing
win rate
in the LDG vehicle market
Applying
expertise
to growth areas around and beyond
ICE (internal combustion engine)
Watch our video: Pioneering clean air technology for
50 years and beyond
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Platinum Group
Metal Services
Our deep knowledge and experience in
platinum group metals (PGMs)and their
chemistry is critical in the transition to net
zero. We harness the unique properties of
these metals to tackle complex technology
challenges for our customers across the wide
range of markets that we serve. In addition
to existing uses, the energy transition is
driving future demand for PGMs in many
new applications.
PGMs from the majority of these applications
can be recycled and reused in new products
indefinitely. As a world-leading recycler
of PGMs, at twice the size of our nearest
competitor (by volume), we currently refine
circa 20% of all PGMs globally from primary
and secondary sources. This circular business
model puts JM right at the heart of the shift
to a more sustainable world.
We are transforming our PGM Services
business so that we can create more
long-term value for customers in existing
and new markets. 2023/24 saw us develop
our product pipeline and pioneer a new
circularity solution for the hydrogen
economy, while investing in our assets
and delivering increased operational
efficiencies. We’re already seeing the
benefits of these improvements in our
customer satisfaction, with our net promoter
score (NPS) increasing from 35-43.
Energy
Hydrogen production
Hydrogen carriers
Emissions abatement
Purification
Biomass utilisation
Sensing and safety
devices
Transportation
Fuel cell vehicles
Fuel cells for
aviation & shipping
Synthetic fuels
Advanced biofuels
Emissions abatement
Ignition and sensing
Industry
Electronics
Process catalysts
Pharmaceutical catalysts
CO2 utilisation
Plastics recycling
Agrochemical precursors
Emissions abatement
and waste treatment
Harnessing PGMs to enable the energy transition
PGMs in
the energy
transition
“This year saw us develop
our product pipeline,
deliver operational
efficiencies, invest in our
assets and pioneer a new
circularity solution for
the hydrogen economy.”
Alastair Judge, Chief Executive,
Platinum Group Metal (PGM)
Services
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Platinum Group Metal Services continued
profit was down by 35% to £164 million.
Additionally, levels of autocatalyst scrap
remained low.
In response to these headwinds we focused
on developing our products business, which
is largely independent of metal prices, while
also driving cost savings and operational
efficiencies. The PGM Services product business
has doubled since 2019 as we grow our
product base beyond auto catalysts and
develop new PGM applications – including
in the hydrogen economy, pharmaceutical
and agrochemical markets. After allowing
for metal prices and exchange rates, PGM
Services underlying operating profit was
broadly flat in the year.
Other R&D initiatives in 2023/24 concentrated
on safely extracting PGMs from complex
new feeds and reducing the environmental
footprint of our refining process.
To drive operational efficiencies we are
automating and optimising processes
within our plants. We opened new refining
capabilities in China, and we can now provide
a full refining offer to our customers across
the region. We continue to progress our new
refinery investment in the UK which
is now in the final execution stage and
is on schedule to be completed in 2026.
Looking ahead
We have an important role to play in the
global shift to more sustainable energy
systems, by leveraging our expert knowledge
of PGMs and the increasing demand they are
facing across industries including aviation and
life sciences as well as the hydrogen economy.
We will continue to evolve our product
portfolio by developing innovative and
circular offerings, creating fully circular
models that enable our customers to meet
increasingly stringent environmental targets.
Improving our own operational efficiency
remains a cornerstone of our strategy: we are
investing in our refining assets and upgrading
them where necessary to ensure they give us
sustainable competitive advantage.
Pioneering circularity for the hydrogen
economy with HyRefine™ technology
2023 saw PGM Services break new
ground in the hydrogen economy with
the successful lab-scale demonstration
of our HyRefine technology. As the
number of hydrogen projects
worldwide continues to grow, there
is a need to embed circularity into the
process from the start. With HyRefine
we now have a way of recycling the two
most critical components of hydrogen
fuel cells and electrolysers: the PGMs
in the catalyst layer, and the
membrane ionomer. These can be
recycled into new catalyst-coated
membranes, a core component of
hydrogen fuel cells and electrolysers.
HyRefine uses a purely chemical
process and provides significant cost,
efficiency and sustainability benefits.
When compared to traditional PGM
refining its carbon footprint is up to
80% lower, with:
• 83% less waste produced
• 79% less energy used
• 67% less water used
Following successful five-litre
lab-scale demonstrations in November
we are now scaling up HyRefine
for 50-litre pilot trials at our facility
in Brimsdown, UK.
Our performance in 2023/24
During 2023/24 the market environment was
challenging as rhodium and palladium prices
continued to decline. These developments
adversely impacted the entire PGM
ecosystem, as demonstrated by restructuring
announcements from several major mining
businesses. As a result, sales declined by 17%
to £462 million and underlying operating
HyRefine™ technology
Catalyst coated membrane (CCM)
Ionomer recycling
PGM recycling
Ir
77
Pt
78
PGM catalyst
Leading in circularity
This year we made significant progress
on delivering innovative circular
solutions for customers across a wide
range of sectors. One key development
was our HyRefineTM technology, which
recycles both the membrane and the
PGMs in the performance-defining
components of hydrogen fuel cells
and electrolysers. This enables both
of these valuable materials to be
reused, while reducing waste and
emissions in the refining process.
We continue to demonstrate how
PGMs can play a central role in
promoting circularity and addressing
availability gaps within the global
energy ecosystem.
JM’s fully circular PGM offer
Recovery from
customer
Depleted catalysts
Catalysts
Metals
Secondary
metal
Primary
metal
Product used in
end-user process
Start:
Customer
commissions
PGM
purchase
JM sells full
suite of
closed-loop
services
JM PGM
refinery
End user PGM
account credited
JM purchases
PGM metals
JM manufacture
catalyst/product
Watch our video: A circular solution: JM’s HyRefine™
technology
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Catalyst
Technologies
Catalyst Technologies is a core growth driver
for JM. Through our expertise in process
technology and catalysis, we enable the
efficient creation of chemicals and fuels
that benefit millions of people every day.
As the world is also looking to convert
alternative feedstocks for energy and fuels,
we are operating in markets with enormous
growth potential. Our technologies are
largely feedstock-agnostic, so we can
serve organisations that need a trusted,
experienced technology partner, whether
for the efficient conversion of fossil
feedstock or new alternative feedstocks
such as biomass, municipal solid waste
and captured carbon dioxide.
Winning business in
sustainable solutions
Low-carbon (blue) hydrogen
JM offers both autothermal reforming
(ATR) and gas heated reforming (GHR)
technologies for the low-carbon (blue)
hydrogen and ammonia market. We have a
very long history in the deployment of ATR
with reference plants around the world.
The combination of our ATR technology
with a gas heated reformer brings further
advantages: it enables higher process
efficiency and lower feedstock usage
compared to conventional ATR technology,
and we are delivering projects that will
capture over 98% of CO2 produced.
In 2023/24, we won two large-scale low
carbon (blue) hydrogen projects in the UK
– H2 NorthEast with Kellas Midstream and
bp’s H2Teesside. We have a strong pipeline
for further ATR-only and ATR-GHR projects.
Sustainable fuels
JM has a portfolio of innovative
technologies for creating sustainable fuels.
Our award-winning Fischer Tropsch (FT)
CANSTM technology developed with bp
converts syngas into sustainable fuels,
and when paired with our HyCOgenTM
technology, can convert captured CO2
and electrolytic (green) hydrogen made
from renewable energy into e-fuels.
We also provide sustainable methanol
technologies including our proprietary
eMERALDTM CO2 to methanol process,
building on our leading position and deep
expertise in conventional methanol
licensing. In addition we license the
BioForming® process originally invented by
Virent and co-developed by JM and Virent,
which helped to power Virgin Atlantic’s
demonstration of the first transatlantic
100% sustainable aviation fuel flight by
a commercial airliner in November 2023.
In 2023/24, we secured four sustainable
fuels projects across FT and sustainable
methanol. In March 2024 we won the
largest sustainable aviation fuel project in
the world using the FT route, with DG Fuels.
A growth-focused solutions provider
in the chemicals and energy space
2023/24 sales
Licensing
10%
Catalysts
90%
“As the world is also
looking to convert
alternative feedstocks
for energy and fuels,
we are operating in
markets with enormous
growth potential.”
Maurits van Tol,
Chief Executive,
Catalyst Technologies
JM total sales:
£3.9bn
CT sales
£578m
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Catalyst Technologies continued
Deploying our leading LCHTM
technology in H2Teesside
This year we signed a licensing and engineering agreement for our LCH technology
at bp’s proposed flagship low-carbon (blue) hydrogen facility in Teesside. This aims
to be one of the UK’s largest low-carbon hydrogen facilities, targeting 1.2GW
of hydrogen production by 2030 – which would represent over 10% of the UK
Government’s hydrogen target of 10GW by 2030.
Industry in the Tees Valley accounts for 64% of total local CO₂ emissions, compared
to 24% nationally. H2Teesside will help power and decarbonise existing local industry,
as well as new businesses attracted to this low-carbon hydrogen produced at scale.
licensing. As we win more business in the
blue hydrogen, sustainable fuels and
chemicals markets, we expect 40% of our
business to come from licensing by 2030.
We implemented a value creation
programme focused on value-based pricing,
manufacturing excellence and procurement
efficiencies. This is putting us on track to
meet our longer-term margin targets and
creating more value for our customers.
To capture the opportunities we see
in the market we expanded our commercial
capability in the US and are opening a new
office in the Middle East. We increased
the number of engineers in our teams
by 20% over 12 months to support our
Licensing business.
Looking ahead
Our first priority is always the safety of our
people. CT has made great progress this
year on our commitment to not harming
anyone as a result of our processes and
activities, lowering our process incident
severity rate by 76% and total recordable
injury and illness incident rate by 27%.
Our second priority is to deliver on
our near-term financial commitments
through continued efficiency and
productivity measures.
Our third priority is to grow for the future
by winning more projects in sustainable
technologies on top of a very solid base
in our existing licensing business.
A
differentiated
customer
offering
Catalysts
Fundamental
to chemical
processes,
increasing plant
efficiency, product
yield and
sustainability
Licensing
Process technology
and engineering
services to design
efficient,
sustainable
chemical processes
Our performance in 2023/24
We performed strongly across 2023/24.
We executed on our strategic milestone
to secure 10 additional large-scale project
wins across 2022/23 and 2023/24,
demonstrating our commercial and
technical strength in blue hydrogen and
sustainable fuels. Sales were up 6% with
strong growth in Licensing, up 20%.
In Catalysts, we saw higher average prices
across our portfolio and delivered strong
performances in formaldehyde and key
syngas segments. In Licensing, we made
progress in scaling our business and
targeting new opportunities. Big wins in
low-carbon hydrogen and sustainable fuels
alongside other areas like oxo alcohols and
butanediol demonstrate the strength of our
offering. We are a trusted partner to our
customers all the way from initial project
design through to commissioning and
ongoing technical support. The value we
provide is reflected in our industry-leading
customer satisfaction NPS score of 54 this
year. As a result, our underlying operating
profit was up 56% to £75 million, and our
underlying operating profit margin grew
390 basis points to 13.0%.
Transforming for future growth
This year we significantly simplified the
business by evolving the previous CT
structure into two business units, Catalysts
and Licensing, to drive faster decision-
making. Currently most of our business
comes from supplying catalysts rather than
Watch our video: Delivering decarbonisation at scale
with low-carbon hydrogen
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“Collaboration along the
whole of the hydrogen
value chain is essential
for the energy transition
to be successful. Recent
market developments
accentuate the need for
partnerships."
Mark Wilson, Chief Executive,
Hydrogen Technologies
The long-term importance of hydrogen
is becoming increasingly clear. It is
essential for tackling the generational
challenges of climate change and global
decarbonisation — particularly in sectors
where driving down emissions poses a
significant challenge. We believe we
are uniquely positioned to be a leader
in this vital market.
In Hydrogen Technologies we provide
critical components for the growing
hydrogen economy, underpinned
by decades of experience in fuel cells
and a deep understanding of PGMs.
Whilst we still believe in the long-term
future of hydrogen, there has been a
slowdown in growth throughout the year.
Continued uncertainty about the exact
nature of the financial incentives for
hydrogen investment in the US and
Europe has resulted in delayed investment
decisions and slowed progress on existing
projects. We are adapting to the changing
demand profiles of our customers as they
navigate this short-term uncertainty.
Throughout 2023/24 our priorities were
diversifying our customer base and strategic
partnerships, scaling the business and
delivering sales growth.
Delivering efficiencies
in manufacturing
Over the past year, we have focused on
improving our operational performance
and have made good progress rolling
out manufacturing efficiency initiatives.
In particular we have increased the line speeds
and improved the overall effectiveness of
our equipment, driving greater output from
our plant in Swindon, the UK. The success of
these initiatives has allowed us to optimise
our planned investment.
Transforming for our customers
We are working to maximise synergies across
the JM group and deliver an enhanced and
collaborative value proposition to our
customers. The successful demonstration
of JM’s HyRefineTM technology this year
generated lots of interest and represents a
significant enhancement of JM’s end-to-end
suite of hydrogen offerings.
In a new and evolving market, organisations
need strategic partners with experience,
capability and market-leading technology.
Building on a unique position, we expanded
a long standing partnership with a leading
provider of fuel cells. While the relationship
has previously centred on direct methanol
fuel cell systems, it will now transition
to the development of proton exchange
membrane (PEM) components for
hydrogen fuel cells, an ultra-low carbon
intensity alternative to those powered
by fossil fuels. Higher customer satisfaction
scores in 2023/24, demonstrated by an
increase in Net Promoter Score, show
that our approach is working and that
customers across the portfolio see the
value that JM provides.
Our performance in 2023/24
Sales for the year were up 31% to
£71 million, driven by demand from our
strategic customers. Our underlying
operating loss of £50 million reflects our
considered investment in building capacity
and product development in line with
market growth. Despite the challenging
external environment, we progressed deals
with new customers, expanded existing
strategic partnerships, and continued to
work with new customers on both our
specialised catalyst-coated membranes
(CCMs) and membrane electrode
assemblies (MEAs).
Hydrogen
Technologies
Adapting to a dynamic market,
delivering growth and driving efficiencies
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Focused on delivering
performance‑defining components
for the hydrogen economy
Introducing major technical
advancements in fuel cells
Our ongoing R&D activities are improving our process technologies
and driving improvements in the next generation of products.
A key way we do that is through optimisation of PGM content
in our products to drive real value for commercial applications.
Iridium can be deployed in fuel cell anodes as an effective key
ingredient to improve durability and has properties that can handle
fluctuations in the hydrogen supply. In 2023, we developed a new
low iridium anode for fuel cells that required 90% less iridium than
previous technologies. Not only does it translate to less iridium
required for the product, but it also delivers three times the
improvement in mitigating hydrogen supply instability. We continue
to work closely with our customers to drive product efficiencies
as we strive for even more significant improvements in PGM loading
and durability in the next generation of products.
Looking ahead
We have positioned ourselves well in our
core markets in North America, Europe
and China. In the US, our planned
investment remains on hold whilst we
evaluate future market evolution and
supply plans with our customers. In the
UK, whilst construction of our new plant
in Royston is substantially complete,
we are re-aligning the start of production
with market development. In China,
we are continuing to progress customer
relationships, especially in fuel cells, and
continue developing partnerships whilst
remaining disciplined in our approach
to scale up in this fast-growing market.
We are playing to win in the hydrogen
market. Despite a market slowdown,
hydrogen is still an essential part of the
net zero transition. It is critical that we
continue to develop our leading-edge
technology to better meet our customers’
evolving needs. In the immediate term we
are reducing our investment and operating
costs to manage the business in an agile
way, ensuring we are ready to scale in line
with market growth.
Heading into 2024/25 we are focusing on
taking the steps needed to establish a
leadership position in our market, whilst
ensuring that our business is more agile,
efficient, and capable of leveraging the full
expertise of JM. As the short-term market
demand continues to change and develop,
we are diversifying our customer base and
continuing to drive increased efficiencies
in manufacturing – and we are expecting to
break-even by the end of 2025/26. These
strategies underscore our commitment to
creating a hydrogen-powered future.
End-user
markets
Raw
materials
Stack
assembly
and systems
integration
Components
Application
Catalyst coated
membrane (CCM)
Membrane electrode
assembly (MEA)
Precious metal recycling
Fuel cells
Electric current
Air
Water
Hydrogen
Hydrogen
Electric current
Water
Oxygen
Electrolyser
Hydrogen Technologies continued
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We have performed well this
year, delivering 11% growth
in underlying operating
performance, when adjusted
for metal prices and exchange
rates. However, significantly
lower platinum group metals
(PGM) prices have again
impacted our overall results,
with revenue down 14% to
£12.8 billion. Sales were down
4% at £3.9 billion at constant
exchange rates. During the year
we managed to partly mitigate
this through better pricing
and transformation benefits
across the group.
As we execute on our strategy we are
focused on driving sustainable value
creation, targeting high single digit growth
in underlying operating profit over the
medium-term and strong long term growth.
Transformation on track
Our transformation is well underway
to drive efficiency and build a stronger
platform for growth. During 2023/24
we delivered cost savings of £75 million,
bringing total cost savings to date to
£120 million. As a result we have increased
our targeted savings to £200 million by the
end of 2024/25, up from our previous
target of in excess of £150 million.
Chief Financial
Officer’s statement
As we drive efficiencies across the group,
this year we closed four out of 16 Clean Air
manufacturing sites as we continue to
rationalise our footprint into fewer, larger,
more efficient locations. By the end of
2025/26 we plan to have closed at least
20 out of 27 of our leased office buildings.
Last year we announced we would be
moving to a new global business services
model to simplify how we provide internal
services. We have made good progress with
JM Global Solutions up and running
delivering from our new service hubs in
Lithuania and India. We are now
transferring significant parts of our Finance,
HR and Procurement services to this new
model, which we are confident will provide
a better experience for our colleagues as
well as delivering significant efficiencies.
Inevitably, the pace and ambition of our
transformation has incurred some one-off
costs. This year we incurred £78 million
of one-time restructuring charges linked
to the transformation programme and
site rationalisation.
During 2023/24 we agreed the divestments
of our remaining non-core businesses, with
the sale of Battery Systems completing
in April 2024, and Medical Device
Components expected to be finally divested
by the autumn of 2024. We now have
a more focused portfolio, and this has
enabled us to drive further efficiencies
and reduce costs.
“As we execute on
our strategy we are
focused on driving
sustainable value
creation, targeting
high single digit
growth in underlying
operating profit over
the medium-term
and strong long
term growth”
Stephen Oxley
Chief Financial Officer
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Chief Financial Officer’s statement continued
Although the disposal of Battery Systems
resulted in a £45 million non-cash
impairment (recognised at 31st March 2024
to reduce the business to its disposal value),
the divestment programme as a whole will
have delivered net proceeds in excess of
£500 million, significantly exceeding our
target of more than £300 million. Once the
divestment proceeds have been received,
we intend to return £250 million to
shareholders via a share buyback. The
remainder will be used to pay down debt,
and for other general corporate uses.
Individual business
performance
Clean Air has been focused on winning
new business, driving efficiency and
delivering cash. The business has been
working on improving margins through
pricing, cost reduction and operating
excellence, as well as the ongoing site
rationalisation programme, setting a
roadmap to achieve an operating margin
target of mid-teens by 2025/26. The
slowdown in battery electric vehicle
penetration means we now expect Clean
Air will be ‘stronger for longer’, and we
now expect the business to deliver over
£4.5 billion cash in the decade to 2030/31
(previously at least £4 billion) and significant
further cash flow in the years following.
PGM Services is a key enabler for the group,
but its results have been materially
impacted by lower precious metal prices.
In the short-term, we have mitigated some
of the impact through continued focus
on efficiencies across areas including
operations and manufacturing. Over the
long-term, the business is expected to see
sustained demand for recycled PGMs due
to growing demand for low carbon metals.
The business is also looking at evolving its
business model to reduce the impact of
metal price on earnings and growing
value-added products businesses.
Catalyst Technologies has undergone a
change in management and reorganisation
to drive improved performance and ensure
it fulfils its growth potential. In the year,
the business has seen continued
improvement in short-term performance
and is winning new projects in sustainable
technologies. The business continues to
focus on improving margins and saw further
improvement in the second half. We have
also been winning exciting new business
across our sustainable solutions portfolio,
with a rich pipeline of further opportunities.
Catalyst Technologies has set growth targets
of high single-digit increases in sales in the
short term, accelerating to mid-teens sales
growth over the medium to long term. We
expect mid-teens operating margin by the
end of 2024/25, high teens by the end of
2027/28, and continued accretion beyond
as the business benefits from increases in
technology licensing.
In Hydrogen Technologies we have scaled
back our investment in line with the slower
pace of hydrogen and fuel cell market
development. The global hydrogen value
chain is in an early stage of development
and continues to evolve with customers
reducing near-term demand expectations.
As a result, whilst construction of our new
plant in Royston is substantially complete,
we are delaying the start of production in
line with market development. We continue
to de-risk our Hydrogen Technologies
investment through reducing operational
expenditure, seeking appropriate
Government incentives and co-investment
opportunities. Hydrogen Technologies sales
increased by 31% this year and, although
we expect slower growth in sales in the
coming years, we are expecting the business
to break even by the end of 2025/26.
A platform for future growth
PGM prices have reduced very significantly
in recent years. We expect prices overall
to be more stable in the future, thereby
having a smaller impact on our results
and cash flow. With further benefits
of transformation, we expect at least
mid single digit growth in operating
performance at constant precious metal
prices and constant currency this year.
Our balance sheet remains strong, with net
debt slightly down year-on-year. Our aim is
to maintain a strong balance sheet and
closed the year at the lower end of our
target level of net debt to EBITDA of 1.5-2.0
times. We remain highly disciplined in our
capital allocation: we will invest for growth
and attractive returns, with a focus on core
activities where we believe we can win.
Beyond this our priority is to ensure a
reliable dividend, targeting a 40% pay-out
ratio over the medium term. We may
consider acquisitions but will be highly
selective, with a focus on bolt-on deals to
acquire technology or accelerate growth
in our core growth businesses. And finally,
we would look to return excess capital to
shareholders, as we plan to with the
disposal proceeds.
Stephen Oxley
Chief Financial Officer
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Financial performance review
Reported results (continuing)
Underlying results (continuing)1,2
Year ended 31st March
Year ended 31st March
2024
2023
% change
2024
2023
% change
% change,
constant FX rates
Revenue
£m
12,843
14,933
-14
Sales excl. precious metals³
£m
3,904
4,201
-7
-4
Operating profit
£m
249
406
-39
410
465
-12
-8
Profit before tax
£m
164
344
-52
328
404
-19
Profit after tax
£m
108
264
-59
260
326
-20
Basic EPS
pence
58.6
144.2
-59
141.3
178.6
-21
Ordinary dividend per share
pence
77.0
77.0
–
Free cash flow
£m
189
74
Cash from operating activities
£m
592
291
Net debt
£m
951
1,023
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 2022/23 results converted at 2023/24 average rates. In 2023/24,
the translational impact of exchange rates on group sales and underlying operating profit was an adverse impact of £120 million and £21 million respectively.
2. Underlying is before profit or loss on disposal of businesses, gain or loss on significant legal proceedings together with associated legal costs, 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 197 to 199.
3. Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers.
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Summary of underlying operating results from
continuing operations
Unless otherwise stated, commentary refers to performance at constant FX rates¹.
Percentage changes in the tables are calculated on rounded numbers
Sales
(£ million)
Year ended 31st March
% change
% change,
constant FX rates
2024
2023
Clean Air
2,581
2,644
-2
+2
PGM Services
462
570
-19
-17
Catalyst Technologies
578
560
+3
+6
Hydrogen Technologies
71
55
+29
+31
Value Businesses²
326
470
-31
-32
Eliminations
(114)
(98)
Sales (continuing)
3,904
4,201
-7
-4
Underlying operating profit
(£ million)
Year ended 31st March
% change
% change,
constant FX rates
2024
2023
Clean Air
274
230
+19
+26
PGM Services
164
257
-36
-35
Catalyst Technologies
75
51
+47
+56
Hydrogen Technologies
(50)
(45)
n/a
n/a
Value Businesses²
29
40
-28
-28
Corporate
(82)
(68)
Underlying operating profit (continuing)
410
465
-12
-8
Reconciliation of underlying operating profit to operating profit
(£ million)
Year ended 31st March
2024
2023
Underlying operating profit (continuing)
410
465
Major impairment and restructuring charges³
(148)
(41)
(Loss) / profit on disposal of businesses³
(9)
12
Amortisation of acquired intangibles
(4)
(5)
Gains and losses on significant legal proceedings³
–
(25)
Operating profit (continuing)
249
406
Notes:
1. Growth at constant rates excludes the translation impact of foreign exchange movements, with 2022/23 results converted at 2023/24
average rates. In 2023/24, the translational impact of exchange rates on group sales and underlying operating profit was an adverse
impact of £120 million and £21 million respectively.
2. Includes Battery Materials, Battery Systems, Diagnostic Services and Medical Device Components.
3. For further detail on these items please see pages 163 to 164.
Full year operating results by business
Clean Air
Improved profitability driven by efficiency benefits
• Sales up 2% reflecting higher volumes partly offset by lower pricing
• Underlying operating profit increased 26% and margin expanded 190 basis points
to 10.6%, with a significant improvement half on half (1H: 9.6% and 2H: 11.6%).
This mainly reflected efficiency benefits and higher volumes, partly offset by lower pricing
• Delivered £2.0 billion¹ of cash from Clean Air in the three years since 2020/21, of which
around one quarter relates to precious metal prices. Upgraded cash target and now
expecting to deliver at least £4.5 billion of cash in the decade to 2030/31² (previously
at least £4 billion)
Year ended 31st March
% change
% change, constant
FX rates
2024
£ million
2023
£ million
Sales
Light duty diesel
1,094
1,075
+2
+5
Light duty gasoline
533
599
-11
-6
Heavy duty diesel
954
970
-2
+2
Total sales
2,581
2,644
-2
+2
Underlying operating profit
274
230
+19
+26
Underlying operating profit margin
10.6%
8.7%
EBITDA margin
13.5%
11.6%
Reported operating profit
237
191
Clean Air provides catalysts for emission control after-treatment systems used in light and
heavy duty vehicles powered by internal combustion engines.
Overall, sales in Clean Air were up 2% with growth in our light duty and heavy duty diesel
businesses partly offset by light duty gasoline. We benefited from higher volumes –
particularly in light duty diesel driven by market share gains in China and North America.
Despite benefits from commercial excellence initiatives including inflation recovery and
further claims for non-inflation related activity, pricing was lower overall.
Sales
Light duty diesel
In light duty diesel, sales grew 5% outperforming the market which saw a modest decline
overall. This largely reflected our strong performance in Asia – particularly China – and also
in the Americas against a backdrop of weaker market production. In Europe, our
performance was slightly behind the market.
Financial performance review continued
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Other information
In Asia, we significantly outperformed the market which saw mixed performance across the
region. We saw good performance in China driven by market share gains following recent
wins and the ramp up of platforms. In India, we also saw good performance reflecting the
ramp up of new platforms.
In the Americas, we outperformed the market which was impacted by economic uncertainty.
Our performance was driven by market share gains and platform ramp ups.
Light duty gasoline
Light duty gasoline sales were down 6%, underperforming the global market which grew well.
Our performance was mainly driven by Asia where we were impacted by the loss of platforms
in previous years as well as mix effects. In Europe, whilst we benefited from a robust market
and saw modest share gains, this was partly offset by lower pricing. In the Americas we
underperformed the market reflecting the loss of platforms from previous years. We expect
this to be the last year where we experience the effect of these historic platform losses.
Heavy duty diesel
In heavy duty diesel, sales were up 2% although behind the market. By region, we saw strong
growth in Asia which was partly offset by lower sales in Europe and the Americas.
In Asia, growth was led by China and India. In China, we benefited from a market recovery
following a weaker prior year with demand impacted by COVID lockdowns. In India, we saw
good performance partly reflecting higher sales for off-road applications. In the Americas,
our sales were broadly in line with a slightly weaker market. This year, Class 8 truck
production was higher than anticipated reflecting a robust economy and strong order
backlogs but the macroeconomic outlook in South America impacted production in the
region. In Europe, we underperformed a growing market due to lower demand from our
customers. Looking forward, our strong presence in heavy duty positions us well for
upcoming advancements, such as internal combustion engines powered by hydrogen.
Underlying operating profit
Underlying operating profit increased 26% and margin expanded 190 basis points
to 10.6%, with a significant improvement half on half (1H: 9.6% and 2H: 11.6%).
This mainly reflected efficiency benefits and higher volumes. Despite benefits from
commercial excellence initiatives, we were impacted by lower pricing partly related
to historical contract commitments.
Cash generation
We delivered another year of strong cash, generating around £600 million¹. In the three
years since 2021/22, we have delivered a cumulative £2.0 billion¹ cash, of which around one
quarter relates to precious metal prices.
PGM Services
Performance reflects lower average PGM prices
• Sales declined 17% primarily due to lower average PGM prices
• Refinery volumes were lower due to continued softness in auto scrap recycling.
This was partially mitigated by higher industrial and mining intakes
• Underlying operating profit declined 35% driven by lower average PGM prices and reduced
volumes, partly offset by a continued focus on efficiencies and metal recoveries from
asset renewals
Year ended 31st March
% change
% change, constant
FX rates
2024
£ million
2023
£ million
Sales
PGM Services
462
570
-19
-17
Underlying operating profit
164
257
-36
-35
Underlying operating profit margin
35.5%
45.1%
EBITDA margin
42.0%
49.6%
Reported operating profit
149
257
PGM Services is the world’s largest recycler of platinum group metals (PGMs). This
business has an important role in enabling the energy transition through 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 in a volatile market, and the manufacture of
value-add PGM products.
Sales
In the year, sales declined 17%. This was primarily driven by lower average PGM prices,
particularly palladium and rhodium which declined 38% and 64% respectively compared to
2022/23. As the year progressed, average PGM prices stabilised with second half pricing
below the levels of the first half.
In our refineries, intake volumes were lower as previously guided due to less auto scrap.
However this was partially mitigated by increased industrial and mining intakes where we
applied our PGM refining expertise to handle highly complex feeds. Sales were lower in our
metal trading business due to reduced PGM prices and volatility. Across our PGM products
business, sales were broadly flat with higher demand for pharma products driven by business
wins which offset cyclical declines in agrochemicals.
Underlying operating profit
Underlying operating profit declined 35% mainly impacted by lower average PGM prices
(£85 million impact) as well as reduced volumes. This was partly mitigated by a continued
focus on efficiencies, as well as metal recoveries from asset renewals.
1. At actual precious metal prices.
2. 1st April 2021 to 31st March 2031, pre-tax and post restructuring cost.
Financial performance review continued
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Other information
Catalyst Technologies
Material margin improvement and strong growth in licensing
• Sales up 6% driven by good growth in catalysts, where higher pricing and better
mix offset lower volumes, and strong growth in licensing
• Won ten large scale projects from April 2022 to March 2024 in our sustainable
technologies portfolio, delivering on our strategic milestone. Won an additional three
projects since 1st April 2024 which contribute to our new strategic milestone
• Underlying operating profit up 56% and margin up 390 basis points, driven by higher
pricing reflecting our stronger commercial focus, better mix and efficiency benefits
Year ended 31st March
% change
% change, constant
FX rates
2024
£ million
2023
£ million
Sales
Catalysts
518
509
+2
+4
Licensing
60
51
+18
+20
Total sales
578
560
+3
+6
Underlying operating profit
75
51
+47
+56
Underlying operating profit margin
13.0%
9.1%
EBITDA margin
17.3%
13.9%
Reported operating profit
70
43
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.
Sales
Sales were up 6%. We saw good growth in Catalysts – which represents the majority of
sales – and strong growth in Licensing, up 20%. In Catalysts we benefited from higher
pricing as we strengthened our commercial focus. Alongside better mix this more than
offset lower volumes.
Catalysts: higher pricing and better mix offsetting lower volumes
Catalysts sales were up 4%. Growth was largely driven by formaldehyde following increased
demand for biodegradable plastics in China. We also saw higher pricing across the portfolio,
particularly in ammonia and hydrogen, and a better mix in additives. These benefits more
than offset lower volumes, which were mainly driven by short-term cyclical weakness –
primarily in methanol – and an unplanned shutdown at one of our plants. We expect the
plant to be back in operation in summer 2024.
Licensing: early sales from our sustainable solutions portfolio
Licensing sales were up 20%. We saw strong growth in areas including oxoalcohols and
methanol, following recent project wins in China. In our existing core portfolio, we signed
eight licences in the period, worth around £110 million in sales over five years
(2022/23: six licences). In our sustainable technologies portfolio, we recognised early sales
from low carbon hydrogen and sustainable fuels. These sales doubled in the period albeit
off a low base.
Underlying operating profit
Underlying operating profit was up 56% to £75 million and the margin grew 390 basis points
to 13.0%. This was largely driven by higher pricing reflecting our strong commercial focus,
better mix and efficiency benefits.
Hydrogen Technologies
Strong sales growth and disciplined investment to scale the business
• Sales up 31% driven by higher volumes for strategic customers in fuel cells
• Underlying operating loss reflects investment to scale the business
• Reducing investment and managing cost base with the pace of market development
Year ended 31st March
% change
% change, constant
FX rates
2024
£ million
2023
£ million
Sales
Hydrogen Technologies
71
55
+29
+31
Underlying operating loss
(50)
(45)
n/a
n/a
Underlying operating loss margin
n/a
n/a
Reported operating loss
(60)
(46)
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.
Sales
In the year, sales in Hydrogen Technologies were up 31% to £71 million driven by demand
from our strategic customers. However, sales growth in the second half slowed as the market
began to soften and our customers started to reduce inventories. This largely reflects a lack of
clarity around regulation and incentives, slowing the development of supply chains and
infrastructure.
Our continued focus on operational improvement and manufacturing efficiency drove
significantly higher output from our UK plant in Swindon, enabling the vast majority of
customer demand to be satisfied from this facility. As the market develops, our ability to
continue making operational improvements will be vital in ensuring we have the agility to
scale in line with market demand.
Underlying operating loss
Underlying operating loss of £50 million reflects investment into building capability and
product development. Towards the end of the year, we took actions to reduce our cost base
as we adapted to the softening market.
Financial performance review continued
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Corporate
Corporate costs were £82 million, an increase of £14 million from the prior year,
largely reflecting higher costs in relation to the implementation of new IT systems.
Research and development (R&D)
R&D spend was £204 million in the year. This was down from £213 million in the prior
year and represents c.5% of sales excluding precious metals. We are prioritising spend
in our growth areas and are pursuing a very focused innovation strategy for Catalyst
Technologies and Hydrogen Technologies. We are also investing in our digital capabilities
to accelerate innovation and provide greater insights to 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 78% of the non-sterling
denominated underlying operating profit in the year ended 31st March 2024, were:
Share of 2023/24
non-sterling denominated
underlying operating profit
Average exchange rate
Year ended 31st March
% change
2024
2023
US dollar
25%
1.26
1.20
+5
Euro
41%
1.16
1.16
–
Chinese renminbi
12%
9.01
8.26
+9
For the year, the impact of exchange rates decreased sales by £120 million and underlying
operating profit by £21 million.
If average exchange rates for May month to date (£:US$ 1.26, £:€ 1.17, £:RMB 9.10) are
maintained throughout the year ending 31st March 2025, foreign currency translation will
have an adverse impact of £4 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 have
an impact of approximately £1 million on operating profit whilst a one cent change in the
average rate of the Euro has approximately a £2 million impact on full year underlying
operating profit.
Efficiency savings
In the year, we delivered c.£75 million of savings through our group transformation
programme and incurred cash costs of c.£55 million. Cumulative benefits from the
programme to date are c.£120 million. Reflecting our good progress, we have upgraded
our cost savings target to £200 million by the end of 2024/25 (previously in excess of
£150 million). 2024/25 will be the final year of the programme, after which we will focus
on continuous improvement. Total associated costs to deliver the programme are around
£130 million (previously around £100 million), all of which are cash.
£ million
Savings delivered to
31st March 2024
Associated costs
incurred to
31st March 2024
Transformation programme
120
75
Items outside underlying operating profit
Non-underlying (charge) / income
(£ million)
As at
31st March
2024
As at
31st March
2023
Major impairment and restructuring charges
(148)
(41)
(Loss) / profit on disposal of businesses
(9)
12
Amortisation of acquired intangibles
(4)
(5)
Gains and losses on significant legal proceedings
–
(25)
Total
(161)
(59)
There was a net charge of £148 million relating to major impairment and restructuring
charges, comprising £78 million of restructuring costs and a net impairment charge of
£70 million. The restructuring costs were recognised in relation to both our transformation
programme and the consolidation of our Clean Air manufacturing footprint. The net
impairment charge includes an impairment of our Battery Systems business to its fair
value ahead of its disposal, as well as impairment charges relating to the recent slowdown
in growth within the hydrogen and fuel cell market which required us to adapt to the
changing demand profiles of our customers as they navigate this short-term uncertainty.
The £9 million loss on disposal of businesses largely comprises transactional costs in the year
relating to the disposal of our Value Businesses.
Finance charges
Net finance charges in the period amounted to £82 million, up from the prior year charge of
£61 million largely reflecting higher average borrowings and a higher interest rate environment.
Taxation
The tax charge on underlying profit before tax for the year ended 31st March 2024 was
£68 million, an effective underlying tax rate of 20.8%, up from 19.3% in 2022/23.
This largely reflects the mix of profit across geographies.
The effective tax rate on reported profit for the year ended 31st March 2024 was 34.4%.
This represents a tax charge of £56 million, compared with £80 million in the prior period.
We expect modest upward pressure to the effective tax rate on underlying profit for the year
ending 31st March 2025 as territories in which we operate increase their domestic Corporate
Tax rate in response to the OECD Pillar 2 rules.
Financial performance review continued
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Post-employment benefits
IFRS – accounting basis
At 31st March 2024, the group’s net post-employment benefit position, was a surplus
of £117 million.
The cost of providing post-employment benefits in the year was £53 million, up from
£40 million last year.
Capital expenditure
Capital expenditure was £390 million in the year, 2.0 times depreciation and amortisation
(excluding amortisation of acquired intangibles). In the period, key projects included:
• PGM Services – investing in the resilience, efficiency and safety of our refinery assets
• Hydrogen Technologies – investing in our manufacturing facility in Royston, UK,
although delaying the start of production to align with market development.
Strong balance sheet
Net debt as at 31st March 2024 was £951 million, a decrease from £1,023 million
at 31st March 2023 and £1,044 million at 30th 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 1.6 times (31st March 2023: 1.6 times, 30th September
2023: 1.7 times), which was at the lower end of 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 31st March 2024 (31st March 2023: £138 million,
30th September 2023: £186 million).
Free cash flow and working capital
Free cash flow was £189 million in the year, compared to £74 million in the prior year,
largely reflecting lower precious metal working capital partly offset by lower net proceeds
from disposals.
Excluding precious metal, average working capital days to 31st March 2024 increased
to 60 days compared to 42 days to 31st March 2023. This largely reflected lower average sales
through the period as well as lower VAT payables and higher working capital to support our
growth businesses.
Outlook for the year ending 31st March 2025
For 2024/25, on a continuing basis excluding Value Businesses, we expect at least
mid single digit growth in underlying operating performance at constant precious metal
prices and constant currency.
In Clean Air we expect modest growth in operating performance, with continued margin
expansion driven by efficiency benefits. Beyond this, with the impact of historical platform
losses behind us, we expect further growth in operating performance and margin expansion.
PGM Services’ operating performance is expected to be broadly stable, with limited impact
from precious metal prices. In Catalyst Technologies we expect further strong growth in
operating performance, with mid-teens margins. In Hydrogen Technologies we now expect
modest sales growth, with a significantly lower operating loss as we manage our investment
with the pace of market development1.
If precious metal prices and foreign exchange rates remain at their current levels2 for the
remainder of 2024/25, we expect an adverse impact of c.£5 million to full year operating
performance compared with the prior year.3, 4
Dividend
The board will propose a final ordinary dividend for the year of 55.0 pence per share
at the Annual General Meeting (AGM) on 18th July 2024. Together with the interim dividend
of 22.0 pence per share, this gives a total ordinary dividend of 77.0 pence per share,
maintained at the same level as the prior year. Subject to approval by shareholders, the final
dividend will be paid on 6th August 2024, with an ex-dividend date of 6th June 2024.
1. Outlook commentary for Clean Air, PGM Services, Catalyst Technologies and Hydrogen Technologies refers to underlying operating performance, and assumes constant precious metal prices and constant currency.
2. Average precious metal prices and average foreign exchange rates in May 2024 (month to date).
3. If precious metal prices remain at their current level for the remainder of 2024/25 there would be a benefit of £1 million on full year operating performance compared with the prior year. A US$100 per troy ounce change in the average annual platinum,
palladium and rhodium metal prices each have an impact of approximately £0.5 million, £1 million and £0.5 million respectively on full year 2024/25 underlying operating profit in PGM Services. This assumes no foreign exchange movement.
4. At average foreign exchange rates for May 2024 month to date (£:US$ 1.26, £:€ 1.17, £:RMB 9.10) translational foreign exchange movements for the year ending 31st March 2025 are expected to adversely impact underlying operating profit by £4 million.
Financial performance review continued
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Other information
Sustainability
We are a global leader in sustainable technologies.
Through inspiring science and continued innovation,
we aspire to enhance life for everyone. That is why
we have firmly embedded our sustainability priorities
of climate, nature and circularity, safety and diversity
throughout our business and value chain.
N
a
t
u
r
e
a
n
d
c
i
r
c
u
l
a
r
i
t
y
C
l
i
m
a
t
e
P
e
o
p
l
e
P
l
a
n
e
t
Catalysing
the net zero
transition
S
a
f
e
t
y
a
n
d
d
i
v
e
r
s
i
t
y
Our core material topics
In 2022 we partnered with a third party to refresh our materiality assessment. They reviewed public
domain opinions of our investors, customers and social media users, as well as interviewing leaders
inside JM. Our material topics were identified as:
Climate change
Air emissions
Water and wastewater
Waste management
Circularity and product
innovation
Health and safety
Human rights
Diversity and inclusion
Community impact
Responsible sourcing
Governance and risk
management
Our approach to sustainability
Planet: Protecting the climate
37
Drive lower global greenhouse gas (GHG) emissions
37
Achieve net zero by 2040
38
Planet: Protecting nature and advancing the circular economy
42
Conserve scarce resources
42
Minimise our environmental footprint
43
People: Promoting a safe, diverse and equitable society
45
Keep people safe
45
Create a diverse, inclusive and engaged company
46
Upholding human rights and high ethical standards
49
Investing in our communities
51
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Sustainability continued
Our sustainability targets for 2030
For over 200 years our expertise in metal chemistry has helped to solve some of the world’s most complex challenges such as air pollution, and now our technologies are accelerating
the transition to net zero1.
Our sustainability targets for 2030 are ambitious, but they build off the incredible impact our products and services already have. Our technologies are now helping the global chemical
industry reduce its GHG emissions and move to sustainable feedstocks, and our business model is underpinned by our circular PGM economy that helps reduce waste and make the most
of scarce resources.
Our GHG reduction targets for 2030 have been approved by the Science Based Targets initiative (SBTi) thereby putting us on the SBTi’s 1.5°C trajectory and placing us among the leading
group of global businesses aiming for a rise of no more than 1.5°C.
Goals
Key performance indicators (KPIs)
Baseline Value
2030 target,
2030 value
2023/24
performance
2022/23
performance2
Planet: Protecting the climate
Our goal: Drive lower
global greenhouse gas
(GHG) emissions
1. GHG emissions avoided per year using technologies enabled by JM’s
products and solutions, compared to conventional offerings
223,946 tCO2e
50,000,000 tCO2e
1,110,057 tCO2e
841,721 tCO2e3
Our goal: Achieve net
zero by 2040
2. Reduction in Scope 1 and Scope 2 GHG emissions
405,770 tCO2e
44% on baseline,
227,231 tCO2e
30% on baseline,
282,403 tCO2e
15% on baseline,
344,910 tCO2e
3. Reduction in Scope 3 GHG emissions from purchased goods
and services
3,433,660 tCO2e
42% on baseline,
1,991,523 tCO2e
26% on baseline,
2,531,576 tCO2e
29% on baseline,
2,450,529 tCO2e
Planet: Protecting nature and advancing the circular economy
Our goal: Conserve
scarce resources
4. Recycled PGM content in JM’s manufactured products
70%
75%
69%
69%
Our goal: Minimise
our environmental
footprint
5. Reduction in total hazardous waste
42,480 tonnes
50% on baseline,
21,240 tonnes
0.4% on baseline,
42,300 tonnes
1% on baseline,
41,854 tonnes
6. Reduction in net water usage
1,932,000 m3
25% on baseline,
1,449,000 m3
9% on baseline,
1,755,000 m3
5% on baseline,
1,826,000 m3
People: Promoting a safe, diverse and equitable society
Our goal: Keep
people safe
7. Total recordable injury and illness rate (TRIIR) for employees and
contractors
0.79
0.25
0.36
0.47
8. ICCA process safety event severity rate (PSESR)
1.18
0.40
0.88
1.02
Our goal: Create a
diverse, inclusive and
engaged company
9. Employee engagement score
6.9
8.0
7.2
6.9
10. Female representation across all management levels4
30%
40%
30%
28%
1. Net zero is the reduction of absolute GHG emissions by 90% or more, with any remaining emissions neutralised through carbon offsets.
2. Rebaselined to remove divested businesses, please see page 210 for more information.
3. Restated due to calculation refinement.
4. All employees whether they are a people manager or not, at a minimum compensation grade.
For more data see our Sustainability Performance Databook, matthey.com/sustainability-databook
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Other information
Our products and services are aligned with four of the UN SDGs where we believe we can make the biggest positive contributions.
• Emission control technologies that reduce harmful oxides of nitrogen (NOx) and
particulates from vehicle tailpipes and stationary engines, enabled by PGMs
• Purification technologies that reduce harmful contaminants, such as mercury,
from industrial processes
• Refinery additives to mitigate NOx and oxides of sulphur (SOx) emissions
• Catalysts used to make pharmaceutical ingredients
• Renewable (green) hydrogen technologies that will support the drive to zero carbon hydrogen
production using renewable energy and electrolysis, enabled by PGMs
• Low-carbon (blue) hydrogen technologies that are available today to help make low-carbon
hydrogen at scale
• PGM recycling to recover and reuse scarce resources
• Chloride guards to prevent corrosion
• PURACARETM services to reduce maintenance lifetime and end-of-life recovery
• CAT-AIDTM products to extend catalyst life
• Technologies that turn high sources of carbon, such as household waste, into sustainable
aviation fuels
• Fuel cell components for low-carbon transportation and distributed power unit
R&D spend contributing to priority UN SDGs
92%
Sales from products contributing
to priority UN SDGs
89%
Sustainability continued
Product life cycle assessment
This year, Johnson Matthey continued to grow its Life Cycle Assessment (LCA) capability through recruitment and training, forming a community of practitioners across the business.
The number of LCAs for JM’s products and services is increasing year on year. One example of new LCA data now available is in Catalyst Technologies, where a cradle-to-gate LCA study
was conducted to measure and compare the environmental impact of JM’s methanol technologies, which are licensed to customers for methanol production.
Visit the IPA website for more information: ipa-news.de
See matthey.com/sustainability for more details
73%
SDG3
11%
Unassigned
7%
SDG13
8%
SDG12
1%
SDG7
58%
SDG3
8%
Unassigned
16%
SDG13
11%
SDG12
7%
SDG7
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Other information
Sustainability continued
C
l
i
m
a
t
e
P
l
a
n
e
t
Catalysing
the net zero
transition
Our company purpose is to catalyse the
net zero transition because we believe
this represents the biggest benefit
we can bring to society. Sales of our
products and services, when used by
our customers, will bring about millions
of tonnes of GHG avoided. We are also
committed to net zero by 2040 for
our operations.
Planet:
Protecting
the climate
50 million
tonnes
of GHG emissions avoided1,2
per year by our customers
using our products by
2030
Sustainable fuels for
aviation and marine use
Low-carbon (blue)
hydrogen technology
Renewable (green)
hydrogen technology
(electrolysers)
Fuel cell components
for distributed power
generation
Energy
Solutions to decarbonise
chemical products, like
ammonia, methanol or
formaldehyde
Solutions to decarbonise
chemical and industrial
processes
Chemicals
Fuel cell components
for hydrogen powered
vehicles
Automotive
Our goal: Drive lower
global greenhouse gas
(GHG) emissions
To drive our positive contribution to climate
protection, we set ourselves the target that
JM technologies will contribute towards
avoiding 50 million tonnes1,2 of GHGs
entering the atmosphere per year by 2030,
compared to conventional technologies
in 2020. This is equivalent to avoiding the
emissions from half of UK transport3. Over
the past year, we have signed significant
licences and partnerships in key technology
areas contributing to this goal, such as
licences for production of low-carbon (blue)
hydrogen, and for the production of
sustainable aviation fuel. This financial
year we achieved a significant milestone
in avoiding over 1 million tonnes of GHG
emissions. The target is largely reliant
on our growth businesses of Hydrogen
Technologies and Catalyst Technologies.
Sustainability Accounting Standards Board
(SASB) Resource efficiency indicator: We
have identified our revenues that align with
the SASB Chemicals Sustainability
Accounting Standard’s definition of
products that, when used, improve energy
efficiency, eliminate or reduce GHG
emissions, reduce raw materials
consumption, lower water consumption
and/or increase product life. In 2023/24,
those sales were £0.84 billion (with sales
excluding precious metals as £3.90 billion)
compared with £0.97 billion4 in 2022/23.
This reduction is mainly due to reduced
demand in the secondary PGMs market see
pages 20-21 for more details.
For our full SASB Index response see
matthey.com/sasb-index
You can read more about how
climate change is bringing
opportunity and risks to our business
in our Task Force on Climate-related
Financial Disclosures (TCFD) report
on pages 53-61
1. Using technologies enabled by JM products and solutions: avoided emissions compared to conventional technologies in 2020.
2. For more information on our calculation methodology please see our Basis of reporting on pages 210-215.
3. https://www.gov.uk/government/statistics/provisional-uk-greenhouse-gas-emissions-national-statistics-2021.
4. Rebaselined to remove divested businesses, please see page 210 for more information.
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Other information
Planet: Protecting the climate
Sustainability continued
Our goal: Achieve net zero by 2040
This year our long-term target of net zero by 2040 was approved by the Science Based Targets initiative (SBTi) under their net zero standard. Having confirmed our precise roadmaps to 2030,
we are working to identify and develop the full range of solutions we will implement to achieve net zero by 2040, indicated on our refreshed net zero roadmap below.
2020
Baseline
2025
Target: 60%
renewable
electricity
2030
Targets: -44% Scope 1 and 2,
-42% Scope 3 (Category 1) GHGs,
90% net zero carbon electricity
2040
Target: -100% GHGs
Carbon offsets
0-10%
Sustainable
business
growth
Scope 3
GHG reduction
91% of
footprint
Scope 1 and 2
GHG reduction
9% of footprint
Carbon offsets (<10%)
Energy and process efficiency
Renewable electricity
Replace fossil fuels
N2O abatement
Carbon capture, usage and storage
Sourcing decisions
Engineering sustainability principles applied to all capital investments (including internal carbon pricing)
Supply chain opportunities
Alternative chemistry and technology development
Raw material efficiency and waste reduction in operations
Low-carbon transportation and travel
Net zero building standard for capital projects
Scope 1 and 2: Initial focus on energy efficiency,
purchase of renewable electricity, further
electrification of our operations and use of
low-carbon fuels. For the longer term, we have
started to scope harder-to-abate process emissions.
Scope 3: Reduction in Category 1 purchased goods
and services through local and secondary sourcing,
optimisation of supply chain packaging and
transport, and operational efficiency. Our near-term
target is on our most material category but we report
on, and seek ways to reduce, all Scope 3 categories.
Business growth: JM’s capital investments are
designed with net zero front of mind, based on
agreed engineering sustainability principles.
Our R&D organisation is applying its expertise to our
manufacturing processes looking for opportunities
to eliminate GHGs at the source.
Offsetting: We aim to significantly reduce our carbon
footprint, and work with our suppliers to reduce
theirs, without relying heavily on offsetting to reach
our net zero targets. We continue to monitor the
voluntary carbon market for opportunities to invest
in high integrity projects in the future.
Net zero1
roadmap
JM believes in a just energy transition, ensuring no one is left behind. See next page for how we approach this
1. Net zero is the reduction of absolute GHG emissions by 90% or more, with any remaining emissions neutralised through carbon offsets.
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Planet: Protecting the climate
Ensuring a just transition to net zero
JM believes that we should decarbonise
the economy whilst ensuring that no one
is left or pushed behind. Being as fair
and inclusive as possible to everyone
affected will increase the chances of
long-term success and sustainability
of the energy transition.
We consider fully the risks and
opportunities of all aspects of our
plans and the impact on our various
stakeholders. For example, through
strategic supplier relationships, operating
with a strict code of conduct and due
diligence, we are increasingly creating
opportunities for collaboration. We will
continue to disclose risks identified in our
supply chain and the action plans we
develop. And we have strong connections
with our local communities, ensuring
both the company and our employees
contribute actively to local initiatives.
See page 51 for more information
on how we are engaging with our
communities
In order to meet the opportunities
created by the global energy transition,
we have to transform JM (see pages 8-9).
Whilst this transformation will bring
many new employment and career
opportunities for current and future
employees, inevitably some roles will
change significantly or indeed
cease to exist.
For example, during 2023/24 we
completed the full closure of two of
our Clean Air plants to optimise our
manufacturing footprint: Clean Air
Royston in the UK and Germiston in South
Africa, impacting around 800 employees
in total. In addition to these two closures
we also consolidated our production sites
in Shanghai, China from two to one,
and sold our plant in Krasnoyarsk, Russia.
We supported the affected employees
with help in finding alternative
employment, either in JM or elsewhere.
This included CV clinics, retirement
workshops, counselling assistance,
financial advice, and support in finding
alternative employment. In Royston, out
of 400 colleagues, we were able to find
alternative roles for 90. Over 100
colleagues found employment elsewhere
during the process. Over a third of our
Germiston employees had secured
alternative employment at the time
of the plant closure.
Our progress in 2023/24
We continue to deliver on our roadmap to
net zero1 by 2040. This year saw an 18%
reduction in our Scope 1 and 2 greenhouse
gas (GHG) emissions from last year, which
represents a 30% reduction since our
baseline year of 2019/20. This significant
reduction was achieved mainly through
increasing our purchase of renewable
energy, in line with our energy strategy,
and we have also improved the underlying
energy efficiency of a number of processes.
Sustainability continued
Energy mix
Non-renewable, grid-supplied electricity
Certified renewable electricity from the grid
Renewable electricity generated locally
Natural gas used on site
Other fossil fuels used on site
Non-renewable steam procured
Fuel used on public roads by JM vehicles on
company business
Total: 1,211,683 MWh
14.4%
22.2%
0.6%
55.8%
4.4%
2.3%
0.3%
Total greenhouse gas emissions
Total Scope 1
Total Scope 2 (market-based)
Scope 3 – Purchased goods and services
Scope 3 – All other categories
6.5%
2.0%
76.5%
15.0%
Total: 3.3 million tonnes CO2e
Our GHG emissions from Scope 3 purchased
goods and services in 2023/24 were
2,531,576 tCO2e, which is a 26% reduction
from baseline year. This is an increase from
2,450,529 tCO2e2 in 2022/23, which
reflects changes in business demands,
see pages 18-25 for more information.
We continue to work with partners
to identify GHG hot spots and potential
reduction actions.
For more information on our
calculation methodology please see our
Basis of reporting on pages 210-215
1. Net zero is the reduction of absolute GHG emissions by 90% or more, with any remaining emissions neutralised through carbon offsets.
2. Rebaselined to remove divested businesses, please see page 210 for more information.
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Strengthening partnerships
throughout the value chain
JM became a member of Together
for Sustainability (TfS), a flagship
initiative launched by companies in
the chemical industry that helps drive
sustainability in our supply chain
through collaboration.
We continue our collaboration with
the Carbon Disclosure Project (CDP)
Supply Chain. In the past year we
engaged with our biggest suppliers
representing 85% of our annual
spend to better understand their
carbon footprint and net zero plans.
This year our Winter Energy Taskforce
became a cross-functional Energy Risk
Steering Committee, to manage the
long-term energy strategy for JM, which
is to increase our proportion of net zero
carbon energy procured through
opportunities which drive cost stability,
energy security and resilience.
Renewable energy
This year 57% of our electricity
consumption came from certified
renewable sources, compared to 41% in
2022/23. This significant increase was due
to renewable energy purchases in the
regions of North Macedonia, India and
China. We are therefore on track to achieve
our ambition of purchasing 60% of our
electricity from certified renewable sources
by 2025.
This year we created a JM Renewable
Energy Standard to provide clarity on our
position and strategy for renewable energy
sourcing, and a hierarchy of preferred
solutions to inform decision-making for our
operations and procurement teams. We use
green tariffs to ensure renewable electricity
consumption in Europe and the US, and
recognised Energy Attribute Certificates in
regions such as India and China. Longer
term we will focus on Power Purchase
Agreements in regions where this
procurement option is available. We
continue to benefit from some on-site
generation as part of the current energy
portfolio in a number of sites, and further
investment in our Taloja, India site this year
has added 44,198 kWh capacity of self-
generated solar energy.
To increase our ambition we agreed a new
target aiming for 90% of our electricity from
certified net zero carbon sources by 2030.
This year
57%
of our electricity
consumption came
from certified renewable
sources, compared to
41% in 2022/23
Planet: Protecting the climate
Sustainability continued
Energy efficiency and security
A focus on energy conservation and energy
efficiency continues to underpin our net
zero strategy. We continue to implement
ISO 50001 across our most energy-intensive
manufacturing sites, using the energy
management framework developed and
introduced to our site teams last year.
Examples of energy efficiency projects
completed this year include:
• Further adoption of waste heat
recirculation, with savings achieved at
Clean Air sites in Poland, India and China
• Improved control has enabled expansion
of the low temperature hot water
network to provide heating for
laboratories at one of our UK sites
• Reducing the idle time of one of our
electric induction furnaces
For our engineering and capital projects
we have developed sustainable engineering
principles and applied a rigorous assessment
process for all capital project investments,
such as asset renewal and growth projects.
For example, replacing steam boilers to best
in class burner design at one of our UK sites,
has resulted in lower energy use (and lower
NOx emissions).
Three of our largest manufacturing sites
also make electricity using combined heat
and power plants (CHPs) to optimise our
energy efficiency. Although these run off
natural gas, our CHPs generated
36,313 MWh of our total electricity this
year, reducing our energy demand.
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Scope 1 and 2 greenhouse gas (GHG) footprint and energy efficiency
2023/24
2022/231
Global
UK only
Global (excl UK)
Global
UK only
Global (excl UK)
% change (global)
Total Scope 1 GHG emissions (tonnes CO2e)
215,429
103,022
112,407
215,368
102,084
113,284
0%
Total Scope 2 GHG emissions (market-based) (tonnes CO2e)
66,974
634
66,340
129,542
1,024
128,518
-48%
Total Scope 2 GHG emissions (location-based) (tonnes CO2e)
196,812
21,677
175,135
204,018
21,710
182,308
-4%
Total Scope 1 and 2 GHG emissions (market-based) (tonnes CO2e)
282,403
103,656
178,747
344,910
103,108
241,802
-18%
Total Scope 1 and 2 GHG emissions (location-based) (tonnes CO2e)
412,241
124,699
287,542
419,386
123,795
295,591
-2%
Total Scope 1 and 2 carbon intensity (market-based) (tonnes CO2e/tonne sales)
2.6
21.6
1.1
3.2
22.7
2.3
-18%
2023/24
2022/231
Global
UK only
Global (excl UK)
Global
UK only
Global (excl UK)
% change (global)
Total energy consumption (MWh)2
1,211,683
348,473
863.210
1,208,836
337,748
871,088
0.2%
Total energy efficiency (MWh/tonne)3
11.2
72.6
8.4
11.2
74.3
8.4
0.4%
Scope 3 GHG emissions by category
(tonnes CO2e)
Category
Category number
2023/24
2022/231
2021/221
2020/211
2019/201
Purchased goods and services
1
2,531,576
2,450,529
2,978,197
2,812,518
3,433,660
Capital goods
2
170,185
177,009
162,949
240,810
365,781
Fuel and energy-related activities
3
38,687
41,789
44,709
37,589
38,985
Upstream transportation and distribution
4
81,707
96,589
120,343
94,348
97,424
Waste generated in operations
5
3,855
4,003
5,204
4,545
3,428
Business travel
6
9,236
7,671
1,925
439
14,006
Employee commuting
7
28,991
13,627
13,517
15,718
25,763
Upstream leased assets
8
6,441
6,810
6,368
5,856
5,094
Processing of sold products
10
11,391
11,353
10,382
10,974
11,151
End of life treatment of sold products
12
23,078
21,003
21,001
23,063
27,334
Investments
15
121,257
125,196
118,356
119,005
129,337
Total
3,026,404
2,955,579
3,482,951
3,364,865
4,151,963
Five-year performance table
2023/24
2022/231
2021/221
2020/211
2019/201
Total energy consumption (MWh)2
1,211,683
1,208,836
1,275,821
1,204,571
1,236,160
Total energy efficiency (MWh/tonne)3
11.2
11.2
11.7
11.3
10.9
Total Scope 1 and 2 GHG emissions (market-based) (tonnes CO2e)
282,403
344,910
395,251
396,885
405,770
Total Scope 1 and 2 carbon intensity (market-based) (tonnes CO2e/tonne sales)
2.6
3.2
3.6
3.7
3.6
Total Scope 3 GHG emissions (tonnes CO2e)
3,026,404
2,955,579
3,482,951
3,364,865
4,151,963
1. Rebaselined to remove divested businesses, please see page 210 for more information.
2. Energy consumption is reported here in MWh, which is equal to 1,000kWh. Total global energy consumption for 2023/24 is 1,211,682,598 kWh.
3. This is the total energy used by the business divided by amount of materials sold to customers.
For more data see our Sustainability Performance Databook, matthey.com/sustainability-databook
Planet: Protecting the climate
Sustainability continued
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Sustainability continued
Our goal: Conserve
scarce resources
We helped create one of the world’s first
circular economies in platinum group
metals and our increasing use of secondary,
or recycled, Platinum Group Metals (PGMs)
is helping to significantly reduce the
emissions and environmental impact
associated with mining these vital materials,
see pages 20 and 21 for more details on
secondary PGMs.
We are also applying our longstanding
recycling expertise to sustainable
technologies that utilise PGMs, such as
fuel cells and electrolyser stacks. We are
upgrading our infrastructure to allow us
to recover and refine the PGMs used in
these technologies to a very high purity in
the same way we do today with production
scrap. This will allow us to create a
continuous loop of PGM availability for the
hydrogen product economy.
Our performance in 2023/24
We set a 2030 target of 75% recycled PGM
content in our products, and in 2023/24
this number was 69%. As existing secondary
routes decline, e.g. automotive market,
and new technologies have yet to establish
these routes, we may see declines in
recyclable material rates, until routes for
the new products, e.g. hydrogen fuel cells,
are developed.
Closing the PGMs loop to meet our
customers’ evolving sustainability demands
remains our driver, and will play an
important role in the transition to net zero.
In 2023/24 we achieved several milestones
which will further enable this ambition.
• Our methodology for specific customers
across JM to purchase 100% recycled
PGM content has been reviewed and
accepted by the Carbon Trust as being
in line with industry recommendations.
In our PGM refinery process we mix
secondary and primary metal feeds, so
there is no way to physically distinguish
the origin of the metal in the output.
Now we can offer 100% recycled metal
to specific customers through our mass
balance approach.
• We have applied our recycling expertise,
and upgraded our infrastructure, to allow
us to recover and refine the PGMs used in
emerging technologies, such as fuel cells
and electrolyser stacks. Our new
HyRefineTM technology integrates both
the PGM catalyst and catalyst coated
membrane (CCM) manufacturing
processes. We believe this is the first
demonstration of circularity for the PGM
and the ionomer together. This enables
us to provide our customers with a full
service offering. Please see page 21 for
more details.
In 2023/24 we set up a voluntary employee
network of Sustainability Champions.
They are employees engaged and
passionate about sustainability.
Supported by the central sustainability team
our champions are already working locally
on initiatives, and going forward we want
to maintain a balance of corporate
involvement with a bottom-up approach
to sustainability. Impact on nature is by
definition a local issue, and this network
provides that grass-roots view of where the
risks and opportunities are.
N
a
t
u
r
e
a
n
d
c
i
r
c
u
l
a
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i
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y
P
l
a
n
e
t
Catalysing
the net zero
transition
In 2023/24 we developed and ratified
a new Nature strategy. We commit to
promoting nature protection, restoration
and sustainable use of natural resources.
Our corporate commitments are
described in our new Nature statement,
found at matthey.com
Circularity is an essential part of the net
zero transition, and as the world’s largest
secondary PGM refiner we will play a
crucial role in securing the metal needed
to supply existing and future demand.
matthey.com/nature-statement
Planet:
Protecting
nature and
advancing
the circular
economy
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Planet: Protecting nature and advancing the circular economy
Sustainability continued
Our goal: Minimise our
environmental footprint
We are committed to protecting the
ecosystems around our sites and minimising
all our potentially harmful interactions.
Our global environmental, health and safety
(EHS) policies, processes and management
system help us to maintain a high level of
environmental performance. All our sites are
assessed against these standards by our
centralised EHS audit team at least once
every three years. 93% of our manufacturing
sites use environmental management
systems that are certified as meeting
ISO 14001 standard, as at 31st March 2024.
Minimising waste: reduce,
reuse, recycle
We are committed to minimising waste
generation and recycling as much as possible.
Our operations create waste, which is always
treated in line with local regulations. But
beyond that we are committed to disposing
of it responsibly and in a safe manner,
working with specialist treatment companies.
The ongoing investment planned in our
new PGM refinery in the UK will be a
significant project towards meeting our 2030
target on hazardous waste reduction. We are
always looking for ways to reduce waste at all
of our sites. For example, last year at our site
in Smithfield, the US we upgraded our NOx
abatement system. This year the new system
has demonstrated not only a reduction in our
emissions, but it also made a significant
reduction in hazardous waste on site,
expecting to reduce hazardous waste
in JM by 2% and reduce JM’s waste
to landfill by 19%.
Total waste sent off site has increased
this year by 4% compared with last year
mainly due to decommissioning of
manufacturing facilities.
Types of waste produced and sent off site for treatment by a third party
Type of waste (tonnes)
2023/24
2022/231
2021/221
2020/211
2019/201
Liquid hazardous waste
39,342 38,518 45,151
41,020 40,011
Solid hazardous waste
2,958
3,336
2,639
2,620
2,469
Liquid non-hazardous waste
10,626
7,056
8,559
7,014
7,772
Solid non-hazardous waste
12,299 13,896 15,230
11,482 13,530
Total hazardous waste sent off site
for treatment
42,300 41,854 47,790
43,640 42,480
Total waste sent off site
65,225 62,806 71,579
62,136 63,782
Methods of waste treatment applied by our third-party providers
Type of treatment (tonnes)
2023/24
2022/231
2021/221
2020/211
2019/201
Off site reuse
532
1,038
1,002
1,031
718
Off site recycling
37,078 36,853 38,270
23,366 19,437
Off site incineration with energy recovery
1,213
1,071
2,041
1,000
1,663
Incineration or other off site treatment
23,064 19,529 26,158
33,570 38,973
Total waste disposed off site to landfill
3,338
4,315
4,107
3,169
2,990
Total waste sent off site
65,225 62,806 71,578
62,136 63,781
Water consumption
2023/24
2022/231
2021/221
2020/211
2019/201
Net freshwater consumption (000’s m3)
1,755
1,826
1,929
1,837
1,932
Total wastewater discharged (000’s m3)
1,205
1,349
1,391
1,493
1,381
Average direct Chemical Oxygen Demand of
wastewater (COD)(mg/L)
264
242
220
112
104
Emissions to air
Type of emissions (tonnes)
2023/24
2022/231,2
2021/221,2
2020/211,2
2019/201,2
Nitrogen oxides (NOx) emissions to air
318
337
358
338
320
Sulphur oxides (SOx) emissions to air
36
31
73
42
16
Volatile organic chemicals (VOCs) emissions to air
45
42
50
39
47
Coverage for NOx reporting
88%
86%
85%
85%
82%
Coverage for SOx reporting
68%
36%
34%
36%
32%
Coverage for VOCs reporting
80%
57%
56%
54%
53%
1. Rebaselined to remove divested businesses, see page 210 for more information.
2. Restated due to improvement in methodology, see page 210 for more information.
We continue to work with third-party waste
providers, looking for opportunities to divert
our waste away from disposal.
We have established processes to recover
PGMs from our production waste and
subsequently recycle in our own refineries.
Using water responsibly
This year our Oberhausen site in Germany
managed to reduce their water consumption,
which will result in a 50% reduction in their
annual water consumption going forward,
through collaboration with the downstream
effluent treatment system operator.
To understand where we need to act most
quickly for most benefit, we use the World
Resource Institute’s (WRI) Water Risk Atlas
tool to analyse usage at our sites. This year the
tool identified 12 manufacturing facilities
which are located in regions with a high or
extremely high baseline water stress level.
This means that they are at higher risk of
declining water availability or increased cost
in the future due to drought or groundwater
table decline. The 12 manufacturing facilities
accounted for 402,254 m3 (23%) of our net
freshwater consumption in 2023/24.
We discharged 1.2 million m3 wastewater
during the year, 96% to municipal
treatment plants and the remainder back
to its original freshwater source after
treatment. We treated 0.9 million m3 of
wastewater on site, of which we recycled
33% back into our manufacturing processes
instead of discharging.
We seek to minimise the chemical burden
in our wastewater discharged.
Reducing emissions to air
Some of our operations produce other air
emissions as by-products of chemical reactions,
including nitrogen oxides (NOx), sulphur oxides
(SOx) and volatile organic compounds (VOCs).
All our permitted sites monitor these emissions
to ensure they comply with local regulations.
This year we saw a further decrease in our
year-on-year NOx emissions due to the
enhanced NOx abatement system at our
Smithfield site, US, delivering improved NOx
removal efficiency. Capital investment to
replace steam boilers to best in class burner
design, at one of our UK sites, has also
resulted in a reduction in NOx emissions.
We don’t produce ozone-depleting
substances (ODS) through our operations,
however, any small leaks of refrigerant gases
are reported in our Scope 1 GHG emissions.
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Sustainability continued
Per- and polyfluoroalkyl
substances (PFAS)
We are aware of the increasing levels of
concern over potential risks posed by a
subset of PFAS entering the environment
and are committed to reducing our uses,
developing alternatives, better
understanding and limiting impacts on
human health and the environment from
PFAS in our operations and products.
An exciting demonstration of this is our
new HyRefine™ technology that delivers
circularity for the PGMs as well as the
valuable ionomer components in fuel cell
and water electrolysers, at end-of-life.
We continued to work directly with
suppliers, customers, trade bodies, NGOs
and regulators to ensure responsible use
and proportionate regulations of PFAS. In
2023 JM actively contributed, individually
and as part of various trade bodies, to the
EU consultation on the PFAS restriction
proposal; UK PFAS policy options; and to
the US proposals under the Comprehensive
Environmental Response, Compensation,
and Liability Act (CERCLA).
Biotechnology in JM
We continue to invest in growing our
biocatalyst product-offering and
manufacturing capabilities, within our Life
Sciences Technology business. Biocatalysts
deliver sustainability and safety benefits to
traditional catalysts, such as requiring less
energy intensive reaction conditions and
reduced need for organic solvents. Our
biocatalysts are manufactured using
genetically engineered microorganisms.
None of our biocatalyst products contain
live organisms at the point of supply to our
customers, and they currently represent just
0.02% of our sales.
See matthey.com/sustainability for
more information
Planet: Protecting nature and advancing the circular economy
Product stewardship
throughout the value chain
The nature of the complex chemistry in our
products and manufacturing processes
means that we sometimes have to use
chemicals that are potentially hazardous.
JM’s product stewardship processes, and our
commitment to Responsible Care®, a global
initiative of the chemical industry, are
central to ensuring our products should not
pose any risk to humans or the environment
when used responsibly and as intended, and
that we comply with all relevant laws and
regulations. We require the same of our
suppliers, see our Supplier Code of Conduct,
supporting them when we identify
deficiencies in e.g. hazard classifications or
regulatory compliance. Our customers can
access support on how to handle and
dispose of our products safely, beyond what
we provide in our safety data sheets, via
published guides and direct engagement
with product specialists. In the event of an
incident with a JM product, a 24-hour
global emergency response telephone
service is in place to provide safety
information in the local language. This year,
we received no reports of significant health
effects from the use of our products, and we
continue to comply with all applicable
health and safety, labelling and marketing
regulations, and voluntary codes.
4th
out of the world’s top 50
chemicals companies
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Sustainability continued
P
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Catalysing
the net zero
transition
S
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s
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We rely on our 11,600+ talented and
passionate employees to drive our
purpose. Ensuring that they are fulfilled
in their careers, work safely and return
home well to their families each day is
our number one priority.
See our EHS policy, which applies to
everyone who works for us, at
matthey.com/ehs-policy
People:
Promoting
a safe,
diverse and
equitable
society
Our goal:
Keep people safe
The nature of our business means we have
complex chemical processes that often
involve heavy machinery and hazardous
chemicals. Our ability to catalyse the net
zero transition depends on the mitigation
of potential risks and the safe operation
of our manufacturing sites.
Take 5 is one of our key global
environmental, health and safety (EHS)
programmes and continues to drive global
improvements in health and safety
performance. During 2023 we ran a
campaign that focused on our key risk areas
such as hand cuts, sprains and strains.
We also created a Centre of Expertise in
Industrial Hygiene by centralising industrial
hygiene resources so that these can be
deployed more effectively to where the risks
are across the group.
In terms of regional EHS performance we
have initiated a project to review and
improve safety at our facilities in the North
America region. A local team comprising
operations and EHS managers has developed
an improvement plan that addresses
common safety issues at our US facilities,
including ergonomics, job risk analysis and
competency. The project leaders report
progress to the Group Operations Leadership
Team on a quarterly basis.
Three of our businesses have introduced
site-specific improvement plans for the
small number of sites that drive their
lagging indicator performance. These plans
are currently ongoing and are reviewed by
the business unit leadership team.
Our occupational health and
safety performance
Lost time injury and illness rate (LTIIR)
reduced from 0.24 last year to 0.17. In our
total recordable injury and illness rate
(TRIIR), for employees and contractors,
we went from 0.47 to 0.36 this year which
is a 23% improvement. This is a
demonstration of the effectiveness of our
Take 5 programme and the impact of our
annual Global Safety Day, as well as
additional local campaigns at site level
which have focused on site-specific safety
issues. We have had no fatalities since 2015.
We continue to embed process safety
training across JM. In the last five years
process safety training has been completed
by over 3,000 operations-based staff, plus
in-depth training for over 700 managers
and senior executives. We have also
completed individual process safety
competency assessments for 305 managers
and engineers in process safety-critical roles
at facilities rated as ‘high hazard’ with an
ongoing programme of assessments for
new starters.
All of our high hazard facilities have now
been subject to a formal corporate EHS
audit within the last three years and a
process safety audit within the last five years.
Global Safety Day 2023
This year’s event focused on Taking 5
Together, with the theme ‘It’s In Our Hands’
designed to encourage employees to feel
empowered to take responsibility for their
own safety and that of their colleagues.
JM teams, globally, dedicated a day to
safety, attended workshops, made personal
safety pledges and celebrated successes.
Our employees across all sites and offices
took part in safety-related activities that
really brought to life the importance of us
all being accountable for safety.
Helping people to feel healthy,
secure, supported and
connected
We have a wellbeing strategy in place to
support all employees and help them focus
on four wellbeing pillars: physical, financial,
social and mental health. Employees are
provided with Elements, a personalised web
platform and app to access wellbeing
resources and support. This includes an
employee assistance programme (Assist)
which provides confidential counselling for
mental health and work-life services. See
page 48 for more details.
TRIIR (employees and contractors)
For more data see our Sustainability
Performance Databook, matthey.com/
sustainability-databook
Our process safety performance
Our International Council of Chemicals
Association (ICCA) process safety event
severity rate (PSESR) has decreased from
1.02 last year to 0.88 PSESR per 200,000
hours worked. There were three Tier 11
process safety events this year, compared
to nine the previous year. We have
improved the governance process for our
high risk process safety scenarios and there
has been great progress in reducing the
number of open scenarios. With the
creation of new engineering teams at group
level and in the businesses, we now have a
joint EHS and Engineering working group
to understand better ways of working to
effectively address implementation of
process safety requirements at site level
such as asset integrity and installation of
modern automated control systems.
0.36
0.47
0.59
2023/24
2022/23
2021/22
1. A Tier 1 Process Safety Event (T-1 PSE) is a loss of primary containment (LOPC) with the greatest consequence as defined by American
Petroleum Institute recommended practice (RP) 754.
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Sustainability continued
People: Promoting a safe, diverse and equitable society
Secondly, we updated our performance
management approach during the year with
a focus on delivering ongoing dialogue
around expectations, forward-focused
feedback and development. We now require
all our managers to hold regular feedback
and performance discussions with their team
members. The new approach has been well
adopted, and employees report they are
having better ongoing dialogue, with
improved quality of feedback, recognition
and development conversations.
We have also built on our digital recognition
platform, Say Thanks, where colleagues can
send appreciation through an eCard or
nominate significant contributions for awards.
Supporting our people’s professional and
personal growth remains at the core of our
commitment as an employer. During
2023/24 we took several initiatives to
support this, including strengthening our
succession planning into critical leadership
roles, ongoing investment in the future
pipeline of leaders through our graduate
programmes, various talent accelerator
programmes, and broad development
initiatives such as customer-centricity
training, business skills programmes,
and the implementation of a new global
digital learning platform, Percipio.
To support and reinforce all these initiatives
we are now supplementing our revamped
annual employee survey with quarterly
all-company pulse survey check-ins,
ensuring that all our managers are
proactively leading their teams through
change whilst providing ongoing feedback,
recognition and development.
For more information see our
Sustainability Performance Databook,
matthey.com/sustainability-databook
Our goal: Create a
diverse, inclusive and
engaged company
A high-performance culture is critical to the
execution of our strategy. We are making
good progress in creating a more market-
focused, agile and less bureaucratic
company, where our people can be truly
customer-centric and thrive in their roles.
Building an engaged,
high-performance culture
At our launch of the ‘Play to Win’ strategy in
2022, we identified three aspects of our
culture that we needed to enhance:
Engagement score
improved from 6.9 in
March 2023 to
7.2
in January 2024 (on a
scale from 1-10)
“Taking action from
last survey” score
improved
+0.8
(on a scale from 1-10)
from March 2023 to
January 2024
Say Thanks:
84%
of all employees in JM
have accessed the portal
and employees have
received three recognition
moments on average
through the year
It is critical that our leaders – at all levels –
in JM take the lead in accelerating this
throughout the organisation. This year we
established a series of ‘Play to Win Through
People’ workshops for managers across the
entire organisation to give them the tools
to bring the strategy to life with their teams,
to clarify expectations on them as
managers, and to build their skills
and confidence to drive performance,
employee engagement and change.
Take accountability
Keep it simple
Drive results
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People: Promoting a safe, diverse and equitable society
Advancing diversity, inclusion
and belonging
Performance and innovation require diversity
of thought, background and representation
as well as a culture of inclusion and
belonging. This year we have taken strategic
and practical steps to ensure our diversity,
inclusion and belonging (DI&B) journey is
meaningful and has long-lasting impact.
We have continued to drive activities in line
with our DI&B roadmap to progress towards
achieving our sustainability goal, targets
and commitments.
See our Diversity, Equity, Inclusion and
Belonging Policy, matthey.com/DIEB
Developing and attracting talent
Our female representation at all
management levels2 is 30%, an
improvement on last year’s 28%, and a step
forward towards our target of 40% by 2030,
with a milestone of 31% in 2025.
Our Talent Acquisition team and DI&B team
have continued to build partnerships with
organisations such as the Society of Women
in Engineering, Women in Chemicals and
Association for Black and ethnic minority
engineers to ensure we can source and
attract the best talent from a range of
diverse backgrounds in the market.
In 2023/24 we formed a partnership with
STEM Returners, a leading organisation in
the UK in returner programmes, to help
STEM professionals return to work after a
career break. To date, we have six returners
in the business in engineering, legal and
procurement with all returners now being
offered either extended contracts or made
permanent employees.
Once we have recruited talented people
into the business, providing the right
environment for all to progress through the
organisation and reach their full potential
is critical. In September we launched our
‘Elevating women in leadership’ pilot
programme, and to support the
development of our Black, Asian and ethnic
minority employees, we continued to
participate in the Black British Business
Awards talent acceleration programme
in the UK and the McKinsey connected
leadership development programme
in the US.
Earlier this year, we ran a diversity data
campaign across our senior leadership to
better understand the ethnic representation
of this population.
In line with the Parker Review
recommendations, we have set
targets to improve senior
representation for minority
ethnic individuals, targeting
15%
representation in our senior
management by 2027, based
on our current representation
of 9%.
Included in this 2027 target is
a separate target for Black
representation of
3%
Sustainability continued
We continued to create awareness around
our DI&B agenda and build confidence in
speaking about difference, with our nine
employee resource groups remaining at the
core of this work. We also implemented a
new DI&B events structure to better engage
our employees. This resulted in widely
attended local events and webinars with
external and internal speakers for
International Women’s Day, LGBTQIA Pride
Month, Hispanic Heritage Month, Black
History Month, and International Day of
Persons with Disabilities, along with the
creation of our first Global Inclusion Day.
Disability inclusion
Last year, we conducted a site accessibility
audit which resulted in a recommendation
to provide all customer-facing staff with
disability equality and awareness training,
specifically including deaf awareness.
Our DI&B and Learning and Development
teams engaged an external partner to
design some disability inclusion training,
which we piloted with our Royston, UK
reception staff. We then worked on a train
the trainer model to allow us to roll out the
training across JM for all employees in a
customer-facing role.
Gender diversity statistics (as at 31st March 2024)
% Female
Female
Male
Total
Board
44%
4
5
9
Group Leadership Team (GLT)
31%
4
9
13
Subsidiary directors
24%
23
74
97
Senior managers1
38%
30
48
78
All management levels2
30%
507
1,190
1,697
New recruits
38%
765
1,232
1,997
All employees
31%
3,577
8,108
11,685
For more information regarding gender, age and ethnicity of our people see our
Sustainability Performance Databook, matthey.com/sustainability-databook
1. Within JM our senior managers are defined as direct reports of the GLT. The UK Corporate Governance Code 2018 requires companies to disclose the gender balance of senior management, which is defined in the Code as a company’s executive committee and the Company Secretary;
the statistics for this are included in the GLT row above. Some individuals are included in more than one category.
2. All employees whether they are a people manager or not, at a minimum compensation grade.
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Fair pay
We operate a ‘total reward’ approach at JM,
and we aim to provide a total reward
offering that is flexible, market competitive
in each country in which we operate and
affordable for JM. For this, we are
committed to providing fair reward that
is consistent with our goal of being an
inclusive and sustainable company.
We understand that there is pressure on our
people’s finances because of the current
economic environment and for the second
year in a row, we have given a larger
portion of the global salary budget to
non-management roles, recognising that
cost-of-living pressures are felt more
acutely here.
We are developing our approach to global
pay transparency in line with EU legislation
and have already disclosed our UK gender
pay gap report in accordance with UK law.
In 2023/24 our UK gender pay gap was
7.6% which puts us ahead of the national
average of 14.3%.
In addition to our employees’ pay, we have
provided support through an employee
assistance programme (Assist), which
provides JM employees and dependants
with confidential, external professional
advice on a variety of financial wellbeing
topics such as debt management,
mortgages, and loans, in addition to
broader mental, physical and social
wellbeing topics. Our temporary employees
received the same benefits as our
permanent employees.
View our gender pay gap report:
matthey.com/gender-pay-gap
Parental leave
We recognise the significance to our
employees of starting and supporting
a growing family. To support employees,
we maintain a Global Parental Leave
Standard. This standard provides a global
minimum standard of 16 weeks fully paid
leave for new parents (including adoptive
parents) who are regarded as the
primary caregiver.
Please see our Global Employee Leave
Policy for more information,
matthey.com/global-employee-leave
For more details see our Sustainability
Performance Databook,
matthey.com/sustainability-databook
Accreditation as Living Wage
Employer UK and exploring
opportunity to apply living
wage policy globally
7.6%
Gender pay gap in UK
People: Promoting a safe, diverse and equitable society
Sustainability continued
Freedom of association
We respect and uphold the freedom
of association and the effective recognition
of the right to collective bargaining.
In 2023/24 a quarter of our people globally
were covered by collective bargaining
agreements and/or represented by works
councils or trade unions.
Regular engagement is undertaken directly
with our employee representative groups
on a range of topics including freedom
of association and collective bargaining.
These groups include recognised trade
unions, or elected employee representative
groups where trade unions are not present.
The engagement is conducted on a regular
and routine basis to ensure employee
representative groups are well informed
across a range of business and people-
related topics. Several of our transformation
initiatives have been guided and subject to
thorough collaboration and consultation
with employee representatives to ensure all
relevant aspects are covered and managed.
Union representation, % of global
headcount
31st March 2024
UK
20%
Rest of Europe
25%
North America
20%
Asia
30%
Rest of the world
45%
Workforce globally
25%
For more information see our
Sustainability Performance Databook,
matthey.com/sustainability-databook
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People: Promoting a safe, diverse and equitable society
Upholding human
rights and high ethical
standards
We support the principles of the Universal
Declaration of Human Rights and the
International Labour Organisation (ILO)
Core Conventions. We are aligned with key
frameworks that define human rights
principles for businesses, including UN
Guiding Principles on Business and Human
Rights and the Organisation for Economic
Co-operation and Development (OECD)
Guidelines for Multinational Enterprises.
Our approach to human rights considers
our entire value chain, including our own
operations, suppliers, partners and
customers. We have set ourselves a
commitment to assess all of our value chain
partners for human rights risks by 2030.
matthey.com/human-rights-policy
Our operations
Our Human Rights policy sets out our
commitments and provides for regular
processes to identify and mitigate risks
in our operations. Where we have operating
sites in high-risk countries we work with
local teams to implement remedial actions
where required.
Our suppliers and customers
We initiated a human rights risk assessment
for suppliers accounting for 85% of our
annual procurement spend (excluding
PGMs). Utilising the EcoVadis IQ Module,
we rated 529 suppliers, with 5% identified as
(very) high risk. We are working with these
suppliers to address these risks effectively.
Where required, mitigations and remedial
actions have been put in place and continued
monitoring has been implemented.
We actively engage and support our
suppliers on their sustainability journey.
Last year we reported the case of a supplier
in a higher risk region that we were working
with to improve their EcoVadis assessment,
following a human rights assessment.
As a result the supplier has this year
achieved a silver medal for their
commitment to sustainable and
responsible business practices.
For Ecovadis KPIs of our suppliers see our
Sustainability Performance Databook,
matthey.com/sustainability-databook
This year we included detailed human rights
expectations into our updated Supplier Code
of Conduct as well as our standard Terms
and Conditions of Purchase and template
purchasing agreements. These require
our suppliers to not only comply with all
applicable human rights laws, but also to put
robust internal procedures in place to mitigate
and remediate human rights risks. These
obligations apply both to our direct suppliers,
existing and new, as well as their supply chain
and subcontractors.
See our refreshed Supplier Code of
Conduct, matthey.com/supplier-code
We also work closely and collaboratively
with our customers to provide open and
transparent disclosure. We see our customers
as valued partners and we contribute to their
sustainability goals by actively engaging and
providing data and information about
climate-related, human rights, diversity and
governance topics. Our commitment extends
to informing them about our sustainable
practices in both our products and
operations, ensuring transparency in all
sustainability developments concerning JM.
Moving forward, our dedication remains
unwavering as we strive to enhance our
engagement with customers, empowering
them to make informed choices that play
a crucial role in shaping a more sustainable
and resilient future.
Modern Slavery Statement
We are committed to ensuring no modern
slavery exists in our business and to identify,
mitigate and remediate any issues we find
in our value chain. We publish our Modern
Slavery Statement annually to demonstrate
our progress.
matthey.com/modern-slavery
Doing the right thing underpins
everything we do
Our new, refreshed and simplified digital
Code of Ethics, called ‘Doing the Right
Thing. Together.’ is a practical guide for us
all to use. It provides guidance around four
key areas applicable to everyone:
1. What doing the right thing means and
our Code commitments
2. Making good, ethical decisions
3. Asking for help when you are unsure
what to do; and
4. How to speak up with serious concerns
Included within is a new decision-making
tool, which assists anyone facing an ethical
dilemma or difficult decision. Our global
network of ethics ambassadors is called out
as an on-site resource should employees
have ethical queries or concerns. And we
have included a people manager section,
highlighting the role and responsibilities
line managers have in promoting an ethical
culture within their teams across JM.
To complement our refreshed Code of
Ethics we rolled out a new programme
of ethics training globally. We also run
bespoke training courses for specific
groups, for example on competition
law and anti-bribery and corruption
for externally facing employees.
This year we also rolled out a human rights
training course to targeted groups.
See our full set of policies on our website
For details of training courses see our
Sustainability Performance Databook,
matthey.com/sustainability-databook
Our Speak Up culture
Our independent Speak Up helpline is available
for anyone wishing to raise a concern.
We analyse Speak Up metrics quarterly to
identify key themes and significant trends
and share these with the Societal Value
Committee and relevant senior leaders.
See page 89 for more information
about our Societal Value Committee
During the year there were 138 Speak Ups, of
which two related to bribery and corruption.
JM has a zero-tolerance approach to bribery
and corruption, and our Ethics & Compliance
team thoroughly investigated to determine
whether the allegations could be proven or
whether any recommendations should be
made, as it does with all categories of Speak
Ups. Even where allegations of bribery and
corruption are not proven, an assessment is
made to ensure the risk of bribery and
corruption taking place in the future is
properly mitigated. During the year no legal
cases regarding bribery and corruption were
brought against JM or its employees.
See our Speak Up Policy,
matthey.com/speak-up-policy
For details of the Speak Up reports see
our Sustainability Performance Databook,
matthey.com/sustainability-databook
Sustainability continued
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People: Promoting a safe, diverse and equitable society
Responsible sourcing
Our global multi-tiered supply chain
encompasses a wide range of suppliers
providing raw materials, goods and services.
We foster a responsible and sustainable supply
chain by collaborating closely with our
suppliers. In 2023/24 our supplier spend was
£3 billion (excluding precious group metals).
In 2023/24 we developed responsible sourcing
principles. Led by our commitment to creating a
positive impact through our operations, the
responsible sourcing principles embody our
dedication to ethical and environmentally-
conscious practices across our value chain.
All new suppliers receive and acknowledge the
refreshed Supplier Code of Conduct which
includes an environmental section.
We also conducted a review of our Scope 3
emissions from purchased goods and services, to
map existing decarbonisation commitments
from suppliers and identify additional levers to
reach our 2030 target. This work will help us
prioritise our engagement with suppliers, and
guide our work with initiatives such as Together
for Sustainability, to ensure we maximise the
positive impact we can have on our supply chain.
We continue our partnership with Tealbook
and Minority Supplier Development UK
(MSDUK). In the next year we aim to use
MSDUK to help us set a long-term supplier
diversity strategy and target. We have
estimated that 3% of our spend with suppliers
is allocated to diverse or small businesses, and
we identified several opportunities to improve
our sourcing practices to be more inclusive as
well as enhance our internal training and
adoption of the programme. We are also
embedding the Tealbook services into our
conversations with customers and suppliers
and update them on the diversity spend.
For more information see our
Sustainability Performance Databook,
matthey.com/sustainability-databook
Sustainability continued
Where we source strategic raw materials
Primary PGMs
Secondary PGMs
Rare earth materials
Zeolites
Ceramic substrates
Platinum group metals (PGMs)
We collaborate with industry associations
such as the International Platinum Group
Metals Association (IPA) to ensure ethical
sourcing of PGMs. Supporting the adoption
of the Initiative for Responsible Mining
Assurance (IRMA) standard, we recognise
the challenges and continue assisting our
suppliers on this journey. Our UK and US
refineries adhere to the London Platinum
and Palladium Market’s ‘Good Delivery’ lists
and Responsible Platinum and Palladium
Guidance, annually confirmed through
third-party audits by RCS Global.
More on the IRMA responsible mining
standard: matthey.com/IRMA
Annual LPPM compliance: matthey.
com/lppm-compliance
See our Supplier Code of Conduct:
matthey.com/supplier-code
Forestry products
We ensure palm oil is being purchased
from sustainable sources, as set out in our
Supplier Code of Conduct which can be
found on our website. As a certified
member of the Roundtable on Sustainable
Palm Oil (RSPO) we successfully completed
an audit by TÜV NORD Integra according
to the RSPO Supply Chain Certification
Standard in August 2023.
Doing business in higher-risk
jurisdictions
In 2023/24 we completed the disposal
of our production facility in Krasnoyarsk
in Russia, which we previously put
into dormant status during 2022/23,
and have now exited Russia completely.
Several raw materials to our products,
including PGMs, rare earth metals and
zeolites, are sourced from China. No major
concerns have been identified, however,
we continue the process of reviewing the
detailed due diligence templates and will
implement mitigations or put remedial
actions in place, as required.
Responsible sourcing
principles
Reduce GHG emissions
Maximise resource efficiency
and promote circularity
Protect nature
Promote ethical behaviours,
uphold human rights, source
minerals responsibly
Provide and create a safe
workplace and safety culture
Live diversity and inclusivity
across our value chain
Conflict minerals and cobalt
In alignment with both our Conflict
Minerals & Cobalt Policy and the OECD’s
Due Diligence Guidance for Responsible
Supply Chains or Minerals from Conflict-
Affected and High-Risk Areas, we engage
with suppliers to get information on 3TGs
(tin, tantalum, tungsten and gold) and
cobalt in our products.
Of the 3TGs, tungsten is used in our
autocatalyst products, though we recognise
we may have small amounts of the others in
finished goods and refining intakes. We
have identified 85 suppliers providing 3TGs
and cobalt going into our products. These
suppliers have each provided due diligence
industry standard reporting templates,
of which four did not fully meet our
requirements due to low supply chain
coverage (less than 75%). We are working
with these suppliers on remediation plans.
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People: Promoting a safe, diverse and equitable society
Sustainability continued
Investing in our
communities
Being a responsible neighbour continues
to be core to our community investment
approach. Through our activities we aim
to strengthen the communities surrounding
our sites by contributing to their long-term
resilience and sustainability, and in
particular by removing barriers to
STEM education.
Our performance in 2023/24
Our colleagues volunteer throughout the
year, however, much of this activity centres
around our two campaigns, #JMvolunteers,
coinciding with International Volunteer
Day, and Earth Month, which we ran for the
first time this year, and that encourages
volunteering with an environmental focus.
2,246
volunteering days during 2023/24,
a 9% increase from last year despite a
decrease in employees
£1,013,000
Expenditure in community investment
Tackling STEM inequality
We remain committed to working with local
partners and schools to tackle STEM
inequality and break down barriers young
people often face in accessing quality STEM
education and opportunities.
Our global community impact programme,
Science and Me, enables us to make
progress in this area by contributing to
projects with funding, expertise and time.
Science and Me has been fostering curiosity
and stimulating an interest in STEM since
launching three years ago.
In 2023, Science and Me awarded grants
for new projects in the US, UK and North
Macedonia. North Macedonia 2025, for
example, aims to enhance access to quality
STEM education for 15 primary schools across
North Macedonia by delivering hands-on
learning experiences that will inspire around
1,500 students and 25 science teachers. Since
its inception, our Science and Me programme
has awarded a total of 30 grants to help tackle
STEM inequality.
We launched a pilot with Tent Partnership
for Refugees with sites across the UK,
Sweden and Germany, enabling our people
to volunteer by taking up mentorship roles
supporting refugee women back into work.
Empowered by a sense of communal
responsibility, our colleagues in
China and Japan responded to local
natural disasters by donating funds
and relief supplies to the victims.
The annual Poland Business Run
saw 220 colleagues globally run
a combined total of 880km in
support of a non-profit, raising
funds and awareness for people
with disabilities.
Our teams in China mobilised
over 320 colleagues to support
nature conservation initiatives,
promoting the preservation of
Chongming island’s ecosystem.
45 colleagues from eight UK
locations participated in the
Peak District Ultra Challenge,
raising £25,000 for 27
charities, which was doubled
through our match funding
scheme.
35 colleagues from our
Wayne and Devon sites
helped clean up trash and
debris from a local
watershed, helping protect
the local ecosystem.
In response to the conflict impacting
Israel and Gaza, we donated to
Médecins Sans Frontières (MSF)
Doctors Without Borders, funding
emergency medical care where it is
most needed.
11 Science
and Me
grants
were awarded in 2023, to five
non-profits and six schools, engaging
nine JM sites in three countries.
Community investment summary
£’000
2023/24
2022/23
% change
Direct expenditure
440
594
-26%
Indirect expenditure
573
479
20%
Total
1,013
1,073
-6%
For more information see our Sustainability Performance Databook,
matthey.com/sustainability-databook
Examples of initiatives
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People: Promoting a safe, diverse and equitable society
Sustainability continued
How we engage with our
external stakeholders
As a global company with a leading role
in the net zero transition, we engage
actively with non-profit organisations,
policy makers, business associations and
global alliances. This helps ensure we
maximise our positive impact on society,
by playing our role in developing
sustainable solutions, and setting the
right sustainability objectives.
Throughout the year, we attended flagship
events and debates to keep up to date with
the latest sector trends and rapidly evolving
regulatory landscapes. For instance, we
were present at COP28 to follow the climate
negotiations and to enable better
understanding of the role that our solutions,
such as sustainable aviation fuels and clean
hydrogen, can play in the journey to net
zero. We attended several conferences to
share insights on our key markets, such as
the World Hydrogen Leaders conference,
ADIPEC and the London Platinum Week.
Business associations and
non-profits
We actively engaged with business
associations last year. For instance, we
worked with the Association for Emissions
Control by Catalyst (AECC) on the
introduction of Euro 7 standards in the EU
and on other regulations promoting clean
air and sustainable mobility solutions. We
also engaged with Hydrogen Europe and
the Hydrogen Council to provide expert
insight on hydrogen technologies, as well as
on the PGM markets, to inform policy and
support the critical role of PGMs in the
energy transition.
We also joined the Industry Council of the
US Department of Energy’s Energy
Innovation Hub. We will help inform the
Critical Materials Innovation Hub’s five-year
programme on PGMs, using our unique and
longstanding depth of knowledge across the
entire PGM ecosystem.
In addition, we engaged with several
non-profit organisations and think tanks on
sustainability topics, including our Nature
strategy, JM Renewable Energy Standard,
and how to best embed sustainability in our
capital investments.
We provided insights to the British Society
of Chemical Industry (SCI) on the business
case for an industrial science and innovation
strategy in the UK, underpinned by
sustainability, which was used in their
Manifesto released in August.
Global alliances
JM is a member of global alliances which
can help drive business outcomes and
shape the low-carbon markets we play
in. For instance, we are actively involved
in the World Economic Forum’s Securing
Minerals for the Energy Transition initiative,
where we provide expert insights on the
supply and demand of the PGM market,
including the key role of the secondary
market and their contributions to
sustainable technologies.
Sustainability continued
Examples of business
associations and global
alliances which were a key
focus of engagement on
sustainability in 2023/24
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In this section
Introduction
53
Governance
53
Strategy
54
Risk management
60
Metrics and targets
61
Introduction
Climate change is one of the most
pressing threats facing our planet today.
We recognise that what we do at Johnson
Matthey has impacts – both positive and
negative. Our solutions help our customers
to reduce greenhouse gas (GHG) emissions
and the new technologies we are designing
will help further accelerate the transition
to a low-carbon future. But our operations
have their own environmental impact,
creating GHG emissions, using water
and producing waste.
Our business strategy is shaped around
the opportunities and the risks that our
changing climate presents. We have set
ourselves the target of achieving net zero
by 2040; our Scope 1, 2 and 3 long-term
target ambition has been recognised as
aligned with the SBTi’s 1.5°C mitigation
pathways.
The disclosures in this report are consistent
with the TCFD recommendations.
Governance
Given the nature of our business,
and how closely aligned our strategy
is to a warming world, climate-related
risks and opportunities have been
on the board’s agenda for many years.
Role of the board and its
committees
The board is responsible for setting and
overseeing the implementation of the
group’s strategy, including the annual
budget and detailed business plans.
In doing so, it considers climate-related
issues, including when approving requests
for capital expenditure or new initiatives.
The responsibilities of the board and its
committees in relation to climate-related
issues and the broader sustainability agenda
are set out in our Matters Reserved for the
Board and in our Audit Committee and
Societal Value Committee (SVC) Terms
of Reference.
See the Matters Reserved for the Board
and Terms of Reference for our
committees within the Corporate
Governance Framework document on
our website: matthey.com/governance
The SVC focuses more closely on the
governance of sustainability matters,
including our response to climate change.
The SVC meets three times a year, see pages
89 to 91 for composition and more
information about its work in 2023/24.
Together with the Nomination Committee,
the board ensures that, among the
directors, it has the necessary sustainability
and climate-related expertise.
For more details of our non-executive
directors’ skills and experience, see
pages 77-79
The Audit Committee monitors and assesses
the level of assurance over TCFD and
climate-related issues and performance
metrics. The committee is also responsible
for reviewing the effectiveness of internal
control and risk management, which
includes climate-related risk.
The Remuneration Committee set
three ESG targets within the group’s
Long-term Performance Share Plan (PSP):
two climate related targets and a DI&B
target. Our senior leaders and directors
participate in this PSP. This clearly reflects
our intent to contribute to an acceleration
of the transition to a net zero world and
creating a diverse, inclusive and engaged
company. Details of the PSP targets set
for 2024 can be found on page 127.
Role of management
The board delegates responsibility
for running the business to the Chief
Executive Officer (CEO); this includes
overall responsibility for climate-related
issues. The CEO is supported by the Chief
Sustainability Officer (CSO) and the
Sustainability Managers who together
develop our sustainability vision,
goals and targets.
The CSO is responsible for prioritising our
sustainability agenda and threading all
elements into our business, providing
updates to the Group Leadership Team
(GLT) on the steps taken to develop or
implement our sustainability strategy,
including key metrics, risks, opportunities
and our roadmaps to net zero by 2040.
At a business level, there are work
streams for advancing specific aspects
of sustainability.
For more information on our
governance structure see page 80
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Governance structure for climate-related issues
Level
Committee/forum
Attendees
Frequency
Objectives
Board
Societal Value
Committee
• Committee members
• CSO
• External experts as required
three times
a year
• Formal board governance
committee on sustainability
• Gives direction and oversight of ESG
strategy, goals, performance
Representation for
sustainability topics
in parallel board
committees – e.g. Audit,
Nomination and
Remuneration
GLT
GLT
• CSO – responsible overall
for climate-related issues
• Other GLT members
Monthly
(CSO updates
as required)
• Agree and formally approve global
sustainability strategy and goals
• Monitor roadmaps and ensure
resources in place to deliver strategy
and targets
Business
Sustainability
work streams
• Sustainability managers
• Operations and commercial
sustainability leads
• Sustainability initiative owners
from global functions
Bi-monthly
• Build and agree roadmaps to targets
• Ensure delivery of roadmaps
• Discuss new and emerging topics
• Ensure customer needs on
sustainability are proactively met
Sustainability leads by
business and function
Other internal
stakeholders
• Sustainability champions
• OneJM scenarios team
As required
• Encourage grassroots initiatives
• Ensure our strategy is based on
the latest understanding of
climate scenarios
In addition to the internal stakeholders listed above, we regularly engage with external stakeholders, such as think tanks and non-profits, to ensure our sustainability strategy is built
on a concerted approach.
Strategy
Our business strategy is based on our
purpose of catalysing the net zero transition
for our customers through enabling the
necessary transitions in energy, chemicals
and automotive, underpinned by circularity.
Climate change offers us many business
growth opportunities through our products
and services, as well as some risks. However,
the pace at which the world will adapt to
the impacts of climate change is uncertain.
So that we properly understand and are
resilient to these uncertainties we maintain
climate-change scenarios to frame the
ambiguities in our long-term business
strategy of an increasingly volatile and
complex environment.
Climate scenarios for evaluating
transition risks and opportunities
Our climate scenarios are used by all our
businesses as a common basis for planning,
forecasting and stress testing their strategy
and assumptions on growth. These
scenarios, which project the impact of
climate change on our operational and
commercial performance, are essential in
informing our strategic decisions, such as
how we invest in R&D and assets, or which
new products to develop. We also use
climate scenarios to consider the resilience
to changing weather patterns of our own
operations, those of our strategic suppliers
and our core supply routes.
Our three transition scenarios represent
three global temperature rise pathways.
• Rapid transition scenario (aligned to
1.5°C) – net zero achieved globally by
2050, in line with the goal of the Paris
Agreement to limit the world’s
temperature rise to well below 2°C above
pre-industrial levels and pursue efforts to
limit the temperature increase to 1.5°C.
This reflects swift and decisive action
regarding policy interventions and
decarbonisation commitments.
• Pragmatic evolution scenario (aligned
to 2°C) – net zero achieved globally
by 2080, which reflects a step-up in
policy interventions and decarbonisation
commitments compared with today,
but not as decisive as under the rapid
transition scenario.
• Slow transition scenario (aligned to 3°C)
– net zero not achieved by 2100,
reflecting a global lack of urgency on
climate change with limited policy or
legislative interventions.
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We developed our climate scenarios
internally, with support from external
experts, and also using the latest available
research from the International Energy
Agency (IEA). The IEA inputs included three
scenarios: the Net Zero Emissions Scenario
(supporting our Rapid Transition scenario),
the Announced Pledges Scenario
(supporting our Pragmatic Evolution
scenario), and the Stated Policies Scenario
(supporting our Slow Transition scenario).
Our methodology breaks down the different
energy sources (electricity, hydrogen, gas,
coal, oil, renewables, biomass and others)
and considers forecasts for each source by
demand type: transport, buildings, industry,
power and heat. We developed in-house
forecasts for specific source / demand
combinations close to our areas of expertise
in automotive, chemicals, hydrogen and
other industries, while ensuring that, at a
macro level, we remained within IEA’s
forecasts. During the last year we have also
started to link availability of critical raw
materials to our scenarios, since this will
likely have a significant impact on the rate
of the clean energy transition progresses,
and allows us to consider risks associated
with both direct access to such materials
and potential geopolitical impacts to
such access.
We update our scenarios at least annually
to reflect changes in external drivers,
incorporating the latest from internationally
recognised sources alongside our own
forecasts. Our updates in the last year
point towards an acceleration in demand
for clean hydrogen in the medium to long
term across scenarios, both for direct use
and in producing sustainable fuels for
both aviation (SAF) and maritime (clean
ammonia and methanol), reflecting
policy mandates and targets.
For example, during the past year,
the International Maritime Organisation
significantly increased its emissions
reduction ambitions, from a 50% reduction
by 2050 (compared to the 2008 baseline
year) to an intention “to reach net-zero by
or around, i.e. close to, 2050”. We are also
seeing increased focus on the potential for
hydrogen-powered aviation in the longer
term (post 2035), both using hydrogen
in internal combustion engines and
in fuel cells.
We model scenarios up to 2100, but look
at shorter-term horizons, specifically 2030
and 2040, to inform our strategic and
operational decisions. In the shorter term
we also consider the impact of factors such
as higher interest rates and current lack of
policy clarity, on the ability of projects to
move towards a Final Investment Decision,
which can impact near-term energy
transition developments. The table below
details the main qualitative and quantitative
assumptions we used for our 2040
scenarios. We use the Pragmatic evolution
scenario as our base case for our
strategic planning.
Market Sector
Metric (2040)
Unit
Rapid transition
Pragmatic evolution
Slow transition
Global
Total primary energy demand
Exajoules (EJ)
500-550
600-650
650-700
Renewables supply (excluding use of biomass)
% of total energy supply
c. 40%
c. 26%
c. 17%
Automotive
Global sales of zero-emissions vehicles
% of total automotive sales
c. 90%
c. 75%
c. 50%
Global sales of fuel cell electric vehicles
% of total automotive sales
c. 10%
c. 7.5%
c. 5%
Hydrogen
Global hydrogen production
Mt p.a.
350-400
300-350
150-200
Slow transition
-
-
-
Pragmatic evolution
Rapid transition
-10
0
10
20
30
40
50
60
2100
2095
2090
2085
2080
2075
2070
2065
2060
2055
2050
2045
2040
2035
2030
2025
2020
Total anthropogenic emissions (GtCO2/yr)
Climate scenarios for evaluating
physical risks
Changing weather patterns as the climate
warms may result in physical risks to our
assets and supply chains. We have evaluated
the exposure of all our assets, with specific
deep dives where needed, and those of our
strategic suppliers to these risks.
We used the Shared Socio-economic
Pathways (SSPs), the latest climate change
modelling scenarios from the
Intergovernmental Panel on Climate
Change (IPCC). The SSPs produce forward-
looking climate data by running climate
models driven by assumptions about future
global GHG emissions, together with
plausible future socio-economic
development metrics (economic growth /
GDP, demographics, land use and
urbanisation), and incorporating the likely
implementation of adaptation and
mitigation measures. The three SSPs we
considered, for the locations of all our own
operations and those of our strategic
suppliers, are shown in the table below.
Four time horizons were considered – 2020
(our baseline), 2030, 2040 and 2050 to
identify the top hazards and how they are
likely to change.
Scenario
Assumed temperature increase (relative to 1850-1900)
SSP 1-2.6
Best estimate of 1.7°C warming by 2041-2060, and 1.8°C by 2081-2100
SSP 2-4.5
Best estimate of 2.0°C warming by 2041-2060, and 2.7°C by 2081-2100
SSP 5-8.5
Best estimate of 2.4°C warming by 2041-2060, and 4.4°C by 2081-2100
SSP 5-8.5 is an extreme scenario that is unlikely to arise, but is useful for stress testing.
We use it to test the resilience of our key sites.
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Our climate-related transition risks and opportunities
Through our scenario work, we identified three distinct potential climate-related impacts, which represent both risks and opportunities for our business.
We use our climate scenarios to evaluate these risks and opportunities in the short (0–3 years), medium (3–10 years) and long term (10+ years), in line with our usual business planning
timescales. We believe the Pragmatic evolution climate scenario is most likely to occur, so have used it as the base case for assessing our transition impacts, and the other two scenarios
to stress test the sensitivity and resilience of our business plans
Primary driver
of impact
Opportunities
(with time horizons)
Risks
(with time horizons)
Management
of impacts1
Financial impacts
(after management)
KPIs to
monitor impacts
1. Changing customer demand for our products due to climate awareness
Regulation
• Tightening emissions
standards for vehicles
• Government incentives
or taxation for energy
production or use based
on carbon footprint
(e.g. IRA and ETS)
• Targets and mandates
for the increased use of
low-carbon alternatives,
such as sustainable aviation
fuels (SAFs), clean hydrogen,
bio-based feedstocks
• National Hydrogen
Strategies
Markets
• Shifts in customer
preferences
Opportunities for new products:
Energy
• Performance-dictating
components for electrolytic
hydrogen generation (short/
medium term and beyond)
• Processes, equipment and
catalysts for the production
of sustainable aviation fuels
(short/medium term
and beyond)
• PGM-based technologies
enabling the energy
transition, along with
recycling solutions
enabling circularity
Chemicals
• Low-carbon solutions for
the chemicals industry
(e.g. CCUS-based hydrogen,
processes and catalysts
reducing carbon intensity)
(short term and beyond)
Automotive
• Performance-dictating
components for fuel cells
vehicles (medium term
and beyond)
• Emission control catalysts
for hydrogen combustion
engines (medium/long term)
Without adaptation of our
portfolio, there is a long-term
risk that we may not have a
financially viable future
business model as society
transitions to net zero.
Main risks include:
• Inability to invest and scale
up rapidly to manufacture
new products for new
sustainable markets (short/
medium term)
• Uncertainty in the rate
of market evolution and
technology adoption,
including the penetration
of sustainable fuels and
hydrogen technologies, which
could affect profitability
(short/medium term)
• Reduced demand for existing
autocatalyst products for
internal combustion vehicles
(medium/long term)
We focus on managing our existing
businesses effectively, with an
increasing focus on sustainable
chemicals and energy.
• We are closely monitoring the
changing market environment
drivers including evolving
government policy on hydrogen,
emissions standards, carbon
taxation and incentives such
as IRA and EU Green Deal
Industry Plan
• We update our climate scenarios
at least once a year to inform
our strategic decisions
• For our growth businesses
we are investing in new
production assets, forming
long-term upstream and
downstream strategic
partnerships to enable us to play
to our strengths to accelerate
growth and maintain capital
expenditure in line with
market expectations
• For our maturing businesses,
we have a plan to reduce our
cost base to improve efficiency
and cash flow
• We have divested businesses not
core to our growth strategy to
simplify and focus
• We keep investing in innovation
to make sure we have products
that differentiate us in all
our markets
Growth
Accelerating profit growth
coming from businesses
related to sustainable
solutions.
Clean Air remains on
track to deliver our cash
generation target of
at least £4.5 billion
by 2030/31
• Tonnes of GHGs avoided
by customers using our
products (target set
for 2030)
• % sales aligned with SDG7
and SDG13
• % R&D spend aligned with
SDG7 and SDG13
1. Impact management activities described in this column are all ongoing or have been implemented.
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Primary driver
of impact
Opportunities
(with time horizons)
Risks
(with time horizons)
Management of impacts1
Financial impacts
(after management)
KPIs to
monitor impacts
2. Increasing demand for low-carbon manufacturing
Markets
• Shift in customer
preferences towards
products with a
low-carbon footprint
Regulation
• EU REDIII (mandates
42% of all industrial
hydrogen used in EU
must be green by 2030)
• Carbon taxation
mechanisms in countries
of operation e.g. ETS
and Carbon Border
Adjustment Mechanism
• Rules on recycled
content of consumer
goods and the need
for companies to declare
the carbon footprint
of their products
• Commercial advantage if we
adapt our manufacturing
plants to low-carbon
operation faster than our
competitors (short/
medium term)
• Save future carbon taxation
costs, which will reduce
operating costs and give us
price advantage as schemes
become more widespread and
expensive (medium term)
• As the world’s largest recycler
of secondary PGMs, we could
benefit from the increased
demand for goods with
low-carbon and/or recycled
critical raw material content
(short/medium term)
Medium-term risk that we cannot transition
our operations and supply chain for net zero
at the correct pace to meet customer
demand for low-carbon products.
• Loss of customers and failure to attract
new customers due to reputational
damage if we do not transition fast
enough to cleaner energy solutions in our
operations (medium/long term)
• Greater capital required to upgrade our
assets and site infrastructure to transition
to low-carbon manufacturing
(medium term)
• Inability to engage suppliers to reduce
Scope 3 emissions; PGMs market
conditions leading to an increased share
of primary PGMs used in our products
• Inability to access the alternative
renewable energy sources needed to
reduce natural gas use in our operations
(medium/long term)
• Loss of competitive advantage due to
increased costs to us and our suppliers of
goods and logistics due to carbon taxation
on raw materials and fossil-fuel derived
energy (medium term)
• We have set challenging 2030 GHG
reduction targets, in line with a
1.5°C trajectory, and published
roadmaps to decarbonise our
manufacturing operations
• We are actively engaging with our
suppliers to reduce our Scope 3
emissions, and have updated our
Responsible Sourcing Principles
accordingly. See page 50 for
more details
• We use an internal carbon price
for our capital investment
decisions and the board consider
sustainability reviews of all
investment decisions £5 million
and above to help us make the
right choices for decarbonising our
operations for net zero in the
long term
• We regularly review global
carbon pricing trends and
ensure our long-term scenarios
are consistent with different
levels of carbon prices
• We monitor trends in customer
requests for product carbon
footprint, Life Cycle Assessment
(LCA) and recycling information
Exposure to direct
carbon taxation on our
manufacturing operation
is not forecast to be
material in our three
year viability period
• Scope 1, 2 and 3
GHG emissions
(target set for 2030)
• Number of customer
requests for
low-carbon and
recycled content
in products
• Current and forecast
direct exposure to
carbon taxation in
2030 for our
operations
3. Increasing stakeholder expectations of corporate climate policy and performance
Reputation
• Increased concerns or
negative feedback from
stakeholders
Legal
• Exposure to litigation
• Developing and delivering
robust climate policy will
increase our long-term
business resilience, attracting
shareholders and employees
aligned with our values (short
term and beyond)
• Delivering our net zero
commitment and science-
based targets will help us
demonstrate sustainability
leadership, and increase our
profile with new customers
and shareholders (medium
term and beyond)
• Investors, employees and wider society
are scrutinising companies’ sustainability
commitments ever more closely. Failing
to meet their expectations could damage
our reputation, losing us customers,
making it difficult to attract and retain
staff, and ultimately increasing the risk of
shareholder action (medium/long term)
• Our plans for meeting our sustainability
commitments are not deemed sufficiently
detailed or credible (short/medium term)
• We fail to meet these commitments
(medium term)
We continue to monitor and manage
the expectations of our stakeholders
as follows:
• SVC monitors our governance
of climate-related issues
• Developing and monitoring
a net zero roadmap to 2040,
with targets set for 2030,
supported by detailed roadmaps
• Maintaining regular dialogue with
investors
• Market scanning and benchmarking
of targets to ensure our climate-
related policies and commitments
meet the highest expectations
Reputational risk has not
been quantified.
How we score on
leading ESG platforms:
• CDP climate
change score
• DJSI, Sustainalytics
and MSCI climate
scores
• Progress towards our
2030 sustainability
targets for GHG
emissions
1. Impact management activities described in this column are all ongoing or have been implemented.
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Our climate-related physical risks and opportunities
Changing weather patterns as the climate warms may result in physical risks to our assets and supply chains. They could damage our sites and disrupt production, leading to loss of sales and
increased costs, as well as posing risks to our employees. They could also hamper our access to strategic raw materials through supply chain disruption, either at our suppliers’ sites or in transit.
These physical risks can be grouped into two categories:
Acute, which are extreme events such as tropical cyclones, thunderstorms, severe flooding events, droughts, heatwaves and wildfires.
Chronic, which are gradual changes like rising sea levels that damage coastal property, or sustained changes to temperature and rainfall.
Primary driver
of impact
Opportunities
(with time horizons)
Risks
(with time horizons)
Management of impacts1
Financial impacts
(after management)
KPIs to
monitor impacts
4. Disruption to our operations resulting in damage to or loss of assets, increased costs and harm to our employees
Physical risks (acute and
chronic)
• Increased frequency, severity
and variability of extreme
weather events and natural
disasters
• Competitive advantage by
improving our business
resilience and controls
through diligent climate-
related screening of assets,
and integration with
business continuity plans
(medium term)
• Damage to our key sites,
equipment or stock from
severe weather (wind, rain
and drought) if any
increased risk is not
effectively mitigated, leading
to disruption of supply to our
customers (medium term)
• Insurance of our sites could
become inadequate or more
expensive if a site is at very
high risk of weather-related
disruption (medium term)
• Increased employee EHS
incidents if sites are not
adapted to increased risk of
heat wave (medium term)
• Our ten most important
manufacturing sites identified as
being located in areas with
increasing risk from high rainfall
are undergoing deep-dive
assessments of their resilience and
implementing mitigation as
required. Following last year’s pilot
we have completed a further four
sites this year
• There are mitigation action plans
to accompany the five physical risk
assessments. The risks and
associated action plans have been
added to our global enterprise Risk
Management process, ensuring
progress is tracked and reported
and the climate risk is integrated
into individual site’s risk
management and risk ownership.
• Integration of weather-related risks
in business continuity plans and
follow-up action plans
• Climate change assessment
considered as part of due diligence
for new investments for growth.
• We use the WRI tool to monitor
where clean water availability
could be at risk in the long-term,
see page 43
• We regularly review the type and
limit of insurance available for
climate risks to our portfolio
• High-level analysis of
our ten most critical
locations shows that
there is no material
financial impact from
climate change risks on
the quantifiable hazards
(flood and windstorm in
the medium term)
Proportion of physical asset
value exposed to a climate
change-related high or very
high hazard levels by 2030:
• Number of sites in
water-stressed areas
• Amount of water
consumed in areas of high
or extremely high baseline
water stress
1. Impact management activities described in this column are all ongoing or have been implemented.
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Primary driver
of impact
Opportunities
(with time horizons)
Risks
(with time horizons)
Management of impacts1
Financial impacts
(after management)
KPIs to
monitor impacts
5. Disruption to our supply chain (upstream and downstream) hampering our access to strategic raw materials (including metals) and products, and
increasing costs.
Physical risks (acute and
chronic)
• Increased frequency, severity
and variability of extreme
weather events and natural
disasters
• Engaging with our suppliers
to help them manage
climate risks to their sites
could enhance our
relationships with them
and save us money
(medium term)
• Increase in business
resilience through more
diligent and frequent
screening of our suppliers’
assets (e.g. through
integration with business
continuity plans)
(medium term)
• Disruption of supply of key
raw materials risks our ability
to deliver goods on time to
customers, resulting in loss
of sales and future business
and damage to our
reputation (medium term)
• Insurance cover of suppliers
is inadequate, and
uncertainty over the future
level of increased risk
responsibility that will be
assumed by suppliers and/or
JM relating to climate risks,
or if physical risks should be
transferred (medium term,
three to ten years)
• Climate risk is integrated into our
principal risk management
structure and supplier partnering
framework (SRM). We undertake
quarterly reviews of the risks
identified, supplier remediation
plans and alignment with
company and category strategies
• Our approach in case of high risks
related to climate emergencies is
to work with strategic suppliers
to integrate specific climate
mitigating actions to improve
their resilience or switch to
alternative suppliers
• We ensure that the type and
limit of our suppliers’ insurance
is in line with our own risks
and external obligations
(medium term)
• We continue to develop
a diversified supply portfolio,
with emphasis on dual sourcing
at supplier and site levels
No issues identified in the
last year.
Number of weather-related
supply chain disruptions.
1. Impact management activities described in this column are all ongoing or have been implemented.
Task Force on Climate-related Financial Disclosures continued
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Other information
Risk management
All our climate-related risks are subject to our global enterprise risk management process, which provides a systematic approach of understanding, evaluating and addressing all identified
risks (see page 63 for more information).
Task Force on Climate-related Financial Disclosures continued
Identifying climate-related risks
We continually review and evaluate our
climate-related risks against industry best practice,
peer benchmarking and risks identified by business
leads and subject matter experts as well as new
and emerging risks.
We believe our climate risks are in line with industry
and legislative expectations.
Managing those risks
The Societal Value Committee (SVC) oversees our
sustainability strategy, including managing our
climate-related risks. These risks may have a direct
or indirect impact on our Principal and Business risks,
and are therefore managed alongside and integrated
within the enterprise risk management process.
To drive consistency, each risk in our enterprise risk
process, including climate-related risks, has been
assigned a risk owner and sponsor. These individuals
are senior stakeholders who are accountable for
reviewing, monitoring and assessing the magnitude
of the risk as well as overseeing the implementation
of appropriate mitigations.
All of our principal risks are reviewed formally,
twice a year, by the GLT and the Board.
Assessing those risks
We also use external third parties to evaluate
physical climate risks at our locations and those
of our suppliers. With the four assessments
conducted this year, we now have detailed site
resilience assessments for five of our top ten
highest risk manufacturing locations. This
determines the requirements for areas we need
to focus on in the short, medium and long term.
Integrating those risks
Through our enterprise risk framework, climate-
related risks and opportunities are integrated into
our strategic decision-making. Climate change
considerations are part of how we operate, and
climate is included in our bottom-up operational
risk management process, providing a clear view of
climate-related risks across the organisation. For
instance, Principal Risk 1 is directly related to the
first transition risk identified as part of TCFD
guidance – see page 64 for more details.
For more information on our risk management approach, please see pages 62 to 70
Risk
management
Assessing
those risks
Identifying
climate-related
risks
Managing
those risks
Integrating
those risks
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Task Force on Climate-related Financial Disclosures continued
Metrics and targets
The metrics and targets we use to help us manage our climate risks and opportunities effectively are shown below. They were identified in the climate-impact tables on pages 56-59 and their
values are summarised here. Our Scope 1, 2 and 3 greenhouse gas (GHG) emissions targets have been verified by the Science Based Targets initiative as consistent with the UN Paris
agreement on climate change’s 1.5°C pathway, and a full breakdown of performance in all categories over the last five years can be found on page 41.
Metric description
Climate-related risk
Target type
Baseline year
Baseline value
2030 target
2023/24 performance
More on page
GHG emissions avoided per year using technologies
enabled by JM products and solutions, compared to
conventional offerings (tonnes CO2e)1
1
Absolute
2020/21
223,9462
50 million
1,110,057
37
% sales aligned with SDG7 and SDG13
1
Intensity
2020/21
6%
No target
8%
36
% R&D spend aligned with SDG7 and SDG13
1
Intensity
2020/21
22%
No target
23%
36
Total Scope 1 and Scope 2 GHG emissions
(market-based) (tonnes CO2e)1
2,3
Absolute
2019/20
405,7702
227,231
282,403
41
Scope 3 GHG purchased goods and services
(tonnes CO2e)
2,3
Absolute
2019/20
3,433,6602
1,991,523
2,531,576
41
% recycled PGM content in our products
2
Intensity
2021/22
70%
75%
69%
42
Potential exposure to carbon taxation in 2030
2
Intensity
2021/22
Not disclosed
No target
Not disclosed
61
CDP climate change score
3
Absolute
2019/20
B
A
A-
1
% physical asset value exposed to high
weather-related hazard by 2030
4
Intensity
2020/21
35%
No target
39%
58
Water consumed in regions of high baseline
water stress (m3)
4
Absolute
2020/21
417,7042
No target
402,254
43
Number of supply chain disruptions due to
severe weather
5
Absolute
2020/21
Not disclosed
0
0
59
1. Metrics are linked to long-term Performance Share Plan (PSP) for senior directors.
2. Rebaselined to remove divested businesses, please see page 210 for more information.
Internal carbon pricing (ICP)
We use a shadow carbon price in our capital investment business case assessment process. Although the ICP is not a real cost of the investment, it demonstrates what the impact would be of
the carbon taxation forecast for 2030 and beyond, and we use it to evaluate and compare potential investments. We expect the ICP to play an increasingly important role in influencing our
investment decisions, as carbon impacts come under increasing scrutiny from key internal and external stakeholders.
We are using the ICP for Scope 1 and 2 emissions for the asset when operational, with the intention to extend this to Scope 3 in the future. We chose not to apply ICP to emissions related to
the development of the project itself, such as equipment manufacture, or to construction-related emissions, since such emissions are both short term and generally minor in relation to the
overall life of the asset. The price applied in 2023/24 was £100/tonnes CO2e, with sensitivity analysis conducted at £50/tonnes CO2e and £150/tonnes CO2e.
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Other information
Risk report
Risk management is an essential
and integral part of JM’s planning
and decision-making. It is fundamental
in helping us achieve our objectives,
improve outcomes for our stakeholders,
enhance the realisation of opportunities
and support the growth afforded by our
stated aim of being a market leader in
energy transition solutions. During the year,
we have refined our principal risks to
enhance clarity and reflect our progress.
Managing risks effectively
The ability to effectively manage the risks
that we encounter plays a crucial part in
strategic delivery and driving accountability.
Risk management stands as a cornerstone
of our governance and operations
throughout the organisation. We continue
to invest in awareness initiatives and the
training of our employees to stay ahead of
various threats. This intends to cover all
areas of risk management, including cyber
security and financial risks.
Financial risk management forms part
of the group-wide risk management
framework which adopts a top-down and
bottom-up approach, to ensuring current
and emerging financial risks are identified,
understood and managed in line with our
risk appetite. Functional leaders, businesses
and site teams are responsible for
identifying, assessing and prioritising their
financial risks, considering the likelihood
of occurrence and their potential impact
on JM’s objectives. This includes reviewing
whether a risk has changed, how effective
the controls we use to manage the risks are,
and whether mitigating actions are in place.
Risk governance and oversight
C
o
m
m
i
t
t
e
e
A
u
d
i
t
G
L
T
B
o
a
r
d
Group Assurance function
Challenges and helps the
Board, Audit Committee,
the GLT, businesses and
functions to consider the
range and materiality of
risks identified.
Monitors how well
mitigating actions or
projects are
implemented, and how
effectively they reduce
risk to ensure alignment
with our risk appetite.
Board
• Sponsors our approach to risk
management and internal controls.
• Sets the tone for risk management
culture.
• Approves risk management policies
and processes.
Audit Committee
• Reviews the effectiveness of our risk
management framework and internal
controls.
GLT
• Regularly carries out top-down
reviews of risks.
• Develops strategy in line with our
risk appetite.
• Manages our definitions of risks
and mitigation plans.
• Monitors whether risks are within
our risk appetite.
Businesses / functions
• Regularly carry out bottom-up
reviews of operational activities.
• Ensure sites have risk registers
in place.
• Report to the GLT about business
risk and issues.
Sites / programmes / projects
• Report key risks to businesses.
• Regularly review controls
implementation and effectiveness.
The effectiveness and adequacy of existing
controls are assessed regularly with risk
sponsors and owners. A subset of the most
relevant financial controls is reported
at least once a year via the Controls
Self-Assessment process and signed off
by management as part of half year and
year end reporting cycles.
The board is responsible for the fraud risk
management processes and ensuring JM’s
internal control systems are effective in
preventing and detecting fraud. The board
is also responsible for explaining the steps
taken to prevent and detect material fraud.
An annual review of fraud risks and the
mitigation controls is performed by
functional owners as part of the annual risk
assessment process facilitated by our risk
and compliance platform, JMProtect. A
walkthrough within each key function is
conducted to identify fraud risks and
mitigating controls which are then captured
in JMProtect with ownership assigned.
Completion of remediating actions,
including those identified through the
independently run Speak Up process,
is monitored regularly by internal
governance bodies. Regular updates are
provided to the Audit Committee
throughout the year.
Climate-related risks and
opportunities
Working closely with our sustainability
team, we continue to support the
recommendations of the Task Force
on Climate-related Financial Disclosures
(TCFD) and disclose how effectively
we are managing climate-related risks and
opportunities. Further details are included
on pages 53-61.
B
u
si
n
e
s
s
e
s
/
f
u
n
c
ti
o
n
s
S
i
t
e
s
/
p
r
o
g
r
a
m
m
e
s
/
p
r
o
je
ct
s
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Risk report continued
Risk management framework
Our risk management methodology
identifies and considers principal risks,
including severe yet plausible scenarios.
Its purpose is to reassure stakeholders that
we have fully considered and understand
a broad range of risks and are managing
them in line with defined risk appetites.
The board, which is ultimately accountable
for risk management and internal controls,
evaluates how effective these systems are at
mitigating principal and emerging risks at
least once every year. The GLT provides
support for the board’s reviews, which
ensures the risks we have identified are
relevant to our current aims and strategic
goals. The Audit Committee supports the
1st line of defence
Businesses / Functions / Sites
Business leadership teams & functional committees
JM Board / Audit Committee
GLT
2nd line of defence
Group Risk and Group Internal Control
3rd line of defence
Group Assurance
• Identify, assess, own and manage risks.
• Design, implement and maintain effective
internal control measures.
• Supervise execution and monitor adherence.
• Implement mitigating actions to address
deficiencies.
• Conduct Control Self-Assessments.
• Set the boundaries for delivery through
the definition of frameworks, policies
and procedures.
• Assist management in developing controls
in line with good practice.
• Monitor compliance and effectiveness.
• Agree any derogation from defined
requirements.
• Identify emerging issues and changing risk
scenarios and alerting senior management.
• Provides objective and independent
assurance about the adequacy and
effectiveness of the frameworks around
governance, risk management and controls.
• Provides proactive evaluation of controls
proposed by management.
• Advises on potential control strategies
and the design of controls.
Management
controls
Includes functions that oversee or specialise in
risk and controls management
Assurance
Internal control
measures
How we manage risk
We apply the three-lines-of-defence model as laid out in the diagram below.
Regulatory inspection bodies
External audit
board in assessing the effectiveness of our
risk management and internal control
systems, processes and policies.
Our risk management methodology takes a
top-down approach to identify our principal
risks (i.e. from board level down) and a
bottom-up approach to identify operational
risks (i.e. from day-to-day level up).
We are constantly looking to improve
how connected and aligned these
approaches are as they operate in parallel.
Functions, businesses and site teams are
responsible for identifying, assessing and
prioritising their risks. They also consider
how likely it is that a risk will materialise
and what effect that would have on our
objectives. This includes reviewing whether
a risk has changed, how strong the controls
we use to manage the risk are and whether
mitigating actions are in place. We use
self-assessment and management
attestation processes to report, at least once
a year, on whether the relevant controls are
effective. This is a maturing process with
several initiatives in progress to improve
our controls environment.
In the past 12 months, we have continued
to improve how we address and monitor
risks in a number of ways, including:
• Making continued enhancements to
our risk and compliance platform,
JMProtect, which offers a combined
and centralised view of our risk universe
and controls framework.
• Developing our Aligned Assurance
model that aligns second and third-line
assurance activities for easier
collaboration and more proportionate
risk-based assurance.
Working closely with Group Insurance,
JM prioritises insurance cover for the most
significant areas of risk across the group,
and areas where insurance is a legal or
contractual requirement. If insurance is
available on commercially reasonable
terms, we also utilise it as a risk mitigation
tool across our wider business. Where
appropriate, we get advice from industry
to help us assess risks and develop
mitigation plans.
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Other information
Principal risks and uncertainties
In the following section, we outline our
principal risks, alongside the measures
we have taken to reduce them. They are
classified as principal risks because they
could materially harm our company’s
operations, either alone or in combination.
We regularly review our risks to best
determine key mitigating actions, while
also assigning appropriate GLT sponsors to
help us overcome our biggest challenges
and continue to meet our strategic
objectives. Our GLT sponsors work closely
with principal risk owners to assess changes
to their risks, better understand our
exposure and create targeted mitigation
strategies. Over the last year, we have
continued to review and update our
principal risks, clarifying associated
opportunities and priority actions.
The principal risks identified below are
categorised as strategic or operational
principal risks. Strategic principal risks,
if handled effectively, carry a significant
opportunity to deliver above stakeholder
expectations. We recognise that risks
present potential exposures that require
effective risk management to control and
treat the uncertainty. This effectiveness also
provides opportunities to the business to
have better strategic thinking that can
provide financial and operational benefits.
We have added ‘Risk movement’ icons in
the principal risk section. The icons show
the risk movement from 2023 as illustrated
in the previous year’s Annual Report.
Strategic and operational risks
To execute our strategy, we must be
mindful of the risks that may undermine us,
while ensuring we capture most of the
opportunity they present. Our day-to-day
operations carry a level of risk that must be
managed effectively to ensure that we are
able to keep our people safe and meet our
strategic goals.
Risk report continued
Description
Key mitigations
Updates made to principal risk
Risk
movement
1. Market factors, customer demand and margin
sustainability
GLT sponsor: Liam Condon, Chief Executive Officer
JM’s strategy is focused on developing solutions to support
our customers through the energy transition, particularly
in sustainable chemicals, fuels and energy.
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 (e.g. 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 and downside exposure
(e.g. from faster or slower energy transition).
If we correctly anticipate and respond to shifts, we can
enhance value through increased revenues, profits and
optimised resource allocation.
Subsequent to a reassessment of the risk exposure due to
changing market conditions and the resulting risk
movement, we are addressing this in the following ways:
• We systematically monitor market conditions,
technologies and customer requirements to adapt
our plans where needed.
• Margin sustainability is underpinned by our on going
transformation program, and our continuous
improvement mindset across the business.
• In addition, we further reinforce and assure margins by
diversifying our customer base, improving our offerings
through innovation and R&D, establishing strategic
partnerships to secure offtake, and focusing
on opportunities where we have significant
competitive advantage.
Formerly ‘Significant shift in demand and/or
commoditisation of sustainable technology’.
Strategic risk
Operational risk
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Risk report continued
Description
Key mitigations
Updates made to principal risk
Risk
movement
2. A significant geopolitical or macroeconomic
event impacting JM’s operations
GLT sponsor: Louise Melikian, Chief Strategy and
Corporate Development Officer
JM has a global business footprint, in terms of operations,
customers and supply chains.
There is a risk that we face disruption due to geopolitical
or macroeconomic events (e.g. from conflict, trade
disputes, sanctions, pandemics, macroeconomic events,
or financial crises).
Mitigating this risk helps avoid adverse impact on our
people, sales, profits or investment. In addition, successfully
mitigating this risk provides a level of competitive
advantage by providing supply security for our customers.
• JM’s wide global presence and portfolio hedges
our macroeconomic and geopolitical risk
to some extent.
• Our strategic planning considers macro and geopolitical
risk when making investment decisions.
• In addition, we continuously monitor JM’s exposure
across the countries and regions to which we
are exposed.
• When needed, we set up taskforces to examine and
address specific risks.
Louise Melikian has taken over
as risk sponsor.
Previously, JM saw potential for elevated
geopolitical risks in serving and sourcing
from China. We have since seen this risk
abate somewhat, although we continue to
monitor and take this risk into
consideration while making decisions.
3. Failure to deliver business value from
strategic capital projects
GLT sponsor: Mark Wilson, Chief Executive,
Hydrogen Technologies
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.
Robust portfolio planning, management and governance,
combined with enhanced competence in capital project
delivery, will provide us with the platform we need to meet
the growth ambitions of our growing businesses and
deliver on our wider strategy.
Delivering high-priority projects on time, within budget
and to benchmarked costs will enable JM to grow
further and faster.
Subsequent to a reassessment of the risk exposure due
to changing market conditions and the resulting risk
movement, we are addressing this in the following ways:
• We continue to strengthen our central engineering and
project organisation and address missing functional
competency gaps.
• Plans are in place to embed project frameworks, with
business-wide compliance as a key value driver and a
foundation of governance.
• Mitigation plan includes transforming roles and
confirming accountability of sponsors for project value.
• We are bringing a continuous improvement approach to
our capital investments by incorporating learnings from
previous capital projects, and ensuring historical weak
points are addressed in the front end planning of new
investments like the refinery investment in the UK.
• Integrated owner project teams with all key functions
represented are being established.
• System performance is continuously being
monitored, using key leading indicators and key
performance indicators.
Mark Wilson has taken over as risk sponsor.
A priority focus has been bringing industry-
leading rigour to our front-end planning
and evaluation of investment opportunities.
We are embedding this through robust
evaluation of our business needs and
matching those needs with a project
solution. As a result, our investment
decision making will be improved, ensuring
we are maximising the utilisation of our
resources and focusing on the right
growth opportunities.
We are making good progress in
strengthening our capital projects execution
capacities, especially as they apply to our
most material and complex capital projects.
We expect this risk to reduce further as gaps
are closed and the long-term value of the
new approach becomes apparent.
Strategic risk
Operational risk
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Description
Key mitigations
Updates made to principal risk
Risk
movement
4. Development of offerings that do not
meet the future needs of customers
GLT sponsors: Liz Rowsell, Chief Technology Officer,
and Anish Taneja, Chief Executive, Clean Air and Chair
of the Group Commercial Council
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.
A strong product portfolio, effectively designed in line
with our customers’ current and future needs, will enable
us to win in our chosen markets for the years to come.
Effective development of products and offerings will
continue to improve our brand and enable us to win in
new markets as they are identified.
Subsequent to a reassessment of the risk exposure due
to changing market conditions and the resulting risk
movement, we are addressing this in the following ways:
• We continue to foster strong connectivity across the
value chain, involving customers and suppliers alike in
innovation discussions.
• We differentiate our innovation portfolio management
approaches to support both our mature and growth
businesses appropriately. We leverage tools such as New
Product Introduction to ensure effective delivery across
the portfolio. Examples of such innovation has resulted
in new products such as FT CANS™ technology and
HyRefine™, our novel process for recycling both the PGMs
and valuable ionomers from fuel cells and electrolysers.
• We are developing a stronger and more consistent
OneJM view of the emerging landscapes in the energy
transition, including technology scanning and scouting
and proactive management of intellectual property in
the new markets.
Formerly ‘Development of products that do
not meet the future needs of customers’.
Liz Rowsell has assumed a role as joint risk
sponsor alongside Anish Taneja.
We ensure we are resourced to maximise
value from our core businesses whilst
supporting growth by investing in the
front-end strategic marketing, business
development, technology development,
manufacturing scale-up, and digital skills
needed to win in the broader playing field.
5. A significant work-related EHS incident
GLT sponsor: Mark Wilson, Chief Executive,
Hydrogen Technologies
The focus of this principal risk, related to Environmental,
Health and Safety (EHS) performance, is around
catastrophic incidents (e.g. 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’.
As we operate high hazard installations, our business is
controlled by a wide range of challenging health, safety
and environmental laws, standards and regulations,
which are set by governments and regulatory agencies
around the world.
• We have a strong health and safety culture across
the group. This is based on clear policies, guidelines
and standards, continual training and awareness
activities and audits.
• A joint EHS and Engineering working group has been
established to understand better ways of working to
effectively address implementation
of process safety requirements.
• We regularly review process safety hazards
at relevant sites by carrying out deep-dive
safety audits.
• We thoroughly investigate incidents or accidents to
identify their root cause and then develop plans to
remediate the problem.
• We monitor our environmental risk, report on
environmental data associated with our sites and always
look for opportunities to improve.
• We regularly review our regulatory and reputational risks
and put mitigation plans in place where we need to.
Over the past 12 months, we have improved
governance on how open high-risk
scenarios from process hazard reviews are
managed. This is allowing a transparent
picture of where each of the high-risk
scenarios are so that they are better managed.
We have created a JM EHS operations
council, which is a cross-business
governance body comprised of Operations,
EHS and Engineering leaders. It is
accountable for EHS performance and for
ensuring a strong safety culture is in place.
The council plays a key role in assessing
whether EHS risks are being managed
effectively across the group through
regularly reviewing EHS performance.
Nevertheless, we continue to review any
emerging EHS risks (especially process
safety) across all our businesses, which
we are fully evaluating and mitigating.
Risk report continued
Strategic risk
Operational risk
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Description
Key mitigations
Updates made to principal risk
Risk
movement
6. Disruption to provision of key goods
or services by suppliers
GLT sponsor: Anish Taneja, Chief Executive, Clean Air
and Chair of the Group Commercial Council
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 a significant disruption in their supply
we would be unable to manufacture our products
to satisfy customer demand.
Our new growth areas (e.g. hydrogen, sustainable
aviation fuel), are nascent industries, and supply chain
infrastructures are immature. Ecosystems of suppliers
are still fragile and vulnerable to market shocks
and uncertainties.
• We ensure physical safety stock is available and review
material lead-times to reduce the impact of any failure
modes on our processes.
• We utilise market intelligence to drive early warnings
and are developing statistical material stock
management systems.
• We use a global category management approach and
have started a process to reduce the number of suppliers
in our tail spend areas.
• We continually review our supplier base according
to our latest business strategies and ensure that our
relationships with the key and high impact suppliers are
rigorously managed.
Formerly ‘Disruption to inbound goods
or services provided’.
The risk has decreased, reflecting the
implementation of our refreshed JM strategy.
A Fit to Win supplier base is at the centre
of our new procurement vision to co-pilot
business to deliver sustainable profitable
growth. We have built the first Fit to Win
2030 supplier base strategy with each
JM business.
Strategic supplier base shaping exercises have
been completed with each of the JM
businesses, and supplier segmentation and
supplier action plans completed with our key
suppliers. The global JM supplier convention
has enabled us to bring our key relationships
to the next level, with closer collaboration to
anticipate potential supply chain disruptions
and market trends.
7. A low-performing culture undermines
our strategy
GLT sponsor: Annette Kelleher, Chief HR Officer
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 on our ability to attract
and retain key talent and therefore successfully execute
our strategy.
A high-performance culture is essential to executing
our strategy, delivering growth and being more
efficient. High-quality leaders can build diverse,
inclusive and engaged teams in which everyone
can deliver better results.
• We are delivering a ‘Play to Win Through People’
campaign across JM to create a clear understanding of
our people manager expectations and their importance
in delivering our strategy.
• We are building commercial and engineering capabilities
to ensure that we have quality leadership with
appropriate skills to lead the execution of our strategy.
• Our global employee engagement survey is helping us
measure the shift to ‘Play to Win culture’. Ensuring that
everyone in our company can share their views.
• Engagement and Diversity, Inclusion & Belonging
roadmaps are in place to create a highly engaged and
inclusive environment.
The risk remains unchanged. While there
are signs of improved engagement
from our surveys, we are still working
towards simplification.
As part of our commitment to a high-
performance culture, we have looked at
different solutions that will help us improve
the way we operate across our functions to
make them fit for the future.
This has led to the strategic decision to
introduce JM Global Solutions (JMGS).
The intention is to reduce complicated
processes that may slow us down and help
impact the customer and employee
experience in a positive way.
Risk report continued
Strategic risk
Operational risk
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Description
Key mitigations
Updates made to principal risk
Risk
movement
8. Breach to security or control of
platinum group metals in our processes
GLT sponsor: Alastair Judge, Chief Executive,
PGM Services
JM uses significant quantities of high-value precious
metals, which are transported, stored and processed
across our operations. We do not carry significant
exposure to price risk as we hedge our metal transactions
centrally, looking at overall group supply and demand.
Our PGMS business ensures the group has sufficient metal
to meet business demands and manages our metal
liquidity levels. There is a risk that we do not have
sufficient metal available. Therefore, we operate within
tight trading limits and defined liquidity levels to manage
the demand volatility. Metal price volatility affects how
much our trading business earns.
The precious metal industry globally is susceptible to
criminal activity resulting in the risk of theft, and we share
those challenges. 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. Failure
to mitigate this risk can have a significant impact on our
working capital, financial viability and/or undermine our
ability to meet our customer commitments.
• Long-term strategic planning around the metal
requirements of the group is undertaken to ensure
appropriate positioning for the future.
• We run a strong operational control environment within
our metal trading business.
• We hedge our metal transactions centrally through
looking at the overall group supply and demand,
minimising our exposure to metal price volatility.
• We maintain a robust security management system
to protect our metal holdings.
• We have appropriate insurance cover in place.
Formerly ‘Security of metal and failure
to manage metal commitments’.
The overall rating of the risk remains high
due to the threats around metal theft.
We have continued to strengthen physical
security and the metal controls environment
to ensure we have a proportionate control
structure to manage and optimise our
metal holdings.
9. Failure in one or more of JM’s
critical operational assets
GLT sponsor: Alastair Judge, Chief Executive,
PGM Services
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.
• Our asset failure risk management process is being
strengthened to calibrate rigour according to the
criticality of assets and risk profile of sites.
• All JM manufacturing sites have been categorised as
high, medium and low risk sites based on objective
review of site hazards and strategic importance to JM.
This will help prioritise resource and capital expenditure
allocation for critical ageing assets.
• In line with the scenario-based risk analysis
recommended by the TCFD, climate-related physical
risk assessments have been completed at a number
of identified sites.
The overall rating for this risk has
not changed.
We continue to assess this risk based on the
level of exposure across our businesses and
their reliance on aged critical equipment.
The implementation plan for enhanced
processes is on track and improvement
in risk exposure will be seen with the delivery
of ongoing initiatives.
Risk report continued
Strategic risk
Operational risk
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Other information
Description
Key mitigations
Updates made to principal risk
Risk
movement
10. Unsuccessful delivery of key business
transformation programmes
GLT sponsor: Peter Hill, Group Global Services and
Transformation Director
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 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.
Together, the transformation programmes will address
capability gaps and poor competitiveness in key markets.
Through the transformation, JM will develop and
strengthen its capability for ongoing continuous
improvement, delivery of complex projects and agility
to respond to future external trends.
• We have staffed and resourced all major transformation
programmes with capable programme leads and subject
matter experts.
• We continue to coach and support programme teams
to apply the JM Transformation Standard.
• Strong change management and
communication plans are in place for major cross-JM
programmes, such as the recent introduction of JMGS.
• We are identifying potential resource conflicts for
programmes running concurrently and working with
programme leads to resolve them.
Peter Hill has taken over as risk sponsor.
Over the past 12 months, we have
established stronger programme
and change management capability.
By applying JM’s Transformation Standard,
we expect to deliver benefits across the
portfolio at or above target and reduce
this risk in the coming year.
11. Business failure through
cyber-attack or other IT incidents
GLT sponsor: Stephen Oxley, Chief Financial Officer
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.
• We are driving investments in our IT and OT
infrastructure to improve our resilience and increase
operational efficiency.
• We deliver a range of employee awareness training
to educate on cyber risks and safe working practices.
• We are enhancing our Global Cyber Security function and
controls with the appointment of business-specific cyber
OT risk champions and technical leads.
The overall rating for this risk remains high,
reflecting the increasingly complex and
heightened external threat landscape. We
continue to manage this risk by enhancing
cyber security technologies and processes,
improving our ability to Identify, Prevent,
Detect, Respond and Recover, aligned
to our adoption of the NIST Cyber
Security Framework.
Risk report continued
Strategic risk
Operational risk
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Other information
Emerging risks and
opportunities
We continually monitor our external risk
landscape using a mixture of key risk
indicators, third-party reports, findings from
internal and external assurance providers,
and feedback from both customers and
suppliers. This information allows us to
identify emerging risks and prepare
reasonable mitigations.
For any identified emerging risks,
considered to be a threat to JM or its value
chain, we tailor our response to the size
of the risk to ensure our mitigation strategy
is proportionate.
In addition to risks continually monitored
by businesses, functions and sites, we
are paying attention to the following
emerging risks:
1. Digital risks
JM is developing strategies to deal with risks
and opportunities present in the digital
space that require focus. With regards to
generative AI, an AI Council has been
formed with cross-business representation
as well as the creation of an AI Policy to
provide employees with high-level direction
whilst the landscape evolves. The aim of the
Council is to evaluate opportunities from
multiple angles including business
enablement, commercial risks, personal
data concerns as well as JM’s ethical
approach to the use of AI and the potential
impact on resources.
Our businesses continue to assess and plan
what is required to move into the next
phases of digitisation for JM. There are
several legacy systems which will require
upgrades and digitisation to aid the speed
of our shift to an energy transition
company. Group IT Security is closely
monitoring the external threat landscape
for cyber-attack use cases, varying in
sophistication from the use of AI to create
more realistic or error free phishing emails
to deepfake technologies and polymorphic
malware that is created using AI to better
evade defences. Equally, our core security
vendors are all moving to incorporate AI
into their product offerings in order to
compete and counterattack vectors.
2. Sustainability risks
JM is committed to complying with
regulations concerning sustainability.
As part of this we are putting in place
mitigation strategies to help deal with our
compliance and reporting procedures. Not
reporting accordingly against sustainability
disclosure rules could result in fines or loss
of reputation.
The mitigation strategies include constant
horizon scanning, reinforcing the message
that ESG disclosure needs to be a priority,
education of colleagues about the issues
and methodologies for disclosure,
underpinned by putting in place
a robust reporting system overseen
by our sustainability team.
Risk report continued
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Other information
Going concern and viability
Going concern
In adopting the going concern basis for preparing
the accounts, the directors have considered the
business activities as set out in the Strategic
report and Financial review, pages 1 to 74,
as well as the group’s principal risks and
uncertainties, pages 62 to 70. As part of this
assessment, we have considered a base case and
severe but plausible trading scenario. Both
scenarios showed sufficient headroom under our
committed facilities and financial covenants.
As a final review, given the climate of greater
political and economic uncertainty, we have also
undertaken a reverse stress test to identify what
additional or alternative scenarios and
circumstances would threaten our financial
covenants or headroom. This shows that we have
headroom against either a further decline in
profitability of approximately 50% in the financial
year to March 2025, well beyond the severe-but-
plausible scenario, or a significant increase in
borrowings (net debt would need to more than
double in the financial year to March 2025),
or a significant increase in interest charges
(these would need to rise more than 70%).
In this unlikely scenario, we still have other
mitigating actions available including retaining
the full expected proceeds from divestment of
Medical Device Components, reducing capital
expenditure, renegotiating payment terms or
reducing our dividend. The directors therefore
believe that the group has adequate resources to
fund its operations for the period of 12 months
following the date of this report, making it
appropriate to prepare the accounts on a going
concern basis. Further details on going concern,
viability and facilities can be found in note 1 on
page 149 of the accounts.
Viability
We have assessed how viable we are as a business
over a three-year period, in line with our
planning horizon as this represents a timeframe
over which the directors believe they can
reasonably forecast the group’s performance.
During the year, the board carried out a robust
assessment of the principal and emerging risks
affecting our business, particularly those that
could threaten our business model. The risks,
and the actions taken to mitigate them, are
described in the Risk report on pages 62 to 70.
We assess our prospects through our annual
strategic and business planning process.
This process includes a review of assumptions
made including market, vehicle and production
outlooks, customer demand, underlying growth,
cost assumptions, metal prices, key risks and
opportunities as well as an appraisal of our
strategy and significant capital investment
decisions. The Chief Executive Officer and Chief
Financial Officer lead these reviews, along with
the Chief Executives of each business.
The board also reviews the strategy for each
business throughout the year, looking at our
current position and prospects for the coming
years. This allows us to reaffirm our overall
strategy and reassess the risks that could
impact its success.
We do not expect climate change risks to have
a material near-term effect on our forward-
looking forecasts for going concern or viability.
See scenarios opposite for more details
of our analysis.
Analysis through five
stress scenarios
In making the viability assessment, we have
analysed each of the principal risks facing the
group – as described in the Risk report on pages
62 to 70 – and identified the items within each
principal risk category that might significantly
affect cash flow and viability. We have then
modelled these in five stress scenarios.
Scenario 1 – Geopolitical and
macroeconomic risks impacting
JM’s operations
This scenario considers the increased risk
presented by geopolitical and macroeconomic
risks, such as a six-month slowdown in our
operations in China. This builds on the severe but
plausible trading scenario which considers faster
electrification and a reduction in end industry
growth across the group.
Scenario 2 – Delivering on key
initiatives (transformation
programmes and capital projects)
This scenario considers the failure to execute
key initiatives and projects effectively. It includes
the impact of a six month delay to key capital
projects, and delays to delivery of transformation
and other cost savings.
Scenario 3 – Failure in one or more
of our critical operational assets
This scenario covers a temporary one-month
shutdown of a refinery, which leads to higher
working capital and lower profits, as well as
a temporary shutdown to key sites due to
potential external events, such as supply chain
or cyber issues.
Scenario 4 – Disruption to the
platinum group metals value chain
This scenario considers the failure to secure metal
deposits and failure to source sufficient metal
to manage and satisfy our internal and external
obligations. We modelled an increase in metal
prices to highs over the period April 2023 to March
2024 and reduction of customer metal funding.
Scenario 5 – Other risks
This scenario includes the effect of all our other
principal risks — outlined in the Risk report on
pages 62 to 70 — where not already considered in
the scenarios above. For each risk, we have
estimated a financial effect, which considers the
impact and likelihood of the risk. Given the wide
range of risks we face, we have then applied an
overall probability weighting of 20% which allows
us to work out the potential financial impact.
In evaluating our viability under each of these
scenarios, we considered our current financing
arrangements, see page 149, and assumed
we would not refinance any maturing debt –
although, in reality, we would expect to refinance
our debts well ahead of maturity thereby
increasing headroom.
At the end of the viability period (March 2027)
we have £1 billion of debt facilities maturing,
that will be appropriately replaced well ahead
of maturity, and we have a strong track record
of refinancing with no concerns and good
capacity in the markets where we raise debt.
Conclusion
In all of the scenarios assessed, our stress testing
shows that, only when all the risks identified
above are overlaid on the severe but plausible
trading scenario, there is a breach of headroom
under our committed facilities in March 2027.
Given refinancing and other mitigations as noted
above, the directors have a reasonable
expectation that the company and group will be
able to continue operating and meet its liabilities
as they fall due over the three year period covered
in the viability review.
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Other information
Compliance statement
The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 amend sections 414C, 414CA and 414CB of the Companies Act 2006 (2006 Act), placing
requirements on the company to incorporate climate disclosures in our Annual Report and Accounts. We believe these have been addressed within this year’s climate-related disclosures
and as such we have referenced the location of these disclosures in the table below, and within our Task Force on Climate-related Financial Disclosures (TCFD) Compliance Table in the
Sustainability Performance Databook available at matthey.com. Our business model is set out on pages 10-11. Our purpose, described on page 7, and our sustainability strategy on pages
34-52 set out how we act as a responsible business. Our non-financial KPIs which support the delivery of our strategic priorities are shown on pages 14-15 and 17. We have policies and
standards in place to manage our principal risks, detailed on pages 62-70, which form part of our internal control framework. A description of all matters relating to climate-related risks
and opportunities, including the governance arrangements, scenario testing and metrics and targets, are included within the TCFD on pages 53-61.
Reporting requirement
Policies and standards that govern
our approach and due diligence1
Relevant principal risks2
Metrics
Outcomes and additional
information
Our group policies governing
Environmental matters define our
key requirements and guiding
principles to reduce the risk of
harm to the environment, support
our commitment to sustainability
and help keep our people and the
communities we serve safe.
• Environment, Health and Safety
(EHS) Policy
• Procurement Policy
• Supplier Code of Conduct
5 – A significant work-related EHS
incident – see page 66
9 – Failure in one or more of JM’s
critical operational assets – see
page 68
• Sales contributing to our four
priority UN Sustainable
Development Goals (SDGs) – see
page 17
• R&D spend contributing to our
four priority SDGs – see page 17
• GHG emissions – see page 41
• CDP climate change rating: A-
• ChemScore – ChemSec: 4th / 50
• MSCI ESG rating: AAA
Sustainability
see pages 34-52
TCFD
see pages 53-61
Societal Value Committee report
see pages 89-91
Section 414CB (2A)(a)-(h)
2006 Act
see pages 53-61
At Johnson Matthey, our people are
the backbone of our success. We
want our Employees to feel safe,
promote a culture of inclusion and
diversity, feel empowered to make
the right decisions, behave in the
right way and build long-term
fulfilling careers. Our HR, Ethics
and Compliance and EHS policies
help support this.
• Board Diversity Policy
• Code of Ethics
• Diversity, Equity, Inclusion and
Belonging Policy
• EHS Policy
• Employee Handbook
• Employee Leave Policy
• Smart Working Policy
• Speak Up Policy
• Substance Misuse Policy
• Working Together Policy
7 – A low-performing culture
undermines our strategy – see
page 67
• Total recordable injury and
illness rate – see pages 17
and 45
• Diversity – female representation
across all management levels –
see pages 17 and 47
• Employee engagement score –
see page 35
• Gender pay gap results – see
page 48
• Equileap: 41st / 4,000
People
see pages 45-52
Health and safety
see page 45
Employee engagement
see page 46
Gender Pay Gap Report
see page 48
Diversity, inclusion and
belonging
see pages 47-48
Speak Up
see page 49
1. Some of which are only published internally.
2. More information about our principal risks can be found on pages 62-70.
Non-financial and sustainability information statement
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Other information
Reporting requirement
Policies and standards that govern
our approach and due diligence1
Relevant principal risks2
Metrics
Outcomes and additional
information
We consider our entire value chain
when looking at Human Rights,
including our own operations,
suppliers and customers.
• Code of Ethics
• Conflict Minerals and Cobalt
Policy
• Data Protection Policy and
Employee Privacy Notice
• Human Rights Policy
• Modern Slavery Statement
• Procurement Policy
• Speak Up Policy
• Supplier Code of Conduct
6 – Disruption to provision of key
goods or services by suppliers – see
page 67
• EcoVadis rating: Gold
• Human rights risk assessment –
see page 49
• Code of Ethics training – see
page 49
Suppliers
see pages 49-50 and 88
Modern Slavery Statement
see page 49 and our website,
matthey.com/modern-slavery
Responsible sourcing
see page 50
Ethical standards
see pages 49-50
Speak Up
see page 49
Doing the Right Thing. Together.
We are all responsible for Social
matters and our Code of Ethics
is a guide for how to do business
ethically, fairly and responsibly.
It ensures we embed sustainability
in everything we do. The Code of
Ethics is relevant to all our
stakeholders (suppliers, customers,
partners, agents, investors and the
wider community). We ensure that
our suppliers are also held to high
standards and adhere to our
Supplier Code of Conduct.
• Code of Ethics
• EHS Policy
• Supplier Code of Conduct
–
• Charitable giving – see page 86
• Volunteering days – see page 51
• FTSE4Good: 4.2 / 5
Ethical standards
see pages 49-50
Investing in our communities
see pages 51-52
Sustainability
see pages 34-52
Sustainability Performance
Databook – see our website,
matthey.com/sustainability-
databook
Johnson Matthey has a zero-
tolerance approach to bribery and
corruption. Our global policies
support the group with compliance
with various laws relating to
Anti-Bribery and Anti-
Corruption. We strive to act with
openness, fairness and honesty
and expect our stakeholders
to do the same.
• Anti-Bribery and Corruption
Policy
• Code of Ethics
• Conflicts of Interest Policy
• Conflict Minerals and Cobalt
Policy
• Data Protection Policy
• Gifts, Hospitality and Charitable
Donations Policy
• Global Tax Policy
• Human Rights Policy
• Speak Up Policy
• Supplier Code of Conduct
–
• Code of Ethics training – see
page 49
• EcoVadis rating: Gold
Suppliers
see pages 49-50 and 88
People
see pages 45-52
Ethical standards
see pages 49-50
1. Some of which are only published internally.
2. More information about our principal risks can be found on pages 63-70.
Non-financial and sustainability information statement continued
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Other information
Our Section 172 statement comprises this section and pages 86-88 of the Governance report; it describes how the directors have had regard to stakeholders’ interests when discharging their
duties under Section 172 of the Companies Act 2006. The mechanisms used to engage with shareholders are described on page 86. You can also read more about how the board considered
these matters during the year, as follows:
Section 172(1) considerations
(a) The likely consequences of any decision
in the long term
During the year, the directors focused on the execution
of our strategy and strategic milestones to ensure we are
positioned to create long-term value for shareholders.
This recognises the role we play in wider society helping
the transition to a greener economy.
• Our purpose – see page 7
• Our business model – see pages 10-11
• Our strategy – see pages 14-15
• Themes that are changing our world – see pages 8-9
• Financial review – see pages 26-33
• Sustainability – see pages 34-52
(b) Interests of employees
The directors recognise the importance of attracting,
retaining and motivating high-performing individuals.
The directors consider the implications for our people where
possible. They also seek to ensure we remain committed
to promoting a safe and inclusive working environment for
all our people.
• People – see pages 45-52
• Employee engagement – see page 91
• Diversity, equity, inclusion and belonging –
see pages 47-48
• Speak Up – see page 49
• Culture – see pages 46 and 90
(e) Maintaining a reputation for high
standards of business conduct
Our Code of Ethics, Supplier Code of Conduct and Modern
Slavery Statement are reviewed regularly by the board. This
ensures the high standards of conduct we expect are upheld
by all levels of the business. The board monitors compliance
with these through JM’s internal control framework.
• Our purpose – see page 7
• Speak Up – see page 49
• Human rights and ethical standards – see pages 49-50
• Internal controls – see page 102
• Modern Slavery Statement – see page 49
• Ethics and compliance – see pages 49-50
(f) The need to act fairly between members
of the company
Following careful consideration of all relevant factors
including the impact on our stakeholders, the directors
assess the course of action that enables the delivery
of our strategy and the long-term success of the company.
• Stakeholder engagement – see pages 86-88
• Board outcomes – see pages 82-83
• Annual General Meeting – see page 130
(c) Fostering the company’s business
relationships with suppliers, customers and
others
Our relationship with customers, suppliers, governments and
partners is essential to ensure the success of our strategy and
the long-term success of the company. The board receives
updates on engagement across the group at meetings.
• Financial review – see pages 26-33
• Modern Slavery Statement – see page 49
• Our business model – see pages 10-11
• Sustainability – see pages 34-52
• Human rights and ethical standards – see pages 49-50
• Culture – see pages 46 and 90
The Strategic report from pages 1-74 was approved by the board on 22nd May 2024 and is signed on its behalf by:
Liam Condon
Chief Executive Officer
Section 172 statement
(d) Impact of operations on the community
and the environment
Sustainability is at the heart of our strategy, and the impact
we have on the community and environment is carefully
considered by the board. The board closely monitors
decisions relating to our sustainability strategy through
the Societal Value Committee.
• Our purpose – see page 7
• Themes that are changing our world – see pages 8-9
• Sustainability – see pages 34-52
• Task Force on Climate-related Financial Disclosures – see
pages 53-61
• Societal Value Committee report – see pages 89-91
Johnson Matthey Annual Report and Accounts 2024
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Other information
Chair’s introduction to governance
Good corporate governance is critical for
our transformation journey, to be successful
and sustainable in the long term. This
report sets out JM’s approach to corporate
governance and how it contributes to the
development and delivery of our strategy.
Strategy
Following the launch of our revised
strategy in 2022, the board has guided
and supported management as we continue
our transformation into an industry-leading
energy transition company. The board
receives regular presentations from senior
management to ensure they are focused
on delivering sustainable growth and
returns for our shareholders.
As a board, we take time to understand
the market opportunities and customer
demand to ensure our businesses can
deliver in line with our stakeholders
expectations. Due to the slower pace in
market development, we took the decisions
to reduce our investment and delay the
start-up of production of our new Hydrogen
Technologies plant at Royston, UK. The
board is confident that the green hydrogen
opportunity remains and we continue to
monitor the market and challenge
management, to ensure the business adapts
to the changing needs of our customers.
Board composition
and succession
This year, the board, together with the
Nomination Committee, continued to
monitor the board’s composition, skills
and diversity to ensure we have the right
structure and skills to support and challenge
the management team. We were delighted
to welcome Barbara Jeremiah to the board
in July 2023. Barbara brings strong
leadership, deep understanding of metals
and has extensive experience in North
American markets. You can read more about
Barbara’s introduction to JM on page 94.
I am pleased to confirm that during the year
the board met and continues to meet the
2024 target set by the Parker Review with
regard to ethnic diversity at board level,
and also the targets set by the FTSE Women
Leaders Review, following the appointment
of Barbara Jeremiah.
Culture and engagement
Our values provide the framework for how
we perform our duties, engage with each
other in JM, and with our customers and
stakeholders. The board places great
emphasis on ensuring JM’s culture aligns
with our purpose, values and strategy and
considers multiple sources to monitor and
assess how our culture is embedded.
We remain mindful of how our decisions
impact our various stakeholders and the
range of matters discussed and debated by
the board during the year can be found on
page 74. Listening to our colleagues
enables us to understand what matters to
them and the challenges to their day-to-day
work. Board members met with colleagues
across JM to hear their experience of
our transformation journey first hand.
You can read more about our culture and
stakeholder engagement on pages 90-91.
Each year, the performance of the board,
its committees, and individual directors, is
reviewed in accordance with the 2018
Corporate Governance Code (the Code), to
ensure they are operating effectively and
to identify development opportunities
where necessary. This year, an externally
facilitated effectiveness review took place,
led by an independent consultant. The
board was pleased by the results of the
effectiveness review which concluded
that it continues to function well. More
information on our externally facilitated
board and committee effectiveness review
can be found on pages 84 and 85.
During the year we also took the
opportunity to simplify our governance
by reducing the membership of our
committees and the frequency of our
meetings. This enables our discussions
to be more focused as we continue to
challenge management on the execution
of our strategy.
Looking ahead
We continue to monitor the ongoing
regulatory reforms in relation to
governance and keep our own governance
arrangements under regular review.
As such, the board has begun to consider
the key changes in the new UK Corporate
Governance Code 2024 which will apply
to JM from April 2025, to ensure we are
well placed to meet these requirements.
As we continue to focus on our strategic
transformation, I would like to thank
all colleagues for their hard work
and commitment during a year
of significant change.
Patrick Thomas
Chair
“Good corporate
governance is critical
for our transformation
journey and sustainable
long-term success.”
Patrick Thomas, Chair
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Other information
How we apply the principles of the Code
Board leadership and company purpose
The role of the board
Page 80
Purpose and culture
Pages 46 and 90
Resources and controls
Page 102
Stakeholder engagement
Pages 86-88
Workforce engagement
Page 91
Division of responsibilities
Role of the Chair, non-executive directors and Company Secretary
Page 80
Composition of the board
Pages 78-79
Composition, succession and evaluation
Appointments to the board and succession planning
Page 94
Career, experience and knowledge of the board
Pages 77-79
Board evaluation
Pages 84-85
Audit, risk and internal control
Audit Committee report
Pages 96-104
Risk report
Pages 62-70
Remuneration
Remuneration Committee report
Pages 105-127
Board statements
Compliance with the UK
Corporate Governance
Code 2018
During the year under review, we have
applied all the principles and complied
with all the provisions of the Code except
provision 41 – engagement with the
workforce on alignment of executive pay
with the wider company pay policy. While
we inform our employees of global changes
to pay and benefits, we have not actively
sought a two-way dialogue over executive
pay. We benchmark remuneration against
our peers to ensure we offer competitive
pay and benefits, so we continue to attract
and retain the highest-calibre candidates.
During the year, all employees were able
to provide feedback on a range of matters,
including remuneration, as part of our
annual employee engagement survey.
Read more in our Remuneration Committee
report on page 107.
The Code is publicly available on the Financial
Reporting Council (FRC) website, frc.org.uk
Fair, balanced and
understandable
In accordance with the Code, the board
considers that, taken as a whole, the Annual
Report and Accounts 2024 is fair, balanced
and understandable, and provides the
information necessary for shareholders
to assess Johnson Matthey’s position,
performance, business model and strategy.
The Audit Committee assesses the process
that management uses to support the
recommendation to the board.
Read more about our FBU process on
page 102.
Going concern
The directors have a reasonable
expectation that Johnson Matthey Plc has
adequate resources to continue to fund
its operations for a period of 12 months
from the date of approval of the financial
statements. For this reason, they continue
to adopt the going concern basis in
preparing the accounts.
Read more about our going concern
on page 71.
Viability
The directors have assessed the viability
of the company and group over a three-year
period, taking into account the group’s
current position and the potential impact
of the principal risks and emerging risks.
Based on this assessment, the directors
confirm they have a reasonable expectation
that the company and group will be able
to continue operating and meet its liabilities
as they fall due over the three-year period
to 31st March 2027.
Read more about our viability
on page 71.
Risk assessment of the principal
risks facing the company and
annual review of systems of risk
management and internal control
The board acknowledges its responsibility
for establishing procedures to manage risk.
During the year, the board reviewed the
effectiveness of the company’s risk
management and internal control systems
and conducted a robust review of the
company’s principal risks. These activities
meet the board’s responsibilities in
connection with risk management and
internal control as set out in the Code.
Read more about our risk assessment of
the principal risks facing the Company
and annual review of systems of risk
management and internal control on
pages 62 to 70.
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Other information
Non-Executive Directors’ skills and experience
Industry experience
Patrick
Thomas
Rita
Forst
Jane
Griffiths
John
O’Higgins
Barbara
Jeremiah
Xiaozhi
Liu
Doug
Webb
Automotive
Chemicals
Energy
Oil and gas
Precious metals
Manufacturing
Professional services
Technology
Sustainability
Organisation transformation
Board at a glance
as at 31st March 2024
Board and committee attendance
Director
Board
Societal Value
Committee1
Nomination
Committee
Audit
Committee1 2
Remuneration
Committee1
Patrick Thomas
7/7
3/3
6/6
–
6/6
Liam Condon
7/7
3/3
–
–
–
Stephen Oxley3
6/7
3/3
–
–
–
Rita Forst4
6/7
3/3
5/6
3/3
5/5
Jane Griffiths5
7/7
3/3
5/6
3/3
5/6
John O’Higgins
7/7
3/3
6/6
3/3
6/6
Barbara Jeremiah6
5/5
2/2
4/5
2/2
3/3
Xiaozhi Liu7
7/7
3/3
5/6
3/3
5/6
Chris Mottershead8
6/6
3/3
5/5
3/3
5/5
Doug Webb9
7/7
3/3
5/6
3/3
5/6
1. With effect from 2nd January 2024, the board committee membership changed. For more information see the Nomination Committee report, page 93.
2. The Audit Committee meets a minimum of four times per year. In the financial year 2023/24, the March meeting was moved to April and will therefore be counted in the next financial year.
3. Stephen Oxley was unable to attend the April 2023 board meeting due to travel disruption.
4. Rita Forst was unable to attend the April 2023 board meeting and February 2024 Nomination Committee meeting, which were arranged at short notice, due to scheduling conflicts.
5. Jane Griffiths was unable to attend the August 2023 Nomination Committee meeting and August 2023 Remuneration Committee meeting, which were arranged at short notice, due to a scheduling conflict.
6. Barbara Jeremiah joined the board and committees in July 2023. Barbara was unable to attend the February 2024 Nomination Committee meeting, which was arranged at short notice, due to a
scheduling conflict.
7. Xiaozhi Liu was unable to attend the August 2023 Nomination Committee meeting and August 2023 Remuneration Committee meeting, which were arranged at short notice, due to a scheduling conflict.
8. Chris Mottershead retired from the board on 26th January 2024.
9. Doug Webb was unable to attend the August 2023 Nomination Committee meeting and August 2023 Remuneration Committee meeting, which were arranged at short notice, due to a scheduling conflict.
Board composition
Gender diversity
Chair and NED tenure
Roles
Nationality
British
Irish
German
US citizen
4
2
2
1
44.5%
22.2%
22.2% 11.1%
Chair
Executive
Non-Executive
1
2
6
11.0%
22.0%
67.0%
0-3 yrs
4-6 yrs
7-9 yrs
2
4
1
57.0%
29.0%
14.0%
Male directors
Female directors
5
4
2023
Male directors: 6
Female directors: 3
44.0%
56.0%
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Other information
Committee Chair
Audit Committee member
Nomination Committee member
Remuneration Committee member
Societal Value Committee member
Board of Directors
Change during the year:
Chris Mottershead stepped down from his position as independent Non-executive Director in January 2024.
Patrick Thomas
Chair
Appointed to the board: June 2018
Career and experience
which support strategy
and long-term success
Between 2015 and May 2018, Patrick
was Chief Executive Officer and Chair
of the board of management at
Covestro AG. Between 2007 and 2015,
he was Chief Executive Officer of its
predecessor, Bayer MaterialScience,
before its demerger from Bayer AG.
He is a fellow of the Royal Academy
of Engineering.
Contribution
Patrick has deep experience of leading
international speciality chemical
businesses. He also has a track record in
driving growth through science and
innovation across global markets, with
a strong focus on sustainability.
External appointments
Non-Executive Director at AkzoNobel
and member of Covestro AG’s
supervisory board.
Liam Condon
Chief Executive Officer
Appointed to the board: March 2022
Career and experience
which support strategy
and long-term success
Liam was previously a member of the
board of management of Bayer AG and
President of the Crop Science Division, a
role he held for nine years. He has also
served in senior roles at Schering AG
and Bayer HealthCare.
Contribution
Liam is a dynamic and values-driven
leader, with an impressive track record
of leading science-based businesses
while delivering consistent high-quality
performance. He balances commercial
ability with a strong strategic
perspective. He has a proven track
record of driving growth and
modernising organisations.
External appointments
Non-Executive Director at Halma plc.
Stephen Oxley
Chief Financial Officer
Appointed to the board: April 2021
Career and experience
which support strategy
and long-term success
Stephen joined from KPMG, where
he was a partner. He is experienced in
both audit and advisory roles for large,
complex international companies
across a variety of sectors including
fast-moving consumer goods, healthcare,
natural resources and industrials.
Stephen is a chartered accountant.
Contribution
Stephen brings operational and
technical understanding of Johnson
Matthey and significant experience
working with companies going through
major change programmes.
External appointments
Non-Executive Member of the Audit
and Risk Assurance Committee for The
Sovereign Grant.
Rita Forst
Independent Non-Executive
Director
Appointed to the board: October 2021
Career and experience
which support strategy
and long-term success
Rita spent more than 35 years at the
Opel European division of General
Motors in senior engineering, product
development and management
positions, including Vice President,
Engineering, for General Motors
Europe. Rita was responsible for the
development of new generations of
engines and car models for Opel and
General Motors, as well as European
research and development activities.
Contribution
Rita has a deep understanding of the
automotive and powertrain sectors.
Her extensive knowledge includes
research and development of
conventional and alternative
powertrains, as well as future
vehicle technologies.
External appointments
Non-Executive Director of Westport
Fuel Systems Inc, Non-Executive
Director of AerCap Holdings N.V.,
Member of the supervisory board of
NORMA Group SE and Member of the
advisory board of iwis SE & Co.KG.
Barbara Jeremiah
Senior Independent Director
Appointed to the board: July 2023
Career and experience
which support strategy
and long-term success
Most recently, Barbara was Executive
Vice President, Corporate Development
of Alcoa Inc, a global aluminiuim
producer. She has extensive board
experience, having previously been a
non-executive director of Premier Oil
plc, Aggreko and Russel Metals Inc.
Barbara is a qualified lawyer.
Contribution
Barbara brings strong leadership, deep
understanding of metals and has
extensive experience in North American
markets, having spent over 30 years at
Alcoa Inc. Her previous experience as a
non-executive director enables her to
act as a soundng board for the Chair.
External appointments
Chair of The Weir Group PLC and
Non-Executive Director of Senior plc.
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Committee Chair
Audit Committee member
Nomination Committee member
Remuneration Committee member
Societal Value Committee member
Jane Griffiths
Independent Non-Executive
Director
Appointed to the board:
January 2017
Career and experience
which support strategy
and long-term success
Jane held various roles at Johnson &
Johnson (J&J) from 1982 until her
retirement in 2019, with experience in
international and affiliate strategic
marketing, sales management, product
management, general management
and clinical research. Most recently, she
was Global Head of Actelion, a Janssen
pharmaceutical subsidiary of J&J.
Contribution
Jane has significant experience and
understanding of global strategy
management across a variety of
markets, and a strong interest in
sustainability and diversity.
External appointments
Chair of Redx Pharma Plc, Non-
Executive Director of BAE Systems plc.
Doug Webb
Independent Non-Executive
Director
Appointed to the board:
September 2019
Career and experience
which support strategy
and long-term success
Doug was Chief Financial Officer at
Meggitt plc from 2013 to 2018, and
was previously Chief Financial Officer at
London Stock Exchange Group plc and
QinetiQ Group plc. Before that, he held
senior finance roles at Logica plc. Doug
began his career in Price Waterhouse’s
audit and business advisory team. He is
a fellow of the Institute of Chartered
Accountants in England and Wales.
Contribution
Doug has a strong background in
corporate financial management and a
deep understanding of the technology
and engineering sectors. Doug chaired
the Audit Committee at SEGRO plc for
nine years until April 2019, making
him ideally suited to chairing our
Audit Committee and acting as its
financial expert.
External appointments
Non-Executive Director of United
Utilities Group PLC.
Simon Price
General Counsel and Company
Secretary
Appointed as General Counsel and
Company Secretary: June 2023
Career and experience
which support strategy
and long-term success
Simon trained as a research
scientist before moving into law,
spending 11 years at Freshfields
and then at Smiths Group plc,
where he was General Counsel for
the APAC region. He joined JM in
2019 as Deputy General Counsel
and General Counsel of Clean Air
before being appointed to the role
of General Counsel and Company
Secretary.
Contribution
Simon’s in-depth knowledge of
corporate law and legal risk, along
with his experience of the
chemicals and technology sectors,
means he is well placed to advise
JM on key issues relating to legal
matters, corporate governance
and compliance.
External appointments
None
Xiaozhi Liu
Independent Non-Executive
Director
Appointed to the board:
April 2019
Career and experience
which support strategy
and long-term success
Xiaozhi is the founder and Chief
Executive of ASL Automobile Science
& Technology, a position she has held
since 2009. She was previously a
senior executive in several automotive
companies, including Chair and
Chief Executive of General Motors
Taiwan and non-executive director
of InBev SA/NB.
Contribution
Xiaozhi has deep knowledge and
perspective on sustainable and
technology-driven businesses, and
strong experience of the global
automotive sector, particularly in China,
as well as Europe and the US.
External appointments
Chief Executive of ASL Automobile
Science & Technology, Non-Executive
Director of Autoliv Inc.
John O’Higgins
Independent Non-Executive
Director
Appointed to the board:
November 2017
Career and experience
which support strategy
and long-term success
John was Chief Executive of Spectris plc
from January 2006 to September 2018,
leading the business through a period
of significant transformation. He
previously worked for Honeywell as
President of Automation and Control
Solutions, Asia Pacific, and in other
management roles. From 2010 to
2015, John was a Non-Executive
Director at Exide Technologies Inc, a
battery technology supplier to
automotive and industrial users. He
began his career as a design engineer at
Daimler-Benz in Stuttgart.
Contribution
John has extensive business and
industrial experience, as well as a track
record of portfolio analysis and
realignment, driving growth and
improving operational efficiencies.
External appointments
Chair of Elementis plc, Non-Executive
Director of Oxford Nanopore
Technologies Plc, member of the
supervisory board of ENVEA Global SA
and Trustee of the Wincott Foundation.
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Other information
Chair
Patrick Thomas
• Leads the board
• Ensures an effective board, including welcoming
contributions and challenges from directors
• Maintains regular and effective shareholder
communications so that the board has a clear
understanding of their views
• Chairs the Nomination Committee, initiating change and
succession planning for the board and senior management
• Promotes high standards of integrity, probity and corporate
governance throughout JM
Senior Independent Director
Barbara Jeremiah
• Provides a sounding board for the Chair
• Acts, if necessary, as a focal point and intermediary
for the other directors
• Ensures any key issues not being addressed by the Chair
or senior management are acted upon
• Is available to shareholders should they have concerns
• Leads the annual appraisal of the Chair’s performance
Chief Financial Officer
Stephen Oxley
• Has day-to-day responsibility for managing the finance,
IT, and security functions
• Leads the group’s finance activities, risks and controls
Independent non-executive directors
Rita Forst, Jane Griffiths, Xiaozhi Liu,
John O’Higgins and Doug Webb
• Constructively challenge the executive directors
• Scrutinise management’s performance
• Provide independent advice on strategy proposals
• Satisfy themselves on the integrity of financial information
and on the effectiveness of financial controls and risk
management systems
• Determine appropriate executive director remuneration
Chief Executive Officer
Liam Condon
• Day-to-day responsibility for running the group’s operations
• Recommends and implements group strategy
• Applies group policies
• Promotes JM’s culture and standards
General Counsel and Company Secretary
Simon Price
• Together with the Chair, keeps the effectiveness of
the company’s and the board’s governance processes
under review
• Provides advice on corporate governance matters
Our board of directors
At the date of this report, the board
comprises nine directors: the Chair,
two executive directors, the Senior
Independent Director and five independent
non-executive directors. The board is
responsible for our long-term success.
It provides leadership and direction and
monitors Johnson Matthey’s culture and
values. The board also sets our strategy
and oversees its implementation, ensuring
we are managing risks appropriately and
acting in the interests of our stakeholders.
The responsibilities we do not delegate
as a board are included in the matters
reserved for the board in our
Governance Framework.
Governance Framework: matthey.com/
governance-framework
Our governance structure
Board composition and roles
Our non-executive directors are determined to be independent by the board, in accordance with the Code’s criteria. The board members’
respective career, experience and knowledge enable them to discharge their respective duties and responsibilities effectively. Further
details can be found on pages 78-79. The Chair was considered independent on appointment.
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Audit
Committee
• Doug Webb (Chair)
• Rita Forst
• Jane Griffiths
• Barbara Jeremiah
• John O’Higgins
Disclosure
Committee
The committee comprises
executive management and
the General Counsel and
Company Secretary (Chair).
The board has delegated
specific responsibilities to
the Disclosure Committee
which identifies and
controls inside information,
and determines how or
when that information is
disclosed, in accordance
with applicable legal and
regulatory requirements.
Group Leadership Team
The board delegates responsibility for implementing operational decisions and for the day-to-day management of the business to the Chief Executive Officer, who is supported
by the Group Leadership Team (GLT). Our Delegation of Authorities Framework sets out levels of authority for decision-making throughout the group.
Nomination
Committee
• Patrick Thomas (Chair)
• Rita Forst
• Barbara Jeremiah
• Jane Griffiths
• John O’Higgins
• Xiaozhi Liu
• Doug Webb
Remuneration
Committee
• John O’Higgins (Chair)
• Jane Griffiths
• Xiaozhi Liu
• Doug Webb
Societal Value
Committee
• Jane Griffiths (Chair)
• Liam Condon
• Barbara Jeremiah
• Rita Forst
• John O’Higgins
• Stephen Oxley
Our board committees
From January 2024, the membership of our board committees was reduced, to align with the company’s overall approach to simplifying the business. Whilst there had been benefits in
all non-executive directors being members of all committees, it was felt that a more focused membership would enhance efficiencies to support the delivery of our strategic priorities.
The number of board and committee meetings held during the financial year are included on page 77. The board keeps the number of meetings under review to ensure that
non-executive directors have sufficient time to discharge their duties.
Governance Framework: matthey.com/governance-framework
Details of GLT members and their relevant experience are on our website: matthey.com/GLT
In May 2024, as we continued to simplify our governance, the board agreed to consolidate the responsibilities of the Ethics Panel, which, among other things, oversaw our Speak Up
programme, to the Societal Value Committee.
Read more on
pages 92 to 95
Read more on
pages 89 to 91
Read more on
pages 96 to 104
Read more on
pages 105 to 127
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Our board agendas reflect our strategic priorities and provide us sufficient time to discuss and develop proposals and monitor group performance. Over these two pages,
we have set out some of the outcomes of matters we discussed during the year, with different stakeholder groups central to those decisions. Our stakeholder engagement
on pages 86 to 88 (including our Section 172 statement on page 74), illustrates how the board considers stakeholder views and the outcomes of those considerations.
Read more about our strategy on pages 14 and 15 and risk on pages 62-70.
Board outcomes
November
• Reviewed and approved the half-year results
and 2024/25 interim dividend
• Carried out a risk review
• Approved board committee composition changes
with effect from 2nd January 2024
April
• Approved the sale of our Diagnostic Services business,
supporting our strategic milestone of the Value
Business divestment programme
• Appointed Simon Price as General Counsel and
Company Secretary with effect from June 2023
May
• Reviewed and approved the full year results and
Annual Report and Accounts 2023, and recommended
approval of the 2022/23 final dividend to shareholders
• Received an update on the JM and Hystar strategic
partnership in renewable hydrogen production, one of
our strategic milestones to win at least two large-scale
strategic partnerships in Hydrogen Technologies
• Our Senior Independent Director met with
the non‑executive directors to review the
Chair’s performance
June
• Investor engagement following the year-end results,
including executive director participation in a Catalyst
Technologies seminar for investors and analysts
October
• Approved the closure of manufacturing operations
at our JM Clean Air plant in Germiston, South Africa
in line with our footprint rationalisation programme
August
• Approved the sale of certain assets of the German
battery materials business, supporting JM’s exit of
the battery materials market to enable focus on its
core businesses
• Barbara Jeremiah visited Wayne, US as part of her
induction programme, including meeting with site
leadership and high-potential leaders
July
• Approved an investment agreement with Shanghai
Jiading District for plans to build a new catalyst coated
membrane production facility for multiple proton
exchange membrane (PEM) fuel cell applications
and PEM electrolysers
• Board engaged with shareholders at the AGM
JM Global Solutions
In October, following a detailed review, the board
approved the JM Global Solutions (JMGS) business
case for a fully integrated hybrid global business
services model for Finance, Procurement and HR.
The board considered this would improve the
quality of the current service, drive standardisation
and reduce cost. The board agreed that this level
of change was key for JM to transform for growth
and would create a more integrated culture.
Governance in action
Governance in action
Board oversight of cyber security
in November, following a request from the board,
an independent review of cyber matters was
undertaken, resulting in a cyber risk reduction
programme being developed using input and
guidance from key partners. The board reviewed
the outcomes and recommendations, and with
oversight through CFO sponsorship, has continued
to review this programme throughout the year.
Updates for these reviews have been provided by
the Chief Information Officer on JM’s cyber risks
and mitigation plans, including current and
future innovation opportunities such as digital,
AI and a demonstration of the cyber security
controls in place.
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December
• Jane Griffiths and Doug Webb visited Swindon, UK as
part of the board’s workforce engagement programme
January
• External board effectiveness review began
February
• Board site visit to Royston, UK including site tours and
workforce engagement
• Approved a new London workspace for employees
May
• Received a teach-in on our Catalyst
Technologies business
• Discussed external board and committee
effectiveness review findings
March
• Approved the sale of our Battery Systems business
and our Medical Device Components business,
as part of our Value Business divestment programme
April
• Xiaozhi Liu visited Shanghai, China as part of the
board’s workforce engagement programme
Board 2023/24 time allocation
Meeting agendas are agreed by the Chair, CEO and
General Counsel and Company Secretary and combine
a balance of regular standing items as outlined below.
Executive reports: The CEO and CFO provide
high-level operational and financial updates
presenting key achievements, challenges and actions
being taken.
Strategy and performance: The board reviews key
areas of strategy and performance, presented by our
business Chief Executives and Function leaders.
Transformation: The board receives updates on the
work of the Transformation Office and JM Global
Solutions, our most significant change programme.
Risk, governance and compliance: The General
Counsel and Company Secretary provides regular
updates on corporate governance developments
as well as internal governance matters. The board
reviews the company’s principal risks at least
twice a year.
Board outcomes continued
Sustainable technology win
In February, the board discussed a licence and
engineering agreement with DG Fuels, to use
JM’s Fischer Tropsch (FT) CANS™ technology,
co-developed with bp, for its first sustainable
aviation fuel (SAF) plant. The board reviewed the
market demand for the technology and, following
consideration, agreed that FT CANS™ technology is
a key contributor to long-term growth. This is the
tenth sustainable technologies project win for
Catalyst Technologies since April 2022.
Governance in action
Hydrogen Technologies Production
The board reviewed the market growth and customer
forecasts for green hydrogen. Having discussed various
options, including their impacts on customers and
employees, it was agreed that investments in
Hydrogen Technologies should be reduced and the
start-up of the new production facility in Royston, UK
should be delayed, with production demand met from
the Swindon facility. The key metrics that would be
monitored to support the decision when to start
production at Royston were agreed.
Governance in action
Executive reports,
Strategy and performance
Transformation
Risk, governance
and compliance
67%
20%
13%
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Board and committee effectiveness
The annual effectiveness review helps drive continuous improvement of the board and, in turn, performance of the company.
The board and committee effectiveness review operates on a three-year cycle as outlined below:
Year 3
Years 1
and 2
2021/22 and 2022/23: internally led
Internal board and committee effectiveness
review, led by the Chair with support from the
General Counsel and Company Secretary.
• January – February: board members, a number
of senior leaders and external advisers
complete a questionnaire compiled by
Independent Audit Limited on a range of
topics including leadership, strategy, board
dynamics and culture
• March: one-to-one meetings between the
Chair and each board member to discuss the
emerging themes from the questionnaire
• May: the Senior Independent Director meets
with directors to appraise the Chair
• May: board and committee discussions
of the results and agreement of action plans
2023/24: externally led
External board and committee effectiveness
review, facilitated by an independent consultant,
Lisa Thomas of Independent Board Evaluation
(IBE). This is the first year IBE have performed
a board effectiveness review for JM.
• November 2023: selection of IBE following
an assessment of suitable independent firms.
The selection process was led by the Chair
and General Counsel and Company Secretary.
Lisa Thomas and IBE have no other connection
with the Company
• January 2024: comprehensive brief given
to IBE by the Chair
• February 2024: board and committee
meeting observations
• February – March 2024: interviews with all
board, GLT members and external advisers
• April 2024: conclusions discussed with the
Chair and subsequent board and committee
reports produced
• May 2024: IBE presented the results to the
board for discussion and agreement of actions.
Subsequent committee-led discussions
of results and action plans
• June 2024: one-to-one meetings between the
Chair and each board member post review
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Board and committee effectiveness continued
Board effectiveness review outcome
The 2023/24 review highlighted the constructive boardroom dynamics and a high degree of openness between board members, underpinned by trusting relationships. There is diversity of
experience and thought, with well-balanced input and specialisms. Shareholder accountability and relationships, governance and compliance and the process for selecting new board
members, were seen as particular strengths. It was noted that improvements could be made to agenda planning, to ensure focus on key issues and sufficient time for full discussion.
Opportunities for the non-executive directors to deepen relationships with the GLT would also be welcomed.
2023/24 action
Responsibility
Agree board objectives for 2024/25, supported by an annual planner
Chair, Committee Chairs, with supported from the General Counsel and Company Secretary
Increase engagement between GLT members and non-executive directors
Chair, CEO
As the new arrangements for board committee composition and cadence embeds,
review roles and responsibilities to ensure these remain appropriate and are in support
of the board’s objectives
Chair, Committee Chairs, General Counsel and Company Secretary
2022/23 review
Actions from the 2022/23 review are set out below together with details of the progress made.
2022/23 action
2022/23 progress and insight
• Review and discuss how cyber risk is managed and mitigated across the group
• The board requested and received two updates on cyber risk during the year.
Read more about board oversight of our cyber security on page 82
• Discuss the approach to culture and agree the methodology of reviewing progress
• Information on the Societal Value Committee’s approach to monitoring culture
and the agreed cultural dashboard can be found in the Societal Value Committee’s
report on page 90
• Secure more opportunities for board members to meet members of the senior leadership
teams outside of formal board meetings
• Details on the board’s engagement with site leadership are set out on page 91
Review of the Chair’s performance
Led by Barbara Jeremiah, the Senior Independent Director, the non-executive directors met without Patrick Thomas to discuss his performance as Chair. They considered he continues
to provide robust leadership for the board and facilitates open and constructive debate.
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Stakeholder engagement
We are focused on driving long-term sustainable success for the benefit of our stakeholders. This section provides an insight into how we, as a board, engage with our stakeholders to
understand what matters to them. Examples of some of the principal decisions taken by the board during the year and the stakeholder views and inputs considered as part of these decisions
are on pages 86-88. Find more information on board outcomes on pages 82-83.
How we engage at board level
• Customer relationships are discussed at every
board meeting
• Key strategic partnerships were approved by the board
during the year, and the board assesses potential
partnerships against our strategic milestones
How we engage across the company
• Customer satisfaction surveys
• Tracking customer perceptions against key indicators
• Engaging customers in the development process
of new products
How we engage at board level
• Review the results of the employee engagement surveys
• Monitor culture and the impact of the transformation
programme on our people
• Regular visits to JM sites to meet colleagues
• Review process safety and EHS processes to ensure they
keep our people safe
• The Nomination Committee receives talent and
succession updates
• The Societal Value Committee reviews matters raised
through our independent Speak Up process
• The Remuneration Committee sets the reward and
benefits framework
How we engage across the company
• Regular internal communications and town halls
• Employee engagement surveys
• Policies, processes and events to keep our people safe and
promote a culture of diversity, inclusivity and belonging,
that reflects our values
• Annual JM Awards
How we engage at board level
• The Societal Value Committee receives reports on
sustainability and actions to support our communities
How we engage across the company
• JM colleagues can take up to two paid volunteering days
every year to work with projects that benefit their local
communities. In 2023/24 volunteering activities ranged
from repairing community facilities to litter picking and
supporting refugees and food banks
• Match funding for employee donations to certain
charitable causes. In 2023/24 JM matched charitable
donations made to a variety of charities from Médecins
Sans Frontières, Doctors Without Borders, to the World
Wildlife Fund and Macmillan Cancer Support
• Donations to support communities in the regions that
we operate in
• Supporting relief efforts in China’s quake-hit Gansu
How we engage at board level
• Review payment practices reporting and areas
of improvement
• Review and approve the Modern Slavery Statement
• Promote an ethical culture
How we engage across the company
• Continually review relationships with our strategic and
high-impact suppliers – see page 88
• Policies and processes to ensure an ethical supply chain,
including the Human Rights Policy and Conflict Minerals
and Cobalt Policy
• Ethics communications to raise awareness of the
importance of ethical conduct within our supply chain
How we engage at board level
• Address key societal issues within our strategy
• Through the Societal Value Committee review the
progress towards our sustainability targets
How we engage across the company
• Play an active role in a variety of associations, including
the Henry Royce Institute, the Society of Chemical
Industries and the UN’s International Hydrogen
Energy Centre
How we engage at board level
• Regular investor updates are presented at board meetings
• Investors have the chance to ask directors questions
at the AGM
• The Chair, Chief Executive Officer and Chief Financial
Officer have regular engagement with investors and
analysts, including presenting full and half year results
• The Remuneration Committee Chair engages directly
on remuneration matters and application of policy
• The Senior Independent Director and committee chairs
are available to meet with investors
How we engage across the company
• Regular dialogue with shareholders to support them in
their investments
• Investor roadshows and investor conferences
• Catalyst Technologies investor seminar
Customers and strategic partners
Our people
Communities
Suppliers
Society
Investors
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Other information
Stakeholder engagement is vital to building
a sustainable business. The board recognises
the need to foster positive business
relationships with suppliers, customers
and governments.
This section provides more details on how
the directors have fulfilled their duties.
The matters we consider differ in relevance
for each stakeholder, and sometimes
stakeholders may have conflicting interests.
We aim to consider the key issues relevant
to each stakeholder group and our decisions
will ultimately promote the group’s
long-term success, and support our vision,
purpose and strategy. In making decisions,
we consider the interests of stakeholders
across the company – not just
at board level.
Transforming the way we
operate – JM Global Solutions
Making JM simpler, more agile and more
cost-effective are key parts of how we
can ‘Play to Win’ and deliver our strategy.
To support the delivery of our strategy
we explored the benefits that a global
business services hybrid operating model
could bring to the way we deliver human
resources, finance and procurement
services. Following discussion and detailed
review, the board took the strategic decision
to implement JM Global Solutions.
Stakeholder engagement in action
Stakeholder considerations
Suppliers
Moving our source-to-pay services to JM
Global Solutions gives us the opportunity
to simplify and clarify our procurement
processes and systems.
Our people
Transforming our culture and the
way we operate impacts our people.
Moving a range of activities from our local
human resources, finance and procurement
teams to JM Global Solutions means
reducing the size of our local teams, whilst
providing the opportunity to simplify our
processes to support our people in getting
things done during their JM life cycle, from
recruitment to retirement. We understand
the impact that transformation can have.
To support our people and build
understanding of this change, we are in
regular communication with our people,
we are holding redeployment workshops
and we have made toolkits and assistance
programmes available.
Investors
Through regular updates we are closely
monitoring the roll-out of JM Global
Solutions. This allows us to challenge
management and ensure that we achieve
the benefits of JM Global Solutions as
quickly as possible for our investors and
wider stakeholders, whilst minimising
disruption to our business.
Outcomes and impact on our
long-term success
We believe that this way of operating
will result in a better experience for our
suppliers, colleagues and investors. It offers
an effective solution for process delivery
and can help create more structure and
standardisation, less duplication and clearer
accountabilities, supporting us to become
simpler, more agile and more cost-effective.
“To be successful, every business needs to adapt and
change. We are no exception. JM Global Solutions
represents a new way of working for everyone. It means
us doing some things differently in return for doing
them better.”
Peter Hill, Group Global Services and Transformation Director
Stakeholder engagement continued
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Stakeholder engagement continued
Deepening our relationships
JM’s first global supplier convention
In November 2023, the Procurement team hosted our first ever global supplier
convention, bringing together senior representatives from our key suppliers and
JM business stakeholders. This event, themed ‘Play to Win Together’, provided an
opportunity to connect our suppliers with our JM strategy. It also allowed us to
refresh our dialogue to collaborate with transparency and strategic intent, share
knowledge and insights to anticipate market uncertainty and supply chain risks,
and unlock future value.
Stakeholder considerations
Customers
Investing in and developing our supplier relationships
is key to building a robust supplier ecosystem to deliver
for our customers through more resilient and sustainable
supply chains.
Investors
The delivery of sustainable profitable growth requires a strong
supplier ecosystem. The board considered that having the right
business partnerships with our suppliers would positively
contribute to investors’ long-term returns.
Communities
and society
We have been evaluating our suppliers through EcoVadis, our
sustainability rating provider, to better understand their
performance in human rights and health and safety, as well as
their journey to net zero. Improving JM’s supplier relationships
enables us to collaborate to reduce wastefulness, embed
circularity, adopt sustainable practices, ensure an ethical value
chain and maintain the highest standards in procurement.
Suppliers
Our global supplier conference signifies a step change in how
we work with our key suppliers. It illustrates how much we
value their commitment to JM. It promotes engagement
and collaboration to evolve from transactional relationships
to true business partnerships, in unlocking value and ensuring
a resilient, ethical supply chain.
Outcomes and impact on our long-term success
This inaugural convention was such a success that we intend to make it a regular
occurrence. The collaborative dialogues and ideas generated during this event have
developed into projects to deliver practical solutions to enhance JM’s responsible
sourcing, whilst driving profitable revenue growth to support our customers
in catalysing the net zero transition.
Delivering on our milestones
Divestment of Medical Device Components
Through our strategic review, Medical Device Components (MDC), a business
producing components for medical device manufacturers globally, with a focus on
precious metal alloys and nitinol, was identified as non-core to JM’s growth strategy.
In March 2024 we announced the sale of MDC to Montagu Private Equity.
“This deal supports the delivery of one of JM’s
strategic milestones, the divestment of Value
Businesses.”
Louise Melikian, Chief Strategy and Corporate Development Officer
Stakeholder considerations
Investors
To create long-term value for our shareholders through profit
growth and improved margins, we need to invest in growth.
The board’s decision to divest MDC supports our strategy
of playing to win in exciting growth markets where our core
competencies and technology portfolio can have maximum
impact. This transaction provides investment for growth for the
benefit of our investors. As previously announced, and in line
with our stated capital allocation policy, it is the board’s current
intention to return to shareholders £250 million of the net sale
proceeds by way of an on-market share buyback programme,
subject to completion of the sale.
Our people
Transforming JM into a leading global energy transition
company requires us to take difficult decisions. The board
considered the strategic review recommendation to divest MDC
and whilst it is hard to let go of our colleagues, we have found
a good fit for MDC to grow and develop its already strong
and profitable business, led by Montagu Private Equity’s strong
and committed leadership team.
Outcomes and impact on our long-term success
This sale is expected to complete by autumn of 2024 and at completion will deliver
cash consideration of US$700 million (£550 million) to the business. This transaction
supports the simplification of our business and one of our strategic milestones,
the divestment of Value Businesses. Delivering in these areas ensures we are positioned
to create long-term value to support our transformation into a leading global energy
transition company.
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Financial statements
Other information
How the committee spent
its time in 2023/24
Sustainability
People
Ethics
Governance
38%
36%
14%
12%
Societal Value
Committee report
reviewed evolving external trends related to
sustainability, in particular upcoming ESG
reporting requirements, and discussed the
plan to ensure JM meets these requirements.
During this period of transformation, it is
important that our commitment to
sustainability embraces a holistic approach
and I am pleased that the committee’s role
has been expanded to monitor culture across
the organisation. Our success and future
growth are intrinsic to the culture that we
promote and the committee spent time
reviewing the cultural transformation and
agreed how this should be monitored going
forward. Our culture is underpinned by the
highest ethical standards in everything we do.
The committee continues to spend time at
each meeting monitoring ethics and
compliance trends, material Speak Up cases
and reviewing ethical dilemmas on JM fact
patterns that provide examples of how we
adhere to our values.
Membership
Jane Griffiths (Chair)
Liam Condon
Barbara Jeremiah
Rita Forst
John O’Higgins
Stephen Oxley
Members’ attendance at committee meetings
during the year is on page 77
Details of changes to the committee’s
membership are set out on page 93
Other regular attendees at committee
meetings
• Chief Sustainability Officer
including Communications and
Government Affairs
• Chief HR Officer
• General Counsel and
Company Secretary
The Committee’s Terms of Reference
set out its full responsibilities:
matthey.com/governance-framework
Sustainability disclosures
• The committee reviewed and
recommended to the Board the approval
of the disclosures in the Sustainability
report on pages 34-52, including our
TCFD disclosures on pages 53-61.
Sustainability Performance Data Book:
matthey.com/sustainability-databook
Now in its third year, the Societal Value
Committee has continued to support the
board by providing challenge and rigour to
our sustainability strategy. The committee
received regular updates on performance
towards achieving our ambitious sustainability
targets for 2030. These targets build upon our
inspiring science and innovation to support
the energy transition that will benefit society.
The committee has been pleased with the
progress made to reduce our Scope 1 and 2
greenhouse gas (GHG) emissions by 44%, in
part due to the efforts to switch to renewable
electricity, and by the SBTi’s validation of our
near-term and long-term ambitions. We also
discussed the importance of further
embedding circularity in what we do, as
exemplified by a new methodology to provide
100% recycled PGMs to selected customers
and innovation in recycling. Circularity is one
of the pillars of our Nature strategy, which we
reviewed this year. This will ensure that
climate, circularity and nature are at the
forefront of our operations and sourcing
strategy in order to achieve our targets.
In addition, the committee was kept informed
of how we engage with stakeholders on
sustainability, both with our colleagues
(e.g. through the Sustainability Champions
network or through volunteering) and
external stakeholders. The committee
“Sustainability has remained at
the heart of JM as we undergo
our transformation.”
But monitoring culture is not enough.
As board members, we need to see and
experience this for ourselves and the
committee has reviewed the mechanisms for
the board to engage directly with the
workforce. This mechanism provides a
two-way dialogue between our workforce and
the board, so we can understand the topics
that really matter to our colleagues.
Our externally-led committee effectiveness
review for 2024 showed that the committee
has risen into a substantial forum from its
inception and continues to operate well.
The committee will keep the scope of its
responsibilities under review throughout the
year, to ensure these remain appropriate and
support our board objectives.
Jane Griffiths
Societal Value Committee Chair
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The committee’s role
Societal value covers a range of economic,
social and environmental topics. Given the
central role of sustainability to our overall
strategy, the committee was established in
2021 to bring continued focus to this area.
The committee assists the board in
overseeing the group sustainability strategy,
including net zero commitments and
science-based GHG targets, monitoring
culture and driving a truly inclusive
organisation, overseeing the group’s
ethical conduct, and keeping up to date
with societal value topics, including
stakeholder expectations.
Information on the governance of
sustainability matters beyond the
committee’s role can be found within our
TCFD disclosures on page 53.
Committee outcomes
The outcomes of the committee’s key
activities during the year included:
• Challenged sustainability performance
data and agreed on adjustments to our
2030 targets
• Agreed and recommended to the
Remuneration Committee sustainability
targets for the next three years for
incorporation into our Performance
Share Plan
• Reviewed Scope 1,2 and 3 GHG footprint
including the levers to reach our
reduction targets by 2030
• Refreshed our responsible
sourcing principles
• Reviewed our updated roadmap to meet
our net zero commitment by 2040
• Agreed a new nature strategy, reflecting
our commitment to nature protection
• Provided feedback on work to integrate
sustainability into engineering and
capital projects
• Received an update on the cultural
transformation and agreed the form of a
dashboard to monitor culture
• Agreed the mechanism for the board’s
engagement with the workforce
• Challenged progress in respect of
diversity, inclusion and belonging
• Received regular horizon scanning
updates, including future sustainability
reporting requirements and benchmarks
• Received updates on ethics and
compliance matters, including Speak Up
trends, ethical dilemmas and ethical
culture heatmaps
• Reviewed the Speak Up process and
agreed this was effective
• Agreed to recommend the Modern
Slavery Statement 2023 to the board
for approval
• Discussed the results of the external
committee effectiveness review and
agreed related actions.
Culture
During the year, it was agreed that the
committee’s responsibilities would expand
to monitor culture across JM. A high-
performing culture generates and protects
value, supporting our strategy to achieve
our purpose of catalysing the net zero
transition. Our cultural transformation is
centred on three pillars: people growth,
customer focus and simplification.
The committee considers multiple sources
to assess the strength of culture and
understand employee sentiment through
regular reporting and metrics, including:
• Feedback from the board’s direct
interaction with the workforce, through
engagement forums, site visits and
interactions with management
• Bi-annual reviews of the cultural dashboard
Societal Value Committee report continued
Governance in action: our cultural dashboard
Our cultural dashboard enables the committee to track progress of our
cultural transformation.
During the year, the committee agreed the form of a cultural dashboard comprising
data relating to the key dimensions of the ‘Play to Win’ behaviours. The dashboard acts
as a check for the committee on the cultural context in which our colleagues work,
and allows us to identify any areas of misalignment and take appropriate action.
Transformation pillar
How we measure it
People growth
Accountability
Quarterly and annual ‘Play to Win’
employee engagement
survey results
Performance
People growth
Inclusiveness
Annual ‘Play to Win’ engagement
survey results
Gender diversity
Engagement
Annual ‘Play to Win’ engagement
survey results
Voluntary
attrition
Voluntary attrition
Safety
Quarterly total recordable
incident rate
Simplification
Simplification
Quarterly and annual ‘Play to Win’
engagement survey results
Customer
centricity
Customer focus
Net Promoter Score
Read more about the changes to our sustainability targets and our cultural
transformation on pages 13 and 35.
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• Updates from the Chief HR Officer on the
progress to create a diverse, inclusive and
engaged company, and the workstreams
to support the cultural transformation
• Regular Speak Up reports and heatmaps
to indicate the ethical culture at key sites.
Engagement with the workforce
Engaging with the workforce at all levels
allows the board to understand the culture,
issues and challenges across our business.
During 2022/23, the engagement forums
led by non-executive directors in key
countries where we operate were paused,
to allow for direct engagement between
management and employees on the
refreshed strategy and cultural ambition.
During the year and on behalf of the board,
the Committee reflected upon the
workforce engagement methods specified
by the UK Corporate Governance Code 2018
and agreed that the global and diverse
network continued to require a different
approach. The committee agreed that the
engagement forums in key countries should
be re-established but in a simplified form to
encourage open and honest conversations.
During the year and up to the date of this
Annual Report and Accounts, engagement
forums have been held in the UK, China and
the US, comprising diverse colleagues from
different businesses, functions, job types,
ages and tenures. These face-to-face
sessions included informal discussions
between approximately eight colleagues
and a non-executive director. These centred
on the understanding of JM’s transformation
journey, opportunities to improve
engagement and how enabled colleagues
feel to deliver in their role. To support
unconstrained dialogue, it was important
that local management were not present
for the forums. The directors shared their
feedback from the engagement forums
with the committee and applicable senior
leaders. The non-executive directors have
also collectively met with colleagues over
lunch as part of the board agenda,
following similar principles to the
engagement forums.
The committee intends to continue its
approach to workforce engagement and
will look to hold engagement sessions in
other countries during 2024/25. Alongside
this, the board continues to engage with
colleagues via site tours, face-to-face
discussions at meetings and attendance
at employee events.
Governance in action:
board attendance at employee engagement sessions
Country
Director
Insight from engagement sessions
UK
Jane
Griffiths
Doug Webb
• Company-wide communication has improved,
including through global town halls but with a
desire for more direct feedback and
communication from line managers.
• Whilst there is a significant focus on people,
more could be done to facilitate cross-business
interactions and learnings.
• Wellbeing is paramount at a time of change and
should remain high on the agenda.
China
Xiaozhi Liu
US
Barbara
Jeremiah
Societal Value Committee report continued
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Financial statements
Other information
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How the committee spent
its time in 2023/24
Nomination
Committee report
This year, a key focus for the committee
has been succession planning, for both the
board and Group Leadership Team (GLT),
whilst ensuring the board and its committees
have the collective skills needed to oversee
JM’s transformation. Chris Mottershead
retired from the board in January 2024,
having been a director for nine years.
The committee monitors the tenure of
non-executive directors closely to ensure
effective succession planning and we
strengthened the board’s composition with
the appointment of Barbara Jeremiah as an
independent Non-Executive Director in
July 2023. You can read more about
Barbara’s induction to JM on page 94.
The committee spent time on executive
succession to ensure we have the right
leaders to deliver our transformation and
to support the long-term success of the
company, and we oversaw a number of
changes to the GLT.
The committee recognises the importance
of diversity in driving meaningful change
across JM. This includes the board, and the
committee was pleased to increase its board
diversity targets in line with the FCA’s
Diversity Listing Rules.
Simplification is a key part of our
transformation and there are opportunities
to be realised in all areas of the organisation.
You can read more about how we simplified
our committees on page 93.
Our externally-led board and committee
effectiveness review for 2023/24 (see pages
82 and 83) confirmed that our discussions
are open and honest, with an atmosphere
of trust. During 2024/25, the committee
intends to focus on medium to longer term
succession planning, considering the skills
needed to support our strategy.
Patrick Thomas
Nomination Committee Chair
Membership
The committee comprises the Chair and all
independent non-executive directors.
Members’ attendance at committee meetings
during the year is on page 77
Details of changes to committee membership
are set out on page 93
Other regular attendees at
committee meetings
• Chief Executive Officer
• Chief HR Officer
• General Counsel and
Company Secretary
The Committee’s Terms of
Reference set out its full
responsibilities: matthey.
com/governance-
framework
“The committee continues
to support long-term
success and ensures
effective succession
planning is in place
for all directors.”
Board and committee composition
Executive succession (GLT)
Governance
54%
38%
8%
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Board composition
The committee regularly reviews the
composition of the board and its
committees to ensure there is an
appropriate balance of skills to support the
company’s strategy. This is facilitated via an
assessment of the board’s collective skillset
by asking each non-executive director to
identify their strengths, scoring their level of
expertise on a scale of one to five. The table
on page 77 shows the skills held by our non-
executive directors that are most relevant to
their role at Johnson Matthey. This year’s
externally-led board and committee
effectiveness review, as detailed on pages
84-85, included an appraisal of each
director, their contributions and any areas
for further development. These individual
reports were shared with the Chair to
support a discussion on any gaps that can
be addressed through future appointments
or additional training.
The committee is satisfied that each
director continues to effectively contribute
to the board and fulfil their duty to promote
the success of the company. The board and
committees include a strong mix of
experienced individuals who provide
constructive challenge to all discussions.
All directors have demonstrated a strong
commitment to their roles and careful
consideration is given to external
appointments, to ensure sufficient time
can be dedicated to their roles on our
board and committees.
Nomination Committee report continued
Board composition changes
during the year
Governance in action:
simplifying our
governance
During the year the committee
considered the composition of
the board committees. Whilst there
have been benefits to having all
non-executive directors as members
of all committees, it was felt that
there were opportunities to simplify
this. The committee considered the
skills, experience, knowledge and
diversity when recommending
committee membership to the board.
The board approved the proposal,
which took effect from 2nd January
2024. The composition of each
committee as at 31st March and the
date of this report is set out on
page 81.
To create further efficiencies, it was
also agreed to reduce the number of
board and committee meetings, with
more committee meetings being held
virtually and separated from the
board meetings. This gives the
committee chairs increased flexibility
in terms of time and how they
manage the agendas.
June 2023
• Appointment of Simon Price
as General Counsel and
Company Secretary
July 2023
• Appointment of Barbara
Jeremiah as independent
Non-Executive Director and
Senior Independent Director
• Appointment of John O’Higgins
as Chair of the Remuneration
Committee
November 2023
• Review of membership of Audit,
Remuneration and Societal
Value committees
January 2024
• Focused membership of Audit,
Remuneration and Societal
Values committees
became effective
• Chris Mottershead stepped down
from his role as independent
Non-Executive Director.
Committee outcomes
The committee ensures JM is led by a
diverse, high-quality board, with the
appropriate skills, knowledge and
experience to ensure our long-term success.
The outcomes of the committee’s key
activities during the year and up to the date
of this report include:
• The appointment of Barbara Jeremiah as
an independent Non-Executive Director
and Senior Independent Director
• Changes to the composition of the
board committees as outlined in the
board composition changes during the
year timeline
• Changes to the composition of the GLT,
including the appointments of:
• Simon Price as General Counsel and
Company Secretary
• Maurits van Tol as Chief Executive
Officer, Catalyst Technologies
• Liz Rowsell as Chief Technology Officer
• Louise Melikian as Chief Strategy and
Corporate Development Officer
• Peter Hill as Group Global Services
and Transformation Director
• Increased responsibilities for Mark Wilson,
Chief Executive, Hydrogen Technologies.
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Succession planning
Board
In January 2024, having achieved a
nine-year tenure, Chris Mottershead
stepped down from the board. Ahead of his
retirement, the committee spent time
discussing the skills and expertise of the
board and recommended that a further
non-executive director be appointed to the
board as Senior Independent Director.
The committee sought an individual with
experience of strong leadership and
delivering transformation programmes and
an understanding of the US commercial
market. Egon Zehnder, a third-party search
and recruitment specialist, assisted with the
search. Following evaluation of the final
short list of candidates, the committee
recommended Barbara Jeremiah’s
appointment. It was felt that Barbara’s
understanding of metals, along with her
investor experience, would enhance the
board’s deliberations. Details of Barbara’s
induction are set out on this page.
GLT
The committee also oversees succession
planning for senior leadership roles and
talent development to build capability for
the future. The committee reviews the
internal pipeline of candidates for
immediate and medium to longer-term
movement to leadership roles. This is
routinely challenged to ensure the
committee understands the breadth
of potential and to balance internal
succession planning with the need for
external perspectives.
During the year, the committee oversaw
the appointments of Simon Price as General
Counsel and Company Secretary, Liz Rowsell
as Chief Technology Officer, Louise Melikian
as Chief Strategy and Corporate Development
Officer and Peter Hill as Group Global
Services and Transformation Director.
Details of gender and ethnic representation
as prescribed by Listing Rule 9.8.6 are
set out in the tables on page 95. The board
and GLT members confirmed their gender
and ethnicity for the purpose of collecting
these data.
Board Diversity Policy:
matthey.com/board-diversity
The board also supports the terms of the
Enhanced Voluntary Code of Conduct for
executive search firms. All our appointed
executive search firms are required to
secure a diverse longlist of candidates,
including Black, Asian and minority
ethnic talent.
The committee also oversaw the
appointment of Maurits van Tol as Chief
Executive, Catalyst Technologies, who
previously held the role of Chief Technology
Officer, and the increase in responsibilities
for Mark Wilson, Chief Executive, Hydrogen
Technologies, to respect of group-wide EHS
and engineering matters.
Turning to the year ahead, the committee
intends to focus on board succession to
ensure an orderly and diverse succession
plan is in place for key roles.
During the year, Egon Zehnder provided
senior-level recruitment services, including
assessment and people development
services. Egon Zehnder has no other
connection with the company or any
other directors.
Diversity and inclusion
The committee continues to drive the
diversity agenda across JM. A diverse and
inclusive organisation is fundamental to
our vision, and our Board Diversity Policy
ensures that the tone is set from the top.
Following our commitment last year to
meet the FCA’s Diversity Listing Rules
target, and the appointment of Barbara
Jeremiah, the targets were successfully met.
In April 2024, the committee reviewed
our Board Diversity Policy and refreshed
its objectives to reflect the requirements of
the FCA’s Diversity Listing Rules, FTSE
Women Leaders and Parker Reviews and
to maintain:
• 40% of women on the board
• at least one woman in the chair or senior
independent director role
• one director from an ethnic minority group.
Our Board Diversity Policy is applied
consistently across all board committees.
Beyond the board, we aspire to have gender
balance across all levels of the group. One of
our key milestones is to achieve greater
than 40% of female representation across
professional management by 2030 and we
are on track to achieve this. While gender
diversity has improved we want to
accelerate the pace of change.
Further details on how we are improving
diversity across the group, the gender
balance of senior management and our
Diversity, Equity, Inclusion and Belonging
Policy are set out on page 47.
Nomination Committee report continued
Governance in action: director inductions
All new directors receive a tailored comprehensive induction programme upon joining
the board including reading material and meetings with colleagues. Barbara Jeremiah’s
induction plan comprised a balance of knowledge-based sessions in addition to site visits
to provide exposure to JM’s business, working environment and culture.
Barbara Jeremiah induction programme
Areas covered
Sessions by
Strategy, financial performance,
investor sentiment
Chief Executive Officer
Chief Financial Officer
Business introductions
Chief Executive, Clean Air
Chief Executive, PGM Services
Chief Executive, Catalyst Technologies
Chief Executive, Hydrogen Technologies
Corporate governance and
board operations
General Counsel and Company Secretary
Legal views of the external
environment
General Counsel and Company Secretary
Site tours
Site leadership teams
Employee interactions
Site-based colleagues
When considering any future appointments the committee will continue to make
recommendations in consideration of our Board Diversity Policy.
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Financial statements
Other information
Gender representation as at 31st March 2024
Number of
board members
% of the board
Number of senior board positions
(CEO, CFO, SID, Chair)
Number in executive
management1
% of executive
management
Men
5
56
3
9
69
Women
4
44
1
4
31
Other categories
0
0
0
0
0
Not specified/prefer not to disclose
0
0
0
0
0
Ethnic representation as at 31st March 2024
Number of
board members
% of the board
Number of senior board positions
(CEO, CFO, SID, Chair)
Number in executive
management1
% of executive
management
White British or other White (including minority-white groups)
8
89
4
11
84
Mixed/Multiple Ethnic Groups
0
0
0
1
8
Asian/Asian British
1
11
0
1
8
Black/African/ Caribbean/Black British
0
0
0
0
0
Other ethnic group, including Arab
0
0
0
0
0
Not specified/ prefer not to say
0
0
0
0
0
1. Executive management includes all members of the GLT.
Nomination Committee report continued
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Other information
How the committee spent
its time in 2023/24
Audit
Committee report
company’s financial calendar. The agenda is
flexible, enabling in-depth reviews of topics
of particular importance to the committee.
The role of the committee
The committee continues to support the
business in achieving its transformation
strategic objectives (see pages 14 to 15).
During the year, the committee supported
the board on a number of governance
matters relating to financial reporting and
internal controls.
The committee’s principal responsibilities are:
• To monitor the integrity of the reported
financial information, reviewing
significant financial considerations and
judgements.
• To review the group’s internal control and
risk management systems and
monitoring the effectiveness of the group
assurance function.
• To oversee the relationship with the
external auditor including monitoring
their independence and objectivity,
reviewing and approving external audit
fees, recommending reappointment or
not, and ensuring a high-quality, effective
audit, based on a sound plan.
The committee’s Terms of Reference
set out its full responsibilities:
matthey.com/governance-framework
Membership
Doug Webb (Chair)*
Rita Forst
Jane Griffiths
John O’Higgins
Barbara Jeremiah
*
Doug Webb, our Committee Chair, is a chartered accountant who brings
a wealth of recent and relevant financial experience, including acting as
Chief Financial Officer at the London Stock Exchange Group, QinetiQ
and Meggitt.
Members’ attendance at committee meetings
during the year is on page 77
Details of changes to the committee’s
membership are set out on page 93
Other regular attendees at
committee meetings
• Chair of the board
• Chief Executive Officer
• Chief Financial Officer
• General Counsel and
Company Secretary
• Director of Assurance
and Risk
• Group Financial
Controller
• PwC audit partner
“The Audit Committee plays
a vital role in identifying
risks and monitoring the
controls in place, to help
the group to achieve its
transformation strategic
objectives.”
During the year, the committee has
focused on identifying risks and monitoring
the controls in place to support JM’s
transformation strategy. This report
covers the committee’s work in relation
to financial reporting, internal financial
controls, internal control and risk
management systems, and the
relationship with our external auditor.
The committee met three times during the
year, with members of senior management
present as and when appropriate. The
committee meets with the external auditor
and the Director of Assurance and Risk
separately during the year without
management present. In addition, the
committee chair holds regular private
sessions with the Chief Financial Officer,
senior members of the finance team, the
Director of Assurance and Risk, and the
external auditor, to ensure that open and
informal lines of communication exist
should they wish to raise any concerns
outside formal meetings. In November
2023, the committee approved an annual
agenda plan which is linked to the
External Audit
Financial reporting
Governance/regulatory updates
27%
32%
5%
Internal Audit
Internal control and risk management
Narrative reporting/sustainability
17%
11%
8%
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Other information
In addition to its regular activities the
committee focused on a number of key
areas this year:
• Oversight of the group’s integrated
assurance project, to consolidate and
map assurance activities, with internal
audit aligning with the JMGS programme
to provide assurance over the new ways
of working.
• Monitored the ongoing transformation of
group finance.
• Approved the level of assurance over
sustainability-related disclosures in the
Annual Report and Accounts.
• Reviewed JM’s cyber readiness and
challenged management’s identification
and remediation of specific cyber
control gaps.
• Challenged management on lessons
learnt from previous strategic changes.
• Reviewed and responded to upcoming
regulatory changes.
During the year, the committee continued to
play a key role in assisting the board in its
oversight responsibility and monitoring the
integrity of the financial information. This has
included challenging management on the
significant accounting judgements made in
the financial reporting, as well as reviewing
the analysis behind our going concern and
viability statements and considering the
processes that underpin the preparation
of the Annual Report and Accounts.
The committee received regular updates at
each meeting from the Director of
Assurance and Risk, covering the control
and risk management framework and
internal audit reviews. The committee
continued to oversee the programme
assurance activities, receiving regular
updates on the progress of key
programmes. See Governance in action on
page 97 for more information.
Read more about the Audit Committee
outcomes during 2024 on pages 98-99
Our response to regulatory
changes
We continue to track developments with
the UK Government’s corporate governance
reforms and consider management’s plans
to respond to the evolving requirements, in
readiness to adapt to the changes in
forthcoming years.
In May 2023 the Financial Reporting
Council (FRC) published a Minimum
Standard for Audit Committees (the
Minimum Standard) in relation to external
audit. The committee reviewed the four
main areas of focus of the Minimum
Standard, in conjunction with the current
UK Corporate Governance Code (2018
Code) and the FRC Guidance on Audit
Committees, and determined that the
Terms of Reference needed to be updated
to refer to the Minimum Standard.
The committee is reviewing the implications
of the FRC’s recently published 2024 UK
Corporate Governance Code (2024 Code)
and identifying any actions JM needs to take
to ensure compliance and enhance the
internal control frameworks. A key
substantive change in the 2024 Code is the
requirement for the board to include a
declaration in the Annual Report and
Accounts on how it has carried out the
review of the effectiveness of the company’s
risk management and internal controls
framework and their conclusions. This new
requirement for a board declaration in the
Annual Report and Accounts will come into
effect for JM in the financial year starting
1st April 2026.
In August 2023, the UK Government
published information on its framework for
creating UK Sustainability Disclosure
Standards (UK SDS) based on the ISSB
Standards which set out corporate
disclosures on the sustainability-related risks
and opportunities that companies face.
The standards will form the basis of any
future requirements in UK legislation or
regulation for companies to report on risks
and opportunities relating to sustainability
matters, including those arising from
climate change. Although the ISSB
Standards will not replace the TCFD
disclosure framework immediately, the ISSB
Standards will be considered now to build
them into future plans.
Audit Committee report continued
Successful transformational change is an
integral part of our business strategy. JM
has embarked on a programme of work
that will take several years to complete,
and to support this, our internal audit
team has adapted its engagement with
these programmes, seeking innovative
ways to proactively support programme
delivery by providing timely insights.
A work stream undertaken by internal
audit, that was recognised by the board
and senior management as being of
significant benefit, was a review of
previous major change programmes
delivered by JM, specifically Unify,
a programme delivering global,
standardised Enterprise Resource
Planning (ERP) processes, data and
systems across JM. Internal audit
identified themed lessons learnt,
taking into consideration other
key transformation programmes.
These lessons learnt were widely shared,
from board and GLT level, down through
the organisation to those running
current programmes.
An example where we demonstrated
lessons learnt from Unify was the JM
Global Solutions (JMGS) programme
where engagement on risk assurance has
brought transparency and improvement
to the governance rigours employed by
the programme teams. Another example
was the engagement on the capital
projects assurance, on which GAR
presented a summary of lessons to be
learnt from the delivery of five previous
projects. The findings from this work,
together with work conducted by an
independent specialist third-party
assurance provider, enable the project
teams to drive tangible improvements
in the processes and controls of
current projects.
Governance in action:
lessons learnt and missed opportunities
The aligned assurance approach contained
within the Group Assurance and Risk (GAR)
plan will help move JM towards the
assessment of the effectiveness of risk
management and internal controls.
Although references to the Audit &
Assurance Policy (AAP) have not been
included in the 2024 Code, the committee
will continue to review and update the
internal AAP, because it is important to
document how the board obtains assurance
over JM’s risks and external reporting.
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Committee outcomes
Financial reporting
• At the conclusion of the Annual Report
and Accounts 2023, the committee
reviewed the process, including
challenges and what went well, and
agreed actions to improve the process for
the following year.
• Reviewed the group’s financial
statements and results announcements,
with consideration given to the
appropriateness of accounting policies
and critical accounting judgements.
Recommendations were made to the
board supporting the half and full-year
accounts and financial statements.
• Reviewed credit controls and risks in the
context of continuous challenging
market conditions.
• Reviewed management’s consideration of
the various FRC thematic reviews and
guidance for financial reporting.
• Reviewed our operating metal framework,
developed by management in response to
a request from the Committee.
Narrative reporting
• Considered the viability and going
concern statements and their underlying
assumptions, evaluating going concern
over an 13-month period, which included
a review of financial plans and
assumptions, access to financing and the
challenging economic environment and
the adaptability of financial plans. The
committee also considered the
appropriateness of a three-year viability
assessment period after modelling the
impact of certain scenarios arising from
the group’s principal risks.
• Reviewed and approved the enhancement
of the process of verification of the
contents of material statements contained
in the non-financial and narrative
reporting within the Annual Report and
Accounts 2024, and approved the scope
of, and provider of, external assurance
over sustainability data.
Internal control and risk
management
• Oversight of significant work performed
on business controls across several key
processes, and independent testing of
those controls, providing more
confidence on improvements in the
control environments and a focus on
remediation efforts. The committee has
oversight of the changing control
environment resulting from the
transformation. In particular the move to
JMGS is a critical change for JM and as a
new way of working is pivotal for our
controls culture.
• Challenged management to resolve issues
relating to internal controls and risk
management systems. Following a site
extended audit performed by internal
audit, the committee provided feedback
to the Clean Air business on its risk
control environment and the
improvements made.
• Technology assurance is an area where
the committee has challenged
management to identify specific cyber
control gaps, where remediation would
provide the greatest level of risk
reduction, and improve controls (in
particular Operational Technology, our
technology infrastructure that drives
manufacturing equipment).
• Reviewed and approved changes related
to controls and liquidity in the group’s
precious metals policy.
• Considered and agreed with
management’s determination that there
were no significant control weaknesses or
lack of adherence to policies and
procedures identified.
• The committee met with the Group’s new
head of tax and reviewed tax risks and
mitigation plans around both direct and
indirect taxes.
External audit
• After due challenge and discussion,
the committee agreed the scope
of the external audit process prior to
commencement of the 2024 audit.
The committee appraised the
effectiveness and performance,
independence and objectivity of PwC,
our external auditor, approved the
external audit fees and terms of
engagement, reviewed and approved
non-audit services and kept under
review the Non-Audit Services Policy.
• Determined that a good quality,
comprehensive audit was completed for
FY2023/24, following a review of PwC’s
regular reports to the committee, and
feedback from PwC’s independent quality
review partner. As a result, the
committee recommended PwC’s
re-appointment.
• The committee approved the proposal
from management for six subsidiaries
within the group to apply for an audit
exemption by way of a parent guarantee
under the Companies Act 2006. This
decision would result in a cost saving
for the group, and the removal of the
external audit process and associated
internal administration. The committee
reviewed the additional controls required
to be established to maintain high-quality
accounting standards.
Audit Committee report continued
Given the importance of sustainability to
JM, whilst the 2024 Code does not include
wider responsibilities and considerations for
the board and audit committee in relation
to sustainability objectives and other
sustainability matters, the committee
will continue to review and assess the
sustainability goals and targets
recommended by the Societal Value
Committee to ensure they remain
measurable and assurable.
The Institute of Internal Auditors’ (IIA)
mandatory 2024 Global Internal Audit
Standards were published in January 2024,
and will apply to JM from April 2025.
During 2024/25 the committee will review
the standards as a basis for evaluating and
elevating the quality of our internal
audit function.
Committee effectiveness
The externally facilitated board and
committee effectiveness review for 2024
(see page 84) concluded that the
committee continues to operate effectively,
while recognising certain areas may benefit
from further development. These include
managing the ever-growing agenda to
ensure appropriate focus on the most
important topics, continued focus on the
group’s evolving internal control systems, in
particular the maturing of assurance plans
over non-financial data, and monitoring the
evolution of the internal audit function.
These will be considered in the forthcoming
financial year.
Doug Webb
Audit Committee Chair
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Other information
Financial reporting
Significant issues considered by the committee in relation to the
group’s and company’s accounts
It is a fundamental part of the committee’s role that we act independently from
management to ensure that the interests of shareholders are properly protected in relation
to financial reporting. When the accounts are being prepared, there are areas where
management exercises a particular judgement or degree of estimation. The committee
assesses whether the judgements and estimates made by management are reasonable and
appropriate. In the process of applying the group’s accounting policies, management also
makes judgements and estimates that have a significant effect on the amounts recognised in
the financial statements. The group’s key accounting judgements discussed and challenged
by the committee are set out below.
Significant current year considerations in
relation to the accounts
Work undertaken / outcome
Impairment of goodwill, other intangibles
and other assets
Key judgements are made in determining
the appropriate level of cash generating unit
(CGU) for the group’s impairment analysis.
Key estimates are made in relation to the
assumptions used in calculating discounted
cash flow projections to value the CGUs
containing goodwill, to value other
intangible assets not yet being amortised,
and to value other assets when there are
indications that they may be impaired. The
key assumptions are management’s
estimates of budgets and plans for how the
relevant businesses will develop or how the
relevant assets will be used in the future, as
well as discount rates and long-term average
growth rates for each CGU.
We reviewed a report from management
explaining the methodology used,
assumptions made, and significant
changes from those used in prior years.
In light of the current volatile
macroeconomic environment, including
high interest rates and energy costs,
management considered the impact
within underlying forecasts and
discount rates.
We challenged management on the
rationale behind the key assumptions and
sensitivities such as discount rates and
growth rates in the goodwill value in use
calculations, especially within Clean Air
and Catalyst Technologies, to ensure we
were satisfied on their reasonableness.
The impairment reviews were an area of
focus for PwC who reported their findings
to us.
We concluded that management’s key
assumptions and disclosures are
reasonable and appropriate.
Internal audit
• Following regular reports from the
Director of Assurance and Risk, the
committee determined that risk
management and internal controls
effectively meet the group’s needs and
manage risk exposure.
• Monitored progress against the 2023/24
GAR plan, which focused on execution
against its four pillars and agreed the
2024/25 plan.
• Assessed the results of a programme
review carried out by GAR and group IT,
with ‘lessons learnt’ recognised and to be
reflected in the design and
implementation of current and future
transformation programmes, to ensure
they are delivered in an optimal way. See
Governance in action: JMGS on page 82
for more information.
• Oversight of the internal audit team
delivering a comprehensive set of
assurance across four pillars, being
operating site reviews, key areas of
business and financial risk including
cyber, IT enabled changes and business
transformation. The function has also
progressed the aligned assurance
mapping and has been engaged with
JMGS to provide assurance over new
ways of working.
Sustainability
• Reviewed the sustainability assurance
framework and concluded that it
continued to deliver against what was
agreed by the committee in 2022. The
framework will continue to apply and
evolve in line with upcoming regulations,
with updates provided to the committee
and an annual review included in the
committee’s annual planner.
Audit Committee report continued
• In understanding the need for
transparency and accuracy of our
sustainability data, in conjunction with
the Societal Value Committee, the
committee agreed to appoint an
independent third party, which, in
conjunction with internal audit, provided
limited assurance to ISAE3000 for
selected sustainability data in our Annual
Report and Accounts 2023. The
committee reviewed the interim and final
assurance certificates which concluded
that the 2022/23 selected information
presented in the Annual Report and
Accounts 2023 was fairly stated, in all
material respects, in accordance with the
reporting criteria.
• Ensured the Task Force on Climate-
related Financial Disclosures (TCFD)
recommendations were incorporated into
the Annual Report and Accounts 2023 as
appropriate, following an assessment by
management of how the considerations
of TCFD impacted the financial accounts.
Those areas within the accounts
which are likely to be impacted by
climate change disclosures are
continuously monitored.
Governance and regulatory
updates
• Remained well-informed of key regulatory
developments relating to audit committees,
such as the FRC Minimum Standard for
audit committees, the Spring Report,
Restoring trust in audit and corporate
governance, and the 2024 Code.
• Reviewed and approved JM’s submission
to the FRC in response to its UK Corporate
Governance Code Consultation published
in May 2023, following a review of the
consultation paper and the associated
questions led by a cross-functional
working group.
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Financial statements
Other information
Significant current year considerations in
relation to the accounts
Work undertaken / outcome
Major impairment, restructuring activities
and transformation costs
Key judgements in relation to impairment
testing relate primarily to estimates in
assessing recoverable value.
Key judgements in relation to restructuring
provisions related to estimates of future cost
and the disclosures relating to
transformation costs.
We reviewed a report from management
outlining the work carried out to assess
the carrying value of the Hydrogen
Technologies CGU following an
impairment indicator that the recent
slowdown in growth within the hydrogen
and fuel cell market required a formal
review for possible impairment. The
assessment considered the net present
value of the post-tax cash flows expected
to be generated by the CGU. The
approach involved an estimation of
future cash flows and a selection of
appropriate key assumptions including
growth and discount rates. Management
concluded that no impairment was
required to be recognised.
We challenged management on the
rationale behind the key assumptions
and the methodology applied to assess
the carrying value of the CGU. We
concluded that management’s key
assumptions and disclosures are
reasonable and appropriate.
We received a report from management
explaining the basis of recognition
and estimate for impairments and
restructuring/transformation costs.
The report also detailed how
transformation related costs reconciled
back to previously announced
transformation programmes.
We challenged the rationale behind
the presentation of the costs as non-
underlying, with particular focus
on areas that required judgement
around recognition.
We concluded that management has
appropriately accounted for, and
disclosed the impacts from major
impairment and restructuring activities
(see note 6 in the annual report).
Significant current year considerations in
relation to the accounts
Work undertaken / outcome
Loss on disposal of businesses and
businesses classified as “held for sale”.
Key judgements in relation to assessing the
fair value less costs to sell of businesses
classified as “held for sale”.
We reviewed and discussed the
accounting for the following disposals:
On 15th June 2023, the group completed
the sale of Johnson Matthey Catalysts LLC
for a cash consideration of £11 million.
On 29th September 2023, the group
completed the sale of its Diagnostic
Services business for an enterprise value
of £55 million (£47 million on a debt
free basis after working capital
adjustments).
On 31st December 2023, the group
completed the sale of the trade and
assets (excluding cash) of its Battery
Materials Germany business for a cash
consideration of £1 million.
The group recorded £9 million of disposal
related costs. This is comprised of
£7 million for the disposals of Medical
Device Components (£5 million) and
Battery Systems (£2 million) which were
signed during the year, and £2 million in
relation to disposals in prior years.
We concluded that management’s key
assumptions and disclosures on the loss
on disposal of businesses above were
reasonable and appropriate.
We also considered the assessment in
arriving at the fair value less costs to sell
of the Battery Systems business and
agreed management’s classification as
“held for sale” was appropriate and that a
£45 million impairment was required.
We agree with management’s assessment
to also classify Medical Device Components
and Battery Materials Poland as “held
for sale”.
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Financial statements
Other information
Significant current year considerations in
relation to the accounts
Work undertaken / outcome
Refining process and stocktakes
When agreeing commercial terms with
customers and establishing process loss
provisions, key estimates are made of the
amount of precious metal that may be
lost during the refining and fabrication
processes. Refining stocktakes involve
key estimates regarding the volumes of
precious metal-bearing material in the
refining system and the subsequent
sampling and assaying to assess the
precious metal content.
We received a report from management
summarising the results of the refinery
stocktakes in the US. The report was
reviewed to ensure that the results
were in line with expectations and
historic trends.
The refining process and stocktakes were
an area of focus for PwC who reported
their findings to us.
We concluded that management’s
accounting for refining stocktake gains
and losses was in accordance with the
agreed methodology.
Post-employment benefits
Key estimates are made in relation to the
assumptions used to value post-employment
benefit obligations, including the discount
rate and inflation.
The key assumptions are based on
recommendations from independent
qualified actuaries.
We received a report from management
summarising the key assumptions used
to value the liabilities of the main
post-employment benefit plans. The
assumptions were compared with those
made by other companies, and PwC’s
assessment of the reasonableness of the
assumptions was considered.
We concluded that the assumptions used,
and accounting treatment, are
appropriate for the group’s post-
employment benefit plans.
Tax provisions
Key estimates are made in determining
the tax charge in the accounts where the
precise impact of tax laws and regulations
is unclear.
We received a report from management
explaining the issues in dispute, or at risk
of this, with tax authorities across the
business, the calculation of tax provisions
and relevant disclosures. We also
considered the sensitivities around the
provisions and debated the circumstances
in arriving at the key provisions.
We concluded that management’s key
assumptions and disclosures are
reasonable and appropriate.
Significant current year considerations in
relation to the accounts
Work undertaken / outcome
Climate change
Key estimates are made in relation to
climate change and the impact on the going
concern period and viability of the period
over the next three years. Additionally, the
potential impact of climate on the financial
statements including forecasts of cash flows
used in impairment assessments,
recoverability of deferred tax assets and
expected lives of fixed assets and their
exposure to the physical risk posed by
climate change.
Management has considered the impact
of climate change in their goodwill
impairment calculations and going
concern/viability forecasts.
We concluded that management’s key
assumptions and disclosures are
reasonable and appropriate.
We also received a report outlining how
TCFD considerations are factored into the
financial statements.
Provisions and contingent liabilities
(judgement)
Key estimates are made in determining
provisions in the accounts for disputes
and claims which arise from time to
time in the ordinary course of business.
Key judgements are made in determining
appropriate disclosures in respect of
contingent liabilities.
We received a report from management
providing information in respect of
significant disputes and claims, including
the accounting and disclosure
implications, which we discussed and
challenged. Claims, uncertainties and
other provisions was an area of focus for
PwC who reported their findings to us.
We concurred with management’s
conclusions regarding provisions and
contingent liabilities and consider the
disclosures to be appropriate.
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Financial statements
Other information
Going concern and
viability statement
We reviewed the matters, assumptions and
sensitivities being used to assess both the
going concern basis and the long-term
viability of the group. This included
assessing risks that would threaten our
business model, current funding position,
as well as different stress scenarios and
mitigating actions. Following our review
and recommendation, the board concluded
that JM is able to continue operating and
can meet liabilities over at least three years,
which remains the most appropriate time
span. Further details on our going concern
and viability statement, and the scenarios
considered, are on page 71.
Fair, balanced and
understandable
We review and assess management’s
process to support the board, so it can give
its assurance that the Annual Report and
Accounts, taken as a whole, is fair, balanced
and understandable (FBU) and provides the
information necessary for shareholders to
assess JM’s position and performance,
business model and strategy.
For the Annual Report and Accounts 2024,
management selected three individuals
from across the group, who were not
involved in the drafting, but were all
familiar with our strategy and business
model, to form an FBU panel and carry out
a detailed review, with the support of GAR
carrying out checks and balances. The FBU
panel, PwC and Annual Report project team
determined whether key messages aligned
with the group’s position, performance and
strategy, and whether the narrative sections
and financial statements were consistent.
The FBU panel presented a report to the
board, highlighting the key themes from
the review and discussion points. The
Disclosure Committee reviewed the
verification process dealing with the report’s
factual content to further support the
board’s review.
Risk management and
internal control
As delegated by the board, the committee is
responsible for reviewing the adequacy and
effectiveness of internal financial controls,
and internal control and risk management
systems. These controls are a critical
component of our governance and
assurance framework, and they detail the
minimum controls we need to keep our
people safe, ensure compliance with our
standards and regulations, protect our
physical and intellectual assets, and facilitate
the accuracy and completeness of financial
reporting. During the year, the committee
assessed the effectiveness of these controls,
considered the key identified control gaps,
and assessed how management planned to
address the findings.
The Director of Assurance and Risk
independently assures that our risk
management and internal control processes
operate effectively. Working closely with
leadership and management, she provides
regular oversight of risk matters that affect
our business, makes recommendations to
address key issues, and ensures that any
mitigating actions are properly tracked,
challenged and reported.
The group’s internal controls over financial
reporting include policies and procedures
designed to ensure the accuracy of our
financial statements. JM’s control self-
assessment and business filing assurance
processes provide management with a view
of the operation of these controls. The
results are presented to the committee as
part of its assessment of the year-end
control environment.
The committee is satisfied that the group’s
internal financial controls operated
effectively throughout the year and up to
the date of approval of this report. However,
these controls do not provide absolute
assurance against material misstatement or
loss and are assessed based on materiality
and level of activities within the business.
Operation of controls
and assurance
There is an ongoing comprehensive
improvement programme across JM’s
financial and operational controls, including
control self-assessment, which has led to
positive development in our internal controls
over financial reporting. During the year, we
reviewed the controls strategy, focusing on
several cultural and operational factors to
ensure JM’s readiness for the enhanced
reporting on the operating effectiveness of
controls from 2025/26. A new second level
line of testing of internal controls was
introduced during the year to provide
management with independent assurance
over the effectiveness of the control self-
assessment process.
Group assurance and risk
The Director of Assurance and Risk provides
regular reports on internal audit reviews,
including key findings, actions needed and
progress on their implementation. We
continually review the effectiveness of the
Group Assurance and Risk (GAR) function,
using inputs including audit reports,
management’s response to audit actions
and discussions over risk exposures. We look
at whether the function has adequate
standing across the group, is free from
management influence or other
restrictions, and is sufficiently resourced.
Integrated or aligned assurance allows us
the opportunity to have an holistic
approach to risk management, by
interacting and working closely with all
teams responsible for first, second and third
lines of defence. This co-ordination helps
set the right risk culture and allows further
assurance that risks are being appropriately
identified and controlled across the
organisation and that appropriate
mitigation strategies are being put in place.
GAR annual plan
We review the GAR annual plan to ensure
that it reflects challenges and changes to
our business. We are confident that it
provides the appropriate level of assurance
over the group’s key risks.
When we reviewed the 2024/25 plan, we
specifically considered whether it continued
to provide the level of assurance over JM’s
principal and operational risks, and
continues to contribute to the improvement
in our overall controls culture and maturity
of the second line of defence.
The GAR annual plan is formed on a
risk-based audit universe covering areas
across financial and operational functions
including IT and transformation activities at
group and business levels. We consider a
wide range of risks that fall into those areas,
including level of change and
transformation in the group and
organisational culture. Close collaboration
with the business ensures it adds value to
management with pragmatic and
manageable action plans. The plan also
allows greater flexibility to ensure that the
GAR team has capacity to deal with
unexpected events.
We believe our 2024/25 assurance plans are
adequate for JM’s size and nature. It is our
opinion they will continue to provide the
group with necessary focus on maturing
controls culture across business and IT
processes. The quality and standing of the
GAR function is appropriate to provide
necessary challenge and support to the
transforming organisation.
Audit Committee report continued
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Audit Committee report continued
Risk management
We work with the board to review and
refine the risk assurance processes,
including the integrated assurance
framework and control self-assessment.
We concentrate on reviewing the mitigating
controls and the levels of assurance,
while the board is directly responsible for
managing risks and establishing levels of
risk appetite for the group’s principal risks.
The GAR function carries out any additional
assurance and reports back to the committee.
Speak Up process
Every year, we review our Speak Up
whistleblowing process to ensure the
procedures allow proportionate and
independent investigation and appropriate
effective follow-up action. The Societal
Value Committee reviews the outcomes
of significant investigations and
remedial actions.
More information on our Speak Up
process can be found on page 49
External auditor
Auditor independence is an essential part of
our audit framework and the assurance it
provides. We confirm ongoing compliance
with the Competition and Markets
Authority’s Statutory Audit Services Order.
Tenure
Our shareholders appointed PwC as the
group’s external auditor in July 2018,
following a formal tender process. This is
the sixth year that PwC has audited the
group, with Graham Parsons as current lead
audit partner. We have no immediate plans
to re-tender the auditor, however, we
anticipate that it would be conducted to
coincide with when Graham Parsons is
required to rotate off after the 2027 audit,
in accordance with the current regulation
that requires a tender every ten years. The
proposed tender date is in the best interests
of shareholders and the company, as PwC
has a detailed knowledge of our business,
an understanding of our industry, and
continues to demonstrate that it has the
necessary expertise and capability to
undertake the audit.
External audit plan
In developing the external audit plan for
2023/24, PwC carried out a risk assessment
to identify potential risks of material
misstatement in the financial statements.
This risk assessment considered the nature,
magnitude and likelihood of each identified
risk, together with relevant controls, to
identify audit risks. PwC refer to key audit
matters in the independent auditors’ report
on pages 133-142, which formed the basis
of the external audit plan.
In determining the scope of coverage, PwC
considered management reporting, the
group’s legal entity structure, the 2023/24
financial results and the financial forecast
for 2024/25. PwC set out details of the
coverage and the agreed scope in the
independent auditors’ report on pages
133-142. The methodology of assessing
materiality was consistent with the prior
year and agreed at approximately 5%
of the three-year average profit before tax,
adjusted for loss on business disposals, loss
on significant legal proceedings, major
impairment and restructuring charges.
Following discussion and challenge, we
concluded the proposed external audit plan
was sufficiently comprehensive for the audit
of the group’s accounts and approved the
proposed fee.
How we review PwC’s
performance
Throughout the year, we review the
ongoing effectiveness and quality of PwC
and the audit process. We look at several
factors: the auditors’ reports to the
committee; Graham Parsons and the PwC
team’s performance in and outside
committee meetings; how the PwC team
interacts with and challenges management;
and on PwC’s efforts at building
relationships with the JM team. We ensure
that we spend sufficient time with the
auditors without management present as
part of our assessment.
We considered how PwC challenged
management’s judgements and
assumptions on matters highlighted on
pages 99-101, and asked PwC to confirm
if those matters had been addressed
correctly by management. Following
detailed analysis of the assurance
completed, PwC agreed with management’s
judgements and assumptions.
We seek direct feedback from PwC’s
independent Quality Review Partner to
review their assessment of the external
auditor’s key planning judgements and the
execution of PwC’s response to significant
risks and reporting. We also ask PwC to
share with us the results of their internal
quality inspections of the audit as well as
those conducted by the FRC. In addition,
we feel it is important to understand
management’s opinion of audit quality and
effectiveness, with the executive directors
and senior management completing a
questionnaire on the external auditor
each year.
How we gather feedback on the
effectiveness of our external auditor
and external audit process:
Third-party reviews
• External reviews of PwC by the FRC’s audit
quality review team and the Quality
Assurance Department of The Institute of
Chartered Accountants in England
and Wales.
Information provided by the auditor
• Details on the audit plan delivery and any
changes to the scope of work.
• Assurance on the operation of PwC’s audit
quality control procedures and insight
into their outcomes as they relate to the
audit and key members of audit team.
Management feedback
• Survey of audit quality and effectiveness
by executive directors and senior
management including
recommendations for improvement.
• Seek assurance on the disclosure process
for the provision of information to
the auditor.
Committee assessment
• Quality of regular audit reports.
• Feedback from committee members and
regular attendees, including the Group
Financial Controller and the Director of
Assurance and Risk.
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Provision of non-audit services
Our Non-Audit Services Policy ensures the
provision of non-audit services is no threat
to PwC’s independence and objectivity as an
auditor. In accordance with the FRC’s
Revised Ethical Standard 2019, the auditor
can only provide additional services directly
linked to the audit.
Our policy sets out how approval should be
obtained before PwC is engaged to provide
a permitted non-audit service. Services
likely to cost £25,000 or less must be
approved by the Chief Financial Officer;
services likely to cost more than £25,000
but less than £100,000 must be approved
by the committee chair. Services likely to
cost over £100,000 must be approved by
the committee.
We reviewed compliance with the Non-
Audit Services Policy, details of the
non-audit services provided by PwC and
associated fees. Audit-related assurance
services reported as non-audit services
related to the review of half-year financial
information and reporting, amounting to
£347,750; other non-audit services in the
year were £8,865, in total representing 7%
of the audit fee, compared with audit fees
of £4.8 million. More information on fees
incurred by PwC for non-audit services, as
well as the split between PwC’s audit and
non-audit fees, are in note 4 to the
accounts, on page 164.
Objectivity and independence
We are responsible for monitoring and
reviewing the objectivity and independence
of PwC. We considered the information
provided by PwC, confirming that no PwC
employees involved with the audit have
links or connections to JM, and that
they complied with the FRC’s Revised
Ethical Standard. We conclude that PwC
is independent.
Proposed re-appointment
of PwC
Following our assessment, we believe that
PwC provides a robust audit and valuable
technical knowledge, and is free from
third-party influence and restrictive
contractual clauses. As a result, we have
included a resolution proposing PwC’s
re-appointment as auditor, and authorised
the committee to determine PwC’s
remuneration, in our 2024 Notice of
Annual General Meeting.
Audit Committee report continued
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Membership
John O’Higgins (Chair)
Jane Griffiths
Xiaozhi Liu
Doug Webb
Members attendance at committee meetings
during the year is on page 77
Details of changes to the committee’s
membership is set out on page 93
Regular attendees at Committee meetings:
• Board Chair
• Chief Executive
• Chief HR Officer
• Group Reward Director
Activities during 2023/24:
• Finalised our 2023 Directors’ Remuneration Policy
• Determined the extent of achievement against the
2022/23 annual bonus targets and 2020/21
Performance Share Plan award targets
• Reviewed our short and long term incentive plan
metrics in light of Company strategy
• Set the performance metrics for the 2023/24 annual
bonus and Performance Share Plan awards
• Discussed Group-wide salary budgets
• Approved Executive Director and GLT base salary increases
• Reviewed the Board Chair’s fee
• Approved the 2022/23 Directors’ Remuneration Report
Our focus areas for 2024/25:
• Aligning incentive plan performance metrics with the
evolution of strategy
• Setting incentive plan performance targets for the
upcoming year
• Overseeing approach to pay transparency for the
wider workforce
The Committee’s Terms of Reference set out our full
responsibilities: matthey.com/governance-framework
“The application of our Remuneration
Policy in 2023/24 balanced our near
term objectives of incentivising
improved performance through the
execution of business transformation
and simplification with our longer-
term objectives of creating sustainable
value creation and growth underpinned
by a high performance culture.”
Our approach to remuneration
Our overall purpose at Johnson Matthey
is catalysing the net zero transition. We
currently have an important role to play in
this process through the application of our
sustainable technologies, products and
services and we will have an increasingly
important role to play as we further
commercialise long-term sustainable
technologies, including our portfolio of
hydrogen technologies, which will enable
decarbonisation and enhance circularity.
Our Remuneration Policy has been
purposefully designed to support our
strategy detailed above. Our pay model,
while market consistent, is weighted
towards long term variable pay which
supports the long term nature of the
investment decisions we make. Our
Executive Directors’ remuneration includes
base salary, pension and benefits, annual
bonus, a performance share plan and share
ownership requirements with the same
policy generally cascading below to our
leaders and senior managers. However,
below director level, we do operate
alternative incentives, including restricted
stock, to ensure we can compete for the
best executive talent in the geographic
locations in which we operate.
Remuneration
Committee report
Dear Stakeholder
I would like to thank those shareholders
who provided feedback on remuneration
matters ahead of our 2023 AGM. I was
pleased that our Directors’ Remuneration
Policy and Annual Report on Remuneration
received 89.08% and 94.96% shareholder
support respectively, reflecting the ongoing
support from shareholders of our approach
to remuneration. We expect our 2023
Remuneration Policy to operate until our
2026 AGM.
As this is my first report as Chair of the
committee, following my appointment on
2nd January 2024, I would like to thank my
predecessor, Chris Mottershead, for his
leadership of the committee and support
during my transition to Chair.
I am pleased to present the Directors’
Remuneration Report for the year ended 31st
March 2024. This report is divided into three
sections: my statement, a summary of the
Directors’ Remuneration Policy
and our Annual Report on
Remuneration for the year
ended 31st March 2024.
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Remuneration Committee report continued
Overview of company
performance
The 2023/24 financial year has been a year
of strong strategic progress and good
financial performance in challenging
macroeconomic conditions. We continued
to transform our business to create a more
streamlined organisation and have
delivered £120 million of total cost savings
to date. We also achieved key milestones in
relation to winning ‘first of a kind’ projects
in sustainable fuels and low carbon
hydrogen. These steps ensure we have a
stronger platform for future growth.
With regard to financial performance,
notwithstanding continued destocking
across a number of our markets, we
achieved growth in underlying profit
(at constant exchange rates and adjusting
for lower precious metal prices) of 11%,
delivering a total underlying operating
profit of £410 million.
2023/24 incentive plan outcomes
Annual Incentive Plan (AIP)
The maximum bonus opportunity for
2023/24 remained unchanged at 180%
of salary for the Chief Executive and 150%
of salary for the Chief Financial Officer.
The bonus was based on underlying profit
before tax (PBT) (50%), working capital
(20%) and strategic and transformation
objectives (30%).
Bonus targets for PBT were set to be
consistent with the board’s 2023/24
objective of delivering growth in underlying
operating profit, adjusted for metal prices
and exchange rates, of 7.5%. The actual
growth in underlying operating profit
achieved on this basis was 11% which was
an excellent result in challenging market
conditions. This growth resulted in the PBT
target, also adjusted for metal prices and
exchange rates, being achieved at 111.7%
which was above the top end of the
performance range which was set at 110%
of the target. However, after considering
the range of assumptions used to set the
original targets, including market
uncertainty, and then testing the targets
based 50% on constant metal prices and
50% on actual metal prices, the committee
concluded that it was appropriate to
increase the original targets after the
standard restatement for metal prices and
exchange rates to ensure that they had the
degree of stretch originally envisaged
allowing for changes to market conditions
through the year. As a result, the
committee used its discretion to increase
the original PBT target by circa. 5%. This
adjustment resulted in increased
performance requirements at all
performance levels given the targets were
set at 90% to 110% of the target. Following
the increase to the target, the extent of
achievement was reduced to 106.6% of
target from 111.7% which resulted in the
bonus earned in relation to PBT reducing
from 100% of maximum to 83% of
maximum. Overall, a total bonus of 67% of
maximum was payable to both Liam
Condon and Stephen Oxley. The committee
is satisfied that this is a fair outcome in the
context of the wider stakeholder experience
and reflective of the overall business
performance delivered during the year. One
half of the bonus payable will be deferred in
shares for a period of three-years. More
details on the performance against the
annual targets and strategic objectives are
set out on pages 120-121.
Performance Share Plan (PSP)
Our Chief Executive and Chief Financial
Officer were both granted PSP awards in
August 2021 that were eligible to vest
based on performance against challenging
EPS growth and relative TSR performance
conditions tested over the three year period
ending 31st March 2024. In light of the
challenging market conditions across the
three year period, the performance
conditions were not met and so the
awards will lapse.
The Remuneration Committee, having had
regard to the remuneration outcomes
across the group, including considering the
relationship between executive and wider
workforce pay, are satisfied that the
remuneration outcomes are appropriate
and that the Remuneration Policy operated
as intended during the year.
Applying the Remuneration
Policy in 2024/25
Base Salary
During the year the Committee reviewed
the salary increase budgets for the
workforce taking into account inflation and
its associated impact on the cost of living.
The salary increase budget in the UK is 4%
for non-management roles and 3% for
management roles. With regards to the
Executive Directors, the Committee
considered the UK salary budget along with
institutional investor guidance on UK
Director salaries that in a high inflation
environment increases should be at a
discount to the workforce and increased
the Executive Director salaries by 3% with
effect from 1st April 2024.
AIP
The maximum opportunity will remain at
180% of salary for the CEO and 150% of
salary for the CFO and the target will
continue to be set at 50% of the maximum.
The Committee reviewed the choice of
performance metrics for the 2024/25 AIP
and made a modest refinement to better
reflect the strategic priorities for the year
ahead. Underlying PBT continued with a
weighting of 45%, working capital days was
retained but with a slightly lower weighting
of 15% (from 20%) and strategic targets
were also retained with a reduced
weighting of 25% (from 30%). In light of
the group-wide focus on cost reduction, a
new corporate costs metric was included
with a weighting of 15% of the total
bonus opportunity.
The range of targets set for 2024/25 have
been recalibrated versus those set for
2023/24 to take account of group
divestments, current forecast metal prices
and exchange rates, as well as internal and
external expectations of future
performance. The committee considers the
range of targets to be at least as challenging
as those set for 2023/24 allowing for
current market conditions.
PSP
The Remuneration Committee intends to
grant awards at the same quantum as in
2024/25, being 250% and 175% of salary
for the CEO and CFO respectively.
The performance measures, tested over the
three year period ending 31st March 2027,
will include a combination of growth in
underlying EPS (25%), relative total
Shareholder return (versus the FTSE 31
to 130 companies but excluding those in
financial services)(25%), return on capital
employed (25%) and sustainability
objectives (25%).
The range of EPS growth targets will require
a minimum growth of 5% p.a. for 15% of
this part of the award to vest, increasing on
a straight line basis to 13% p.a. growth for
full vesting. The range of targets were set
having regard to internal planning, external
expectations for future growth and wider
market conditions. The committee
considers the range of targets set to be
similarly challenging to those set in
prior years.
TSR will be assessed against the constituents
of the companies ranked 31 to 130 in the
FTSE All-Share Index (excluding financial
services companies) to reflect JM’s current
position in the FTSE. Threshold vesting
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Remuneration Committee report continued
starts at 25% for median performance,
increasing on a straight line basis, with
100% vesting for achieving at least upper
quartile performance.
Inclusion of a return on capital measure in
the 2024 award will incentivise delivery of
the transformation programme across JM
and aligns with investor focus on our return
on capital capabilities. Threshold vesting
starts at 25% for 12% performance,
increasing on a straight line basis, with a
100% vesting for achieving 16%.
Our sustainability targets are set as
challenging structured targets that align
with increasing the GHG emissions avoided
through the use of our products and
solutions, reducing our own GHG (Scope 1
and Scope 2) and increasing the percentage
of female representation across our
management levels. The range of targets
are disclosed on page 127 and are set to be
similarly challenging to the financial and
TSR targets.
The Remuneration Committee retains
discretion on vesting to adjust the number
of shares vesting having had regard to
underlying performance during the three
year performance period and/or if it
considers there to have been the potential
for a windfall gain on vesting. The factors
that the committee would consider in
determining if there had been a windfall
gain would include, but not be limited to,
the share price on grant and at the end of
the period, and performance through
the period.
Prior to granting the 2024/25 PSP award
the committee intends to undertake a final
review of the performance targets allowing
for the prevailing market conditions versus
the time at which the proposed targets were
set. Full details of the intended awards are
set out on page 127.
Chair and non-executive
director fees
The fees payable to the Chair and non
executive directors are reviewed annually.
In line with the increase in base salaries for
Executive Directors, the Chair fee and NED
base fee was increased by 3% (lower than
the typical 4% salary increase awarded to
the wider workforce) with effect from
1st April 2024.
Wider employee remuneration
Paying our employees fairly for their role,
skills, experience and performance is
central to our approach to remuneration,
and our reward framework and policies
support us in doing this.
Equal pay is also critical, and we review our
pay levels on an ongoing basis to ensure
that employees are paid fairly. We will
continue our work in this area over the
coming year as we prepare for the EU Pay
Transparency Directive.
We are also committed to the real living
wage and narrowing the gender pay gap
that exists among our employees, and to
tackling the root causes of gender
imbalance to ensure a truly inclusive culture
that supports diversity.
We aspire to offer a well-balanced,
progressive and structured approach to
reward, with appropriate variation by
location. We also find that the non-financial
reward elements are essential to a
supportive culture, with the wellbeing
of staff a prominent part of our
employment proposition.
This year, all employees were able to
provide their feedback on a range of
matters, including remuneration, through
our annual employee engagement survey
and local and global town hall meetings.
Committee effectiveness
The externally facilitated board
and committee effectiveness review
concluded that the committee continued
to function effectively.
Shareholder engagement
We were grateful for the feedback we
received prior to the 2023 AGM from our
largest investors as well as Institutional
Shareholder Services (‘ISS’), The Investment
Association (‘IA’) and Glass Lewis as part of
the renewal of our Directors’ Remuneration
Policy. The feedback we received was
supportive of our general approach to
Directors’ remuneration and the minor
refinements we proposed.
We welcome an open dialogue with our
shareholders, and I will be available at the
2024 AGM to answer any questions about
the work of the Remuneration Committee
2024 AGM
The committee believes that the policy and
our approach to implementation are in the
best interests of the company.
I ask you to support the advisory vote on this
Annual Statement and the 2024 Annual
Report on remuneration at our AGM on
18th July 2024.
John O’Higgins
Remuneration Committee Chair
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Fixed pay (£’000)
Variable pay (£’000)
Stephen Oxley — Chief Financial Officer
Fixed pay (£’000)
Variable pay (£’000)
Liam Condon — Chief Executive Officer
Group profit before tax1
£394m
Earnings per share2
-8.1%
Total shareholder return
-37.4%
2022, 2023 & 2024 Award
1. Measured at constant exchange rates and 50% actual, 50% budgeted metal prices.
2. CAGR in underlying EPS.
3. Included in all awards from 2022.
4. Included in 2023 award only.
5. Included in 2024 award only.
Performance Share Plan
Aligning remuneration with strategy
We will use our deep knowledge of metals chemistry to help our
customers address the complex technical challenges of the four
transitions – transport, energy, decarbonising chemicals production
and a circular economy – by delivering sustainable products, services
and technologies. Our strategic milestones can be found on page 13.
Remuneration at a glance
2024 pay outcomes
The pay breakdowns for the executive directors in 2022/23 and 2023/24 are set out below:
KPIs
Liam Condon
Stephen Oxley
Outcomes of variable remuneration1
Weighting
Formulaic outcome
(% base salary)
Formulaic outcome
(% base salary)
Annual bonus
Profit before tax
50%
74.6%
62.2%
Working capital days (including PGMs)
10%
18.0%
15.0%
Working capital days (excluding PGMs)
10%
0.0%
0.00%
Strategic objectives
30%
27.0%
22.5%
Total
100%
119.6%
99.7%
Performance Share Plan
Compound annual growth rate in earnings per share
50%
–
–
Total Shareholder return
50%
–
–
1. Liam Condon and Stephen Oxley did not hold any 2020–23 Performance Share Plan awards.
Annual Incentive Plan
2023/24
2022/23
Salary
Benefits
Pension
983
283
147
950
280
143
2023/24
2022/23
Salary
Benefits
Pension
20
90
602
20
87
582
2023/24
2022/23
Annual Incentive Plan
Perfomance Share Plan
1,176
1,274
2023/24
2022/23
Annual Incentive Plan
Perfomance Share Plan
600
650
All Awards
Group working capital days
32.2
(total)
59.6
(excl PGMs)
Strategic KPIs (including sustainability)
• D&I – female representation3
• GHG emissions avoided through our products and services3
• Reduction in Scope 1 and 2 emissions3
• GBS cost reduction4
• Return on capital employed5
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Remuneration Policy
The Directors’ Remuneration Policy was approved at the 2023 AGM on 20th July 2023 and will remain in effect until the 2026 AGM
A summary of the policy is set out below. The full policy can be found on our website https://matthey.com/remuneration-committee
Remuneration Policy Table
Element
Summary
Potential value of element and performance measures
Base salary
Base salaries will normally be reviewed annually, and any changes normally take effect
from 1st April each year.
In determining salaries and salary increases, the Remuneration Committee will take
account of the performance of the individual director against a broad set of parameters
including financial, environmental, social and governance issues.
The Remuneration Committee will also take into account the director’s knowledge,
contribution to the role, length of time in post, and any additional responsibilities since
the last salary review, as well as the level of salary increases awarded to the wider Johnson
Matthey workforce.
Maximum opportunity
No salary increase will be awarded which results in a base salary
which exceeds the competitive market range considered
appropriate by the committee for the role.
Benefits
Benefits include, but are not limited to, medical, life and income protection insurance,
medical assessments, company sick pay, a company car (or equivalent), relocation
benefits relating to business moves and assistance with tax advice and compliance
services where appropriate
Other appropriate benefits may also be provided from time to time at the discretion of the
Remuneration Committee.
Benefits are not generally expected to be a significant part of the
remuneration package in financial terms. Car benefits will not
exceed a total of £25,000 per annum.
The cost of medical insurance for an individual executive director
and dependants will not exceed £25,000 per annum.
Pension
All executive directors will be eligible to participate in a company pension plan and/or
paid a cash supplement in lieu of membership in a pension plan.
The maximum company contribution is 15% of base salary for
executive directors. This is aligned to the typical cost of providing
pension benefits to other employees in the UK.
Annual Incentive Plan
The Remuneration Committee sets the AIP performance measures and targets for each
new award cycle. At the end of the year, the committee determines the extent to which
these have been achieved. The committee retains the discretion to reduce any bonus
award if, in its opinion, the underlying financial performance of the company has not
been satisfactory in the circumstances.
Of any bonus paid, up to 50% is paid in cash and the remaining balance is deferred into
shares for a three-year period as an award under the deferred bonus plan.
Maximum opportunity and vesting thresholds
• Chief Executive Officer – 180% of base salary.
• Other executive directors – 150% of base salary.
Where financial measures are set the threshold performance
level will result in a bonus of up to 25% of the target bonus
opportunity. On-target performance will result in 50% payment
of the maximum opportunity. Where non-financial targets are
set, it may not be practicable to set targets on a sliding scale.
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Element
Summary
Potential value of element and performance measures
Performance Share
Plan
Shares may be awarded each year and are subject to performance conditions tested over a
minimum three- year performance period. Subject to the performance conditions being
met the shares will vest after which the directors will be required to hold any vested shares
until the fifth anniversary of the award.
Award levels and vesting thresholds
The maximum award level is 250% of salary.
The current award levels are:
• Chief Executive Officer – 250% of base salary
• Other Executive Directors – 175% of salary.
Threshold performance will result in vesting of up to a maximum
of 25% for each performance measure.
All employee share
plan
Executive directors are entitled to participate in the company’s all-employee plan under
which regular monthly share purchases are made and matched with the award of
company shares, subject to retention conditions.
Executive directors would also be entitled to participate in any other all-employee
arrangements that may be established by the company on the same terms as all
other employees.
Executive directors are entitled to participate up to the same
limits in force from time to time for all employees.
Shareholding
requirements
Executive directors are expected to build up a shareholding in the company over a
reasonable period of time, and upon cessation of employment are expected to retain a
shareholding for a period of up to two years.
The minimum shareholding requirement while an executive
director and for the two-year period after cessation of
employment is as follows:
• Chief Executive Officer – 250% of base salary.
• Other executive directors – 200% of base salary.
Non-executive
director fees
Non-executive director fees are determined by the board and the non-executive directors
exclude themselves from these discussions.
The fees for the Chair are determined by the Remuneration Committee taking into
account the views of the Chief Executive Officer. The Chair excludes himself from
these discussions.
Non-executive directors are paid a base fee each year with an additional fee for each
committee Chair or additional role held.
Non-executive director fees are reviewed every year.
The fee levels are set subject to the maximum limits set out in
the company’s Articles of Association.
Remuneration Policy continued
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Remuneration Policy continued
The committee is responsible for determining, and agreeing with the board, the Directors’ Remuneration Policy and has oversight of its implementation. The committee has clear terms of
reference, works with management and independent advisers to develop proposals and recommendations, and exercises independent judgement when making decisions. This process is
considered to manage any potential conflicts of interest.
The policy is performance focused and, given the long-term nature of JM’s business, is weighted towards long-term performance and includes market standard shareholding expectations
and recovery and withholding provisions.
The committee considered the principles listed in the UK Corporate Governance Code 2018 when reviewing the Directors’ Remuneration Policy and took these into account in its design
and implementation.
Clarity
Remuneration arrangements have defined parameters which can be transparently communicated to shareholders and other stakeholders.
Simplicity
Remuneration arrangements for executive directors consist of:
• Salary, benefits, and a fixed pension contribution – set to reflect the typical rate provided to the UK workforce.
• Annual Incentive Plan (AIP), a portion of which is deferred into shares.
• Annual long-term Performance Share Plan (PSP) awards which provide focus on performance over the longer term.
Unnecessary complexity is avoided by the committee in operating the arrangements.
Risk
The remuneration arrangements are designed to have a robust link between pay and performance, thereby mitigating the risk of excessive reward.
In addition, behavioural risks are considered when setting targets for performance-related pay, and the arrangements have safeguards to ensure that pay
remains appropriate, including committee discretion to adjust incentive outturns, deferral of incentive payments in shares, recovery provisions and share
ownership requirements. To avoid conflicts of interest, committee members are required to disclose any conflicts or potential conflicts ahead of committee
meetings. No executive director or other member of management is present when their own remuneration is under discussion.
Predictability
The committee set specific targets for different levels of performance which are communicated to the individuals and disclosed to shareholders.
Proportionality
The AIP and PSP have performance metrics that are aligned with the company’s KPIs, and the payouts reflect achievement against the targets.
The committee may reduce payouts under the AIP and PSP if they are not considered aligned with underlying performance. Safeguards are identified
to ensure that poor performance is not rewarded.
Alignment to culture
The directors’ remuneration arrangements are cascaded through the organisation ensuring that there are common goals. The committee reviews
remuneration arrangements throughout the company and takes these into account when setting directors’ remuneration.
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Remuneration Policy continued
Selection of performance targets
Annual Incentive Plan
Financial performance targets under the AIP are set by the Remuneration Committee with
reference to the prior year and to the budgets and business plans for the coming year, ensuring
the levels to achieve threshold, target or maximum payout are appropriately challenging.
The performance targets for 2024/25 are predominantly based on financial measures
(75% of maximum opportunity) including underlying PBT, working capital days and
corporate cost reduction to ensure that there is strong attention paid to delivery of current
operational plans and operational efficiency.
Commercial sensitivity precludes the advance publication of the actual bonus targets,
but these targets will be retrospectively published in the Annual Report on Remuneration
for 2024/25.
Performance Share Plan
The performance targets under the PSP are set to reflect the company’s longer-term
growth objectives at a level where the maximum represents genuine outperformance.
The performance measures proposed for the 2024 award are underlying EPS, TSR,
return on capital employed and strategic objectives.
Underlying EPS is considered a simple and clear measure of absolute growth in line with the
company’s strategy.
TSR is considered a simple and clear performance relative to a comparator group
(FTSE 31-130 excluding financial services companies).
Return on capital employed supports our transformation journey and aligns with investor
focus on our ability to return value on investments.
The strategic objectives will consist of three equally weighted metrics related to our
sustainability framework.
Discretion
The Remuneration Committee can exercise discretion in a number of areas when operating
the company’s incentive plans, in line with the relevant rules of the plan. These include (but
are not limited to):
• The choice of participants
• The size of awards in any year (subject to the limits set out in the Directors’
Remuneration Policy table)
• The extent of payments or vesting in light of the achievement of the relevant
performance conditions
• The determination of good or ordinary leavers and the treatment of outstanding awards
(subject to the provisions of the plan rules and the remuneration policy provisions)
• The treatment of outstanding awards and assessing performance in the event of a change
of control.
In addition, if events occur which cause the Remuneration Committee to conclude that any
performance condition is no longer appropriate, that condition may be substituted, varied or
waived as is considered reasonable in the circumstances, in order to produce a fairer measure
of performance that is not materially less difficult to satisfy.
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Remuneration scenarios
Below is an illustration of the potential future remuneration that could be received by each executive director for the year starting 1st April 2024, both in absolute terms and as a proportion of
the total package under different performance scenarios. The value of the PSP is based on the award that will be granted in August 2024. In developing the scenarios, the following
assumptions have been made:
Below threshold
Only fixed elements of remuneration (base salary, pension and benefits) are payable
Threshold
Fixed elements of remuneration plus 25% of target bonus and 22% vesting of PSP award are payable
Target
Fixed elements of remuneration plus 50% of maximum bonus and 60% vesting of PSP award are payable
Maximum
Fixed elements of remuneration plus 100% of maximum bonus and 100% vesting of PSP award are payable
Maximum plus 50% share price appreciation
Maximum plus a 50% share price appreciation on the PSP award
Value of package
Liam Condon
(‘000)
Stephen Oxley
(‘000)
Composition of package
Maximum with 50%
share price appreciation
Maximum
Target
Threshold
Below threshold
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Maximum with 50%
share price appreciation
Maximum
Target
Threshold
Below threshold
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Maximum with 50%
share price appreciation
Maximum
Target
Threshold
Below threshold
0
20
40
60
80
100
Maximum with 50%
share price appreciation
Maximum
Target
Threshold
Below threshold
0
20
40
60
80
100
Base salary
Benefits
Pension
Bonus
PSP
PSP share price appreciation
Remuneration Policy continued
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Remuneration Policy continued
Group employee considerations
The Remuneration Committee considers the directors’ remuneration, along with the
remuneration of the Group Leadership Team (GLT), in the context of the wider employee
population, and is kept regularly updated on pay and conditions across the group.
We aspire to offer a well-balanced, progressive and structured approach to reward, with
appropriate variation by location. We also find that the non-financial reward elements are
essential to a supportive culture, with the wellbeing of staff a prominent part of our
employment proposition.
The general principle for remuneration in Johnson Matthey is to provide a competitive package
of pay and benefits in all markets and at all job levels to attract and retain high‑quality
and diverse employees. Equal and fair pay is also a critical component of our proposition, and we
regularly review our pay levels and develop actions to remove any form of potential inequality.
The proportion of variable pay increases with progression through management levels, with
the highest proportion of variable pay at executive director level, as defined by the
Remuneration Policy.
This year, all employees were able to provide their feedback on a range of matters, including
remuneration, through our annual employee engagement survey and townhall meetings.
This provided valuable employee context to decision making when considering remuneration
decisions made during the year. While we inform our employees of global changes to pay
and benefits, we have not actively sought a two-way dialogue over executive pay
during 2023/24.
Corporate Governance: matthey.com/corporate-governance
The table below sets out how our remuneration arrangements cascade through the organisation:
Executive directors
Senior managers
Middle managers
Managers
Wider workforce
Base salary
Base salary is set with reference to the relevant local market and takes account of the employee’s knowledge, experience and
contribution to the role. Base salaries are usually reviewed annually and take into account local salary norms, local wage
inflation and business conditions. Increases in base salary for directors will take into account the level of salary increases
granted to all employees within the group.
Base salary is either subject
to negotiation with local
trade unions or follows the
market pay approach
outlined for managers.
Pension and benefits
Employment-related benefits are offered in line with local market conditions.
Short-term incentives
Annual incentive based on
75% financial metrics plus
25% strategic objectives.
Compulsory deferral into
shares for three years.
Annual incentive based on
75% financial metrics or
strategic business goals,
plus 25% individual
performance. Compulsory
deferral into shares for
three-years for certain levels
within this category.
Annual incentive based on 75% financial metrics or strategic
business goals plus 25% individual performance.
Annual incentive is either
subject to negotiation with
local trade unions or follows
the standard AIP framework
with financial, non-financial
and individual performance
measures used.
Long-term incentives
PSP awards are subject to a
three-year performance
period and a two-year
holding period. Performance
conditions are designed to
drive company financial
performance and align with
stakeholder interests.
PSP awards are subject to a three-year performance period.
Performance conditions are designed to drive company
financial performance and align with stakeholder interests.
Restricted Share Plan (RSP) awards may be granted as
special recognition or to motivate and retain key talent.
They are typically subject to a three-year service condition.
RSP awards may be granted as special recognition or to
motivate and retain key talent. They are typically subject to a
three-year service condition.
Eligible employees may participate in JM’s Share Incentive Plan (ShareMatch). Two free matching shares are awarded for every one partnership share
purchased by the employee, subject to an annual maximum employee contribution of £1,500.
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Shareholder considerations
The committee has a standard annual
agenda item whereby the feedback from
shareholders and investor advisory bodies is
presented and discussed following the AGM.
The Committee Chair is also available for
questions at the AGM. The feedback that
the committee receives then informs
discussions for the formulation of future
policy and subsequent remuneration
decisions. The committee is also regularly
updated on the collective views of
shareholders and investor advisory bodies
by its independent advisor.
Approach to recruitment
The recruitment policy provides an
appropriate framework within which to
attract individuals of the required calibre to
lead a company of Johnson Matthey’s size,
scale and complexity. The Remuneration
Committee determines the remuneration
package for any appointment to an
executive director position, either from
within or outside Johnson Matthey.
The following table sets out the various
components which would be considered for
inclusion in the remuneration package for
the appointment of an executive director
and the approach to be adopted by the
Remuneration Committee in respect of
each component.
In the case of an internal promotion to
the board, the company will honour any
contractual commitments made prior to
the promotion.
Remuneration Policy continued
Area
Policy and operation
Overall
The policy of the board is to recruit the best candidate possible for any board position and to structure pay and
benefits in line with the Remuneration Policy set out in this report. The ongoing structure of a new recruit’s package
would be the same as for existing directors, with the possible exception of an identifiable buy-out provision, as set
out below.
Base salary
or fees
Salary or fees will be determined by the Remuneration Committee in accordance with the principles set out in the
approved remuneration policy. https://matthey.com/remuneration-committee
Benefits and
pension
An executive director will be eligible for benefits and pension arrangements in line with the company’s approved
remuneration policy for current executive directors. https://matthey.com/remuneration-committee
Annual Incentive
Plan
The maximum level of opportunity is as set out in the policy summary on page 109. The Remuneration Committee
retains discretion to set different performance targets for a new externally appointed executive director, or to adjust
performance targets and/or measures in the case of an internal promotion, to be assessed over the remainder of the
financial year. In this case any bonus payment would be made at the same time as for existing directors, such award
to be pro-rated for the time served in the performance period.
Performance
Share Plan
The maximum level of opportunity is as set out in the policy summary on page 110. In order to achieve rapid
alignment with Johnson Matthey’s and shareholder interests, the Remuneration Committee retains discretion to
grant a PSP award to a new externally appointed executive director on or soon after appointment if they join outside
of the normal grant period.
Replacement
awards buy-out
The Remuneration Committee retains discretion to grant replacement buy-out awards (in cash or shares) to a new
externally appointed executive director to reflect the loss of awards granted by a previous employer. Where this is the
case, the Remuneration Committee will seek to structure the replacement award such that overall it is on an
equivalent basis to broadly replicate that foregone, using appropriate performance terms. If granted, any
replacement buy-out award would not exceed the maximum set out in the rules of the 2017 Performance Share Plan
(350% of base salary).
If the executive director’s prior employer pays any portion of the remuneration that was anticipated to be forfeited,
the replacement awards shall be reduced by an equivalent amount.
Other
The Remuneration Committee may agree that the company will meet certain mobility costs and relocation costs
including temporary living and transportation expenses, in line with the company’s prevailing mobility policy for
senior executives as described in the approved remuneration policy https://matthey.com/remuneration-committee
Service contracts and policy on payment for loss of office
The following table summarises relevant key provisions of executive directors’ service contracts and the treatment of payments on
termination of employment. The full contracts of service of the executive directors (as well as the terms and conditions of appointment
of the non-executive directors) are available for inspection at the registered office of the company during normal business hours as well as
prior to and during the forthcoming AGM.
In exceptional circumstances, the Remuneration Committee may authorise, where it considers it to be in the best interests of the company
and shareholders, entering into contractual arrangements with a departing executive director, for example a settlement, confidentiality,
restrictive covenant or other arrangement, pursuant to which sums not set out in the following table may become payable. Full disclosure of
the payments will be made in accordance with the remuneration reporting requirements.
The table on the following page describes the contractual conditions pertaining to the contracts for Liam Condon and Stephen Oxley and for
any future executive director.
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Remuneration Policy continued
Summary of key provisions of executive directors’ service contracts and treatment of payments on termination
Liam Condon
Stephen Oxley
Date of service agreement
10th November 2021
1st December 2020
Date of appointment as
director
1st March 2022
1st April 2021
Employing company
Johnson Matthey Plc
Contract duration
No fixed term
Notice period
No more than 12 months’ notice
Post-termination restrictions
The contracts of employment contain the following restrictions on the director for the following periods from the date of termination of employment:
• non-compete – six months
• non-dealing and non-solicitation of client/customers – 12 months
• non-solicitation of suppliers and non-interference with supply chain – 12 months
• non-solicitation of employees – 12 months.
Summary termination –
payment in lieu of notice
(PILON)
The company may, in its absolute discretion, terminate the employment of the director with immediate effect by giving written notice together with
payment of a sum equivalent to the director’s base salary and the value of his contractual benefits as at the date such notice is given, in respect of the
director’s notice period, less any period of notice actually worked.
The company may elect to pay the PILON in equal monthly instalments. The director is under a duty to seek alternative employment and to keep the
company informed about whether they have been successful. If the director commences alternative employment, the monthly instalments shall be
reduced (if appropriate to nil) by the amount of the director’s gross earnings from the alternative employment. A PILON paid to a director who is a US
taxpayer would be in equal monthly instalments.
Termination payment –
change of control
If, within one year after a change of control, the director’s service agreement is terminated by the company (other than in accordance with the
summary termination provisions), the company shall pay, as liquidated damages, one year’s base salary, together with a sum equivalent to the value of
the director’s contractual benefits, as at the date of termination, less the period of any notice given by the company to the director.
Termination – treatment of
annual incentive awards
Annual bonus awards are made at the discretion of the Remuneration Committee.
Executive directors leaving the company’s employment will receive a bonus, pro-rata to service, unless the reason for leaving is resignation or misconduct.
Any bonus awarded would continue to be subject to deferral as set out in the Remuneration Policy.
In relation to deferred bonus awards which have already been made, shares will be released on the normal vesting date unless one of the following
circumstances applies, and subject to the discretion of the Remuneration Committee:
• the participant leaves as a result of misconduct; or
• the participant, prior to vesting, breaches one of the post-termination restrictions or covenants contained in their employment contract, termination
agreement or similar agreement.
In which case the deferred awards will lapse on cessation of employment.
The Remuneration Committee has the discretion to accelerate vesting of a deferred award if appropriate to do so to reflect the circumstances of the
departure. It is intended that this would only be used in the event of a departure due to ill health (or death).
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Summary of key provisions of executive directors’ service contracts and treatment of payments on termination (continued)
Liam Condon
Stephen Oxley
Termination – treatment of
long-term incentive awards
Employees, including executive directors, leaving the company’s employment will normally lose their long-term incentive awards unless they leave for a
specified “good leaver” reason (e.g. death, retirement), in which case their shares will be released on the normal release dates, subject to the
performance condition. The Remuneration Committee has discretion to accelerate vesting, in which case the performance condition would be assessed
based on available information at the time. In either case, unless the Remuneration Committee determines otherwise, the level of vesting shall be
pro-rated to reflect the proportion of the performance period which has elapsed to the date of leaving. In the post-vesting deferral period, only those
who leave due to misconduct will lose their shares.
Redundancy arrangements
Directors are not entitled to any benefit under any redundancy payments arrangement operated by the company.
Holiday
Upon termination for any reason, directors will be entitled to payment in lieu of accrued but untaken holiday entitlement.
Chair and Non-Executive Directors
The Chair and each of the non-executive directors have letters of appointment. The letters of appointment do not contain any contractual entitlement to a termination payment and the
non‑executive directors can be removed in accordance with the company’s Articles of Association. Directors are required to retire at each AGM and seek re-election by shareholders.
The details of the service contracts, including notice periods, contained in the letters of appointment in relation to the non-executive directors who served during the year are set out in the
table below. Neither the Chair or the non-executive directors has provisions in his or her letter of appointment that relate to a change of control of the company.
Non-Executive Director
Committee appointments
Date of appointment
Expiry of current term
Notice period by the individual
Notice period by the company
Patrick Thomas (Chair)
1st June 2018
31st May 2024
6 months
6 months
Jane Griffiths
1st January 2017
31st December 2025
1 month
1 month
Chris Mottershead1
27th January 2015
26th January 2024
1 month
1 month
John O’Higgins
16th November 2017
16th November 2026
1 month
1 month
Xiaozhi Liu
2nd April 2019
1st April 2025
1 month
1 month
Doug Webb
2nd September 2019
1st September 2025
1 month
1 month
Rita Forst
4th October 2021
3rd October 2024
1 month
1 month
Barbara Jeremiah
1st July 2023
30th June 2026
1 month
1 month
Audit Committee
Remuneration Committee
Nomination Committee
Societal Value Committee
Committee Chair
1. Chris Mottershead stepped down from the board on 26th January 2024.
Remuneration Policy continued
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Other information
This section provides details of how the Directors’ Remuneration Policy was
implemented during 2023/24 and how we intend to apply it in 2024/25.
About the Remuneration Committee
The members of the Remuneration Committee are John O’Higgins (Chair), Jane Griffiths,
Xiaozhi Liu and Doug Webb. Prior to 2nd January 2024, when membership of the Board
Committees was streamlined, the Remuneration Committee had comprised all six of the
Company’s non-executive directors. Details of attendance at committee meetings during the
year ended 31st March 2024 are shown on page 77.
The Remuneration Committee’s Terms of Reference can be found at matthey.com/REM-
terms-of-reference. These include determination of fair remuneration for the group Chair,
executive directors and senior management, including the General Cousel and Company
Secretary (no individual participates in discussions of their own remuneration). The General
Counsel and Company Secretary acts as secretary to the committee.
Advisers to the committee
The committee appoints and receives advice from independent remuneration consultants on
the latest developments in corporate governance and market trends in pay and incentive
arrangements. The committee appointed Korn Ferry as adviser to the Remuneration
Committee after a competitive tender process in 2017. The total fees paid to Korn Ferry in
respect of its services to the committee during the year were £32,480 +VAT. The fees paid to
Korn Ferry are based on the standard market rates Korn Ferry has for remuneration
committee advisory services.
Korn Ferry also provides consultancy services to the company in relation to certain employee
and benefit matters to those below the Board. Korn Ferry is a signatory to the Remuneration
Consultants Group Code of Conduct.
The committee is satisfied that the advice provided by Korn Ferry, an unconnected third party,
was independent and objective and that the provision of additional services did not
compromise that independence. The committee is also satisfied that the team who provided
that advice does not have any connection to Johnson Matthey that may impair their
independence and objectivity.
Herbert Smith Freehills is the committee’s legal adviser. There was no requirement during
2023/24 for Herbert Smith Freehills to provide advice to the committee. The committee is
aware that Herbert Smith Freehills is one of a number of legal firms that provide legal advice
and services to the company on a range of matters.
A statement regarding the use of remuneration consultants for the year ended
31st March 2024 is available at matthey.com/corporate-governance.
Annual report on remuneration
Statement of shareholder voting
We carefully monitor shareholder voting on our Remuneration Policy and its
implementation. We recognise the importance of our shareholders’ continued support for
our remuneration arrangements.
The next table shows the results of the polls taken on the resolution to approve the
Remuneration Policy and Annual Statement and Annual Report on Remuneration
at the 2023 AGM.
Resolution
Number of votes cast
For
Against
Votes withheld
Remuneration Policy
115,069,890
14,109,737
129,179,627
(89.08%)1
(10.92%)1
1,656,783
Annual Statement and Annual
Report on Remuneration
122,723,247
6,511,519
129,234,766
(94.96%)
(5.04%)
1,601,644
1. Percentage of votes cast, excluding votes withheld.
The Remuneration Committee believes that the 89.08% vote in favour of the Remuneration
Policy and the 94.96% vote in favour of the Annual Statement and Annual Report on
Remuneration at the 2023 AGM showed strong shareholder support for the group’s
remuneration arrangements at that time.
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Remuneration for the year ended 31st March 2024
Single total figure table of remuneration (audited)
Our Remuneration Policy operated as intended over the year, and the table below sets out the total remuneration and breakdown of the elements each director received in relation to the
years ended 31st March 2024 and 31st March 2023. An explanation of how the figures are calculated follows the table.
Base salary/fees
£’000
Benefits
£’000
Pension1
£’000
Total fixed
remuneration
£’000
Annual incentive
£’000
Long-term incentive
£’000
Total variable
remuneration
£’000
Total remuneration
£’000
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Executive directors
Liam Condon
983
950
2832
2802
147
143
1,413
1,373
1,176
1,274
–
–
1,176
1,274
2,589
2,647
Stephen Oxley
602
582
20
20
90
87
712
689
600
650
–
–
600
650
1,312
1,339
Non-executive directors
Patrick Thomas
390
376
–
–
–
–
390
376
–
–
–
–
–
–
390
376
Jane Griffiths
90
86
–
–
–
–
90
86
–
–
–
–
–
–
90
86
Chris Mottershead3
75
86
–
–
–
–
75
86
–
–
–
–
–
–
75
86
John O’Higgins
90
87
–
–
–
–
90
87
–
–
–
–
–
–
90
87
Xiaozhi Liu
71
68
–
–
–
–
71
68
–
–
–
–
–
–
71
68
Doug Webb
93
89
–
–
–
–
93
89
–
–
–
–
–
–
93
89
Rita Forst
71
685
–
–
–
–
71
68
–
–
–
–
–
–
71
68
Barbara Jeremiah4
67
–
–
–
–
–
67
–
–
–
–
–
–
–
67
–
1. Represents a cash allowance in lieu of a pension.
2. Liam Condon is entitled to certain allowances and benefits associated with his international relocation. These include housing (£180k), schooling and other family disturbance allowances (£70k).
3. Chris Mottershead stepped down from the board on 26th January 2024. The fee disclosed relates to the 10 months served on the Board.
4. Barbara Jeremiah joined the board on 1st July 2023. The fee disclosed relates to the 9 months served on the Board.
5. Due to an administrative error, which has been corrected, fees received from October 2021 to April 2023 were £67k per year but should have been £68,350. Figure for 2023 updated to reflect what should have been paid.
Base salary/fees
Salary paid during the year to executive directors and fees paid during the year to non-executive directors.
Benefits
All taxable benefits, such as medical and life insurance, service and car allowances, mobility allowances, matching shares under the all-employee share
incentive plan and assistance with tax advice and tax compliance services, where appropriate.
Pension
The amounts shown represent the value of any cash supplements paid in lieu of pension membership.
Annual incentives
Annual bonus awarded for the year ended 31st March 2024. The figure includes any amounts deferred and awarded as shares. These shares are not subject
to any further conditions other than forfeiture in certain termination scenarios.
Long-term incentives
The 2024 figure represents the value of shares that satisfied performance conditions on 31st March 2024. The 2023 figure represents the value of shares that
satisfied performance conditions on 31st March 2023.
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Financial measures
Liam Condon
Stephen Oxley
Performance measure1
Bonus
weighting
Unit
Outcome
Target
Threshold
Maximum
Maximum bonus
available
(% base salary)
Outcome
(% base salary)
Maximum bonus
available
(% base salary)
Outcome
(% base salary)
Group underlying PBT2
50%
£m
393.9
369.5
332.6
406.5
90
74.6
75
62.2
Group Working Capital Days (incl. pgms)
10%
Average days
32.2
35.3
37.1
33.5
18
18
15
15
Group Working Capital Days (excl. pgms)
10%
Average days
59.6
45.1
47.4
42.8
18
0
15
0
Total bonus for financial measures
126
92.6
105
77.2
1. Group underlying PBT and group working capital days are measured using Johnson Matthey’s budgeted foreign exchange rates.
2. Group underlying PBT is measured based on 50% constant and 50% actual metal prices.
Annual Report on remuneration continued
Annual bonus for the year ended 31st March 2024 (audited)
Liam Condon and Stephen Oxley were eligible for a maximum annual bonus of 180% of base
salary and 150% of base salary, respectively. The target bonus opportunity was set at 50% of
maximum and the threshold bonus opportunity was 25% of the target opportunity.
The performance measures and weightings for the annual bonus were as follows:
Percentage of bonus available
Group underlying
PBT
Group working
capital days1
Strategic
objectives
Liam Condon
50%
20%
30%
Stephen Oxley
50%
20%
30%
1. Group working capital days is split 50% total working capital (including PGMs) and 50% total working capital days (excluding PGMs).
Performance targets were set by looking at:
• Previous year financial performance.
• Budgets and business plans for 2023/24. These are built from the bottom up and are
subject to thorough challenge before being finalised by the board.
• Consensus of industry analysts’ forecasts, provided by Vara Research.
The committee also considered the performance range for the group profit measures and
concluded that given the continued uncertainty in the market at the time the targets were set,
the range should continue to be 90% to 110% of target performance. The 2023/24 targets are
considered similarly challenging, if not more challenging than those set in 2022/23.
The strategic objectives were set based on well-defined key deliverables that support our
strategy relating to science, customers, operations and people.
Bonus outcomes (audited)
The underlying PBT target was set to be consistent with a 7.5% growth in underlying operating
profit. The formulaic outcome based on delivery of 11% underlying growth in operating profit when
adjusted for metal prices and exchange rates was a 111.7% achievement against the PBT target.
However, after considering the range of assumptions used to set the original targets, including
market uncertainty, and then testing the targets based 50% on constant metal prices and 50% on
actual metal prices, the committee concluded that it was appropriate to increase the original targets
after the standard restatement for metal prices and exchange rates to ensure that they had the
degree of stretch originally envisaged allowing for changes to market conditions through the year.
As a result, the committee used its discretion to increase the original PBT target by circa. 5%. Based
on performance against the adjusted targets, total bonuses for the year ended 31st March 2024
were as set out below. The committee is comfortable that the bonuses earned, based on the revised
targets, are appropriate in the context of the wider stakeholder experience through the year.
Financial
measures
outcome
(% base salary)
Strategic
measures
formulaic
outcome
(% base salary)
Total bonus
outcome
(% base salary)
Total bonus
outcome
(% of target)
Total value
of bonus1
(£)
Liam Condon
92.6
27.0
119.6
132.9
1,176,251
Stephen Oxley
77.2
22.5
99.7
132.9
600,455
1. 50% of this figure is deferred into conditional shares subject to a three-year vesting period with no other performance conditions.
This figure represents the full bonus paid for the year.
The detailed breakdown of performance against the financial targets and strategic objectives
is set out in the next tables.
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Strategic objectives
Objective
Assessment
Formulaic
outcome
(% of maximum
bonus)1
Bonus payable
(% of base
salary)
Liam Condon
Achieve our strategic milestones to FY24 as detailed on page 13.
Good progress has been made on JM’s strategic milestones with all but
two either on track or achieved. The decision to delay the start of
production at our new Hydrogen Technologies plant at Royston,
UK was required to reflect delays in end markets.
50%
27%
Put in place succession plans for all GLT members and their direct
reports and ensure development plans are in place for all GLT
direct reports.
Succession plans are in place for all GLT roles and for 65% of GLT direct
reports. Further work is planned to increase this cover.
Drive long-term growth for JM by forming strategic partnerships in
growth businesses, with two new strategic partnerships for Catalyst
Technologies and another two for Hydrogen Technologies
Catalyst Technologies won nine sustainable technology projects
with strategic partners, including two of the largest LCH projects in
the world.
No new strategic partnerships were signed in Hydrogen Technologies
due to the change in market outlook during the year.
Accelerate cultural transformation with focus on enhancing
customer orientation, disciplined execution and efficiency by:
• Increasing JMs net promoter score
• Implementing a new performance management approach
• Fully staffing critical engineering capex roles
• Set-up of Global Business Services
Good progress has been made in all areas:
• JM’s net promoter score has increased by five points versus 2023.
• JM’s new performance management and incentivisation approach
was successfully rolled out, evidenced by improved scoring related to
objective setting, feedback and development in our pulse surveys.
• We have staffed all critical engineering roles for capex projects.
• All key milestones have been achieved without any business
disruption and ahead of the approved GBS business case.
Stephen Oxley
Achieve our strategic milestones to FY24 as detailed on page 13.
Good progress has been made on JMs strategic milestones with all but
two either on track or achieved. The decision to delay the start of
production at our new Hydrogen Technologies plant at Royston,
UK was required to reflect delays in end markets.
50%
22.5%
Put in place succession plans for all GLT members and their direct
reports and ensure development plans are in place for all GLT
direct reports.
Succession plans are in place for all GLT roles and for 65% of GLT direct
reports. Further work is planned to increase this cover.
Execution of the Finance, IT transformation, Security and Real Estate
plans delivering headcount savings and financial targets in line with
approved plans.
Good progress was made in the year with cost savings broadly on track.
Headcount reductions and the IT transformation are on track. JMs
corporate real estate rationisation is in line with the approved plan.
Complete JMs divestiture programme and deliver at least £300m net
proceeds in FY24.
All businesses have agreed contracts for sale and the net proceeds
substantially exceed the target.
1. The committee assess executive director performance using the same framework that operates across Johnson Matthey. This involves assessing the extent of achievement and categorizing that achievement in performance bands which, for Executive Directors, also involves
consideration of the overall financial performance achieved over the financial year. As a result, notwithstanding that more than 50% of the strategic objectives set out above were achieved during the year, the bonus out-turn in relation to strategic targets was moderated to 50% of
the maximum.
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Long-term incentives
PSP awards vesting for the three-year performance period ended 31st March 2024 (audited)
The 2021 PSP awards were made in August 2021 and performance was measured over the period 1st April 2021 to 31st March 2024. Where the performance conditions are met, the shares
will vest and be subject to a two year holding period. The awards vest on a straight-line basis between threshold (15% vesting for EPS and 25% vesting for TSR) and maximum (100% vesting).
The performance condition for the 2021 award and the actual performance achieved are shown below. Performance conditions were not satisfied so the award will lapse in full.
Weighting
Threshold
Maximum
Actual
Compound annual growth rate in earnings per share
50%
4%
12%
-8.1%
50%
Median
Upper Quartile
Below Threshold
Relative total shareholder return
1.9%
26.6%
-37.4%
PSP awards granted in the year ended 31st March 2024 (audited)
The next table provides details of the PSP awards granted to executive directors in the year ended 31st March 2024.
Executive directors
Award date
Award type
Award size
(% of base salary)
Number of shares
awarded
Face value1
% vesting at threshold2
End of performance period
End of holding period
Liam Condon
1st August 2023
Conditional shares
250
140,265
£2,458,116
22%
31st March 2026
1st August 2028
Stephen Oxley
1st August 2023
Conditional shares
175
60,146
£1,054,047
22%
31st March 2026
1st August 2028
2. Face value is calculated using the award share price of 1,752.48 pence, which is the average closing share price over the four-week period starting on 26th May 2023.
3. Threshold vesting is 15% for the earnings per share (EPS) measure and 25% for the relative total shareholder return (TSR) and strategic objectives scorecard measures. The value shown is the average threshold vesting for the award.
The performance targets and vesting ranges for the 2023 award are set out below:
30% of performance condition
40% of performance condition
Compound annual growth rate in earnings per share
Relative total shareholder return
Performance
Proportion of shares vesting
Performance
Proportion of shares vesting
<1%
0%
Below median
0%
1%
15%
Median
25%
7%
100%
Upper quartile
100%
Between 1% and 7%
Straight-line between 15% and 100%
Between median and upper quartile
Straight-line between 25% and 100%
30% of performance condition
Strategic Objectives scorecard (targets equally weighted)
Tonnes of GHG avoided using technologies enabled by our
products and solutions
Reduction in scope 1 and 2 GHG emissions
Percentage of female representation across management levels
Reduction in total annualised cost
associated with delivering global business services
Performance
Proportion of shares
vesting
Performance
Proportion of shares
vesting
Performance
Proportion of shares
vesting
Performance
Proportion of shares
vesting
< 8.0m tonnes (MT)
0%
Below 20% reduction
0%
Below 32%
representation
0%
Below £23m
reduction
0%
8.0 MT
25%
20% reduction
25%
32% representation
25%
£23m reduction
25%
12.0 MT
100%
25% reduction
100%
33% representation
100%
£33m reduction
100%
Between 8.0 MT
and 12.0 MT
Straight-line between
25% and 100%
Between 20% and
25% reduction
Straight-line between
25% and 100%
Between 32% and
33% representation
Straight-line between
25% and 100%
Between £23m and
£33m reduction
Straight-line between
25% and 100%
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Statement of directors’ shareholding (audited)
The table below shows the directors’ interests in the shares of the company, together with
their unvested scheme interests, effective 31st March 2024.
Ordinary
shares1
Subject to
ongoing
performance
conditions2
Not subject
to further
performance
conditions3
Executive directors
Liam Condon
58,264
308,392
36,336
Stephen Oxley
15,795
141,263
74,7714
Non-executive directors
Patrick Thomas
13,194
–
–
Jane Griffiths
5,171
–
–
Chris Mottershead5
5,718
–
–
John O’Higgins
1,500
–
–
Xiaozhi Liu
4,000
–
–
Doug Webb
6,500
–
–
Barbara Jeremiah
1,000
–
–
Rita Forst
2,000
–
–
1. Includes shares held by the director and / or connected persons, including those in the all-employee share matching plan. Shares in the
all-employee share matching plan may be subject to forfeiture in accordance with the rules of the plan.
2. Represents unvested PSP shares within three years of the date of award.
3. Represents unvested deferred bonus shares that are not subject to service conditions.
4. Includes 41,500 shares awarded in year end 31st March 2022 to compensate for the loss of KPMG long-term deferred cash award.
5. The figure for Chris Mottershead is as at 26th January 2024 when he stepped down from the board.
Directors’ interests as at 23rd May 2024 were unchanged from those listed above other than
that the Trustees of the all-employee share matching plan have purchased another 42 shares
for Liam Condon and 42 shares for Stephen Oxley.
Executive directors are expected to achieve a shareholding guideline of 250% of base salary
for the Chief Executive Officer and 200% for other executive directors, within a reasonable
timeframe. The director’s total shareholding for the purposes of comparing it with the
minimum shareholding requirement includes shares held beneficially by the director and
any connected persons (as recognised by the Remuneration Committee), together with the
shares awarded under the Deferred Bonus Plan (DBP), for which there are no further
performance or service conditions.
Shares that count towards achieving the post-cessation guideline include the same as those
while an executive director. Executive directors are expected to retain at least 50% of the net
(after tax) vested shares that are released under the PSP and DBP until the required levels of
shareholding are achieved.
Annual Report on remuneration continued
Executive director shareholdings as at 31st March 2024 as a percentage of base salary1 are
shown below:
Requirement
Achievement
Liam Condon2
250%
158%
Stephen Oxley3
200%
134%
1. Value of shares as a percentage of base salary is calculated using a share value of 1646.5159 pence, which was the average share price
prevailing between 1st January 2024 and 31st March 2024.
2. Liam Condon was appointed Chief Executive Officer on 1st March 2022 and will build his shareholding over a reasonable timeframe.
3. Stephen Oxley was appointed Chief Financial Officer on 1st April 2021 and will build his shareholding over a reasonable timeframe.
Pension entitlements (audited)
No director is currently accruing any pension benefit in the group’s pension schemes.
Both Liam Condon and Stephen Oxley receive an annual cash payment in lieu of pension
membership, equal to 15% of base salary. This is in line with pension provision for the
wider workforce.
Payments to former directors (audited)
There were no payments made to, or in respect of, any former director in 2023/24 that have
not been previously disclosed.
Payments for loss of office (audited)
There were no payments made to, or in respect of, any former director for loss of office
in 2023/24.
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Other information
Annual Report on remuneration continued
Performance graph and comparison to Chief Executive Officer’s remuneration
Johnson Matthey and FTSE 100 total shareholder return rebased to 100
The following chart illustrates the total cumulative shareholder return of the company for the ten-year period from 1st April 2014 to 31st March 2024 against the FTSE 100 as the most
appropriate comparator group when considering our market capitalisation over the period, rebased to 100 at 1st April 2014.
JMAT
FTSE 100
40
60
80
100
120
140
160
180
200
April-14
Mar-24
74.7%
(28.0%)
Mar-23
Mar-22
Mar-21
Mar-20
Mar-19
Mar-18
Mar-17
Mar-16
Mar-15
Historical data regarding Chief Executive Officer’s remuneration
2014/151
2015/162
2016/17
2017/18
2018/19
2019/20
2020/21
2021/223
2022/235
2023/24
Single total figure of remuneration (£000)
2,539
1,429
1,971
2,013
2,784
1,462
2,532
1,672
2,647
2,589
Annual incentives (% of maximum)
54
15
40
69
45
26
98
42
75
67
Long-term incentives (% of award vesting)4
–
33
28
–
67
–
–
–
–
–
1. The figures for 2014/15 are in respect of both Robert MacLeod and Neil Carson, who both held the position of Chief Executive Officer in the year. The single total figure of £2,539k comprises £1,594k for Robert MacLeod and £945k for Neil Carson.
2. Figures from 2015/16 to 2020/21 are in respect of Robert MacLeod.
3. The figures for 2021/22 are in respect of both Robert MacLeod and Liam Condon, who both held the position of Chief Executive Officer in the year. The single total figure of £1,672k comprises £1,557k for Robert MacLeod and £115k for Liam Condon. The value shown for annual
incentives relates to Robert MacLeod only because Liam Condon was not eligible to participate in the AIP in 2021/22.
4. Vesting of long-term incentive awards whose three-year performance period ended in the financial year shown.
5. Figures for 2022/23 onwards are in respect of Liam Condon.
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Change in directors’ remuneration
The table below shows how the remuneration of directors, both executive and non-executive, has changed over the year ended 31st March 2024. This is then compared to employees of
Johnson Matthey Plc.
2024
2023
2022
2021
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Salary
Bonus
Benefits
Executive directors
Liam Condon1
4%
-8%
–
0%
–
–
–
–
–
–
–
–
Stephen Oxley2
4%
-8%
–
3%
7%
–
–
–
–
–
–
–
Non-executive directors
Patrick Thomas
4%
–
–
–
–
–
2%
–
–
0%
–
–
Jane Griffiths
5%
–
–
3%10
–
–
24%3
–
–
0%
–
–
Chris Mottershead
-13%12
–
–
–
–
–
2%
–
–
0%
–
–
John O’Higgins
4%
–
–
–
–
–
10%4
–
–
27%
–
–
Xiaozhi Liu
4%
–
–
–
–
–
2%
–
–
0%
–
–
Doug Webb
4%
–
–
0%
–
–
10%5
–
–
31%
–
–
Rita Forst6
4%14
–
–
100%11
–
–
–
–
–
–
–
–
Barbara Jeremiah13
–
–
–
–
–
–
–
–
–
–
–
–
Comparator group
JM Plc employees
10%7
9%8
0%9
8%7
-10%8
0%9
6%7
4%8
0%
2%
312%
0%
1. Liam Condon was appointed Chief Executive Officer on 1st March 2022, so no change in compensation can be calculated for 2022. No change in bonus can be calculated for 2023 as not eligible in 2022.
2. Stephen Oxley was appointed Chief Financial Officer on 1st April 2021, so no change in compensation can be calculated for 2022.
3. Represents the additional fee received for taking the SVC Chair position on 1st June 2021 and annual fee review.
4. Represents the additional fee received for taking the Senior Independent Director role on 23rd July 2020 and annual fee review.
5. Represents the additional fee received for taking the Audit Committee Chair role on 23rd July 2020 and annual fee review.
6. Rita Forst was appointed to the board on 4th October 2021, so no change in compensation can be calculated for 2022.
7. Includes promotions and market adjustments.
8. The percentage change in bonus was calculated based on the change in bonus accrual taken for Johnson Matthey Plc (JM Plc) employees, excluding the directors, for the 2023/24, 2022/23, 2021/22 and 2020/21 years.
9. There has been no change to the benefits policy for Johnson Matthey Plc employees; therefore, a 0% change has been reported.
10. Represents the additional fee received for taking the SVC Chair position on 1st June 2021, which was pro-rated in 2022.
11. Rita Forst was appointed to the board on 4th October 2021 and received a pro-rated fee for 6 months in 2022 and full fee based on 12 months in 2023.
12. Chris Mottershead stepped down from the board on 26th January 2024.
13. Barbara Jeremiah was appointed to the board on 1st July 2023 so no change in compensation can be calculated for 2024.
14. Due to an administrative error, which has been corrected, fees received from October 2021 to April 2023 were £67k but should have been £68,350. Change in remuneration reflects the change from what the correct fees for 2023 should have been rather than what was actually paid.
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Relative spend on pay
The table below shows the absolute and relative amounts of distributions to shareholders
and the total remuneration for the group for the years ended 31st March 2023 and
31st March 2024.
Year ended
31st March 2023
£ million
Year ended
31st March 2024
£ million
% change
Payments to shareholders
1862
141
-24%
Total remuneration (all employees)1
732
746
2%
1. Figure is for all operations and excludes termination benefit
2. Includes £45m related to the share buy-back that completed on 13th May 2022
Chief Executive Officer to employee pay ratio
The table below shows the ratio of Chief Executive Officer to employee pay between 2020
and 2024. We have compared the single total figure of remuneration for the Chief Executive
Officer to the total pay and benefits of UK employees, on a full-time equivalent basis, who
are ranked at the lower quartile, median and upper quartile across all UK employees effective
31st March 2024.
We believe that using total pay and benefits for the year ending 31st March 2024 provides a
like-for-like comparison to the Chief Executive Officer pay data.
Chief Executive Officer
pay ratio
2020
2021
2022
20231
2024
Method
A – Total pay and
benefits in 2019/20
A – Total pay and
benefits in 2020/21
A – Total pay and
benefits in 2021/22
A – Total pay and
benefits in 2022/23
A – Total pay and
benefits in 2023/24
Chief Executive
Officer single figure
£1,462,000
£2,532,000 £1,672,0002
£2,646,222
£2,589,900
Upper quartile
22:1
35:1
20:1
30:1
32:1
Median
28:1
45:1
28:1
42:1
42:1
Lower quartile
36:1
57:1
35:1
53:1
53:1
1. Chief Executive Officer pay ratio revised to include employee bonuses payable in relation to 2022/23. This changed upper quartile from
37:1 to 30:1, median from 49:1 to 42:1 and lower quartile from 60:1 to 53:1.
2. The Chief Executive Officer single figure for 2021/22 is in respect of both Robert MacLeod and Liam Condon, who both held the position
of Chief Executive Officer in the year. The single total figure of £1,672,000 comprises £1,557,000 for Robert MacLeod and £115,000 for
Liam Condon.
Bonus data for UK employees was left out of the 2024 calculation because it was not
administratively possible to calculate these bonuses before the publication of this report.
However, the calculation will be revised to include these bonuses once available and will be
disclosed in the 2025 report.
Excluding the 2023/24 bonus payable to the Chief Executive Officer from the calculation
would result in the following pay ratios: lower quartile – 29:1, median – 23:1 and upper
quartile – 17:1.
The salary and total pay for the individuals identified at the lower quartile, median and upper
quartile positions in 2024 are set out below:
2024
Salary1
Total pay
Upper quartile individual
£62,799
£80,832
Median individual
£37,160
£61,082
Lower quartile individual
£39,593
£49,161
1. Includes shift allowance.
Our principles for pay setting and progression are consistent across the organisation.
Underpinning our principles is a need to provide a competitive total reward to enable the
attraction and retention of high-calibre individuals and giving the opportunity for individual
development and career progression. The pay ratios reflect the difference in role
accountabilities that are recognised through our pay structures and the greater variable pay
opportunity for more senior positions. The Chief Executive Officer’s variable pay opportunity
is higher than those employees noted in the table reflecting the weighting towards long-
term value creation and alignment with shareholder interests inherent in this role.
The movement in our Chief Executive Officer to employee pay ratio between 2020 and 2024
is driven by the different bonus outcomes and fixed income for the Chief Executive Officer in
each of these years. There have been no other changes to remuneration arrangements for
our UK employees that would affect the CEO pay ratio.
We are satisfied that the median pay ratio is consistent with our wider pay, reward and
progression policies for employees. All our employees have the opportunity for annual pay
increases, career progression and development opportunities.
Annual Report on remuneration continued
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Implementing the Directors’ Remuneration Policy for 2024/25
The table below sets out how the Remuneration Committee intends to apply the Directors’ Remuneration Policy for the year ended 31st March 2025.
Salary
The Chief Executive Officer and Chief Financial Officer both received a pay increase of 3%. This is in line with the pay increases for management employees in the UK but below the
increase awarded to non-management UK employees.
Benefits
No change to policy applied in 2023/24.
Pension
All executive directors will have a maximum pension cash supplement of 15%.
Annual
incentives
The maximum bonus opportunity for 2024/25 remains unchanged at 180% of salary for the Chief Executive Officer and 150% of salary for the Chief Financial Officer.
2024/25 bonus will be based on underlying profit before tax (45%), working capital (15%), corporate cost reduction (15%) and strategic and transformation objectives (25%).
Targets for the Chief Executive Officer and Chief Financial Officer will be based on group performance.
The 2024/25 targets are considered similarly challenging, if not more challenging to those set in 2023/24, when accounting for the divestments in the year and uncertain economic
outlook. Targets have been set taking this into account as well as internal and external planning. To the extent that metal prices move outside a defined corridor the Remuneration
Committee will rebase the targets such that they are similarly challenging as when the targets were originally set. The Remuneration Committee considers the forward-looking targets
to be commercially sensitive but full retrospective disclosure of the actual targets will be included in next year’s Directors’ Remuneration report.
50% of any bonus paid will be deferred in shares for three years, and the payment of any bonus is subject to appropriate malus and clawback provisions.
Long-term
incentives
The Chief Executive Officer award level is 250% of base salary and the Chief Financial Officer award level is 175% of base salary. These award levels are in line with our remuneration policy.
The long-term Performance Share Plan will be based on EPS growth targets (25% of the award), relative TSR performance (25% of the award), return on capital employed (25%) and
specific and measurable strategic objectives (25% of award).
The range of annualised EPS growth targets that the committee intends to set for the 2024/25 awards is 5% per annum growth for threshold (15%) vesting, rising to 13% per annum
growth for maximum vesting (100%). Vesting will be on a straight-line basis between 5% and 13%. The committee considered the effect of metal price volatility on potential
outcomes and, as a result, earnings will be assessed 50% against actual metal prices and 50% against constant metal prices. The committee believes that this will allow for a more
accurate assessment of underlying business performance.
The ROCE targets that the committee intends to set for the 2024/25 awards is 12% for threshold (25%) vesting rising to 16% for maximum (100%) vesting. Vesting will be on a
straight-line between 12% and 16% ROCE. As detailed in the Chair’s statement, the range of EPS and ROCE targets have been set to be challenging with reference to internal
planning, external expectations for our future performance and wider market conditions. ROCE has been introduced as a measure to align with the successful delivery of our
transformation programme and driving improved returns on our capital employed.
The TSR target will be 25% vesting for median performance, increasing on a straight-line basis to 100% vesting for upper quartile performance. The TSR peer group will be the FTSE
31 – 130 (excluding financial services companies). The committee considers that this comparator group is the most appropriate given our current market capitalisation.
The strategic objectives scorecard will consist of three equally weighted metrics. Threshold vesting will be 25%, increasing on a straight-line basis to 100% at maximum. The three
metrics are as follows:
• Products and services – tonnes of GHG avoided during the period using technologies enabled by our products and solutions, compared to conventional solutions, where threshold
vesting will be 4 million tonnes GHG avoided and maximum will be 10 million tonnes GHG avoided.
• Operations – reduction in Scope 1 and 2 GHG emissions (from the 2020 baseline), where threshold vesting will be achieved for a 32% reduction in GHG emissions and maximum
vesting for a 36% reduction in GHG emissions.
• People – percentage of female representation across our management levels, where threshold vesting will be achieved at 33% female representation at management levels and
maximum at 35% female representation at management levels.
Awards vest in year three and are then subject to a two-year holding period.
Chairman and
non-executive
director fees
The fees for the Chair and non-executive directors were reviewed during the year and increased in line with the increase awarded to executive directors.
This Remuneration Report was approved by the Board of Directors on 22nd May 2024 and signed on its behalf by:
John O’Higgins
Remuneration Committee Chair
Annual Report on remuneration continued
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Financial statements
Other information
Statutory and other information
The Directors’ report required under the Companies Act 2006 (2006 Act) comprises the Governance report (pages 75 to 127), including the Sustainability report for our disclosure of carbon
emissions, which is included in the Strategic report (pages 34 to 52). The management report required under Disclosure Guidance and Transparency Rule 4.1.8R comprises the Strategic
report (pages 1 to 74), which includes the risks relating to our business, and the Directors’ report.
Index of disclosures referred to elsewhere in the report
Business model
10-11
Modern slavery and human trafficking statement
49
matthey.com
Corporate governance statement
76
Non-financial key performance indicators
17
Directors
77-79
Related party transaction
196
Diversity and employment of disabled persons
47
Research and development activities
8-40
Directors’ interests
123
Results
28-33 and 143
Dividends
182
Section 172 statement and stakeholder engagement
74, 86-88
Employee engagement
91
Share capital
181-183
Future developments
18-25
Use of financial instruments
152-153
Greenhouse gas emissions
41
Whistleblowing (Speak Up)
49
Human rights and anti-bribery and corruption
49-50
Directors’ report
Interest capitalised
168
Allotments of equity securities
for cash
130
Dividend waiver
130
There are no other applicable disclosures.
Listing Rule 9.8.4R
Details of the disclosures to be made under
Listing Rule 9.8.4R are listed below.
Other disclosures
Dividend
reinvestment plan
A dividend reinvestment plan is available. This allows shareholders to purchase additional shares in Johnson Matthey Plc with their dividend payment.
Further information and a mandate can be obtained from our registrar, Equiniti, whose details can be found on page 220, and on our website: matthey.com
Directors’
indemnities
and insurance
Johnson Matthey Plc has granted indemnities to each Johnson Matthey Plc director and the directors of the group’s subsidiaries in respect of certain liabilities
arising against them in the course of their duties. Neither Johnson Matthey Plc nor any subsidiary has indemnified any director of the company or a subsidiary
in respect of any liability that they may incur to a third party in relation to a relevant occupational pension scheme. The company maintains appropriate
directors’ and officers’ liability insurance.
Conflicts of interest
The board has a policy for identifying and managing directors’ conflicts of interest, which extends to cover close family members. The board annually reviews
external appointments to consider any potential or actual conflict of interest. If a conflict of interest is declared, the board will review the authorisation and
terms associated, to ensure that all matters presented to the board are considered solely with a view to promoting JM’s business success. For the year under
review, there were no potential or actual conflicts of interest.
External
appointments
The board approves all external appointments in advance of acceptance. If an external appointment arises between meetings, this is considered by the Chair
and Chief Executive Officer, with the assistance of the General Counsel and Company Secretary. In approving each additional external appointment, the board
assesses time commitment to ensure that no directors are considered over-boarded.
Directors’
reappointment
Johnson Matthey Plc’s Articles of Association (the Articles) provide the rules on director appointments and are consistent with the recommendation contained
within the UK Corporate Governance Code 2018. All directors retire and are eligible for re-election at each Annual General Meeting (AGM) (except any director
appointed after the notice of an AGM meeting is published and before that AGM is held).
Directors’ powers
The powers of the directors are determined by the Articles, UK legislation including the 2006 Act, and any directions given by the company in general
meetings. The directors are authorised by the company’s Articles to issue and allot ordinary shares and to make market purchases of its own shares.
These powers are referred to shareholders for renewal at each AGM. Further information is set out on page 130 under ‘Authority to purchase own shares’.
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Financial statements
Other information
Directors’ report continued
Constitution
Articles of Association
The Articles may only be amended by a special resolution at a general meeting of the company. The Articles were adopted on 17th July 2019 and are available
on our website: matthey.com/corporate-governance.
Branches
The company and its subsidiaries have established branches in several different countries in which they operate.
Change of control
As at 31st March 2024 and as at the date of approval of this Annual Report and Accounts, there were no significant agreements, to which the company or any
subsidiary was or is a party to, that take effect, alter or terminate on a change of control of the company, whether following a takeover bid or otherwise.
However, the company and its subsidiaries were, as at 31st March 2024, and as at the date of approval of this report, party to a number of commercial
agreements. These may allow counterparties to alter or terminate the commercial agreements on a change of control of JM following a takeover bid.
These are not deemed significant in terms of their potential effect on the group.
The group also has a number of loan notes and borrowing facilities that may require prepayment of principal and payment of accrued interest and breakage
costs if there is a change of control of JM. The group has entered into a series of financial instruments to hedge its currency, interest rate and metal price
exposures, which provide for termination or alteration if a change of control at JM materially weakens the creditworthiness of the group.
The executive directors’ service contracts each contain a provision to the effect that, if the contract is terminated by the company within one year after a
change of control of the company, JM will pay an amount equivalent to one year’s gross base salary and other contractual benefits, less the period of any
notice given by the company, to the director as liquidated damages.
The rules of the company’s employee share schemes set out the consequences of a change of control of the company on participants’ rights under the
schemes. Generally, the rights will vest and become exercisable on a change of control, subject to the satisfaction of relevant performance conditions.
As at 31st March 2024, and as at the date of approval of this Annual Report and Accounts, there were no other agreements between the company,
any subsidiaries and directors or employees, providing compensation for loss of office or employment (through resignation, purported redundancy
or otherwise) that occurs due to a takeover bid.
Stakeholders and policies
Suppliers
We recognise the importance of good supplier relationships to our overall success. Further information on our payment practices is on the UK Government’s
reporting portal.
Read more about our Supplier Code of Conduct and our engagement with suppliers during the year on pages 49 and 50
Political donations
No political donations or contributions to political parties under the 2006 Act have been made during the year. The group policy is that no political donations
be made or political expenditure incurred.
Events occurring after
the reporting period
There have been no material events affecting Johnson Matthey Plc or any subsidiary between 31st March 2024 and 22nd May 2024.
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Other information
Directors’ report continued
Shareholders and share capital
AGM
Our 2024 AGM will be held on Thursday 18th July 2024 at 11.00 am at Herbert Smith Freehills, Exchange House, Primrose Street, London EC2A 2EG. We will
provide a live webcast and telephone conference so shareholders can also participate virtually and ask questions in real time. Details on how to join are
included in the Notice of AGM (Notice). In the Notice, we propose separate resolutions on each substantially separate issue. For each resolution, shareholders
may direct their proxy to vote either for or against or to withhold their vote. A ‘vote withheld’ is not legally a vote and will not be counted in the calculation of
the proportion of the votes cast. All AGM resolutions are decided by a poll, with the results announced as soon as possible and posted on our website. This poll
will show votes for and against, as well as votes withheld.
Authority to purchase
own shares
At the 2023 AGM, shareholders authorised Johnson Matthey Plc to make market purchases of up to 18,345,341 ordinary shares of 110 49/53 pence each,
representing 10% of the then issued share capital of the company (excluding treasury shares). Any shares so purchased by the company may be cancelled or
held as treasury shares. This authority will cease at the conclusion of the 2024 AGM, and shareholders will be asked to give a similar authority at the AGM.
There were no share allotments during the year.
Rights and obligations
attaching to shares
The rights and obligations attaching to the ordinary shares in Johnson Matthey Plc are set out in the Articles.
As at 31st March 2024, and as at the date of approval of this Annual Report and Accounts, there were no restrictions on the transfer of ordinary shares in the
company, no limitations on the holding of securities and no requirements to obtain the approval of the company, or of other holders of securities in Johnson
Matthey Plc, for a transfer of securities – except as referred to below. The directors may, in certain circumstances, refuse to register the transfer of a share in
certificated form that is not fully paid up, where the instrument of transfer does not comply with the requirements of the company’s Articles, or if entitled
under the Uncertificated Securities Regulations 2001. As at 31st March 2024 and as at the date of approval of this Annual Report and Accounts:
• No person held securities in Johnson Matthey Plc carrying any special rights with regard to control of the company.
• There were no restrictions on voting rights (including any limitations on voting rights of holders of a given percentage or number of votes or deadlines for
exercising voting rights), except that a shareholder can only vote in respect of a share if it is fully paid.
• There were no arrangements by which, with the company’s co-operation, financial rights carried by shares in the company are held by a person other than the
holder of the shares.
• There were no agreements known to the company between holders of securities that may result in restrictions on the transfer of securities or on voting rights.
Nominees, financial
assistance and liens
During the year:
• No shares in Johnson Matthey Plc were acquired by the company’s nominee, or by a person with financial assistance from the company, in either case where
the company has a beneficial interest in the shares (and no person acquired shares in the company in any previous financial year in its capacity as the
company’s nominee or with financial assistance from the company).
• The company did not obtain or hold a lien or other charge over its own shares.
Allotment of securities
for cash and placing of
equity securities
During the year neither Johnson Matthey Plc nor any major subsidiary undertaking of the company has allotted equity securities for cash. During the year,
JM has not participated in any equity securities’ placing.
American Depositary
Receipt programme
Johnson Matthey has a sponsored Level 1 American Depositary Receipt (ADR) programme, which BNY Mellon administers and for which it acts as Depositary.
Each ADR represents two ordinary Johnson Matthey shares. The ADRs trade on the US over-the-counter market under the symbol JMPLY. When dividends are
paid to shareholders, the Depositary converts those dividends into US dollars, net of fees and expenses, and distributes the net amount to ADR holders.
Employee share
schemes
As at 31st March 2024, 3,458 current and former employees were shareholders in Johnson Matthey Plc through the group’s employee share schemes. Through these
schemes, current and former employees held 2,940,525 ordinary shares or 1.52% of issued share capital, excluding treasury shares. Also as at 31st March 2024,
2,829,146 ordinary shares had been awarded but had not yet vested, under the company’s long-term incentive plans, to 363 current and former employees.
Shares acquired by employees through JM’s employee share schemes rank equally with the other shares in issue and have no special rights. Voting rights in
respect of shares held through the company’s employee share schemes are not exercisable directly by employees. However, employees can direct the trustee
of the schemes to exercise voting rights on their behalf. The trustee of the company’s Employee Share Ownership Trust (ESOT) has waived its right to
dividends on shares held by the ESOT, which have not yet vested unconditionally to employees.
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Financial statements
Other information
Directors’ report continued
Shareholders and share capital continued
Interests in
voting rights
The following information has been disclosed to the company under the FCA’s Disclosure Guidance and Transparency Rules in respect of notifiable interests in
the voting rights in Johnson Matthey Plc’s issued share capital:
As at 31st March 2024:
Nature
of holding
Total
voting rights1
% of total
voting rights2
Amerprise Financial, Inc. and its group
Direct
1,768
Indirect
9,062,122
4.94%
Bank of America Corporation
Indirect3
32,992,987
17.98%
BlackRock, Inc.
Indirect3
10,216,388
5.56%
Jefferies Financial Group
Direct
10,540,153
5.74%
Standard Latitude Master Fund Ltd
Direct
18,504,373
10.09%
Other than as stated above, as far as the company is aware, there is no person with a significant direct or indirect holding of securities in Johnson Matthey Plc.
This information was correct at the date of notification. However, since notification of any change is not required until the next notifiable threshold is crossed,
these holdings are likely to have changed. Between 31st March 2024 and the date of this Annual Report and Accounts, 22nd May 2024, the company has been
notified of changes in the following interest:
Nature
of holding
Total
voting rights1
% of total
voting rights2
Bank of America Corporation
Indirect3
27,814,925
15.16%
1. Total voting rights attaching to the issued ordinary share capital of the company (excluding treasury shares) at the time of disclosure to the company.
2. % of total voting rights at the date of disclosure to the company.
3. Indirect holdings include qualifying financial instruments and contract for differences.
Contracts with
controlling
shareholders
During the year there were no contracts of significance (as defined in the FCA’s Listing Rules) between any group undertaking and a controlling shareholder,
and no contracts for the provision of services to any group undertaking by a controlling shareholder.
The Directors’ report was approved on 22nd May 2024 and is signed on its behalf by:
Simon Price
General Counsel and Company Secretary
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Other information
Statement of directors’
responsibilities in respect
of the Annual Report and
Accounts 2024
The directors are responsible for preparing
the Annual Report and Accounts and the
financial statements in accordance with
applicable law and regulation.
Company law requires the directors to
prepare financial statements for each
financial year. Under that law, the directors
have prepared the group financial
statements in accordance with UK-adopted
international accounting standards and the
parent company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising
FRS 101 ‘Reduced Disclosure Framework’,
and applicable law).
Under company law, directors must not
approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the group
and parent company and of the profit or
loss of the group for that period. In
preparing the financial statements, the
directors are required to:
• select suitable accounting policies and
then apply them consistently;
• state whether applicable UK-adopted
international accounting standards have
been followed for the group financial
statements and United Kingdom
Accounting Standards, comprising FRS
101 have been followed for the parent
company financial statements, subject to
any material departures disclosed and
explained in the financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the group
and parent company will continue
in business.
The directors are responsible for
safeguarding the assets of the group and
parent company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are also responsible for
keeping adequate accounting records that
are sufficient to show and explain the
group’s and parent company’s transactions
and disclose with reasonable accuracy at
any time the financial position of the group
and parent company and enable them to
ensure that the financial statements and
the Directors’ Remuneration Report comply
with the Companies Act 2006.
The directors are responsible for the
maintenance and integrity of the parent
company’s website. Legislation in the UK
governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Directors’ confirmations
The directors consider that the Annual
Report and Accounts 2024, taken as a
whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the group’s and
parent company’s position and
performance, business model and strategy.
Each of the directors, whose names and
functions are listed in the Governance
section of the Annual Report and Accounts
2024, confirm that, to the best of
their knowledge:
• the group and parent company financial
statements, which have been prepared
in accordance with UK-adopted
international accounting standards,
give a true and fair view of the assets,
liabilities and financial position of
the group;
• the parent company financial statements,
which have been prepared in accordance
with United Kingdom Accounting
Standards, comprising FRS 101, give a
true and fair view of the assets, liabilities
and financial position of the parent
company; and
• the Strategic report includes a fair review
of the development and performance of
the business and the position of the group
and parent company, together with a
description of the principal risks and
uncertainties that it faces.
• In the case of each director in office at the
date the Directors’ report is approved:
• so far as the director is aware, there is no
relevant audit information of which the
group’s and parent company’s auditors
are unaware; and
• they have taken all the steps that they
ought to have taken as a director in order
to make themselves aware of any relevant
audit information and to establish that
the group’s and parent company’s
auditors are aware of that information.
The Directors’ report and responsibilities
statement was approved 22nd May 2024
and is signed on behalf of the board by:
Simon Price
General Counsel and Company Secretary
Responsibilities of directors
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Financial statements
Other information
Independent auditors’ report to the members
of Johnson Matthey Plc
Report on the audit of the financial statements
Opinion
In our opinion:
• Johnson Matthey Plc’s group financial statements and company financial statements
(the “financial statements”) give a true and fair view of the state of the group’s and of the
company’s affairs as at 31 March 2024 and of the group’s profit and the group’s cash flows
for the year then ended;
• the group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards as applied in accordance with the
provisions of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts
(the “Annual Report”), which comprise: Consolidated Statement of Financial Position and
Parent Company Statement of Financial Position as at 31 March 2024; the Consolidated
Income Statement and Consolidated Statement of Total Comprehensive Income, the
Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity and
Parent Company Statement of Changes in Equity for the year then ended; and the notes to
the financial statements, comprising material accounting policy information and other
explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the
FRC’s Ethical Standard were not provided.
Other than those disclosed in note 4, we have provided no non-audit services to the company
or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• We conducted full scope audits at 17 business units for group reporting purposes.
In addition, we performed specified procedures over targeted balances and transactions
at a further 15 business units.
• The business units on which audit procedures were performed together account for 84% of
group revenue and 62% of group underlying profit before tax from continuing operations.
• As part of the group audit supervision process, the group engagement team met with and
discussed the approach and results of audit procedures with component teams and
reviewed a selection of audit files and final deliverables. In-person site visits to components
in the UK, China, South Africa, the US and North Macedonia were also performed.
• The group engagement team audited the company and other centralised functions including
those covering the group treasury operations, corporate taxation, post-retirement benefits,
and certain goodwill and intangible asset impairment assessments. The group engagement
team also performed audit procedures over the group consolidation and financial
statements disclosures and performed group level analytical procedures over out of
scope components.
• The group engagement team performed substantive procedures over all of the material
balances and transactions of the Parent Company.
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Other information
Independent auditors’ report to the members of Johnson Matthey Plc continued
Key audit matters
• Refinery metal accounting (group and parent)
• Carrying value of goodwill (group and parent)
• Claims, uncertainties and other provisions (group and parent)
Materiality
• Overall group materiality: £20.1 million (2023: £21.1 million) based on approximately 5%
of the three year profit before tax from continuing operations, adjusted for loss on disposal
of businesses, gains and losses on significant legal proceedings, major impairment,
amortisation of acquired intangibles and restructuring charges (“underlying profit
before tax”).
• Overall company materiality: £70.6 million (2023: £60 million) based on approximately
1% of total assets. However, materiality is capped at £19.5 million (2023: £20 million)
for the purpose of the audit of the consolidated financial statements, being the maximum
allocation of group materiality to a component.
• Performance materiality: £15.1 million (2023: £15.8 million) (group) and £14.6 million
(2023: £15 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of
most significance in the audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Uncertain tax provisions, which was a key audit matter last year, is no longer included
because of settlements agreed with tax authorities during the year. Otherwise, the key audit
matters below are consistent with last year.
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Other information
Key audit matter
How our audit addressed the key audit matter
Refinery metal accounting (group and parent)
Refer to the Significant issues considered by the Audit Committee within the Audit
Committee Report and note 1 and 36 to the financial statements.
As part of its refining activities, the group processes a significant amount of metal on behalf
of third parties, whereby the group must return pre-agreed recoverable quantities of
refined metal to those parties at an agreed date. Any metal in excess of this pre-agreed
quantity is retained by the group. As such, the group makes an estimate of how much
metal it will recover as part of its refining operations. The majority of metal processed at
refineries is owned by customers and is not held on the financial balance sheet of the
group. As such, the group performs a metal balance sheet reconciliation to ensure
quantities of precious metals held at year-end are appropriately understood, classified as
either owned by Johnson Matthey or by the customer and reconciled to its financial
position. This ensures that only the group-owned inventory is recorded on the balance
sheet and that the price allocated to this owned inventory is at the lower of cost and net
realisable value.
During the refining process, there are a series of complex estimates including:
i. Estimation of the level of metal contained in the carrier material entering the refining
process, the refined metal that leaves the refining process and the residual metal in the
refining process at year-end;
ii. Estimates of the process losses of precious metals that may be lost during the refining
and fabrication process and the adequacy of these provisions;
iii. Estimates of the metal in the refinery process as informed by refinery stocktakes and the
subsequent sampling and assaying to assess the precious metal content in stocktake
samples; and
iv. Estimates of the net realisable value of unhedged metal held at year-end.
Each of these estimates impacts different areas of the audit. The refining process and its
associated estimates are an area of focus for our audit due to the inherent complexity of
the accounting and the amount of metal processed.
We evaluated the design and operation of key controls at the main refining locations over
refinery stocktakes and metal assaying procedures. We tested that the metal balance sheet
was prepared and reviewed on a monthly basis. We tested the classification of precious
metals at year-end on the metal balance sheet to determine if metal was owned by the
group or the customer.
Our procedures included sending confirmations to customers, and testing the balance of
customer metal that was in the refining process, but not contractually due.
We assessed management’s policy for recognising stocktake gains and losses arising from
stocktakes. We attended physical stock counts at sites where these stocktakes were
performed. The purpose was to verify the existence of inventory and adherence to the
group’s stocktake processes and to assess the reasonableness of stocktake gains and losses
at these sites.
We assessed the underlying controls that have been implemented by management to
monitor potential inventory gains or losses through the refining process and stocktake
results and to assess the likelihood and quantum of process losses (if any) of metal between
the date of the stocktake and the year-end date. We assessed process loss provisions
compared to historical metal gain revenue and refinery stocktake results.
We tested that all unhedged metal was being held at the lower of cost and net realisable
value, on an individual metal by metal methodology, with reference to external metal
price data.
We considered the adequacy of the group’s disclosures about the degree of estimation
involved in arriving at the value of metal inventory.
Based on the procedures performed, we noted no material issues arising from our work.
Independent auditors’ report to the members of Johnson Matthey Plc continued
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Other information
Key audit matter
How our audit addressed the key audit matter
Carrying value of goodwill (group and parent)
Refer to the Significant issues considered by the Audit Committee within the Audit
Committee Report and notes 1, 5, 13, 36 and 38 to the financial statements.
The group holds goodwill of £353 million (2023: £364 million) at 31 March 2024. Of this
amount, £113 million (2023: £113 million) is held within the parent company.
The group has significant goodwill arising from the acquisition of businesses and the
carrying value is dependent on the financial performance of the cash generating unit
(CGU) to which it relates. The two largest CGUs are Catalyst Technologies and Clean Air
Heavy Duty Catalysts which account for £264m (2023: £268m) and £84m (2023: £87m)
respectively of goodwill at 31 March 2024. The goodwill held in the parent company relates
to the Catalyst Technologies CGU.
The impairment assessments prepared by management reflect its best estimates of future
cashflows. These estimates contain significant uncertainty and are inherently judgemental
in nature, where changes in the key assumptions can result in materially different
impairment charges or available headroom. As set out in note 1, management has
considered the impacts of climate change in their models. This is therefore an area of focus
in our audit procedures.
Management’s assessment of the goodwill in the other CGUs concluded that no impairment
was required.
Management included disclosures to explain its key judgements and estimates as part of
notes 1 and 5.
We obtained management’s value in use goodwill impairment models and agreed the
forecast cash flows to board-approved budgets, assessed how these budgets are compiled,
confirmed data accuracy and understood and evaluated key related judgements and estimates.
We assessed management’s historical forecasting accuracy by comparing the prior year
forecasts with actual results. This informed our independent sensitivity analysis.
We performed work over each material CGU being the Catalyst Technologies and Clean Air
Heavy Duty Catalysts CGUs. The nature and extent of work was commensurate with the
level of headroom and sensitivity of the CGU to impairment.
Our testing was focused on the key assumptions in the board-approved three year forecasts
and we corroborated the assumptions to supporting evidence which included both internal
and external sources of evidence. In addition, we assessed the appropriateness and impact
of the specific growth assumptions applied by management for the period after the year
three forecast but before a long term growth rate is applied (typically year ten).
Management has included certain key assumptions relating to climate change. These
include restricting the useful economic life applied in modelling Heavy Duty Catalysts to
2040 (2023: 2040) and the application of a negative growth rate from 2033 (2023: 2033).
Working with our valuation experts, we have considered external market outlooks and
information on emission legislation to corroborate these assumptions.
We engaged our valuations experts to assess the long term growth rate and discount
rate for each CGU by comparison with third party information and past performance.
Our procedures also included considering the overall level of risk in the future cash
flow projections.
We tested the mathematical integrity of the forecasts and of the value in use model,
audited the allocation of central costs to the CGUs and agreed the carrying values in
management’s impairment models to underlying accounting records.
We assessed management’s sensitivity analysis and performed our own independent sensitivity
analysis which was more severe than management’s to assess whether a reasonable
downside change in the key assumptions could give rise to a material impairment.
We consider the disclosures with respect of goodwill, including the associated sensitivities,
to be appropriate.
Based on the procedures performed, we noted no material issues arising from our work.
Independent auditors’ report to the members of Johnson Matthey Plc continued
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Key audit matter
How our audit addressed the key audit matter
Claims, uncertainties and other provisions (group and parent)
Refer to the Significant issues considered by the Audit Committee and notes 1, 22, 32, 36
and 47 to the financial statements.
This risk covers warranty provisions, product liability issues and other litigation matters
across the group. There is inherent judgement and estimation involved in determining
when and how much to provide for claims and uncertainties.
Due to the complex nature of the products offered by Johnson Matthey, the group at any
point in time may be exposed to liability issues including claims for damages or
compensation. The assumptions underpinning these claims and the identification of when
such claims arise are inherently judgemental. Careful consideration needs to be given as to
how the claim and any potential exposure are estimated and subsequently accounted for.
The group is also involved in various legal proceedings, including actual or threatened
litigation and regulatory investigations. The number and nature of claims vary from year to
year; note 32 discloses the major matters in the year. The most significant is the contingent
liability arising following the sale of the Health Business in May 2022.
The group discloses such risks as contingent liabilities where it is unable to make a reliable
estimate of potential exposures or where it believes a material outflow is possible but not
probable. If the group is unable to successfully defend against such claims, these risks could
give rise to a future liability.
For litigation matters, we read the summary of major litigation matters provided by
management and held discussions with group and sector level general counsel. For new
matters with potential exposure above £1 million, we obtained and reviewed
correspondence with external legal counsel, including any particulars of claim.
We have circularised external legal counsel to independently assess legal exposures and the
expected outcome for new and material cases across the group.
We reviewed board minutes and made inquiries of management to address the
risk of undisclosed claims and uncertainties. We performed audit procedures to identify
all third party legal counsel used by management and as appropriate included them in
our circularisation.
We applied professional scepticism in auditing both the likely outcome and quantification
of exposures, including performing audit procedures over claims management determined
to be immaterial and being sceptical of where a constructive obligation existed but
management considered a reliable estimate could not be made. As we deemed it to be
necessary, we also instructed third party legal experts to support an independent
assessment of possible outcomes of claims.
Where settlements have occurred, we have agreed these to settlement agreements
between the company and the claimant.
We have assessed the level of provisioning and contingent liability disclosures, where
relevant, in response to known claims.
Based on the procedures performed, we noted no material issues arising from our work.
Independent auditors’ report to the members of Johnson Matthey Plc continued
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How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to
give an opinion on the financial statements as a whole, taking into account the structure of
the group and the company, the accounting processes and controls, and the industry in
which they operate.
The group is structured across five sectors: Clean Air, PGM Services, Catalyst Technologies,
Hydrogen Technologies and Value Businesses, as well as the central Corporate unit.
The financial statements are a consolidation of approximately 236 business units. We have
identified each individual business unit, or a series of business units where they map to a
single legal statutory entity, as a component. These components comprise the group’s
operating businesses and holding companies across the five sectors and corporate.
Based on our risk and materiality assessments, we determined which components required
an audit of their complete financial information having considered the relative significance
of each entity to the group, locations with significant inherent risks and the overall coverage
obtained over each material line item in the consolidated financial statements.
We identified 17 business units which, in our view, required an audit of their complete
financial information, due to size or risk characteristics.
In addition to the business units in full scope, we performed specified procedures at
15 business units covering revenue, trade and other receivables and deferred income,
cash, inventory, metal inventory, accruals, fixed assets and depreciation, cost of sales and
operating expenses and we tested manual journal entries. This ensured that appropriate
audit procedures were performed to achieve sufficient coverage over these financial
statement line items.
The total 32 in-scope business units are located in numerous countries around the world.
We used local teams in these countries to perform the relevant audit procedures. Of these,
five business units have been determined to be financially significant based on their
contribution to the group. These financially significant component teams are located
in the UK, North Macedonia and the United States.
The group consolidation, financial statement disclosures and corporate functions were
audited by the group audit team. This included our work over the consolidation, litigation
provisions, centrally recognised tax balances, goodwill, post-retirement benefits, earnings
per share and treasury related balances. This scope of work, together with additional
procedures performed at the group level, accounted for 84% of group revenue and 62% of
group underlying profit before taxation from continuing operations. This provided the
evidence we needed for our opinion on the consolidated financial statements taken as a
whole. This was before considering the contribution to our audit evidence from performing
audit work at the group level, including disaggregated analytical review procedures, which
covers certain of the group’s smaller and lower risk components that were not directly
included in our group audit scope. Our audit of the Parent Company Financial Statements
was undertaken by the Group audit team and included substantive procedures over all
material balances and transactions.
The impact of climate risk on our audit
Climate change is expected to present both risks and opportunities for the group. As explained
in the Sustainability section of the Strategic Report, the group has plans towards a Net Zero
pathway by 2040. Management’s climate change initiatives and commitments will impact
the group in a variety of ways. While the group has started to quantify some of the impacts
that may arise on its net zero pathway, the future financial impacts are clearly uncertain
given the medium to long term horizon. Disclosure of the impact of climate change risk
based on management’s current assessment is incorporated in the Task Force on climate
related financial disclosures (‘TCFD’) section of the Annual Report.
As part of our audit, we made enquiries of management to understand the extent of the
potential impact of climate change on the group’s business and the financial statements,
including reviewing management’s climate change risk assessment which was prepared with
support from an external expert. Using our knowledge of the business, we challenged the
completeness of management’s risk assessment. This included reading CDP submissions
made by the Group and its competitors to ensure appropriate consistency with the
judgements and disclosures reflected in the Financial Statements.
We assessed that the key areas in the financial statements which are more likely to be
materially impacted by climate change are those areas that are based on future cash flows.
As a result, we particularly considered how climate change risks and the impact of climate
commitments made by the group would impact the assumptions made in the forecasts
prepared by management that are used in the group’s impairment analysis (see also key
audit matter on Carrying value of goodwill) and for going concern purposes. We challenged
how management had considered longer term physical risks such as severe weather related
impacts, and shorter-term transitional risks such as the introduction of carbon taxes. Our
procedures did not identify any material impact on our audit for the year ended 31 March
2024. We also checked the consistency of the disclosures in the TCFD section of the Annual
Report with the relevant financial statement disclosures, including note 1 and the going
concern section of the accounting policies, and with our understanding of the business and
knowledge obtained in the audit.
We confirmed with management and the Audit Committee that the estimated financial
impacts of climate change will be reassessed prospectively and our expectation is that
climate change disclosures will evolve as the understanding of the actual and potential
impacts on the group’s future operations is established with greater certainty.
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Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – company
Overall materiality
£20.1 million (2023: £21.1 million).
£70.6 million (2023: £60 million).
How we determined it
approximately 5% of the three year profit before tax from continuing
operations, adjusted for loss on disposal of businesses, gains and losses on
significant legal proceedings, major impairment, amortisation of acquired
intangibles and restructuring charges (“underlying profit before tax”)
approximately 1% of total assets. However, materiality is capped at £19.5 million
(2023: £20 million) for the purpose of the audit of the consolidated financial
statements, being the maximum allocation of group materiality to a component
Rationale for
benchmark applied
Underlying profit before tax from continuing operations is used as
the materiality benchmark. Management uses this measure as it believes
that it reflects the underlying performance of the group and this is how
the directors and key management personnel are measured on
their performance.
We considered total assets to be an appropriate benchmark for the parent
company given that, while it does include trading businesses, it is the ultimate
holding company, incurs corporate costs and enters into financing on behalf of the
group. The parent company is also a component of the group audit.
The materiality level was capped at £19.5 million given overall group materiality
for the purposes of the audit of the consolidated financial statements, being the
maximum allocation of group materiality to a component.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was
between £1.4 million and £19.5 million. Certain components were audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £15.1 million (2023: £15.8 million) for the group financial
statements and £14.6 million (2023: £15 million) for the company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and
concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1 million (group audit) (2023: £1 million) and £1 million (company audit)
(2023: £1 million) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
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Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to
continue to adopt the going concern basis of accounting included:
• Evaluation of management’s base case and downside case scenarios, understanding and
evaluating the key assumptions, including assumptions related to inflation and other
macro-economic factors;
• Validation that the cash flow forecasts used to support management’s impairment, going
concern and viability assessments were consistent;
• Assessment of the historical accuracy and reasonableness of management’s forecasting;
• Consideration of the group’s available financing and debt maturity profile;
• Testing of the mathematical integrity of management’s liquidity headroom, covenant
compliance, sensitivity analysis and stress testing calculations;
• Assessment of the reasonableness of management’s planned or potential mitigating
actions; and
• Reviewing the related disclosures in the Annual Report.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the group’s and the company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not
a guarantee as to the group’s and the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’
statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the
financial statements and our auditors’ report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude
whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires
us also to report certain opinions and matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information
given in the Strategic report and Directors’ Report for the year ended 31 March 2024 is
consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and company and their
environment obtained in the course of the audit, we did not identify any material
misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Annual Report on Remuneration to be audited has been
properly prepared in accordance with the Companies Act 2006.
Independent auditors’ report to the members of Johnson Matthey Plc continued
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Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern,
longer-term viability and that part of the corporate governance statement relating to the
company’s compliance with the provisions of the UK Corporate Governance Code specified for
our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with the
financial statements and our knowledge obtained during the audit, and we have nothing
material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging
and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures
are in place to identify emerging risks and an explanation of how these are being managed
or mitigated;
• The directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and company’s ability to
continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects,
the period this assessment covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the
company will be able to continue in operation and meet its liabilities as they fall due over
the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and
company was substantially less in scope than an audit and only consisted of making inquiries
and considering the directors’ process supporting their statement; checking that the
statement is in alignment with the relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the financial statements and our
knowledge and understanding of the group and company and their environment obtained in
the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the corporate governance statement is materially consistent
with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary for the members to
assess the group’s and company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement
relating to the company’s compliance with the Code does not properly disclose a departure from a
relevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities in respect of the Annual
Report and Accounts, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they
give a true and fair view. The directors are also responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s
and the company’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 the company or to cease operations, or have
no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks
of non-compliance with laws and regulations related to environmental legislation, health
and safety regulations (EHS) and anti bribery and corruption laws, and we considered the
extent to which non-compliance might have a material effect on the financial statements.
We also considered those laws and regulations that have a direct impact on the financial
statements such as tax legislation and the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries and management bias in making
accounting estimates and judgements. The group engagement team shared this risk
assessment with the component auditors so that they could include appropriate audit
procedures in response to such risks in their work.
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Other information
Audit procedures performed by the group engagement team and/or component
auditors included:
• Discussions with management, internal audit and the group’s legal advisors, and the head
of ethics and compliance including consideration of known or suspected instances of
non-compliance with laws and regulations and fraud;
• Reading the minutes of board meetings and the Ethics Committee, and assessment of
“SpeakUp” matters through the ethics reporting line and the results of management’s
investigation into these matters;
• Reviewing financial statement disclosures to supporting documentation to assess
compliance with applicable laws and regulations;
• Challenging management’s significant judgements and estimates in particular those
relating to the carrying value of goodwill, post-employment benefits, refining processes
and stocktakes, metal accounting and provisions and contingent liabilities;
• Identifying and testing manual journal entries, in particular any journal entries posted with
unusual account combinations, and all material consolidation journals;
• Incorporating unpredictable procedures into our audit approach including varying the
timing and nature of testing performed; and
• Considering the outcome of key transactions in the year and assessing the appropriateness
of related accounting and disclosure within the financial statements.
There are inherent limitations in the audit procedures described above. We are less likely to
become aware of instances of non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete populations. We will often
seek to target particular items for testing based on their size or risk characteristics. In other
cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located
on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s
members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and
for no other purpose. We do not, in giving these opinions, 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.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for
our audit have not been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Annual Report on Remuneration to
be audited are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members
on 18 July 2018 to audit the financial statements for the year ended 31 March 2019 and
subsequent financial periods. The period of total uninterrupted engagement is six years,
covering the years ended 31 March 2019 to 31 March 2024.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and
Transparency Rules to include these financial statements in an annual financial report
prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R and filed on
the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report
provides no assurance over whether the structured digital format annual financial report has
been prepared in accordance with those requirements.
Graham Parsons (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
22nd May 2024
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The notes on pages 149-209 form an integral part of the accounts.
Consolidated Income Statement
for the year ended 31st March 2024
Notes
2024
£m
2023
£m
Revenue
2,3
12,843
14,933
Cost of sales
(11,916)
(13,939)
Gross profit
927
994
Distribution costs
(119)
(117)
Administrative expenses
(398)
(412)
(Loss) / profit on disposal of businesses
27
(9)
12
Amortisation of acquired intangibles
4
(4)
(5)
Gains and losses on significant legal proceedings
4
–
(25)
Major impairment and restructuring charges
4,6
(148)
(41)
Operating profit
2,4
249
406
Finance costs
8
(146)
(110)
Investment income
8
64
49
Share of losses of associates
15
(3)
(1)
Profit before tax from continuing operations
164
344
Tax expense
9
(56)
(80)
Profit for the year from continuing operations
108
264
Profit after tax from discontinued operations
–
12
Profit for the year
108
276
pence
pence
Earnings per ordinary share
Basic
10
58.6
150.9
Diluted
10
58.3
150.2
Earnings per ordinary share from continuing operations
Basic
10
58.6
144.2
Diluted
10
58.3
143.6
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The notes on pages 149-209 form an integral part of the accounts.
Consolidated Statement of Total Comprehensive Income
for the year ended 31st March 2024
Notes
2024
£m
2023
£m
Profit for the year
108
276
Other comprehensive (expense) / income
Items that will not be reclassified to the income statement in subsequent years
Remeasurements of post-employment benefit assets and liabilities
24
(68)
(149)
Fair value losses on equity investments at fair value through other comprehensive income
(7)
(12)
Tax on items that will not be reclassified to the income statement1
18
37
Total items that will not be reclassified to the income statement
(57)
(124)
Items that may be reclassified to the income statement
Exchange differences on translation of foreign operations
25
(79)
33
Exchange differences on translation of discontinued foreign operations
–
(32)
Amounts (charged) / credited to hedging reserve
25
(1)
114
Fair value gains / (losses) on net investment hedges
4
(10)
Tax on above items taken directly to or transferred from equity2
1
(28)
Total items that may be reclassified to the income statement (in subsequent years)
(75)
77
Other comprehensive expense for the year
(132)
(47)
Total comprehensive (expense) / income for the year
(24)
229
Total comprehensive (expense) / income for the year arises from:
Continuing operations
(24)
249
Discontinued operations
–
(20)
(24)
229
1. The tax credit on other comprehensive income that will not be reclassified to the income statement of £18 million (2023: £37 million) relates to remeasurements of post-employment benefit assets and liabilities.
2. The tax credit on other comprehensive income that may be reclassified to the income statement of £1 million (2023: £28 million charge) relates to tax on amounts (charged) / credited to hedging reserve.
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Other information
The notes on pages 149-209 form an integral part of the accounts.
Consolidated Statement of Financial Position
as at 31st March 2024
Notes
2024
£m
2023
£m
Assets
Non-current assets
Property, plant and equipment
11
1,436
1,332
Right-of-use assets
12
40
49
Goodwill
13
353
364
Other intangible assets
14
301
287
Investments in associates
15
71
75
Investments at fair value through other comprehensive income
29
40
49
Other receivables
17
104
113
Interest rate swaps
15
20
Other financial assets
18
34
48
Deferred tax assets
23
128
121
Post-employment benefit net assets
24
153
203
Total non-current assets
2,675
2,661
Current assets
Inventories
16
1,211
1,702
Taxation recoverable
10
12
Trade and other receivables
17
1,718
1,882
Cash and cash equivalents
542
650
Other financial assets
18
53
47
Assets classified as held for sale
26
127
75
Total current assets
3,661
4,368
Total assets
6,336
7,029
The accounts were approved by the Board of Directors on 22nd May 2024 and signed on its
behalf by:
L Condon
Directors
S Oxley
Notes
2024
£m
2023
£m
Liabilities
Current liabilities
Trade and other payables
19
(2,209)
(2,497)
Lease liabilities
12
(8)
(9)
Taxation liabilities
(75)
(105)
Cash and cash equivalents - bank overdrafts
(12)
(13)
Borrowings and related swaps
20
(110)
(155)
Other financial liabilities
18
(11)
(27)
Provisions
22
(63)
(63)
Liabilities classified as held for sale
26
(35)
(25)
Total current liabilities
(2,523)
(2,894)
Non-current liabilities
Borrowings and related swaps
20
(1,339)
(1,460)
Lease liabilities
12
(24)
(31)
Deferred tax liabilities
23
(2)
(19)
Interest rate swaps
(10)
(15)
Employee benefit obligations
24
(39)
(41)
Provisions
22
(17)
(28)
Trade and other payables
19
(2)
(2)
Total non-current liabilities
(1,433)
(1,596)
Total liabilities
(3,956)
(4,490)
Net assets
2,380
2,539
Equity
Share capital
25
215
215
Share premium
148
148
Treasury shares
(17)
(19)
Other reserves
25
36
118
Retained earnings
1,998
2,077
In
Total equity
2,380
2,539
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
The notes on pages 149-209 form an integral part of the accounts.
Consolidated Statement of Cash Flows
for the year ended 31st March 2024
Notes
2024
£m
2023
£m
Cash flows from operating activities
Profit before tax from continuing operations
164
344
Profit before tax from discontinued operations
–
5
Adjustments for:
Share of losses of associates
3
1
Profit on disposal of businesses
–
(23)
Depreciation
144
151
Amortisation
48
36
Impairment losses
70
27
Profit on sale of non-current assets
(2)
(6)
Share-based payments
5
7
Decrease / (increase) in inventories
396
(139)
Decrease / (increase) in receivables
89
(102)
Decrease in payables
(288)
(4)
(Decrease) / increase in provisions
(7)
7
Contributions in excess of employee benefit obligations charge
(10)
(21)
Changes in fair value of financial instruments
(10)
22
Net finance costs
82
61
Income tax paid
(92)
(75)
Net cash inflow from operating activities
592
291
Cash flows from investing activities
Interest received
62
28
Purchases of property, plant and equipment
(301)
(253)
Purchases of intangible assets
(67)
(63)
Purchases of investments held at fair value through other
comprehensive income
–
(17)
Government grant income received
5
7
Proceeds from sale of non-current assets
5
8
Proceeds from sale of investment in joint ventures
–
2
Proceeds from sale of businesses
41
187
Net cash outflow from investing activities
(255)
(101)
Notes
2024
£m
2023
£m
Cash flows from financing activities
Purchase of treasury shares
–
(45)
Proceeds from borrowings
1
672
Repayment of borrowings
(151)
(281)
Dividends paid to equity shareholders
25
(141)
(141)
Interest paid
(137)
(94)
Principal element of lease payments
(11)
(14)
Net cash (outflow) / inflow from financing activities
(439)
97
Change in cash and cash equivalents
(102)
287
Exchange differences on cash and cash equivalents
(5)
4
Cash and cash equivalents at beginning of year
637
346
Cash and cash equivalents at end of year
530
637
Cash and deposits
208
129
Money market funds
334
521
Bank overdrafts
(12)
(13)
Cash and cash equivalents
530
637
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Financial statements
Other information
The notes on pages 149-209 form an integral part of the accounts.
Consolidated Statement of Changes in Equity
for the year ended 31st March 2024
Share
capital
Share
premium
account
Treasury
shares
Other
reserves
(note 25)
Retained
earnings
Total
equity
£m
£m
£m
£m
£m
£m
At 1st April 2022
218
148
(24)
50
2,049
2,441
Profit for the year
–
–
–
–
276
276
Remeasurements of post-employment benefit assets and liabilities
–
–
–
–
(149)
(149)
Fair value losses on investments at fair value through other comprehensive income
–
–
–
(12)
–
(12)
Exchange differences on translation of foreign operations
–
–
–
1
–
1
Amounts credited to hedging reserve
–
–
–
114
–
114
Fair value losses on net investment hedges taken to equity
–
–
–
(10)
–
(10)
Tax on other comprehensive income
–
–
–
(28)
37
9
Total comprehensive income
–
–
–
65
164
229
Dividends paid (note 25)
–
–
–
–
(141)
(141)
Purchase of treasury shares (note 25)
(3)
–
–
3
(1)
(1)
Share-based payments
–
–
–
–
18
18
Cost of shares transferred to employees
–
–
5
–
(14)
(9)
Tax on share-based payments
–
–
–
–
2
2
At 31st March 2023
215
148
(19)
118
2,077
2,539
Profit for the year
–
–
–
–
108
108
Remeasurements of post-employment benefit assets and liabilities
–
–
–
–
(68)
(68)
Fair value losses on investments at fair value through other comprehensive income
–
–
–
(7)
–
(7)
Exchange differences on translation of foreign operations
–
–
–
(79)
–
(79)
Amounts charged to hedging reserve
–
–
–
(1)
–
(1)
Fair value gains on net investment hedges taken to equity
–
–
–
4
–
4
Tax on other comprehensive income
–
–
–
1
18
19
Total comprehensive (expense) / income
–
–
–
(82)
58
(24)
Dividends paid (note 25)
–
–
–
–
(141)
(141)
Share-based payments
–
–
–
–
17
17
Cost of shares transferred to employees
–
–
2
–
(13)
(11)
At 31st March 2024
215
148
(17)
36
1,998
2,380
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Financial statements
Other information
Guide to financial statement disclosures
for the year ended 31st March 2024
Notes and appendices
Page
Notes and appendices
Page
Operations - information relating to our operating performance
2
Segmental information
157
6
Major impairment and restructuring charges
166
3
Revenue
160
10
Earnings per ordinary share
168
4
Operating profit
163
34
Non-GAAP measures
197
5
Impairment losses
164
Financing - information relating to how we finance our business
8
Investment income and financing costs
166
25
Share capital and other reserves
184
18
Other financial assets and liabilities
171
28
Financial risk management
188
20
Borrowings and related swaps
172
29
Fair values
193
21
Movements in assets and liabilities arising from financing activities
173
Working capital - information relating to the day-to-day working capital of our business
16
Inventories
171
19
Trade and other payables
171
17
Trade and other receivables
171
22
Provisions
174
Tax - information relating to our current and deferred taxation
9
Tax expense
167
23
Deferred tax
175
Employees - information relating to the costs associated with employing our people
7
Employee information
166
30
Share-based payments
194
24
Post-employment benefits
176
Long-term assets - information relating to our long-term operational and investment assets
11
Property, plant and equipment
168
14
Other intangible assets
170
12
Leases
169
15
Investments in associates
170
13
Goodwill
169
24
Post-employment benefits
176
Other - other useful information
1
Accounting policies
149
32
Contingent liabilities
196
26
Assets and liabilities classified as held for sale
186
33
Transactions with related parties
196
27
Disposals
187
34
Non-GAAP measures
197
31
Commitments
196
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Financial statements
Other information
Notes on the Accounts
for the year ended 31st March 2024
1
Accounting policies
The Company and the Group
Johnson Matthey plc (the ‘Company’) is a public company limited by shares incorporated under the
Companies Act 2006 and domiciled in England in the United Kingdom. The consolidated accounts
of the company for the year ended 31st March 2024 consist of the audited consolidation of the
accounts of the Company and its subsidiaries (together referred to as the ‘Group’), together with
the employee share ownership trust and the group's interest in joint ventures and associates.
Basis of accounting and preparation – group
The financial statements of the group have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards.
The accounts are prepared on the historical cost basis, except for certain assets and liabilities
which are measured at fair value as explained below.
The group accounts comprise the accounts of the parent company and its subsidiaries,
including the employee share ownership trust, and include the group's interest in joint ventures
and associates. Entities the group controls are accounted for as subsidiaries. Entities that are
joint ventures or associates are accounted for using the equity method of accounting.
Transactions and balances between group companies are eliminated. Profit recognised on
transactions between group companies is eliminated on consolidation.
The results of businesses acquired or disposed of in the year are consolidated from or up to the
effective date of acquisition or disposal, respectively. The net assets of businesses acquired are
recognised in the consolidated accounts at their fair values at the date of acquisition.
Going concern
The directors have reviewed a range of scenario forecasts for the group 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 annual accounts.
As at 31st March 2024, the group maintains a strong balance sheet with around £1.5 billion
of available cash and undrawn committed facilities. Free cash flow was strong in the year
at £189 million and net debt reduced by £72 million. Net debt at 31st March 2024 was
£951 million at 1.6 times net debt (including post tax pension deficits) to underlying EBITDA
which was at the lower end of our target range.
Although impacted by the significant headwinds faced in the current macroeconomic
environment such as low metal prices and continued soft economic outlook across major
economies, the group’s performance during the period was resilient, both in terms of underlying
operating profit and cash flow. For the purposes of assessing going concern, we have revisited our
financial projections using the latest budget for our base case scenario. The base case scenario was
stress tested to a severe-but-plausible downside case which reflects severe recession scenarios.
The severe-but-plausible case for Clean Air modelled scenarios assuming a smaller light duty
vehicle market from reduced vehicle production and/or market consumer demand disruption or
greater share of zero emission vehicles in market, assumed to result in a 10% drop in sales. For
PGMS and Catalyst Technologies, it also assumed a reduction in sales and associated operating
profit based on adverse scenarios using external and internal market insights.
Additionally, as part of viability testing, the group considered scenarios including the impact
from metal price volatility, delays in capital projects and delivery of cost transformation savings,
and slow down of operations in China. Whilst the combined impact would reduce profitability
and EBITDA against our latest budget, our balance sheet remains strong with ample working
capital and Net Debt/EBITDA ratios.
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 31st March 2024. There was £334 million of cash held in money market funds and
£208 million of other cash and bank deposits. Of the existing loans, £271 million of term debt
and £40 million of other bank loans mature in the period to June 2025. Currently, the group is
in the process of refinancing around £310m of term debt with a US Private Placement issuance.
We assume no refinancing of this debt in 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 if required but the going concern conclusion is not
dependent on such access as the company has sufficient financing and liquidity to fund its
obligations in the base and severe-but-plausible scenarios. The group also has a number of
additional sources of funding available including uncommitted metal 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.
Conclusion
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. To give further
assurance on liquidity, we have also undertaken a reverse stress test to identify what additional
or alternative scenarios and circumstances would threaten our current financing arrangements.
This shows that we have headroom against either a further decline in profitability well beyond
the severe-but-plausible scenario, or a significant increase in borrowings, or a significant
increase in interest charges. Furthermore, the group has other mitigating actions available
which it could utilise to protect headroom including retaining the full expected proceeds from
divestment of Medical Device Components, reducing capital expenditure, renegotiating
payment terms or reducing future dividends distributions.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
The directors are therefore of the opinion that the group has adequate resources to fund its
operations for the period of at least twelve months following the date of these financial
statements and there are no material uncertainties relating to going concern so determine that
it is appropriate to prepare the accounts on a going concern basis.
Material accounting policies
The group’s and parent company’s accounting policies have been applied consistently during
the current and prior year, other than where new policies have been adopted (see below).
The group’s and parent company’s material accounting policies are as follows:
Foreign currencies
Foreign currency transactions are recorded in the functional currency of the relevant subsidiary,
joint venture, associate or branch at the exchange rate at the date of the transaction. Foreign
currency monetary assets and liabilities are retranslated into the relevant functional currency at
the exchange rate at the balance sheet date.
Income statements and cash flows of overseas subsidiaries, joint ventures, associates and
branches are translated into sterling at the average rates for the year. Balance sheets of overseas
subsidiaries, joint ventures, associates and branches, including any fair value adjustments and
related goodwill, are translated into sterling at the exchange rates at the balance sheet date.
Exchange differences arising on the translation of the net investment in overseas subsidiaries,
joint ventures, associates and branches, less exchange differences arising on related foreign
currency financial instruments which hedge the group’s net investment in these operations,
are taken to other comprehensive income. On disposal of the net investment, the cumulative
exchange difference is reclassified from equity to operating profit.
Other exchange differences are recognised in operating profit.
Revenue
Revenue represents income derived from contracts for the provision of goods and services by
the parent company and its subsidiaries to customers in exchange for consideration in the
ordinary course of the group’s activities.
Performance obligations
Upon approval by the parties to a contract, the contract is assessed to identify each promise to
transfer either a distinct good or service or a series of distinct goods or services that are
substantially the same and have the same pattern of transfer to the customer. Goods and
services are distinct and accounted for as separate performance obligations in the contract if the
customer can benefit from them either on their own or together with other resources that are
readily available to the customer and they are separately identifiable in the contract.
The group typically sells licences to its intellectual property together with other goods and services
and, since these licences are not generally distinct in the context of the contract, revenue recognition
is considered at the level of the performance obligation of which the licence forms part. Revenue in
respect of performance obligations containing bundles of goods and services in which a licence with a
sales or usage-based royalty is the predominant item is recognised when sales or usage occur.
Transaction price
At the start of the contract, the total transaction price is estimated as the amount of
consideration to which the group expects to be entitled in exchange for transferring the
promised goods and services to the customer, excluding sales taxes. Variable consideration,
such as trade discounts, is included based on the expected value or most likely amount only to
the extent that it is highly probable that there will not be a reversal in the amount of cumulative
revenue recognised. The transaction price does not include estimates of consideration resulting
from contract modifications until they have been approved by the parties to the contract. The
total transaction price is allocated to the performance obligations identified in the contract in
proportion to their relative stand-alone selling prices. Many of the group's and parent company’s
products and services are bespoke in nature and, therefore, stand-alone selling prices are
estimated based on cost plus margin or by reference to market data for similar products
and services.
Revenue recognition
Revenue is recognised as performance obligations are satisfied as control of the goods and
services is transferred to the customer.
For each performance obligation within a contract, the group and parent company determine
whether it is satisfied over time or at a point in time. Performance obligations are satisfied over
time if one of the following criteria is satisfied:
• the customer simultaneously receives and consumes the benefits provided by the group’s and
parent company’s performance as they perform;
• the group’s and parent company’s performance creates or enhances an asset that the
customer controls as the asset is created or enhanced; or
• the group’s and parent company’s performance does not create an asset with an alternative
use to the group and parent company and they have an enforceable right to payment for
performance completed to date.
For more detail of our revenue recognition policy see note 3.
In the event that the group and parent company enter into bill-and-hold transactions at the
specific request of customers, revenue is recognised when the goods are ready for transfer to
the customer and when the group and parent company are no longer capable of directing those
goods to another use.
Revenue includes sales of precious metal to customers and the precious metal content of
products sold to customers.
Linked contracts under which the group and parent company sell or buy precious metal and
commit to repurchase or sell the metal in the future are accounted for as finance transactions
and no revenue is recognised in respect of the sale leg.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
No revenue is recognised by the group or parent company in respect of non-monetary exchanges
of precious metal on the basis that the counterparties are in the same line of business.
Consideration payable to customers
Consideration payable to customers in advance of the recognition of revenue in respect of the
goods and services to which it relates is capitalised and recognised as a deduction to the
revenue recognised upon transfer of the goods and services to the customer.
Costs to fulfil a contract
Contract fulfilment costs in respect of over time contracts are expensed as incurred. Contract
fulfilment costs in respect of point in time contracts are accounted for under IAS 2, Inventories.
Contract receivables
Contract receivables represent amounts for which the group and parent company have a conditional
right to consideration in respect of unbilled revenue recognised at the balance sheet date.
Contract liabilities
Contract liabilities represent the obligation to transfer goods or services to a customer for which
consideration has been received, or consideration is due, from the customer.
Finance costs and investment income
Finance costs that are directly attributable to the construction of an asset that necessarily takes
a substantial period of time to get ready for its intended use are capitalised as part of the cost of
that asset. Other finance costs and finance income are recognised in the income statement in
the year incurred. Finance costs and finance income include the forward point movements
from FX Swap contracts (i.e. the interest rate differential between currencies specified in a FX
Swap contract). Other finance costs and finance income are recognised in the income
statement in the year incurred.
Research and development
Research expenditure is charged to the income statement in the year incurred. Development
expenditure is charged to the income statement in the year incurred unless it meets the
recognition criteria for capitalisation. When the recognition criteria have been met, any further
development expenditure is capitalised as an intangible asset.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any
provisions for impairment. Depreciation is provided at rates calculated to write-off the cost less
estimated residual value of each asset over its useful life and is recognised within administrative
expenses. Certain buildings and plant and equipment are depreciated using the units of
production method as this more closely reflects their expected consumption. All other assets are
depreciated using the straight-line method. The useful lives vary according to the class of the
asset, but are typically:
• buildings – not exceeding 30 years; and
• plant and machinery – 4 to 10 years.
• land is not depreciated.
The expected lives of property, plant and equipment tends to be short to medium term, as such
the physical risk posed by climate change in the long term is low.
Impairment
The group and parent company reviews the carrying amounts of its non-financial assets
regularly to determine whether there is any indication of impairment. Goodwill is tested for
impairment annually or more frequently if there are indications that goodwill might be
impaired. If any such indication of impairment exists, the recoverable amount of the non-
financial asset is estimated in order to determine the extent of any impairment loss. Where the
asset does not generate cash flows that are independent from other assets, the group estimates
the recoverable amount of the cash-generating unit (CGU) to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value-in-use. In estimating
value-in-use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset (or CGU) for which the estimates of future cash flows have not
been adjusted.
An impairment loss is recognised as an expense immediately whenever the carrying amount of
a non-financial asset or the CGU to which it belongs exceeds its recoverable amount.
Impairment losses for goodwill are not reversable in subsequent reporting periods. Where an
impairment loss subsequently reverses for a finite lived non-financial asset, the carrying amount
of the asset (or CGU) is increased to the revised estimate of its recoverable amount, not to
exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (or CGU) in prior years. A reversal of an impairment loss is recognised as
income when identified.
Goodwill and other intangible assets
Goodwill arises on the acquisition of a business when the fair value of the consideration exceeds
the fair value attributed to the net assets acquired (including contingent liabilities). It is subject
to annual impairment reviews. Acquisition-related costs are charged to the income statement
as incurred. The group and parent company have taken advantage of the exemption allowed
under IFRS 1 and, therefore, goodwill arising on acquisitions made before 1st April 2004 is
included at the carrying amount at that date less any subsequent impairments.
Other intangible assets are stated at cost less accumulated amortisation and any provisions for
impairment. Customer contracts are amortised when the relevant income stream occurs.
All other intangible assets are amortised by using the straight-line method over the useful lives
from the time they are first available for use. Amortisation is recognised within administrative
expenses. The estimated useful lives vary according to the specific asset, but are typically:
• customer contracts and relationships – 1 to 15 years;
• capitalised computer software – 3 to 8 years;
• patents, trademarks and licences – 3 to 20 years, for perpetual software licences the
estimated useful is 4 to 7 years;
• acquired research and technology – 4 to 10 years; and
• capitalised development currently being amortised – 3 to 8 years.
Intangible assets which are not yet being amortised are subject to annual impairment reviews.
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Other information
Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
Investments in associates
Associates are entities over which the group exercises significant influence when it has the
power to participate in the financial and operating policy decisions of the entity but it does not
have the power to control or jointly control the entity.
Investments in associates are accounted for using the equity method of accounting and are
initially recognised at cost. Thereafter the investments are adjusted to recognise the group’s
share of the post-acquisition profits or losses after tax of the investee in the income statement,
and the group’s share of movements in other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from associates are recognised as a
reduction in the carrying amount of the investment. The carrying value of the investments are
reviewed for impairment triggers on a regular basis.
Where the group’s share of losses in an equity-accounted investment equals or exceeds its
interest in the entity, the group does not recognise further losses unless it has incurred
obligations to do so.
Unrealised gains and losses on transactions between the group and its associates are eliminated
to the extent of the group’s interest in these associates.
Leases
Leases are recognised as a right-of-use asset, together with a corresponding lease liability, at the
date at which the leased asset is available for use.
The right-of-use asset is initially measured at cost, which comprises the initial value of the lease
liability, lease payments made (net of any incentives received from the lessor) before the
commencement of the lease, initial direct costs and restoration costs. The right-of-use asset is
depreciated on a straight-line basis over the shorter of the asset’s useful life and the lease term
in operating profit.
The lease liability is initially measured as the present value of future lease payments discounted
using the interest rate implicit in the lease or, where this rate is not determinable, the group’s
incremental borrowing rate, which is the interest rate the group would have to pay to borrow
the amount necessary to obtain an asset of similar value in a similar economic environment
with similar terms and conditions. Interest is charged to finance costs at a constant rate of
interest on the outstanding lease liability over the lease term.
Payments in respect of short-term leases, low-value leases and precious metal leases are
charged to the income statement on a straight-line basis over the lease term in operating profit.
The group leases precious metals to fund temporary peaks in metal requirements provided
market conditions allow. These leases are from banks for specified periods (less than 12
months) and the group pays a fee which is expensed on a straight-line basis over the lease term
in finance costs. The group holds sufficient precious metal inventories to meet all the
obligations under these lease arrangements as they fall due. Precious metal leases do not fall
under the scope of IFRS 16.
Inventories
Precious metal
Inventories of gold, silver and platinum group metals are valued according to the source from
which the metal is obtained. Metal which has been purchased and committed to future sales to
customers is valued at the price at which it is contractually committed, adjusted for unexpired
contango and backwardation. Other precious metal inventories owned by the group, which are
unhedged, are valued at the lower of cost and net realisable value using the weighted average
cost formula.
Other
Non-precious metal inventories are valued at the lower of cost, including attributable
overheads, and net realisable value. Except where costs are specifically identified, the first-in,
first-out cost formula is used to value inventories.
Cash and cash equivalents
Cash and deposits comprise cash at bank and in hand and short-term deposits with a maturity
date of three months or less from the date of acquisition. Money market funds comprise
investments in funds that are subject to an insignificant risk of changes in fair value. The group
and parent company routinely use short-term bank overdraft facilities, which are repayable on
demand, as an integral part of their cash management policies and, therefore, cash and cash
equivalents include cash and deposits, money market funds and bank overdrafts. Offset
arrangements across group businesses have been applied to arrive at the net cash and
overdraft figures.
Financial instruments
Investments and other financial assets
The group and parent company classify their financial assets in the following
measurement categories:
• those measured at fair value either through other comprehensive income or through profit or
loss; and
• those measured at amortised cost.
At initial recognition, the group and parent company measure financial assets at fair value plus,
in the case of financial assets not measured at fair value through profit or loss, transaction costs
that are directly attributable to their acquisition.
The group and parent company subsequently measure equity investments at fair value and
have elected to present fair value gains and losses on equity investments in other
comprehensive income. There is, therefore, no subsequent reclassification of cumulative fair
value gains and losses to profit or loss following disposal of the investments.
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Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
The group and parent company subsequently measure trade and other receivables and
contract receivables at amortised cost, with the exception of trade receivables that have been
designated as at fair value through other comprehensive income because the group has certain
operations with business models to hold trade receivables for collection or sale. All other
financial assets, including short-term receivables, are measured at amortised cost less any
impairment provision.
For the impairment of trade and contract receivables, the group and parent company apply the
simplified approach permitted by IFRS 9, Financial Instruments, which requires expected
lifetime losses to be recognised from initial recognition.
Derivative financial instruments
The group and parent company use derivative financial instruments, in particular forward
currency contracts, currency swaps, interest rate swaps and commodity derivatives to manage
the financial risks associated with their underlying business activities and the financing of those
activities. The group and parent company do not undertake any speculative trading activity in
derivative financial instruments.
Derivative financial instruments are measured at their fair value. Derivative financial
instruments may be designated at inception as fair value hedges, cash flow hedges or net
investment hedges if appropriate. For currency swaps designated as instruments in cash flow or
net investment hedging relationships, the impact from currency basis spreads is included in the
hedge relationship and may be a source of ineffectiveness recognised in the income statement.
Derivative financial instruments which are not designated as hedging instruments are classified
as at fair value through profit or loss, but are used to manage financial risk. Changes in the fair
value of any derivative financial instruments that are not designated as, or are not determined
to be, effective hedges are recognised immediately in the income statement. The vast majority
of forward precious metal price contracts are entered into and held for the receipt or delivery of
precious metal and, therefore, are not recorded at fair value.
Cash flow hedges
Changes in the fair value of derivative financial instruments designated as cash flow hedges are
recognised in other comprehensive income to the extent that the hedges are effective.
Ineffective portions are recognised in the income statement immediately. If the hedged item
results in the recognition of a non-financial asset or liability, the amount previously recognised
in other comprehensive income is transferred out of equity and included in the initial carrying
amount of the asset or liability. Otherwise, the amount previously recognised in other
comprehensive income is transferred to the income statement in the same period that the
hedged item is recognised in the income statement. If the hedging instrument expires or is sold,
terminated or exercised or the hedge no longer meets the criteria for hedge accounting,
amounts previously recognised in other comprehensive income remain in equity until the
forecast transaction occurs. If a forecast transaction is no longer expected to occur, the amounts
previously recognised in other comprehensive income are transferred to the income statement.
If a forward precious metal price contract will be settled net in cash, it is designated and
accounted for as a cash flow hedge.
Fair value hedges
Changes in the fair value of derivative financial instruments designated as fair value hedges are
recognised in the income statement, together with the related changes in the fair value of the
hedged asset or liability. Fair value hedge accounting is discontinued if the hedging instrument
expires or is sold, terminated or exercised or the hedge no longer meets the criteria for
hedge accounting.
Net investment hedges
For hedges of net investments in foreign operations, the effective portion of the gain or loss on
the hedging instrument is recognised in other comprehensive income, while the ineffective
portion is recognised in the income statement. Amounts taken to other comprehensive income
are reclassified from equity to the income statement when the foreign operations are sold
or liquidated.
Financial liabilities
Borrowings are measured at amortised cost. Those borrowings designated as being in fair value
hedge relationships are remeasured for the fair value changes in respect of the hedged risk with
these changes recognised in the income statement. All other financial liabilities, including
short-term payables, are measured at amortised cost.
Precious metal sale and repurchase agreements
The group and parent company undertake linked contracts to sell or buy precious metal and
commit to repurchase or sell the metal in the future. An asset representing the metal which the
group and parent company have committed to sell or a liability representing the obligation to
repurchase the metal are recognised in trade and other receivables or trade and other
payables, respectively.
Taxation
Current and deferred tax are recognised in the income statement, except when they relate to
items recognised directly in equity, in which case the related tax is also recognised in equity.
Current tax is the amount of income tax expected to be paid in respect of taxable profits using
the tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the balance sheet. It
is provided using the tax rates that are expected to apply in the period when the asset or liability
is settled, based on tax rates that have been enacted or substantively enacted at the balance
sheet date.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will
be available against which the temporary differences can be utilised. No deferred tax asset or
liability is recognised in respect of temporary differences associated with investments in
subsidiaries and branches where the group is able to control the timing of the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
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Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
Provisions and contingencies
Provisions are recognised when the group has a present obligation as a result of a past event
and a reliable estimate can be made of a probable adverse outcome, for example warranties,
environmental claims and restructuring. Otherwise, material contingent liabilities are disclosed
unless the probability of the transfer of economic benefits is remote. Contingent assets are only
recognised if an inflow of economic benefits is virtually certain.
Share-based payments and treasury shares
The fair value of shares awarded to employees under the performance share plan,
restricted share plan, long term incentive plan and deferred bonus plan is calculated by
adjusting the share price on the date of allocation for the present value of the expected
dividends that will not be received. The resulting cost is charged to the income statement over
the relevant performance periods, adjusted to reflect actual and expected levels of vesting
where appropriate.
The group and parent company provide finance to the employee share ownership trust (ESOT)
to purchase company shares in the open market. Costs of running the ESOT are charged to the
income statement. The cost of shares held by the ESOT is deducted in arriving at equity until
they vest unconditionally with employees.
Post-employment benefits
The costs of defined contribution plans are charged to the income statement as they fall due.
For defined benefit plans, the group and parent company recognise the net assets or liabilities
of the plans in their balance sheets. Assets are measured at their fair value at the balance sheet
date. Liabilities are measured at present value using the projected unit credit method and a
discount rate reflecting yields on high quality corporate bonds. The changes in plan assets and
liabilities, based on actuarial advice, are recognised as follows:
• The current service cost is deducted in arriving at operating profit.
• The net interest cost, based on the discount rate at the beginning of the year, contributions
paid in and the present value of the net defined benefit liabilities during the year, is included
in finance costs.
• Past service costs and curtailment gains and losses are recognised in operating profit at the
earlier of when the plan amendment or curtailment occurs and when any related
restructuring costs or termination benefits are recognised.
• Gains or losses arising from settlements are included in operating profit when the
settlement occurs.
• Remeasurements, representing returns on plan assets, excluding amounts included in
interest, and actuarial gains and losses arising from changes in financial and demographic
assumptions, are recognised in other comprehensive income.
Assets held for sale and discontinued operations
Non-current assets and disposal groups are classified as held for sale, if available for sale in its
present condition and a sale is considered highly probable within 12 months. They are
measured at the lower of their carrying amount and fair value less costs to sell. Assets and
liabilities classified as held for sale are presented separately on the Balance Sheet. The assets are
not depreciated or amortised while they are classified as held for sale.
An impairment loss is recognised in the Income Statement for any initial or subsequent write-
down of the asset or disposal group to fair value less costs to sell. A gain is recognised for any
subsequent increases in fair value less costs to sell of an asset or disposal group, but not in
excess of any cumulative impairment loss previously recognised. A gain or loss not previously
recognised by the date of the sale of the non-current asset (or disposal group) is recognised at
the date of de-recognition.
A discontinued operation is a component of the group’s business that either has been disposed
of, or that is classified as held for sale and represents a separate major line of business or
geographical area of operations, is part of a single co-ordinated plan to dispose of a separate
major line of business or geographical area of operations or is a subsidiary acquired exclusively
with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation
meets the criteria to be classified as held for sale. The results of discontinued operations are
presented separately in the Income Statement. When an operation is classified as a
discontinued operation, the comparative Income Statement and Statement of Total
Comprehensive Income is restated as if the operation had been discontinued from the start of
the comparative year.
Sources of estimation uncertainty
Determining the carrying amounts of certain assets and liabilities at the balance sheet date
requires estimation of the effects of uncertain future events. In the event that actual outcomes
differ from those estimated, there may be an adjustment to the carrying amounts of those
assets and liabilities within the next financial year. Other significant risks of material adjustment
are the valuation of the liabilities of the defined benefit pension plans and tax provisions. The
group and parent company have considered the refining process and stocktakes, deferred tax
assets and climate change and, whilst not deemed to represent a significant risk of material
adjustment to the group’s and parent company’s financial position during the year ending
31st March 2024, represent important accounting estimates.
Goodwill, other intangibles and other assets
The group and parent company have significant intangible assets from both business
acquisitions and investments in new products and technologies. Some of those acquisitions and
investments are at an early stage of commercial development and, therefore, carry a greater
risk that they will not be commercially viable. Goodwill and intangible assets not yet ready for
use are not amortised but are subject to annual impairment reviews. Other intangible assets are
amortised from the time they are first ready for use and, together with other assets, are assessed
for impairment when there is a triggering event that provides evidence that they are impaired.
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Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
The impairment reviews require the use of estimates of future profit and cash generation based
on financial budgets and plans approved by management, generally covering a three-year
period and then extrapolated using long term growth rates, and the pre-tax discount rates used
in discounting projected cash flows, see note 5.
The Directors have determined that there is significant accounting judgement with respect to
the estimated cash flows in assessing the value in use of the Hydrogen Technologies CGU given
the slower pace of hydrogen and fuel cell market development. Refer to note 5 for information
about the key assumptions applied in the value in use calculation.
Post-employment benefits
The group’s and parent company’s defined benefit plans are assessed annually by qualified
independent actuaries. The estimate of the liabilities of the plans is based on a number of
actuarial assumptions.
There is a range of possible values for each actuarial assumption and the point within that range
is estimated to most appropriately reflect the group’s and parent company’s circumstances.
Small changes in these assumptions can have a significant impact on the estimate of the
liabilities of the plans. A description of those discount rate and inflation assumptions, together
with sensitivity analysis, is set out in note 24 to the group and parent company accounts.
Tax provisions
Tax provisions are determined based on the tax laws and regulations that apply in each of the
jurisdictions in which the group operates. Tax provisions are recognised where the impact of
those laws and regulations is unclear and it is probable that there will be a tax adjustment
representing a future outflow of funds to a tax authority or a consequent adjustment to the
carrying value of a tax asset.
Provisions are measured using the best estimate of the most likely amount, being the most
likely amount in a range of possible outcomes. The resolution of tax positions taken by the
group can take a considerable period of time to conclude and, in some cases, it is difficult to
predict the outcome. Group current income tax liabilities at 31st March 2024 of £77 million
(2023: £106 million) include tax provisions of £64 million (2023: £97 million) and the
estimation of the range of possible outcomes is an increase in those liabilities by £72 million
(2023: £66 million) to a decrease of £54 million (2023: £55 million). The estimates made
reflect where the group faces routine tax audits or is in ongoing disputes with tax authorities;
has identified potential tax exposures relating to transfer pricing; or is contesting the tax
deductibility of certain business costs.
Deferred tax assets
Deferred tax assets are recognised to the extent it is probable that future taxable profits will be
available, against which the deductible temporary difference can be utilised, based on
management’s assumptions relating to future taxable profits.
Determination of future taxable profits requires application of judgement and estimates,
including: market share, expected changes to selling prices, product profitability, precious
metal prices and other direct input costs, based on management’s expectations of future
changes in the markets using external sources of information where appropriate. The estimates
take account of the inherent uncertainties, constraining the expected level of profit as
appropriate. Changes in these estimates will affect future profits and therefore the recoverability
of the deferred tax assets.
Refining process and stocktakes
The group’s and parent company’s refining businesses process significant quantities of precious
metal and there are uncertainties regarding the actual amount of metal in the refining system
at any one time. The group’s refining businesses process over four million ounces of platinum
group metals per annum with a market value of around £5 billion. The majority of metal
processed is owned by customers and the group and parent company must return pre-agreed
quantities of refined metal based on assays of starting materials and other contractual
arrangements, such as the timing of the return of metal. The group and parent company
calculate the profits or losses of their refining operations based on estimates, including the
extent to which process losses are expected during refining. The risk of process losses or
stocktake gains depends on the nature of the starting material being refined, the specific
refining processes applied, the efficiency of those processes and the contractual arrangements.
Stocktakes are performed to determine the volume and value of metal within the refining system
compared with the calculated estimates, with the variance being a profit or a loss. Stocktakes are,
therefore, a key control in the assessment of the accuracy of the profit or loss of refining operations.
Whilst refining is a complex, large-scale industrial process, the group and parent company have
appropriate processes and controls over the movement of material in their refineries.
Climate change
The impact of climate change presented in the group’s Strategic Report (see pages 53 to 61)
and the stated net zero targets have been considered in preparing the group accounts.
The following considerations were made:
• Impact on the going concern period and viability of the group over the next three years.
The latest forecasts reflect the continuous investment in sustainable technologies including
commercialisation of our products used in green hydrogen production and higher performance
fuel cell components for a range of automotive, non-automotive and stationary applications.
The potential impact of climate change on a number of areas within the financial statements
has been considered, including:
• The forecasts of cash flows used in impairment assessments for the carrying value of non-
current assets including goodwill (see note 5).
• When considering the recoverability of deferred tax assets, the taxable profit forecasts
are based on the same information used to support the going concern and impairment
assessments.
• The expected lives of fixed assets and their exposure to the physical risk posed by climate change.
The expected lives of property, plant and equipment tends to be short to medium term, as such
the physical risk posed by climate change in the long term is low.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
1
Accounting policies (continued)
Judgements made in applying accounting policies
Metal
The group and parent company use precious metal owned by customers in their production
processes. It has been determined that this metal is not controlled by the group or parent
company and, therefore, it is not recognised on the balance sheet.
The group and parent company manage precious metal inventories by entering into physically
settled forward sales and purchases of metal positions in line with a well-established hedging
policy. The own use exemption has been adopted for these transactions and, therefore, the
group and parent company do not fair value such physically settled contracts.
The group undertakes linked contracts to sell or buy precious metal and commits to repurchase
or sell the metal in the future to manage inventory levels. Accordingly, cash flows in respect of
sale and repurchase agreements are shown as cash flows from operating activities in the cash
flow statement rather than cash flows from financing activities.
Provisions and 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. Judgement is required to determine if an outflow of
economic resources is probable, or possible but not probable for such events. Where it is
probable, a liability is recognised and further judgement is used to determine the amount of the
provision. Where it is possible but not probable, further judgement is used to determine if the
likelihood is remote, in which case no disclosures are provided; if the likelihood is not remote
then a contingent liability is disclosed. Provisions and contingent liabilities are set out in notes
22 and 32, respectively.
In the course of preparing the accounts, no other judgements have been made in the process of
applying the group’s and parent company’s accounting policies, other than those involving
estimations, that have had a significant effect on the amounts recognised in the accounts.
Changes in accounting policies
Amendments to accounting standards
The International Accounting Standards Board (IASB) has issued the following amendments,
which have been endorsed by the UK Endorsement Board, for annual periods beginning on or
after 1st January 2023:
• Amendments to IFRS 17, Insurance Contracts;
• Amendments to IAS 1 and IFRS Practice Statement 2;
• Amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors; and
• Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
These changes have not had a material impact on the group.
On the 19th July 2023, the UK endorsed the amendments to IAS 12 Income Taxes, issued by the
International Accounting Standards Board on 23rd May 2023, which grants companies a
temporary exemption from applying IAS 12 to the International Tax Reform: Pillar Two Model
Rules. The group has adopted the amendments to IAS 12 and applied the exception to
recognising and disclosing information about deferred tax assets and liabilities related to Pillar
Two income taxes. Refer to note 9 for further details.
The following are accounting standards to be adopted by the group in future reporting periods;
they have not yet been endorsed by the UK Endorsement Board:
• IFRS 18, Presentation and Disclosure in Financial Statements, published by the IASB on
9th April 2024 and effective for accounting periods commencing 1st January 2027; and
• IFRS 19, Subsidiaries without Public Accountability, published by the IASB on 9th May 2024
and effective for accounting periods commencing 1st January 2027.
The group will assess the impact of these new accounting standards in due course following
endorsement by the UK Endorsement Board.
The group has not early adopted any standard, interpretation or amendment that was issued
but is not yet effective. The group does not expect these amendments to have a material impact
on the group.
The list of amendments considered in relation to the above are as follows:
• Amendments to IAS 1, Classification of liabilities as current and non-current and non-current
liabilities with covenants;
• Amendments to IFRS 16, Lease liability in a sale and leaseback;
• Amendments to IAS 7 and IFRS 7, Supplier finance arrangements; and
• Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates
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 34.
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Other information
Notes on the Accounts for the year ended 31st March 2024 continued
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 – enables the decarbonisation of chemical and fuel value chains.
Hydrogen Technologies – provides catalyst coated membranes that are a critical component
for fuel cells and electrolysers.
Value Businesses – a portfolio of businesses managed to drive shareholder value from activities
considered to be non-core to JM. This includes Battery Systems (sold on 30th April 2024),
Battery Materials Poland (sold on 31st December 2023), Medical Device Components (sale
agreed on 20th March 2024) and Diagnostic Services (sold on 29th September 2023 - refer to
note 27 for further information on the disposal of Diagnostic Services). Battery Materials UK
and Battery Materials Canada were sold on 26th May 2022 and 1st November 2022 respectively
and are included within the prior period balances.
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 29 to 33. The
performance of the group’s operating businesses is assessed on sales and underlying operating
profit (see note 34). Sales between segments are made at market prices, taking into account
the volumes involved.
Year ended 31st March 2024
Clean Air
PGM Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Eliminations
Total
£m
£m
£m
£m
£m
£m
£m
£m
Revenue from external customers
5,219
6,490
634
85
415
–
–
12,843
Inter-segment revenue
8
2,432
19
1
–
–
(2,460)
–
Revenue
5,227
8,922
653
86
415
–
(2,460)
12,843
External sales
2,573
374
560
71
326
–
–
3,904
Inter-segment sales
8
88
18
–
–
–
(114)
–
Sales1
2,581
462
578
71
326
–
(114)
3,904
Underlying operating profit / (loss)1
274
164
75
(50)
29
(82)
–
410
Year ended 31st March 2023
Clean Air
PGM Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Eliminations
Total
£m
£m
£m
£m
£m
£m
£m
£m
Revenue from external customers
6,273
7,360
673
62
565
–
–
14,933
Inter-segment revenue
–
3,227
14
–
–
–
(3,241)
–
Revenue
6,273
10,587
687
62
565
–
(3,241)
14,933
External sales
2,644
485
547
55
470
–
–
4,201
Inter-segment sales
–
85
13
–
–
–
(98)
–
Sales1
2,644
570
560
55
470
–
(98)
4,201
Underlying operating profit / (loss)1
230
257
51
(45)
40
(68)
–
465
1. Sales and underlying operating profit are non-GAAP measures (see note 34). Sales excludes the sale of precious metals. Underlying operating profit excludes profit or loss on disposal of businesses, gain or loss on significant legal proceedings, together with associated legal costs, amortisation of
acquired intangibles and major impairment and restructuring charges.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
2
Segmental information (continued)
Reconciliation from underlying operating profit to operating profit by business
Year ended 31st March 2024
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Total
£m
£m
£m
£m
£m
£m
£m
Underlying operating profit / (loss)1
274
164
75
(50)
29
(82)
410
Loss on disposal of businesses (note 27)
(4)
–
–
–
(5)
–
(9)
Amortisation of acquired intangibles
(1)
–
(3)
–
–
–
(4)
Major impairment and restructuring charges (note 6)
(32)
(15)
(2)
(10)
(53)
(36)
(148)
Operating profit / (loss)
237
149
70
(60)
(29)
(118)
249
Year ended 31st March 2023
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Total
£m
£m
£m
£m
£m
£m
£m
Underlying operating profit / (loss)1
230
257
51
(45)
40
(68)
465
Profit on disposal of businesses
–
–
–
–
12
–
12
Amortisation of acquired intangibles
(1)
–
(4)
–
–
–
(5)
Loss on significant legal proceedings
(25)
–
–
–
–
–
(25)
Major impairment and restructuring charges
(13)
–
(4)
(1)
(14)
(9)
(41)
Operating profit / (loss)
191
257
43
(46)
38
(77)
406
1. Underlying operating profit is a non-GAAP measures (see note 34). Underlying operating profit excludes profit or loss on disposal of businesses, gain or loss on significant legal proceedings, together with associated legal costs, amortisation of acquired intangibles and major impairment and
restructuring charges.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
2
Segmental information (continued)
Other segmental information
Year ended 31st March 2024
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Total
£m
£m
£m
£m
£m
£m
£m
Segmental net assets
1,351
38
718
271
178
449
3,005
Net debt (note 34)
(946)
Post-employment benefit net assets and liabilities
114
Deferred tax net assets
126
Provisions and non-current other payables
(82)
Investments in associates (note 15)
71
Net assets held for sale (note 26)
92
Net assets
2,380
Property, plant and equipment
52
116
50
87
9
11
325
Intangible assets
3
4
12
9
–
37
65
Capital expenditure
55
120
62
96
9
48
390
Depreciation
70
27
23
3
8
13
144
Amortisation
4
3
5
–
–
36
48
Impairment losses and reversals (notes 5 and 6)
(2)
(12)
–
(6)
(50)
–
(70)
Total
72
18
28
(3)
(42)
49
122
Year ended 31st March 2023
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Corporate
Total
£m
£m
£m
£m
£m
£m
£m
Segmental net assets
1,784
(2)
680
114
175
515
3,266
Net debt
(1,023)
Post-employment benefit net assets and liabilities
162
Deferred tax net assets
102
Provisions and non-current other payables
(93)
Investments in associates (note 15)
75
Net assets held for sale (note 26)
50
Net assets
2,539
Property, plant and equipment
70
73
28
44
13
14
242
Intangible assets
11
6
14
2
–
28
61
Capital expenditure
81
79
42
46
13
42
303
Depreciation
74
24
26
4
10
13
151
Amortisation
2
2
5
–
–
27
36
Impairment losses notes 5 and 6
(4)
2
–
–
12
3
13
Total
72
28
31
4
22
43
200
Refer to note 3 for further required disclosures per IFRS 8, Operating Segments.
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Notes on the Accounts for the year ended 31st March 2024 continued
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 catalysts
Point in time
On despatch or delivery
Catalyst Technologies
Catalysts
Chemicals / oil and gas Speciality catalysts and additives
Point in time
On despatch or delivery
Licensing
Chemicals / oil and gas Process technology licences
Over time
Based on costs incurred or straight-line over
the licence term1
Engineering design services
Over time
Based on costs incurred
Hydrogen Technologies
Fuel Cells technologies
Various
Fuel cell catalyst coated membrane
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.
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Notes on the Accounts for the year ended 31st March 2024 continued
3
Revenue (continued)
Revenue judgements
Over time revenue
Over time revenue recognition predominantly occurs in Catalyst Technologies and PGM Services (Refining Services), see criteria for over time recognition as defined by the group’s accounting
policies in note 1.
Refining Services
The majority of the metal processed by the group and parent company’s refining businesses is owned by customers and, therefore, revenue is recognised over time on the basis that the group and
parent company are providing a service to enhance an asset controlled by the customer. The customer controls the metal throughout the refining process, the key indicators being legal ownership,
metal price risk and that the customer has the right to claim the equivalent metal at all stages of processing.
The performance obligation contained in all refining contracts is a service arrangement to refine customer metal to a specified quality and volume by a certain date. For a contract that has multiple
metals, the refinement of each metal is a separate performance obligation. We receive the contracted cash fee which is set with reference to market price at the start of the contract. Upon delivery
of the refined metal to the customer, the percentage of the refined metal that we may retain at settlement is considered to be a non-cash consideration and is recognised as part of revenue at
fair value.
Revenue from refining services is recognised using an output method by estimating the progress of the metal in the refining process. Once the customer metal is in the refining process it is
commingled with metal from other customers and it is not separately identifiable. Because we have a consistent volume of metal flowing through the refinery process, we estimate that all of the
metal in the refinery is on average 50% of the way through the process. We therefore recognise up to 50% of the revenue (cash service fee and non-cash consideration) for our services when metal
enters the refining process. Since refining each type of metal is a separate performance obligation, once we have returned the metal to the customer, we recognise the remaining 50% of revenue
for that particular metal while other metal may still be due to the same customer.
Where refinery stocktakes indicate that metal recoveries have been lower than anticipated and/or allowed for in process loss provisioning, refined metal gain revenue is reduced accordingly. Where
refinery stocktakes indicate that metal recoveries have been higher than anticipated, any incremental refining metal gain revenue is only recognised once it is highly probable that a reversal in the
amount of cumulative revenue recognised will not occur and the metal has been sold.
Revenue from external customers by principal products and services
Year ended 31st March 2024
Continuing operations
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Total
£m
£m
£m
£m
£m
£m
Metal
2,646
6,116
74
14
89
8,939
Heavy Duty Catalysts
953
–
–
–
–
953
Light Duty Catalysts
1,620
–
–
–
–
1,620
Catalysts
–
–
500
–
–
500
Licensing
–
–
60
–
–
60
Platinum Group Metal Services
–
374
–
–
–
374
Fuel Cells
–
–
–
71
–
71
Battery Systems
–
–
–
–
194
194
Diagnostic Services
–
–
–
–
37
37
Medical Device Components
–
–
–
–
91
91
Other
–
–
–
–
4
4
Revenue
5,219
6,490
634
85
415
12,843
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Notes on the Accounts for the year ended 31st March 2024 continued
3
Revenue (continued)
Revenue from external customers by principal products and services (continued)
Year ended 31st March 2023
Continuing operations
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Total
£m
£m
£m
£m
£m
£m
Metal
3,629
6,875
126
7
95
10,732
Heavy Duty Catalysts
970
–
–
–
–
970
Light Duty Catalysts
1,674
–
–
–
–
1,674
Catalyst Technologies
–
–
547
–
–
547
Platinum Group Metal Services
–
485
–
–
–
485
Fuel Cells
–
–
–
55
–
55
Battery Systems
–
–
–
–
284
284
Diagnostic Services
–
–
–
–
71
71
Medical Device Components
–
–
–
–
93
93
Other
–
–
–
–
22
22
Revenue
6,273
7,360
673
62
565
14,933
Revenue from external customers by point in time and over time performance obligations
Year ended 31st March 2024
Continuing operations
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Total
£m
£m
£m
£m
£m
£m
Revenue recognised at a point in time
5,219
6,307
518
85
387
12,516
Revenue recognised over time
–
183
116
–
28
327
Revenue
5,219
6,490
634
85
415
12,843
Year ended 31st March 2023
Continuing operations
Clean Air
PGM
Services
Catalyst
Technologies
Hydrogen
Technologies
Value Businesses
Total
£m
£m
£m
£m
£m
£m
Revenue recognised at a point in time
6,273
7,096
555
62
534
14,520
Revenue recognised over time
–
264
118
–
31
413
Revenue
6,273
7,360
673
62
565
14,933
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Notes on the Accounts for the year ended 31st March 2024 continued
3
Revenue (continued)
Geographical analysis of revenue from external customers and
non-current assets
The group’s country of domicile is the UK. Revenue from external customers based on the
customer’s location and non-current assets based on the location of the assets are
disclosed below.
Revenue from external
customers
Non-current assets
2024
2023
2024
2023
£m
£m
£m
£m
UK
3,697
3,630
1,094
852
Germany
1,280
1,256
227
239
Rest of Europe
1,424
1,875
306
326
USA
2,468
2,779
368
451
Rest of North America
686
612
27
34
China (including Hong Kong)
1,375
1,649
178
201
Rest of Asia
1,429
2,287
137
147
Rest of World
484
845
2
18
2,339
2,268
Investments at fair value through other
comprehensive income
40
49
Interest rate swaps
15
20
Deferred tax assets
128
121
Post-employment benefit net assets
153
203
Total
12,843
14,933
2,675
2,661
Major customers
The group received £1.4 billion of revenue from one external customer in the Clean Air business
which represents more than 10% of the group’s revenue from external customers during the
year ended 31st March 2024 (2023: £1.6 billion of revenue from one external customer in the
Clean Air business).
Unsatisfied performance obligations
At 31st March 2024, for contracts that had an original expected duration of more than one year,
the group had unsatisfied performance obligations of £550 million (2023 restated:
£961 million), representing contractually committed revenue to be recognised at a future date.
Of this amount, £321 million (2023 restated: £487 million) is expected to be recognised within
one year and £229 million (2023 restated: £474 million) is expected to be recognised after
one year.
During the year we identified a prior period error in the calculation of the unsatisfied
performance obligations. This solely impacts the disclosure note above and has resulted in a
decrease of £6 million in the unsatisfied performance obligations disclosure, split between an
increase of £93 million in the less than one year amount, offset by a decrease of £99 million in
the greater than one year amount.
Payment terms
The group and parent company supply goods and services on payment terms that are consistent
with those standard across the industry and it does not have any customer contracts with a
material financing component. Where revenue is recognised over time, payment terms are
generally consistent with the timeframe over which revenue is recognised.
4
Operating profit
Operating profit from continuing operations is arrived at after charging / (crediting):
2024
2023
£m
£m
Research and development expenditure charged to the income statement
204
213
Less: External funding received from governments
(26)
(19)
Net research and development expenditure charged to the
income statement
178
194
Inventories recognised as an expense
10,962
12,962
Write-down of inventories recognised as an expense
38
39
Reversal of write-down of inventories from increases in net realisable value
(36)
(19)
Net losses / (gains) on foreign exchange
3
(11)
Net (gains) / losses on foreign currency forwards at fair value through
profit or loss
–
19
Past service credit
–
(20)
Depreciation of:
Property, plant and equipment
134
137
Right-of-use assets
10
14
Depreciation
144
151
Amortisation of:
Internally generated intangible assets
1
1
Acquired intangibles
4
5
Other intangible assets
43
30
Amortisation
48
36
Gains and losses on significant legal proceedings
–
25
Loss / (profit) on disposal of businesses (note 27)
9
(12)
Impairment losses included in administrative expenses
–
3
Impairment losses (note 5)
–
3
Impairment losses and reversals included in major impairment and
restructuring charges
70
10
Restructuring charges included in major impairment and
restructuring charges
78
31
Major impairment and restructuring charges (note 6)
148
41
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Notes on the Accounts for the year ended 31st March 2024 continued
4
Operating profit (continued)
Gains and losses on significant legal proceedings
During the prior year, the group paid £25 million in respect of a settlement with a customer
on mutually acceptable terms with no admission of fault relating to failures in certain engine
systems for which the group supplied a particular coated substrate as a component for that
customer’s emissions after-treatment systems.
2024
2023
£m
£m
Fees payable to the company’s auditor and its associates for:
The audit of the company accounts
2.7
2.4
The audit of the accounts of the company’s subsidiaries
2.4
2.4
Total audit fees
5.1
4.8
Audit-related assurance services
0.4
0.4
Total non-audit fees
0.4
0.4
Total fees payable to the company’s auditor and its associates
5.5
5.2
No audit fees were paid to other auditors (2023: £nil).
Audit-related assurance services predominantly comprise of reviews of interim financial information.
5
Impairment losses
Impairment testing
The group and parent company test goodwill annually for impairment or more frequently if there
are indications that goodwill might be impaired. For the purpose of impairment testing, assets are
grouped at the lowest levels for which there are separately identifiable cash flows, known as cash-
generating units (CGUs). The recoverable amounts of the CGUs are determined using value in use
calculations which generally use extrapolated cash flow projections based on financial budgets and
plans covering a three-year period approved by management. The budgets and plans are based on
a number of assumptions, including market share, impact of carbon pricing, expected changes to
selling prices, product profitability, precious metal prices and other direct input costs, based on past
experience and management’s expectations of future changes in the markets using external
sources of information where appropriate. We also considered how climate change will affect the
future cash flows of the CGUs based on internal and external expert guidance.
In addition, we review the carrying amounts of the group’s and parent company’s non-
financial assets, including property, plant and equipment to determine whether any
indications of impairment exist. Where an indication exits, the recoverable amount of the
asset is estimated in order to determine the extent, if any, of the impairment loss. Where it is
not possible to estimate the recoverable amount of an individual asset, we estimate the
recoverable amount of the CGU to which the asset belongs.
Impairment loss
During the year ended 31st March 2024, following our review for impairment triggers,
no impairment loss (2023: £3 million related to property, plant and equipment) has been
recognised in the group income statement within underlying operating profit. However
impairment losses of £70 million (2023: £10 million) have been recognised by the group in
major impairments and restructuring (see note 6).
Hydrogen and fuel cell market
The carrying amount of the Hydrogen Technologies CGU comprising attributable net assets of
£196 million of which, £138 million relates to property, plant and equipment, was tested for
impairment at 31st March 2024 following an indicator that the recent slower pace of
hydrogen and fuel cell market development required a formal review for possible impairment.
No balance of goodwill is allocated to the Hydrogen Technologies CGU. The recoverability of
the carrying amount of the Hydrogen Technologies CGU has been assessed against its
estimated value in use at the reporting period end date applying the key assumptions detailed
below. Following this review, management has determined that no impairment is required.
In estimating value in use, the year-one cash flows include the additional investment expected
to be incurred before certain assets under construction that support the group’s expansion
plans for hydrogen technology are ready for use. Whilst the assumptions applied in the
Hydrogen Technologies assessment for years four to ten assume growth in the business based
on a compound annual growth rate kept broadly flat in the outer years, they also reflect a
reduced level of demand in hydrogen fuel cells and electrolyser market in the global energy
transition. This is a key area of management judgement which has been considered in the
context of the group's leading technological position in the market for fuel cells and
electrolysers but also recognising the industry challenges around scale up given the global
value chain is in an early stage of development. Our assessment over this period has therefore
considered: i) manufacturing capacity in existing plants where we expect to maintain volumes
consistent with near term forecasts to meet customer demand; and ii) the expected
manufacturing capacity following completion of certain assets under construction which is
aligned to meet the expected growth in customer demand over the four to ten year period as
the market develops, as is currently expected. After this period, growth is estimated to be in
line with a long-term growth rate of 3.0%. Should the market not develop as expected or
meet the overall market scale forecast by management, then this could give rise to an
impairment in future periods.
The estimated recoverable amount of the Hydrogen Technologies GCU exceeds its carrying
amount using a pre-tax discount rate of 13.0% which is derived from the group’s post-tax
weighted average cost of capital of 8.9% and adjusted for the risks applicable to the CGU.
If the discount rate and long-term growth rate key assumptions were changed to 17.4% and
(12.0)% respectively, this would, in isolation, lead to an impairment.
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Notes on the Accounts for the year ended 31st March 2024 continued
5
Impairment losses (continued)
Goodwill
Significant CGUs
Goodwill arising on the acquisition of businesses is allocated, at acquisition, to the CGUs that
are expected to benefit from that business combination. These CGUs represent the smallest
identifiable groups of assets that generate cash inflows that are largely independent of the
cash inflows from other groups of assets. Goodwill allocated to the significant CGUs is
as follows:
Group
2024
2023
£m
£m
Clean Air
• Heavy Duty Catalysts
84
87
Catalyst Technologies
264
268
Other1,2
5
9
Total carrying amount at 31st March (note 13)
353
364
1. Battery Systems Poland goodwill has been impaired by £6 million. Refer to note 26 for further information.
2. Other is comprised of CGUs with goodwill balances individually less than £5 million.
Key assumptions used in value in use
Unallocated corporate costs are split between CGUs based on their share of contribution.
The three-year cash flows are extrapolated using the long term average growth rates for the
relevant products, industries and countries in which the CGUs operate.
The expected economic life of the Heavy Duty Catalysts has been restricted to 2040 reflecting
internal climate change targets and impact of legislation changes. In the medium term,
growth will come from tightening emissions legislation driving demand for more
sophisticated catalyst systems. Beyond the medium term, the world will increasingly use
alternatives to the internal combustion engine which is reflected in the long-term decline rate
used in our modelling.
Pre-tax discount rates, derived from the group’s post-tax weighted average cost of capital of
8.9% (2023: 8.0%), adjusted for the risks applicable to each CGU are used to discount these
projected risk-adjusted cash flows.
The key assumptions are:
Discount rate
Long term growth rate
2024
2023
2024
2023
Clean Air
• Heavy Duty Catalysts
13.8%
12.1%
-11.5%
-10.5%
Catalyst Technologies
11.1%
10.8%
3.0%
3.0%
Different long term growth rates are used for the Clean Air - Heavy Duty Catalysts CGU
because of expected macroeconomic trends in the industry in which the business operates.
The growth rate for years four to ten is expected to be -3.9% (2023: 2.2%). After that, growth
is expected to decline further and, therefore, the long term growth rate above is used for year
eleven onwards.
Sensitivity analysis
The headroom for the significant CGUs, calculated as the difference between net assets
including allocated goodwill at 31st March 2024 and the value in use calculations, is shown
below. The table also shows, for each significant CGU, the headroom assuming a 1% decrease
in the growth rate assumption and a 1% increase in the discount rate assumption used in the
value in use calculations.
Headroom as
at 31st March
2024
Headroom
assuming a
1% decrease
in the growth
rate
Headroom
assuming a
1% increase
in the
discount rate
£m
£m
£m
Clean Air
• Heavy Duty Catalysts
356
333
319
Catalyst Technologies
253
136
129
A reduction in the Heavy Duty Catalysts CGU’s expected economic life by one year reduces
headroom by approximately £12 million from £356 million. We don't expect an impairment
in the near term in Clean Air despite the declining long-term assumptions.
A reduction in operating margin of 1% in the Catalyst Technologies CGU in each of the future
years, with no mitigating actions taken, reduces headroom by approximately £123 million
from £253 million.
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Notes on the Accounts for the year ended 31st March 2024 continued
6
Major impairment and restructuring charges
The below amounts are excluded from the underlying operating profit of the group for
continuing operations.
2024
2023
£m
£m
Property, plant and equipment
22
17
Right-of-use assets
1
–
Goodwill
6
4
Other intangible assets
–
3
Inventories
29
(8)
Trade and other receivables
12
(6)
Impairment losses and reversals
70
10
Restructuring charges
78
31
Total major impairment and restructuring charges
148
41
The £22 million impairment of Property, Plant and Equipment is inclusive of a £7 million
impairment reversal (see note 26).
Major impairment and restructuring charges are shown separately on the face of the income
statement and excluded from underlying operating profit (see note 34).
Major impairments – the group’s net impairment charge of £70 million includes amounts
incurred as we prepared for the disposal of our Value Businesses, of which £45 million relates
to an impairment in Battery Systems (see note 26). The residual balance is predominantly
comprised of £18 million recognised in relation to the recent slowdown in growth within the
hydrogen and fuel cell market which required us to adapt to the changing demand profiles of
our customers as they navigate this short-term uncertainty.
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 £48 million have been recognised of which £32 million relates to Johnson Matthey
Global Solutions and IT transformation, with the remainder other redundancy and
implementation costs. The remaining £30 million charge is predominantly related to Clean
Air’s ongoing plant consolidation initiatives, of which the majority is redundancy and
exit costs.
7
Employee information
Employee numbers
2024
2023
Clean Air
5,283
5,668
PGM Services
2,022
1,839
Catalyst Technologies
1,773
1,623
Hydrogen Technologies
616
418
Value Businesses
1,119
1,363
Corporate1
1,442
1,590
Monthly average number of employees
12,255
12,501
1. The Corporate segment includes global functions serving our business units including procurement, HR, IT and shared service centres.
2024
2023
£m
£m
Wages and salaries
596
604
Social security costs
64
70
Post-employment costs (note 24)
53
40
Share-based payments (note 30)
17
18
Termination benefits
16
1
Employee benefits expense from continuing operations
746
733
8
Investment income and financing costs
2024
2023
£m
£m
Net loss on remeasurement of foreign currency swaps held at fair
value through profit or loss
(14)
(20)
Interest payable on financial liabilities held at amortised cost and
interest on related swaps
(81)
(55)
Interest payable on other liabilities1
(49)
(33)
Interest payable on lease liabilities
(2)
(2)
Total finance costs
(146)
(110)
Net gain on remeasurement of foreign currency swaps held at fair
value through profit or loss
6
9
Interest receivable on financial assets held at amortised cost
13
11
Interest receivable on other assets1
38
21
Interest on post-employment benefits
7
8
Total investment income
64
49
Net finance costs from continuing operations
(82)
(61)
1. Interest payable and receivable on other liabilities and assets mainly comprises interest on precious metal leases and the amortisation of
contango and backwardation on precious metal inventory and sale and repurchase agreements.
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Other information
Notes on the Accounts for the year ended 31st March 2024 continued
9
Tax expense
2024
2023
£m
£m
Current tax
Corporation tax on profit for the year
89
95
Adjustment for prior years
(21)
1
Total current tax
68
96
Deferred tax
Origination and reversal of temporary differences
(34)
(37)
Adjustment for prior years
22
14
Total deferred tax (note 23)
(12)
(23)
Tax expense
56
73
The tax expense can be reconciled to profit before tax in the income statement as follows:
2024
2023
£m
£m
Profit before tax from continuing operations
164
344
Profit before tax from discontinued operations
–
5
Profit before tax
164
349
Tax expense at UK corporation tax rate of 25% (2023: 19%)
41
66
Effects of:
Overseas tax rates
(17)
5
Expenses not deductible for tax purposes
34
5
Losses and other temporary differences not recognised
11
8
Recognition or utilisation of previously unrecognised tax assets
–
(7)
Adjustment for prior years
(1)
15
Patent box / Innovation box
(10)
(7)
Other tax incentives
(2)
(3)
Tax rate adjustments
–
(1)
Disposal of businesses
(2)
(13)
Irrecoverable withholding tax
–
10
Other
2
(5)
Tax expense
56
73
Tax expense from continuing operations
56
80
Tax credit from discontinued operations
–
(7)
Tax expense
56
73
Adjustments for prior years includes current and deferred tax adjustments in respect of India,
Malaysia, Poland and the UK, as well as adjustments in respect of provisions for uncertain
tax positions.
Other tax incentives includes research and development tax incentives in the UK, US
and China.
Other movements mainly includes movements in respect of provisions for uncertain tax
positions and non-taxable income.
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation has
been enacted in the UK, as well as several other territories where the Group operates, and will
come into effect in respect of the Group's next financial period (FY25).
Since the Pillar Two legislation was not effective at the reporting date, the Group has no
related current tax exposure. The Group applies the exception to recognising and disclosing
information about deferred tax assets and liabilities related to Pillar Two income taxes,
as provided in the amendments to IAS 12 issued in May 2023.
Under the legislation, the Group will be 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 based on the FY24 financial information and conclude that the Group meets the
exemptions in the Transitional Country by Country Reporting (‘CbCR’) safe harbours in
all tax jurisdictions in which it operates, except for Bermuda, Hong Kong, Macedonia,
Mexico and Malaysia.
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. Should the Transitional CbCR safe harbours not
apply to any of the jurisdictions in which the Group operates in FY25, the Group’s future ETR
will be impacted with an additional current tax exposure. In the event the jurisdictions named
above led to a Pillar 2 additional tax charge in FY25, the Group estimates that this could
increase the Group’s Underlying ETR by c.1-2%.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
10 Earnings per ordinary share
Earnings per ordinary share have been calculated by dividing profit for the year by the
weighted average number of shares in issue during the year.
2024
2023
pence
pence
Earnings per share
Basic
58.6
150.9
Diluted
58.3
150.2
Basic from continuing operations
58.6
144.2
Diluted from continuing operations
58.3
143.6
2024
2023
Earnings (£ million)
Basic and diluted earnings
108
276
Weighted average number of shares in issue
Basic
183,392,681
183,012,301
Dilution for long-term incentive plans
859,636
851,432
Diluted
184,252,317
183,863,733
Presented earnings per ordinary share have been calculated using unrounded numbers.
11 Property, plant and equipment
Group
Land and
buildings
£m
Leasehold
improvements
£m
Plant and
machinery
£m
Assets in
the course of
construction
£m
Total
£m
Cost
At 1st April 2022
570
27
2,055
304
2,956
Additions
1
–
24
217
242
Transferred to assets classified as held
for sale
–
(1)
(41)
–
(42)
Transfers from assets in the course
of construction
22
2
128
(152)
–
Disposals
(1)
(1)
(33)
(13)
(48)
Disposal of businesses
–
–
(10)
–
(10)
Exchange adjustments
7
1
28
4
40
At 31st March 2023
599
28
2,151
360
3,138
Additions
2
–
39
284
325
Transferred to assets classified as held
for sale (note 26)
–
(4)
(66)
(4)
(74)
Transfers from assets in the course
of construction
12
1
102
(115)
–
Disposals
(1)
(2)
(27)
(5)
(35)
Disposal of businesses (note 27)
(1)
–
(4)
–
(5)
Exchange adjustments
(20)
–
(52)
(5)
(77)
At 31st March 2024
591
23
2,143
515
3,272
Land and
buildings
£m
Leasehold
improvements
£m
Plant and
machinery
£m
Assets in
the course of
construction
£m
Total
£m
Accumulated depreciation and impairment
At 1st April 2022
265
14
1,424
15
1,718
Charge for the year
17
1
119
–
137
Impairment losses (notes 5, 6 and 26)
–
–
8
4
12
Transferred to assets classified as held
for sale
–
(1)
(31)
–
(32)
Disposals
(1)
–
(33)
(11)
(45)
Disposal of businesses
–
–
(8)
–
(8)
Exchange adjustments
3
1
20
–
24
At 31st March 2023
284
15
1,499
8
1,806
Charge for the year
16
1
114
3
134
Impairment losses (notes 5, 6 and 26)
–
–
20
9
29
Transferred to assets classified as held
for sale (note 26)
–
(2)
(47)
(3)
(52)
Disposals
(1)
(2)
(25)
(5)
(33)
Disposal of businesses (note 27)
(1)
–
(4)
–
(5)
Exchange adjustments
(8)
–
(35)
–
(43)
At 31st March 2024
290
12
1,522
12
1,836
Carrying amount at 31st March 2024
301
11
621
503
1,436
Carrying amount at 31st March 2023
315
13
652
352
1,332
Carrying amount at 1st April 2022
305
13
631
289
1,238
Finance costs capitalised were £5 million (2023: £2 million) and the capitalisation rate used
to determine the amount of finance costs eligible for capitalisation was 3.3% (2023: 4.0%).
During the year, the group recognised impairments of £29 million. This impairment charge is
included in non-underlying expenses.
The assets transferred to held for sale relates to Medical Device Components (see note 26).
Battery Materials Poland is not included as these were transferred to held for sale in the prior
year. The assets presented within disposal of businesses relate to Johnson Matthey Catalyst LLC
(see note 27). Diagnostic Services is not included as these were transferred to held for sale in
the prior year.
During the prior year, the group recognised impairments of £12 million. The impairment
charge is comprised of £3 million included in administrative expenses and a net £9 million
charge included in non-underlying expenses.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
12 Leases
Leasing activities
The group leases some of their property, plant and equipment which are used by the group
company in their operations.
Right-of-use assets
Group
Land and
buildings
Plant and
machinery
Total
£m
£m
£m
At 31st March 2023
44
5
49
New leases, remeasurements and modifications
10
1
11
Disposals
(3)
–
(3)
Depreciation charge for the year
(8)
(2)
(10)
Impairment losses (note 6, 27)
(1)
–
(1)
Transferred to held for sale (note 26)
(4)
–
(4)
Exchange adjustments
(2)
–
(2)
At 31st March 2024
36
4
40
Lease liabilities
Group
2024
2023
£m
£m
Current
8
9
Non-current
24
31
Total liabilities
32
40
Group
2024
2023
£m
£m
Interest expense
2
2
The weighted average incremental borrowing rate applied to the group’s lease liabilities was
5.2% (2023: 4.4%).
A maturity analysis of lease liabilities is disclosed in note 28.
Other
Group
2024
2023
£m
£m
Total cash outflow for leases
13
16
The expense relating to low-value and short-term leases is immaterial.
13 Goodwill
Group
£m
Cost
At 1st April 2022
573
Disposal of business
(148)
Exchange adjustments
6
At 31st March 2023
431
Transferred to assets classified as held for sale (note 26)
(1)
Exchange adjustments
(4)
At 31st March 2024
426
Accumulated impairment
At 1st April 2022
207
Disposal of businesses
(144)
Impairment losses
4
At 31st March 2023
67
Impairment losses (notes 5, 6, 26)
6
At 31st March 2024
73
Carrying amount at 31st March 2024
353
Carrying amount at 31st March 2023
364
Carrying amount at 1st April 2022
366
During the year, the goodwill related to Battery Systems was fully impaired by £6 million to
reflect the fair value less costs to sell of the business upon reclassification to assets as held for
sale. Goodwill of £1 million attributed to the Medical Device Components sale has been
transferred to assets classified as held for sale.
During the prior year, the Diagnostic Services goodwill was fully impaired by £4 million to
reflect the fair value less costs to sell of the business upon reclassification to assets held for
sale. The Health business was disposed during the prior year.
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Financial statements
Other information
12
28
Notes on the Accounts for the year ended 31st March 2024 continued
14 Other intangible assets
Group
Customer
contracts and
relationships
Computer
software
Patents,
Trademarks
and
licences
Acquired
research
and
technology
Development
expenditure
Total
£m
£m
£m
£m
£m
£m
Cost
At 1st April 2022
132
419
47
37
135
770
Additions
–
59
2
–
–
61
Transferred to assets classified
as held for sale
(1)
(1)
–
(1)
–
(3)
Disposals
(2)
(2)
(7)
–
–
(11)
Disposal of businesses
(13)
–
–
–
–
(13)
Exchange adjustments
–
–
1
1
–
2
At 31st March 2023
116
475
43
37
135
806
Additions
–
64
1
–
–
65
Transferred to assets classified
as held for sale (note 26)
(10)
(1)
–
(6)
–
(17)
Disposals
–
(1)
(11)
–
–
(12)
Exchange adjustments
(3)
(1)
(1)
(1)
(1)
(7)
At 31st March 2024
103
536
32
30
134
835
Accumulated amortisation and impairment
At 1st April 2022
112
178
44
36
133
503
Charge for the year
4
31
–
1
–
36
Impairment losses
(notes 5, 6 and 26)
–
3
–
–
–
3
Transferred to assets classified
as held for sale
(1)
(1)
–
(1)
–
(3)
Disposals
(2)
(2)
(6)
–
–
(10)
Disposal of businesses
(13)
–
–
–
–
(13)
Exchange adjustments
1
–
1
1
–
3
At 31st March 2023
101
209
39
37
133
519
Charge for the year
2
45
–
–
1
48
Transferred to assets classified
as held for sale (note 26)
(10)
(1)
–
(6)
–
(17)
Disposals
–
–
(11)
–
–
(11)
Exchange adjustments
(2)
(1)
–
(1)
(1)
(5)
At 31st March 2024
91
252
28
30
133
534
Carrying amount at
31st March 2024
4
4
–
1
301
Carrying amount at
31st March 2023
15
266
4
–
2
287
Carrying amount at
1st April 2022
20
241
3
1
2
267
15 Investments in associates
2024
2023
£m
£m
Investments in associates
71
75
The movements in the year were:
Joint ventures
Associates
£m
£m
At 1st April 2022
2
–
Additions
–
75
Disposals
(2)
–
Group’s share of loss for the year
–
(1)
Exchange adjustments
–
1
At 31st March 2023
–
75
Group’s share of loss for the year
–
(3)
Exchange adjustments
–
(1)
At 31st March 2024
–
71
As part of the disposal of our Health business in the prior year, we received £75 million in the
form of shares which constitutes an approximately 30% equity interest in the re-branded
business, Veranova Parent Holdco L.P. (‘Veranova’). The group has determined that it has
significant influence and therefore has equity accounted this stake as an investment
in associate.
The group has disclosed a contingent liability relating to this associate, see note 32. Financial
information for Veranova for the year to 31st March 2024 is provided below, note Veranova’s
financial year end is 31st December. The information disclosed reflects the amounts presented
in the financial statements of Veranova and not the group’s share of those amounts.
2024
2023
£
£m
Summarised balance sheet
Non-current assets
93
159
Cash and cash equivalents
30
12
Other current assets
267
203
Current assets
297
215
Current liabilities
(155)
(71)
Non-current liabilities
(8)
(14)
Net assets
227
289
Summarised statement of comprehensive income
Revenue
255
189
Depreciation and amortisation
(17)
(19)
Income tax expense
1
(2)
Loss for the year and total comprehensive income
(9)
(4)
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
16 Inventories
Group
2024
2023
£m
£m
Raw materials and consumables
289
359
Work in progress
591
1,047
Finished goods and goods for resale
331
296
Inventories
1,211
1,702
Work in progress includes £315 million (31st March 2023: £754 million) of precious metal
which is committed to future sales to customers and valued at the price at which it is
contractually committed.
Write-downs of inventories amounted to £38 million (2023: £39 million). These were
recognised as an expense during the year ended 31st March 2024 and included in cost of sales
in the income statement.
17 Trade and other receivables
Group
2024
2023
£m
£m
Current
Trade receivables
964
1,304
Contract receivables
56
70
Prepayments
74
83
Value added tax and other sales tax receivable
121
142
Advance payments to customers
18
10
Amounts receivable under precious metal sale and repurchase
agreements1
417
222
Other receivables
68
51
Trade and other receivables
1,718
1,882
Non-current
Value added tax and other sales tax receivable
–
3
Advance payments to customers
44
53
Other receivables
60
57
Other receivables
104
113
1. The fair value of the precious metal contracted to be sold by the group under sale and repurchase agreements is £398 million (2023:
£215 million).
The group enters into factoring type arrangements in a small number of countries as part of
normal business due to longer than standard payment terms, we seek to collect payments in
the month following sale. As at 31st March 2024, the level of these arrangements was
approximately £165 million (31st March 2023: approximately £250 million).
Trade receivables and contract receivables are net of expected credit losses (see note 28).
18 Other financial assets and liabilities
Group
2024
2023
£m
£m
Non-current assets
Forward foreign exchange contracts designated as cash flow hedges
1
–
Forward precious metal price contracts designated as cash flow
hedges
33
48
Other financial assets
34
48
Current assets
Forward foreign exchange contracts designated as cash flow hedges
7
11
Forward precious metal price contracts designated as cash flow hedges
41
30
Forward foreign exchange contracts and currency swaps at fair value
through profit or loss
5
6
Other financial assets
53
47
Current liabilities
Forward foreign exchange contracts designated as cash flow hedges
(5)
(13)
Forward foreign exchange contracts and currency swaps at fair value
through profit or loss
(4)
(14)
Foreign exchange swaps designated as hedges of a net investment in
foreign operations
(2)
–
Other financial liabilities
(11)
(27)
19 Trade and other payables
Group
2024
2023
£m
£m
Current
Trade payables
655
831
Contract liabilities
177
181
Accruals
328
338
Amounts payable under precious metal sale and repurchase agreements1
844
838
Other payables
205
309
Trade and other payables
2,209
2,497
Non-current
Other payables
2
2
Trade and other payables
2
2
1. The fair value of the precious metal contracted to be repurchased by the group under sale and repurchase agreements is £797 million (2023:
£802 million).
The amount of the contract liabilities balance at 31st March 2023 which was recognised in
revenue during the year ended 31st March 2024 for the group company was £85 million
(2023: £70 million).
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
20 Borrowings and related swaps
Group
2024
2023
£m
£m
Non-current
Bank and other loans
3.57% £65 million Bonds 2024
–
(65)
3.565% $50 million KfW loan 2024
–
(40)
3.14% $130 million Bonds 2025
(103)
(105)
1.40% €77 million Bonds 2025
(64)
(61)
2.54% £45 million Bonds 2025
(45)
(45)
3.79% $130 million Bonds 2025
(103)
(105)
3.97% $120 million Bonds 2027
(95)
(97)
SONIA + 1.25% UKEF EDG £ Facility 2028
(248)
(248)
EURIBOR + 1.20% UKEF EDG € Facility 2028
(153)
(157)
3.39% $180 million Bonds 2028
(142)
(144)
1.81% €90 million Bonds 2028
(71)
(69)
2.77% £35 million Bonds 2029
(35)
(35)
3.00% $50 million Bonds 2029
(40)
(40)
4.10% $30 million Bonds 2030
(24)
(24)
2.92% €25 million Bonds 2030
(21)
(22)
1.90% €225 million Bonds 2032
(192)
(198)
Cross currency interest rate swaps designated as net investment hedges
(3)
(5)
Borrowings and related swaps
(1,339)
(1,460)
Current
2.99% $165 million Bonds 2023
–
(133)
2.44% €20 million Bonds 2023
–
(18)
3.57% £65 million Bonds 2024
(65)
–
3.565% $50 million KfW loan 2024
(40)
–
Other bank loans
(5)
(4)
Borrowings and related swaps
(110)
(155)
The 1.40% €77 million Bonds 2025 and the 1.81% €90 million Bonds 2028 have been swapped into floating rate euros. $100 million of the 3.14% $130 million Bonds 2025 have been swapped
into sterling at 2.83% and the 3.00% $50 million Bonds 2029 have been swapped into euros at 1.71%.
All borrowings bear interest at fixed rates with the exception of the UKEF EDG EUR and GBP facilities which bear interest at 6 Months EURIBOR plus 1.20% and SONIA plus 1.25% and bank
overdrafts, which bear interest at commercial floating rates.
The margins on the UKEF EDG financing are impacted by the group’s ability to meet targets around the reduction in its scope 1 and 2 emissions.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
21 Movements in assets and liabilities arising from financing activities
Non-cash movements
2023
Cash outflow
Transfers
Transfers to held
for sale
Foreign exchange
movements
Fair value and
other movements
2024
£m
£m
£m
£m
£m
£m
£m
Non-current assets
Interest rate swaps
20
–
–
–
–
(5)
15
Non-current liabilities
Borrowings and related swaps
(1,460)
–
105
–
16
–
(1,339)
Interest rate swaps
(15)
–
–
–
–
5
(10)
Lease liabilities
(31)
–
10
4
2
(9)
(24)
Current liabilities
Borrowings and related swaps
(155)
150
(105)
–
–
–
(110)
Lease liabilities
(9)
11
(10)
1
–
(1)
(8)
Net movements in assets and liabilities arising from financing activities
–
161
–
5
18
(10)
Dividends paid to equity shareholders
–
141
Interest paid
–
137
Net cash outflow from financing activities
–
439
Non-cash movements
2022
Cash (inflow) /
outflow
Transfers
Transfers to held
for sale
Foreign exchange
movements
Fair value and
other movements
2023
£m
£m
£m
£m
£m
£m
£m
Non-current assets
Interest rate swaps
12
(1)
–
–
–
9
20
Non-current liabilities
Borrowings and related swaps
(899)
(672)
149
–
(36)
(2)
(1,460)
Interest rate swaps
(2)
1
–
–
–
(14)
(15)
Lease liabilities
(40)
–
11
9
–
(11)
(31)
Current liabilities
Borrowings and related swaps
(265)
281
(149)
–
(21)
(1)
(155)
Lease liabilities
(10)
14
(11)
1
–
(3)
(9)
Net movements in assets and liabilities arising from financing activities
–
(377)
–
10
(57)
(22)
Dividends paid to equity shareholders
–
141
Interest paid
–
94
Purchase of treasury shares
–
45
Net cash inflow from financing activities
–
(97)
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
22 Provisions
Group
Restructuring
provisions
Warranty and
technology
provisions
Other
provisions
Total
£m
£m
£m
£m
At 1st April 2022
42
5
37
84
Charge for the year
25
10
8
43
Utilised
(28)
(1)
(1)
(30)
Released
(1)
(2)
(3)
(6)
At 31st March 2023
38
12
41
91
Charge for the year
36
2
7
45
Utilised
(34)
(2)
(1)
(37)
Released
(10)
(4)
(5)
(19)
At 31st March 2024
30
8
42
80
2024
2023
£m
£m
Current
63
63
Non-current
17
28
Total provisions
80
91
Restructuring
The restructuring provisions are part of the group’s efficiency initiatives (see note 6).
Warranty and technology
The warranty and technology provisions represent management’s best estimate of the group’s liability under warranties granted and remedial work required under technology licences based on
past experience in Clean Air, Catalyst Technologies and Value Businesses. Warranties generally cover a period of up to three years.
Other
The other provisions include environmental and legal provisions arising across the group. Amounts provided reflect management's best estimate of the expenditure required to settle the obligations
at the balance sheet date.
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Other information
Notes on the Accounts for the year ended 31st March 2024 continued
23 Deferred tax
Group
Property, plant
and equipment
Post-employment
benefits
Provisions
Inventories
Intangibles
Other
Total deferred tax
(assets) / liabilities
£m
£m
£m
£m
£m
£m
£m
At 1st April 2022
(37)
85
(44)
(49)
(2)
(33)
(80)
(Credit) / charge to the income statement
(7)
7
(15)
22
(8)
(22)
(23)
Disposal of businesses
5
–
4
1
(7)
7
10
Transferred to assets classified as held for sale
3
–
–
–
–
–
3
Tax on items taken directly to or transferred from equity
–
(37)
–
–
–
26
(11)
Exchange adjustments
(1)
–
–
–
–
–
(1)
At 31st March 2023
(37)
55
(55)
(26)
(17)
(22)
(102)
Charge / (credit) to the income statement (note 9)
–
3
(8)
(1)
25
(31)
(12)
Transferred to assets classified as held for sale (note 26)
–
–
–
–
–
4
4
Tax on items taken directly to or transferred from equity
–
(17)
–
–
–
–
(17)
Exchange adjustments
–
–
–
–
–
1
1
At 31st March 2024
(37)
41
(63)
(27)
8
(48)
(126)
2024
2023
£m
£m
Deferred tax assets
(128)
(121)
Deferred tax liabilities
2
19
Net amount
(126)
(102)
Deferred tax has not been recognised in respect of tax losses of £158 million (2023: £85 million) and other temporary differences of £8 million (2023: £23 million). Of the total tax losses,
£69 million (2023: £30 million) is expected to expire within 5 years, £36 million within 5 to 10 years (2023: £30 million), £nil after 10 years (2023: £nil) and £53 million carry no expiry
(2023: £25 million). These deferred tax assets have not been recognised on the basis that their future economic benefit is not probable.
In addition, the group’s overseas subsidiaries have net unremitted earnings of £1,149 million (2023: £933 million), resulting in temporary differences of £451 million (2023: £563 million).
No deferred tax has been provided in respect of these differences since the timing of the reversals can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
The recognition of deferred tax assets has been determined by the recoverability of those assets against future tax liabilities as determined by budgets and plans that are showing profits in relevant
businesses. The majority of the deferred tax assets and liabilities noted above are anticipated to be realised after more than 12 months.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits
Group
Background
Pension plans
The group operates a number of post-employment retirement and medical benefit plans
around the world. The retirement plans in the UK, US and other countries include both
defined contribution and defined benefit plans.
For defined contribution plans, retirement benefits are determined by the value of funds
arising from contributions paid in respect of each employee and the investment returns on
those contributions prior to retirement.
For defined benefit plans, which include final salary, career average and other types of plans
with committed pension payments, the retirement benefits are based on factors, such as the
employee’s pensionable salary and length of service. The majority of the group’s final salary
and career average defined benefit retirement plans are now closed to new entrants and
future accrual.
Regulatory framework and governance
The UK pension plan, the Johnson Matthey Employees’ Pension Scheme (JMEPS), is a
registered arrangement established under trust law and, as such, is subject to UK pension, tax
and trust legislation. It is managed by a corporate trustee, JMEPS Trustees Limited. The trustee
board includes representatives appointed by both the parent company and employees and
includes an independent chairman.
Although the parent company bears the financial cost of the plan, the trustee directors are
responsible for the overall management and governance of JMEPS, including compliance with
all applicable legislation and regulations. The trustee directors are required by law to act in the
interests of all relevant beneficiaries and: to set certain policies; to manage the day-to-day
administration of the benefits; and to set the plan’s investment strategy following consultation
with the parent company.
UK pensions are regulated by the Pensions Regulator whose statutory objectives and
regulatory powers are described on its website: www.thepensionsregulator.gov.uk
The JMEPS Trustee Board considers how climate risk is integrated within investment processes
when appointing, monitoring and withdrawing from investment managers using the
investment consultant’s Environmental, Social and Governance (ESG) ratings. The ESG ratings
include consideration of climate risk management policies. On a periodic basis, JMEPS will
review the ESG ratings assigned to the underlying investments based on the investment
consultant’s ESG research.
The US pension plans are qualified pension arrangements and are subject to the requirements
of the Employee Retirement Income Security Act, the Pension Protection Act 2006 and the
Department of Labor and Internal Revenue. The plans are managed by a pension committee
which acts as the fiduciary and, as such, is ultimately responsible for: the management of the
plans’ investments; compliance with all applicable legislation and regulations; and overseeing
the general management of the plans.
Other trustee or fiduciary arrangements that have similar responsibilities and obligations are
in place for the group’s other funded defined benefit pension plans outside of the UK and US.
Benefits
The UK defined benefit pension plan is segregated into two sections – a legacy section which
provides final salary and career average pension benefits and a hybrid arrangement which
provides three levels of membership offering cash balance and defined contribution sections.
The legacy section provides benefits to members in the form of a set level of pension payable
for life based on the member’s length of service and final pensionable salary at retirement or
averaged over their career with the company. The majority of the benefits attract inflation-
related increases both before and after retirement. The final salary element of the legacy
section was closed to future accrual of benefits from 1st April 2010 and the career average
element of the legacy section was closed to new entrants on 1st October 2012 and closed to
future accrual on 31st March 2024.
The cash balance section provides benefits to members at the point of retirement in the form
of a cash lump sum. The benefits attract inflation-related increases before retirement but,
following the payment of the retirement lump sum benefit, the plan has no obligation to pay
any further benefits to the member. All new employees join the defined contribution section
but have the opportunity to switch to the cash balance section of the plan within 60 days of
joining the Company.
The group operates two defined benefit pension plans in the US. The hourly pension plan is for
unionised employees and provides a fixed retirement benefit for life based upon years of
service. The salaried pension plan provides retirement benefits for life based on the member’s
length of service and final pensionable salary (averaged over the last five years). The salaried
plan benefits attract inflation-related increases before leaving but are non-increasing
thereafter. On retirement, members in either plan have the option to take the cash value of
their benefit instead of a lifetime annuity in which case the plan has no obligation to pay any
further benefits to the member.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
The US salaried pension plan was closed to new entrants on 1st September 2013, and the US
hourly pension plan was closed to new entrants on 1st January 2019. The hourly pension plan
remains open to future accrual for existing members but the salaried pension plan was closed
to future accrual from 1st July 2023 with plan participants transferring to a defined
contribution plan. All new US employees now join a defined contribution plan.
Other post-employment benefits
The group’s principal post-employment medical plans are in the UK and US, and are unfunded
arrangements that have been closed to new entrants for over ten years.
Maturity profile
The estimated weighted average durations of the defined benefit obligations of the main
plans as at 31st March 2024 are:
Weighted
average
duration
Years
Pensions:
UK
14
US
9
Post-retirement medical benefits:
UK
8
US
9
Funding
Introduction
The group’s principal defined benefit retirement plans are funded through separate
fiduciary or trustee administered funds that are independent of the sponsoring company.
The contributions paid to these arrangements are jointly agreed by the sponsoring company
and the relevant trustee or fiduciary body after each funding valuation and in consultation
with independent qualified actuaries. The plans’ assets, together with the agreed funding
contributions, should be sufficient to meet the plans’ future pension obligations.
UK valuations
UK legislation requires that pension plans are funded prudently and that, when undertaking a
funding valuation (every three years), assets are taken at their market value and liabilities are
determined based on a set of prudent assumptions set by the trustee following consultation
with their appointed actuary. The assumptions used for funding valuations may, therefore,
differ to the actuarial assumptions used for IAS 19, Employee Benefits, accounting purposes.
In January 2013, a special purpose vehicle (SPV), Johnson Matthey (Scotland) Limited
Partnership, was set up to provide deficit reduction contributions and greater security to the
trustee. The group invested £50 million in a bond portfolio which is beneficially held by the
SPV. The income generated by the SPV is used to make annual distributions of £3.5 million to
JMEPS for a period of up to 25 years. These annual distributions are only payable if the legacy
section of JMEPS continues to be in deficit, on a funding basis. This bond portfolio is held as a
non-current investment at fair value through other comprehensive income and the group’s
liability to pay the income to the plan is not a plan asset under IAS 19 although it is for
actuarial funding valuation purposes. The SPV is exempt from the requirement to prepare
audited annual accounts as it is included on a consolidated basis in these accounts.
A funding valuation of JMEPS was carried out as at 1st April 2021 and showed that there was a
deficit of £9 million in the legacy section of the plan, or a surplus of £24 million after taking
account of the future additional deficit contributions from the SPV. The valuation also showed
a deficit in the cash balance section of the plan of £1 million. The next triennial actuarial
valuation of JMEPS was carried out as at 1st April 2024 with the results known later in the year.
In accordance with the governing documentation of JMEPS, any future plan surplus would be
returned to the parent company by way of a refund assuming gradual settlement of the
liabilities over the lifetime of the plan. As such, there are no adjustments required in respect of
IFRIC 14, IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction.
US valuations
The last annual review of the US defined benefit pension plans was carried out by a qualified
actuary as at 1st July 2023 and showed that there was a surplus of $18 million on the projected
funding basis.
The assumptions used for funding valuations may differ to the actuarial assumptions used for
IAS 19 accounting purposes.
Other valuations
Similar funding valuations are undertaken on the group’s other defined benefit pension plans
outside of the UK and US in accordance with prevailing local legislation.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
Risk management
The group is exposed to a number of risks relating to its post-retirement pension plans, the
most significant of which are:
Risk
Mitigation
Market (investment) risk
Asset returns may not move in
line with the liabilities and may
be subject to volatility.
The group’s various plans have highly diversified
investment portfolios, investing in a wide range of assets
that provide reasonable assurance that no single security
or type of security could have a material adverse impact on
the plan.
A de-risking strategy is in place to reduce volatility in the
plans as a result of the mismatch between the assets and
liabilities. As the funding level of the plans improve and hit
pre-agreed triggers, plan investments are switched from
return-seeking assets to liability-matching assets.
The plans implement partial currency hedging on their
overseas assets to mitigate currency risk.
Interest (discount) rate risk
Liabilities are sensitive to
movements in bond yields
(interest rates), with lower
interest rates leading to an
increase in the valuation of
liabilities, albeit the impact on
the plan’s funding level will be
partially offset by an increase in
the value of its bond holdings.
The group’s defined benefit plans hold a high proportion of
their assets in government or corporate bonds, which
provide a natural hedge against falling interest rates.
In the UK, this interest rate hedge is extended by the use of
interest rate swaps, such that the plan is 100% hedged on
the plan’s funding basis. The swaps are held with several
banks to reduce counterparty risk.
Risk
Mitigation
Inflation risk
Liabilities are sensitive to
movements in inflation,
with higher inflation leading
to an increase in the valuation
of liabilities.
Where plan benefits provide inflation-related increases,
the plan holds some inflation-linked assets which
provide a natural hedge against higher than expected
inflation increases.
In the UK, this inflation hedge is extended by the use of
inflation swaps, such that the plan is 100% hedged on the
plan’s funding basis. The swaps are held with several banks
to reduce counterparty risk.
Longevity risk
The majority of the group’s
defined benefit plans provide
benefits for the life of the
member, so the liabilities are
sensitive to life expectancy, with
increases in life expectancy
leading to an increase in the
valuation of liabilities.
The group has closed most of its defined benefit pension
plans to new entrants, replacing them with either a cash
balance plan or defined contribution plans, both of which
are unaffected by life expectancy.
For the plans where a benefit for life continues to be
payable, prudent mortality assumptions are used that
appropriately allow for a future improvement in life
expectancy. These assumptions are reviewed on a
regular basis.
Liquidity risk
The pension plan may have
insufficient access to cash to
meet its short-term cash and
collateral obligations, such that
adverse scenarios could force the
sale of a less-liquid assets at
depressed prices.
The group’s defined benefit plans hold sufficient liquid
assets to meet its cashflow obligations and the collateral
requirements of its inflation and interest rate hedging. This
reduces the risk of being a forced seller of less-liquid assets.
Contributions
During the year, total contributions to the group’s post-employment defined benefit plans
were £38 million (2023: £40 million). It is estimated that the group will contribute
approximately £35 million to the post-employment defined benefit plans during the year
ending 31st March 2025.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
IAS 19 accounting
Principal actuarial assumptions
Qualified independent actuaries have updated the IAS 19 valuations of the group’s major defined benefit plans to 31st March 2024. The assumptions used are chosen from a range of possible
actuarial assumptions which, due to the long-term nature of the plans, may not necessarily be borne out in practice.
Financial assumptions
2024
2023
UK plan
US plans
Other plans
UK plan
US plans
Other plans
%
%
%
%
%
%
First year's rate of increase in salaries
3.50
–
2.43
4.40
4.50
3.97
Ultimate rate of increase in salaries
3.50
–
2.20
3.40
4.50
2.20
Rate of increase in pensions in payment
2.90
–
2.20
2.90
–
2.80
Discount rate
4.90
5.20
3.30
4.80
4.90
4.40
Inflation
–
2.20
2.20
–
2.50
3.90
• UK Retail Prices Index (RPI)
3.10
–
–
3.10
–
–
• UK Consumer Prices Index (CPI)
2.75
–
–
2.65
–
–
Current medical benefits cost trend rate
8.95
–
–
12.50
–
–
Ultimate medical benefits cost trend rate
5.40
–
–
5.40
–
–
Demographic assumptions
The mortality assumptions are based on country-specific mortality tables and, where appropriate, include an allowance for future improvements in life expectancy. In addition, where credible data
exists, actual plan experience is taken into account. The group’s most substantial pension liabilities are in the UK and the US where, using the mortality tables adopted, the expected lifetime of
average members currently at age 65 and average members at age 65 in 25 years’ time (i.e. members who are currently aged 40 years) is respectively:
Currently age 65
Age 65 in 25 years
UK plan
US plans
UK plan
US plans
Male
87
86
89
88
Female
89
89
91
90
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Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
Financial information
Plan assets
Movements in the fair value of plan assets during the year were:
UK pension -
legacy section
UK pension - cash
balance section
UK post-retirement
medical benefits
US pensions
US post-
retirement medical
benefits
Other
Total
£m
£m
£m
£m
£m
£m
£m
At 1st April 2022
2,160
156
–
310
–
8
2,634
Administrative expenses
(4)
–
–
(1)
–
–
(5)
Interest income
65
6
–
12
–
–
83
Return on plan assets excluding interest
(698)
(29)
–
(57)
–
(1)
(785)
Employee contributions
3
7
–
–
–
–
10
Company contributions
8
21
1
7
1
2
40
Benefits paid
(62)
(2)
(1)
(42)
(1)
(1)
(109)
Exchange adjustments
–
–
–
21
–
–
21
At 31st March 2023
1,472
159
–
250
–
8
1,889
Administrative expenses
(4)
–
–
(1)
–
–
(5)
Interest income
68
8
–
12
–
–
88
Return on plan assets excluding interest
(106)
(4)
–
(9)
–
(1)
(120)
Employee contributions
2
7
–
–
–
–
9
Company contributions
10
22
1
3
–
2
38
Benefits paid
(58)
(3)
(1)
(29)
–
(3)
(94)
Exchange adjustments
–
–
–
(5)
–
–
(5)
At 31st March 2024
1,384
189
–
221
–
6
1,800
The fair values of plan assets are analysed as follows:
2024
2023
UK pension -
legacy section
UK pension - cash
balance section
US pensions
Other
UK pension -
legacy section
UK pension - cash
balance section
US
pensions
Other
£m
£m
£m
£m
£m
£m
£m
£m
Quoted corporate bonds
494
61
80
–
382
56
191
–
Inflation and interest rate swaps
(8)
1
–
–
5
1
–
–
Quoted government bonds
490
45
65
–
563
41
42
1
Cash and cash equivalents
25
4
76
–
46
5
2
–
Quoted equity
1
62
–
–
212
56
15
1
Unquoted equity
49
–
–
–
51
–
–
–
Property
51
–
–
–
58
–
–
–
Insurance policies
–
–
–
6
–
–
–
6
Other
282
16
–
–
155
–
–
–
Plan assets
1,384
189
221
6
1,472
159
250
8
The UK plan’s unquoted equities are assets within a pooled infrastructure fund where the underlying assets are a broad range of private infrastructure investments, diversified by geographic region,
infrastructure sector, underlying asset type and development stage. These infrastructure assets are valued using widely recognised valuation techniques which use market data and discounted cash
flows. The same valuation approach is used to determine the value of the swaps and insurance policies.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
The UK plan’s property represents an investment in the Blackrock UK Property Fund, which is a unitised fund where the underlying assets are taken at market value. The valuation of the fund is
independently audited by KPMG on an annual basis.
The defined benefit pension plans do not invest directly in Johnson Matthey Plc shares and no property or other assets owned by the pension plans are used by the group.
Defined benefit obligation
Movements in the defined benefit obligation during the year were:
UK pension -
Legacy section
UK pension - cash
balance section
UK post-retirement
medical benefits
US pensions
US post-retirement
Medical benefits
Other
Total
£m
£m
£m
£m
£m
£m
£m
At 1st April 2022
(1,809)
(174)
(9)
(312)
(13)
(35)
(2,352)
Current service cost
(4)
(21)
–
(5)
–
(1)
(31)
Past service (cost) / credit
(2)
–
–
22
–
–
20
Interest cost
(56)
(5)
–
(12)
(1)
(1)
(75)
Employee contributions
(3)
(7)
–
–
–
–
(10)
Remeasurements due to changes in:
Financial assumptions
577
77
1
52
1
7
715
Demographic assumptions
2
–
–
–
–
–
2
Experience adjustments
(70)
(4)
–
(9)
2
–
(81)
Benefits paid
62
2
1
42
1
1
109
Disposal of business
–
–
–
–
–
3
3
Exchange adjustments
–
–
–
(22)
–
(3)
(25)
At 31st March 2023
(1,303)
(132)
(7)
(244)
(10)
(29)
(1,725)
Current service cost
(2)
(15)
–
(2)
–
(1)
(20)
Interest cost
(61)
(7)
–
(11)
(1)
(1)
(81)
Employee contributions
(2)
(7)
–
–
–
–
(9)
Remeasurements due to changes in:
Financial assumptions
15
4
–
8
1
–
28
Demographic assumptions
32
–
–
–
–
–
32
Experience adjustments
(6)
–
–
(2)
–
–
(8)
Benefits paid
58
3
1
29
–
3
94
Exchange adjustments
–
–
–
3
–
2
5
At 31st March 2024
(1,269)
(154)
(6)
(219)
(10)
(26)
(1,684)
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
Reimbursement rights
A government subsidy is receivable under the US Medicare legislation as the US post-retirement medical benefits plan is actuarially equivalent to the Medicare Prescription Drug Act and there is an
insurance policy taken out to reinsure the pension commitments of one of the small pension plans which does not meet the definition of a qualifying insurance policy. These are accounted for as
reimbursement rights and are shown on the balance sheet in post-employment benefit net assets.
There were no movements in the reimbursement rights during the year and the balance as at 31st March 2024 is £1 million.
Net post-employment benefit assets and liabilities
The net post-employment benefit assets and liabilities are:
UK pension -
legacy section
UK pension - cash
balance section
UK post-retirement
medical benefits
US pensions
US post-retirement
medical benefits
Other
Total
£m
£m
£m
£
£m
£m
£m
At 31st March 2024
Defined benefit obligation
(1,269)
(154)
(6)
(219)
(10)
(26)
(1,684)
Fair value of plan assets
1,384
189
–
221
–
6
1,800
Reimbursement rights
–
–
–
–
–
1
1
Net post-employment benefit assets and liabilities
115
35
(6)
2
(10)
(19)
117
At 31st March 2023
Defined benefit obligation
(1,303)
(132)
(7)
(244)
(10)
(29)
(1,725)
Fair value of plan assets
1,472
159
–
250
–
8
1,889
Reimbursement rights
–
–
–
–
–
1
1
Net post-employment benefit assets and liabilities
169
27
(7)
6
(10)
(20)
165
These are included in the balance sheet as follows:
2024
2023
Post-employment
benefit net assets
Employee benefit
net obligations
Total
Post-employment
benefit net assets
Employee benefit
net obligations
Total
£m
£m
£m
£m
£m
£m
UK pension - legacy section
115
–
115
169
–
169
UK pension - cash balance section
35
–
35
27
–
27
UK post-retirement medical benefits
–
(6)
(6)
–
(7)
(7)
US pensions
2
–
2
6
–
6
US post-retirement medical benefits
–
(10)
(10)
–
(10)
(10)
Other
1
(20)
(19)
1
(21)
(20)
Total post-employment plans
153
(36)
117
203
(38)
165
Other long-term employee benefits
(3)
(3)
Total long-term employee benefit obligations
(39)
(41)
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
24 Post-employment benefits (continued)
Financial information (continued)
Income statement
Amounts recognised in the income statement for long term employment benefits were:
2024
2023
£m
£m
Administrative expenses
(5)
(5)
Current service cost
(20)
(31)
Past service credit
–
20
Defined benefit post-employment costs charged
to operating profit
(25)
(16)
Defined contribution plans’ expense
(28)
(24)
Charge to operating profit
(53)
(40)
Interest on post-employment benefits charged to finance income
7
8
Charge to profit before tax
(46)
(32)
Statement of total comprehensive income
Amounts recognised in the statement of total comprehensive income for long term
employment benefits were:
2024
2023
£m
£m
Return on plan assets excluding interest
(120)
(785)
Remeasurements due to changes in:
Financial assumptions
28
715
Experience adjustments
(8)
(81)
Demographic assumptions
32
2
Remeasurements of post-employment benefit assets
and liabilities
(68)
(149)
Sensitivity analysis
The calculations of the defined benefit obligations are sensitive to the assumptions used.
The following summarises the estimated impact on the group’s main plans of a change in the
assumption while holding all other assumptions constant. This sensitivity analysis may not be
representative of the actual change as it is unlikely that the change in assumptions would
occur in isolation of one another.
Financial assumptions
A 0.1% change in the discount rate and inflation assumptions would (increase) / decrease the
UK and US pension plans’ defined benefit obligations at 31st March 2024 as follows:
0.1% increase
0.1% decrease
UK plan
US plans
UK plan
US plans
£m
£m
£m
£m
Effect of discount rate
20
2
(21)
(2)
Effect of inflation
(19)
–
19
–
Demographic assumptions
A one-year increase in life expectancy would increase the UK and US pension plans' defined
benefit obligation by £38 million and £4 million, respectively.
Other
In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees II Limited)
ruled that certain historical amendments for contracted out defined benefit schemes were
invalid if they were not accompanied by the correct actuarial confirmation. The judgment is
subject to appeal and possible further intervention. The Trustee has taken legal and actuarial
advice and the Trustee and Group are monitoring developments and will consider if there are
any implications for the UK Pension Fund, if the ruling is upheld.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
25 Share capital and other reserves
Share capital
Number
£m
Issued and fully paid ordinary shares
At 1st April 2022
195,861,765
218
Share buyback
(2,271,920)
(3)
At 31st March 2023 and 31st March 2024
193,589,845
215
Details of outstanding allocations under the company’s long term incentive plans and awards
under the deferred bonus which have yet to mature are disclosed in note 30.
The total number of treasury shares held was 9,649,874 (2023: 10,136,428) at a total cost of
£177 million (2023: £186 million).
The group and parent company’s employee share ownership trust (ESOT) also buys shares on
the open market and holds them in trust for employees participating in the group’s executive
long term incentive plans. At 31st March 2024, the ESOT held 511,623 shares (2023: 570,053
shares) which had not yet vested unconditionally to employees. Computershare Trustees (CI)
Limited, as trustee for the ESOT, has waived its dividend entitlement.
Dividends
2024
2023
£m
£m
2021/22 final ordinary dividend paid — 55.00 pence per share
–
100
2022/23 interim ordinary dividend paid — 22.00 pence per share
–
41
2022/23 final ordinary dividend paid — 55.00 pence per share
101
–
2023/24 interim ordinary dividend paid — 22.00 pence per share
40
–
Total dividends
141
141
A final dividend of 55.0 pence per ordinary share has been proposed by the board which will
be paid on 6th August 2024 to shareholders on the register at the close of business on 7th June
2024, subject to shareholders’ approval. The estimated amount to be paid is £101 million and
has not been recognised in these accounts.
The board is responsible for the group’s capital management including the approval of
dividends. This includes an assessment of both the level of reserves legally available for
distribution and consideration as to whether Johnson Matthey Plc would be solvent and
maintain sufficient liquidity following any proposed distribution. The board has assessed the
level of distributable profits as at 31st March 2024 and is satisfied that they are sufficient to
support the proposed dividend.
Other reserves
Capital redemption reserve, The capital redemption reserve represents the cumulative
nominal value of the company’s ordinary shares repurchased and subsequently cancelled.
Foreign currency translation reserve, The foreign currency translation reserve comprises all
foreign currency differences arising from the translation of the financial statements of
foreign operations.
Fair value through other comprehensive income reserve, The fair value through other
comprehensive income reserve represents the equity movements on financial assets held
within this category.
Hedging reserve, The hedging reserve comprises the effective portion of the cumulative net
change in the fair value of cash flow hedging instruments.
The Foreign currency translation reserve includes a £2 million loss (2023 restated: £6 million
loss) in relation to continuing hedge relationships and £104 million loss (2023 restated: £104
million loss) in relation to discontinued hedge relationships. All cash flow hedge reserves
balances relate to continuing hedge relationships.
During the year we identified a prior period error in the calculation of the continuing and
discontinued hedge relationships. This solely impacts the disclosure note above and has
resulted in a decrease of £6 million to the continuing hedge relationships disclosure and an
increase of £101 million in the discontinued hedging relationships disclosure.
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
25 Share capital and other reserves (continued)
Group
Hedging reserve
Capital
redemption
reserve
Foreign
currency
translation
reserve
Fair value through
other
comprehensive
income reserve
Forward
currency
contracts
Cross
currency
contracts
Forward
metal
contracts
Total
other
reserves
£m
£m
£m
£m
£m
£m
£m
At 1st April 2022
10
69
–
(5)
–
(24)
50
Cash flow hedges — (losses) / gains taken to equity
–
–
–
(10)
9
72
71
Cash flow hedges — transferred to revenue (income statement)
–
–
–
6
–
38
44
Cash flow hedges — transferred to cost of sales (income statement)
–
–
–
6
–
–
6
Cash flow hedges — transferred to foreign exchange (income statement)
–
–
–
–
(7)
–
(7)
Cash flow hedges — transferred to inventory (balance sheet)
–
–
–
–
–
–
–
Fair value losses on net investment hedges taken to equity
–
(10)
–
–
–
–
(10)
Fair value losses on investments at fair value through other comprehensive income
–
–
(12)
–
–
–
(12)
Exchange differences on translation of foreign operations taken to equity
–
1
–
–
–
–
1
Cancelled ordinary shares from share buyback
3
–
–
–
–
–
3
Tax on above items taken directly to or transferred from equity
–
–
–
(1)
(1)
(26)
(28)
At 31st March 2023
13
60
(12)
(4)
1
60
118
Cash flow hedges — gains / (losses) taken to equity
–
–
–
3
(4)
27
26
Cash flow hedges — transferred to revenue (income statement)
–
–
–
12
–
(31)
(19)
Cash flow hedges — transferred to cost of sales (income statement)
–
–
–
(10)
–
–
(10)
Cash flow hedges — transferred to foreign exchange (income statement)
–
–
–
–
2
–
2
Fair value gains on net investment hedges taken to equity
–
4
–
–
–
–
4
Fair value losses on investments at fair value through other comprehensive income
–
–
(7)
–
–
–
(7)
Exchange differences on translation of foreign operations taken to equity
–
(79)
–
–
–
–
(79)
Tax on above items taken directly to or transferred from equity
–
–
–
(5)
–
6
1
At 31st March 2024
13
(15)
(19)
(4)
(1)
62
36
Capital
The group's policy for managing capital is to maintain an efficient balance sheet to ensure that the group always has sufficient resources to be able to invest in future growth. During the year,
the group complied with all externally imposed capital requirements to which it is subject.
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
26 Assets and liabilities classified as held for sale
The group drives for efficiency and disciplined capital allocation to enhance returns, as such we continue to actively manage our portfolio. In line with this strategy and to focus on our core
businesses, during the period we completed the sale of our Diagnostics Services business. Refer to note 27 for further information on this disposal.
In March 2024, the group agreed to sell its Medical Device Components business expecting to realise net proceeds of £530 million which is in excess of the carrying amount of its assets.
The business is classified as a disposal group held for sale.
Additionally, in March, the group agreed to sell its Battery Systems business. As at 31st March 2024, the proceeds less costs to sell for the Battery Systems business are estimated to be c.£30 million
and so an impairment of £45 million has been recognised, see note 6. This impairment has been allocated against goodwill (£6 million), property, plant and equipment (£10 million), right-of-use
assets (£1 million) and inventories (£28 million). The business is classified as a disposal group held for sale.
During the year we recognised an impairment reversal of £7 million for the land and buildings of our previous Battery Materials business in Poland to reflect the latest fair value less costs to sell. The
original impairment on the land and buildings was in the year ended 31st March 2022.
The major classes of assets and liabilities comprising the businesses classified as held for sale as at 31st March are:
2024
Medical
Device
Components
Battery
Systems
Battery
Materials
Poland
Total
2023
£m
£m
£m
£m
£m
Non-current assets
Property, plant and equipment
22
–
25
47
27
Right-of-use-assets
4
–
–
4
9
Goodwill
1
–
–
1
–
Other intangible assets
–
–
–
–
1
Deferred tax assets
–
4
–
4
3
Current assets
Inventories
7
29
–
36
5
Trade and other receivables
13
22
–
35
30
Assets classified as held for sale
47
55
25
127
75
Current liabilities
Trade and other payables
(5)
(22)
–
(27)
(14)
Lease liabilities
(1)
–
–
(1)
(1)
Taxation liabilities
(1)
(2)
–
(3)
(1)
Non-current liabilities
Lease liabilities
(3)
(1)
–
(4)
(9)
Liabilities classified as held for sale
(10)
(25)
–
(35)
(25)
Net assets of disposal group
37
30
25
92
50
The prior year held for sale balances relate to Battery Materials and Diagnostic Services.
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
27 Disposals
Diagnostic Services
On 29th September 2023, the group completed the sale of its Diagnostic Services business
for an enterprise value of £55 million (£47 million on a debt free basis, after working
capital adjustments). The business was disclosed as a disposal group held for sale as at
31st March 2023.
Diagnostic
Services
£m
Proceeds
Cash consideration
47
Cash and cash equivalents disposed
(3)
Net cash consideration
44
Disposal costs paid
(2)
Net cash inflow
42
Assets and liabilities disposed
Non-current assets
Property, plant and equipment
10
Right-of-use assets
9
Current assets
Inventories
5
Trade and other receivables
32
Cash and cash equivalents
3
Deferred tax assets
3
Current liabilities
Trade and other payables
(9)
Non-current liabilities
Lease liabilities
(11)
Net assets disposed
42
Diagnostic
Services
£m
Cash consideration
47
Deferred consideration
4
Working capital adjustments at time of disposal
4
Less: carrying amount of net assets sold
(42)
Less: disposal costs
(8)
Cumulative currency translation loss recycled from other comprehensive income
(1)
Profit recognised in the income statement
4
Johnson Matthey Catalysts LLC
On 15th June 2023, the group completed the sale of Johnson Matthey Catalysts LLC, its
operations in Russia, to Catalysts and Technologies LLC for a cash consideration of £11 million.
All assets excluding cash had previously been impaired. The sale resulted in a net loss on sale
of £4 million due to a cumulative currency translation loss being recycled from other
comprehensive income.
Battery Materials Germany
On 31st December 2023, the group completed the sale of the trade and assets (excluding
cash) of its Battery Materials Germany business for a total consideration of £1 million.
There was £nil profit on sale.
Disposal related costs
Included within loss on disposal of businesses is £9 million of disposal related costs. This is
comprised of £7 million for the disposals of Medical Device Components (£5 million) and
Battery Systems (£2 million) which were signed during the year and £2 million in relation to
disposals in prior years.
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management
The group’s activities expose it to a variety of financial risks, including credit risk, market risk
and liquidity risk. Market risk includes foreign currency risk, interest rate risk and price risk.
The financial risks are managed by the group, under policies approved by the board. The
financial risk management is carried out by a centralised group treasury function. Group
treasury’s role is to optimise the group’s liquidity, mitigate financial risks and provide treasury
services to the group’s operating businesses. The group uses derivative financial instruments,
including forward currency contracts, interest rate swaps and currency swaps, to manage the
financial risks associated with its underlying business activities and the financing of those
activities. Some derivative financial instruments used to manage financial risk are not
designated as hedges and, therefore, are classified as at fair value through profit or loss.
The group does not undertake any speculative trading activity in financial instruments.
Credit risk
Within certain businesses, the group derives a significant proportion of its revenue from sales
to major customers. Sales to individual customers are large if the value of precious metals is
included in the price. The failure of any such company to honour its debts could materially
impact the group’s results. The group derives significant benefit from trading with its
customers and manages the risk at many levels. Each business has a credit committee that
regularly monitors its exposure. The Audit Committee receives a report every six months that
details all significant credit limits, amounts due and overdue within the group, and the
relevant actions being taken. At 31st March 2024, trade receivables for the group amounted to
£964 million (2023: £1,304 million), excluding £31 million classified as held for sale, of
which £792 million (2023: £1,077 million) are in Clean Air which mainly supplies car and
truck manufacturers and component suppliers in the automotive industry. Although Clean Air
has a wide range of customers, the concentrated nature of this industry means that amounts
owed by individual customers can be large and, in the event that one of those customers
experiences financial difficulty, there could be a material adverse impact on the group.
Other parts of the group tend to sell to a larger number of customers and amounts owed tend
to be lower. At 31st March 2024, no single outstanding balance exceeded 2% (2023: 2%)
of revenue.
The credit profiles of the group’s customers are obtained from credit rating agencies where
possible and are closely monitored. The scope of these reviews includes amounts overdue and
credit limits. The group’s exposure to credit risk is influenced mainly by the individual
characteristics of each customer. However, risk associated with the industry and country in
which customers operate may also influence the credit risk. The credit quality of customers is
assessed against the appropriate credit ratings, financial strength, trading experience and
market position to define credit limits. Controls and risk mitigants include daily monitoring of
exposures, investing in counterparties with investment grade ratings, restricting the amount
that can be invested with one counterparty and credit-rating mitigation techniques. Generally,
payments are made promptly in the automotive industry and in the other markets in which
the group operates.
A provision matrix is used to calculate lifetime expected credit losses using historical loss rates
based on days past due and a broad range of forward-looking information, including country
and market growth forecasts. This year, expected credit losses on unimpaired trade and
contract receivables reduced to £12 million (2023: £16 million) driven by a lower trade
receivables balance.
Trade receivables are specifically impaired when the amount is in dispute, customers are in
financial difficulty or for other reasons which imply there is doubt over the recoverability of the
debt. They are written off when there is no reasonable expectation of recovery, based on an
estimate of the financial position of the counterparty.
Movements in the allowance for credit losses on trade and contract receivables are as follows:
Group
2024
2023
£m
£m
At beginning of year
30
37
Charge for year
11
5
Utilised
(2)
(1)
Released
(10)
(11)
At end of year
29
30
The group’s maximum exposure to default on trade and contract receivables is £1,079 million
(2023: £1,429 million), of which £31 million is classified as held for sale.
The group’s financial assets included in other receivables are all current and not impaired.
The credit risk on cash and deposits and derivative financial instruments is limited because the
counterparties with significant balances are banks with strong credit ratings. The exposure to
individual banks is monitored frequently against internally-defined limits, together with each
bank’s credit rating and credit default swap prices. At 31st March 2024, the maximum net
exposure with a single bank for cash and deposits was £81 million (2023: £37 million), whilst
the largest mark to market exposure for derivative financial instruments to a single bank was
£8 million (2023: £11 million). The group also uses money market funds to invest surplus
cash thereby further diversifying credit risk and, at 31st March 2024, the group’s exposure to
these funds was £334 million (2023: £521 million). The amounts on deposit at the year end
represent the group’s maximum exposure to credit risk on cash and deposits. Expected credit
losses on cash and cash equivalents are immaterial.
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management (continued)
Foreign currency risk
The group operates globally with a significant amount of its profit earned outside the UK. The
main impact of movements in exchange rates on the group’s results arises on translation of
overseas subsidiaries’ profits into sterling. The largest exposure is to the euro and a 5% (5.8
cent (2023: 5.8 cent)) movement in the average exchange rate for the euro against sterling
would have had a £11 million (2023: £11 million) impact on underlying operating profit. The
group is also exposed to the US dollar and a 5% (6.3 cent (2023: 6.0 cent)) movement in the
average exchange rate for the US dollar against sterling would have had a £7 million (2023:
£10 million) impact on underlying operating profit. This exposure is part of the group’s
economic risk of operating globally which is essential to remain competitive in the markets in
which it operates.
The group matches foreign currency assets and liabilities (where these differ to the functional
currency of the relevant subsidiary) to avoid the risk of a material impact on the income
statement resulting from movements in exchange rates. The group does, however, have
foreign exchange exposure on movements through equity related to cash flow and net
investment hedges. A 10% depreciation or appreciation in the US dollar and euro exchange
rates against sterling would increase / (decrease) other reserves as follows:
10% depreciation
10% appreciation
2024
2023
2024
2023
£m
£m
£m
£m
Cash flow hedges
16
5
(22)
(8)
Net investment hedges
(22)
5
21
(8)
For the net investment hedges, these movements would be fully offset in reserves by an
opposite movement on the retranslation of the net assets of the overseas subsidiaries.
Investments in foreign operations
To protect the group’s sterling balance sheet and reduce cash flow risk, the group has financed
most of its investment in the US and Europe by borrowing US dollars and euros, respectively.
Although much of this funding is obtained by directly borrowing the relevant currency, a part
is achieved through currency swaps which can be more efficient and reduce costs.
The group has designated US dollar and euro loans and a cross currency swap as hedges of net
investments in foreign operations as they hedge changes in the value of the subsidiaries' net
assets against movements in exchange rates. The change in the value of the net investment
hedges from movements in foreign currency exchange rates is recognised in equity and is
offset by an equal and opposite movement in the carrying value of the net assets of the
subsidiaries. All critical terms of the hedging instruments and hedged items matched during
the year and, therefore, hedge ineffectiveness was immaterial. The hedge ratio is 1:1.
Year ended 31st March 2024
US dollar
and euro
loans1
Cross
currency
swap2
FX
Forwards3
Total
£m
£m
£m
£m
Carrying value of hedging instruments at
31st March 2024
(160)
(3)
(2)
(165)
Change in carrying value of hedging instruments
recognised in equity during the year
4
2
(2)
4
Change in fair value of hedged items during the year
used to determine hedge effectiveness
(4)
(2)
2
(4)
Year ended 31st March 2023
US dollar
and euro
loans1
Cross
currency
swap2
Total
£m
£m
£m
Carrying value of hedging instruments at
31st March 2023
(164)
(5)
(169)
Change in carrying value of hedging instruments
recognised in equity during the year
(8)
(2)
(10)
Change in fair value of hedged items during the year
used to determine hedge effectiveness
8
2
10
1. The designated hedging instruments are $75 million of the 3.97% $120 million Bonds 2027, €17 million of the 2.44% €20 million Bonds
2023, 1.81% €90 million Bonds 2028, €10 million of the 2.92% €25 million Bonds 2030.
2. The designated hedging instrument are a cross currency swap expiring in 2025 whereby the group pays 2.609% fixed on €77 million and
receives 2.83% fixed on £65 million and a cross current swap expiring in 2029 whereby the group pays 1.712% fixed on €46 million and
receives 2.6723% fixed on £38 million.
3. $355 million FX forwards maturing June 2024.
Johnson Matthey Annual Report and Accounts 2024
189
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management (continued)
Forecast receipts and payments in foreign currencies
The group uses forward foreign exchange contracts to hedge foreign exchange exposures
arising on forecast receipts and payments in foreign currencies. These are designated and
accounted for as cash flow hedges. The group’s policy is to hedge between 50% and 80% of
forecast receipts and payments in foreign currencies over the next 12 months.
For hedges of forecast receipts and payments in foreign currencies, the critical terms of the
hedging instruments match exactly with the terms of the hedged items and, therefore, the
group performs a qualitative assessment of effectiveness. Ineffectiveness may arise if the
timing of the forecast transaction changes from what was originally estimated or if there are
changes in the credit risk of the group or the derivative counterparty. Hedge ineffectiveness
was immaterial during the year. The hedge ratio is 1:1.
Year ended 31st March 2024
Sterling / US
dollar
Sterling / euro
Other
Total
£m
£m
£m
£m
Carrying value of hedging instruments at
31st March 2024
• assets
4
1
3
8
• liabilities
(4)
–
(1)
(5)
Change in carrying value of hedging
instruments recognised in equity during
the year
7
(1)
(3)
3
Change in fair value of hedged items
during the year used to determine
hedge effectiveness
(7)
1
3
(3)
Notional amount1
477
76
44
–
Year ended 31st March 2023
Sterling / US
dollar
Sterling / euro
Other
Total
£m
£m
£m
£m
Carrying value of hedging instruments at
31st March 2023
• assets
4
1
6
11
• liabilities
(8)
(1)
(4)
(13)
Change in carrying value of hedging
instruments recognised in equity during
the year
(10)
1
–
(9)
Change in fair value of hedged items
during the year used to determine
hedge effectiveness
10
(1)
–
9
Notional amount1
348
42
16
–
1. The notional amount is the sterling equivalent of the net currency amount purchased or sold.
The weighted average exchange rates on sterling / US dollar and sterling / euro forward
foreign exchange contracts are 1.26 and 0.87 (2023: 1.26 and 0.88), respectively. The
hedged, highly probable forecast transactions denominated in foreign currencies are expected
to occur over the next 12 months.
Foreign currency borrowings
The group has designated two US dollar fixed interest rate to sterling fixed interest rate cross
currency swaps as cash flow hedges. This swap hedges the movement in the cash flows on
$100 million of the 3.14% $130 million bonds 2025 attributable to changes in the US dollar /
sterling exchange rate while the second swap hedges the movement in the cash flows on the
3.00% $50 million bonds 2029 attributable to changes in the US dollar / sterling exchange
rate. The currency swaps have similar critical terms as the hedged items, such as reference
rate, reset dates, payment dates, maturity and notional amounts. As all critical terms matched
during the year, hedge ineffectiveness was immaterial. The hedge ratio is 1:1. The interest
element of the swaps is recognised in the income statement each year.
Cross currency swap
2024
2023
£m
£m
Carrying value of hedging instruments at 31st March1
15
20
Change in carrying value of hedging instruments recognised in
equity during the year
(4)
9
Change in fair value of hedged items during the year used to
determine hedge effectiveness
4
(9)
1. The designated hedging instruments are two cross currency swaps, one expiring in 2025 whereby the group pays 2.83% fixed on £65 million
and receives 3.14% fixed on $100 million and one expiring in 2029 whereby the group pays 2.67% fixed on £38 million and receives 3.00%
fixed on $50 million.
Johnson Matthey Annual Report and Accounts 2024
190
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management (continued)
The group’s interest rate risk arises from fixed rate borrowings (fair value risk) and floating
rate borrowings (cash flow risk) as well as cash deposits and short term investments. Its policy
is to optimise interest cost and reduce volatility in reported earnings and equity. The group
manages its risk by reviewing the profile of debt regularly and by selectively using interest rate
swaps to maintain borrowings at competitive rates. At 31st March 2024, 63% (2023: 67%) of
the group’s borrowings and related swaps was at fixed rates with an average interest rate of
3.1% (2023: 3.1%). The remaining debt is floating rate. Based on the group’s borrowings and
related swaps at floating rates, after taking into account the effect of the swaps, a 1% change
in all interest rates during the current year would have a £5 million impact on the group’s
profit before tax (2023: £5 million).
The group has designated three (2023: three) fixed rate to floating interest rate swaps as fair
value hedges as they hedge the changes in fair value of bonds attributable to changes in
interest rates. All hedging instruments have maturities in line with the repayment dates of the
hedged bonds and the cash flows of the instruments are consistent. All critical terms of the
hedging instruments and hedged items matched during the year and, therefore, hedge
ineffectiveness was immaterial.
2024
£m
2023
£m
Carrying value of hedging instruments at 31st March1
(10)
(15)
Amortised cost
(143)
(147)
Fair value adjustment
8
17
Carrying value of hedged items at 31st March1
(135)
(130)
Change in carrying value of hedging instruments recognised in
profit or loss during the year
5
(14)
Change in fair value of hedged items during the year used to
determine hedge effectiveness
(9)
14
1. The hedged items in the current year are the 1.40% €77 million Bonds 2025 and 1.81% €90 million Bonds 2028, Interest rate swaps have
been contracted with aligned notional amounts and maturities to the bonds with the effect that the group pays an average floating rate of six-
month LIBOR plus 0.64% on the US dollar bonds and six-month EURIBOR plus 0.94% on the euro bonds.
Price risk
Fluctuations in precious metal prices have an impact on the group’s financial results. Our
policy for all manufacturing businesses is to limit this exposure by hedging against future price
changes where such hedging can be done at acceptable cost. The group enters into forward
precious metal price contracts for the receipt or delivery of precious metal. The group does not
take material price exposures on metal trading. A proportion of the group’s precious metal
inventories are unhedged due to the ongoing risk over security of supply.
Liquidity risk
The group’s funding strategy includes maintaining appropriate levels of working capital,
undrawn committed facilities and access to the capital markets. We regularly review liquidity
levels and sources of cash, and we maintain access to committed credit facilities and debt
capital markets. At 31st March 2024, the group had borrowings under committed bank
facilities of £nil (2023: £nil). The group also has a number of uncommitted facilities and
overdraft lines at its disposal.
The group has a £1 billion revolving credit facility with a maturity date of March 2027 which
includes Environmental, Social and Governance KPIs which provides the group with a nominal
interest saving or cost depending on our performance.
The group has three sustainability-linked private placements (€225 million £35 million and
$50 million). The notes have interest rates linked with Johnson Matthey’s Key Performance
Indicator for the reduction of its Scope 1 and 2 greenhouse gas emissions and are among the
first sustainability-linked financing in the market from a UK corporate issuer.
2024
£m
2023
£m
Expiring in more than one year
1,000
1,000
Undrawn committed bank facilities
1,000
1,000
Johnson Matthey Annual Report and Accounts 2024
191
Strategic report
Governance
Financial statements
Other information
12
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management (continued)
Liquidity risk (continued)
The maturity analyses for financial liabilities showing the remaining contractual undiscounted
cash flows, including future interest payments, at current year exchange rates and assuming
floating interest rates remain at the latest fixing rates, are:
At 31st March 2024
Within 1
year
1 to 2
years
2 to 5
years
After 5
years
Total
£m
£m
£m
£m
£m
Bank overdrafts
–
–
–
12
Bank and other loans – principal
105
317
719
312
1,453
Bank and other loans – interest payments
53
44
89
14
200
Lease liabilities - principal
8
6
9
9
32
Lease liabilities - principal - classified as
held for sale
1
1
3
–
5
Lease liabilities - interest payments
1
1
2
8
12
Financial liabilities in trade and other
payables
2,032
2
–
–
2,034
Financial liabilities in trade and other
payables classified as held for sale
27
–
–
–
27
Total non-derivative financial liabilities
2,239
371
822
343
3,775
Forward foreign exchange contracts –
payments
713
7
–
–
720
Forward foreign exchange contracts –
receipts
(705)
(7)
–
–
(712)
Currency swaps – payments
760
–
–
–
760
Currency swaps – receipts
(755)
–
–
–
(755)
Cross currency interest rate swaps -
payments
4
133
2
78
217
Cross currency interest rate swaps -
receipts
(6)
(147)
(4)
(78)
(235)
Interest rate swaps – payments
7
72
88
–
167
Interest rate swaps – receipts
(2)
(68)
(81)
–
(151)
Total derivative financial liabilities
16
(10)
5
–
11
At 31st March 2023
Within 1
year
1 to 2
years
2 to 5
years
After 5
years
Total
£m
£m
£m
£m
£m
Bank overdrafts
13
–
–
–
13
Bank and other loans – principal
155
104
809
542
1,610
Bank and other loans – interest payments
52
49
112
24
237
Lease liabilities - principal
9
9
12
10
40
Lease liabilities - principal - classified as
held for sale
1
1
2
6
10
Lease liabilities - interest payments
2
1
3
8
14
Financial liabilities in trade and other
payables
2,316
2
–
–
2,318
Financial liabilities in trade and other
payables classified as held for sale
14
–
–
–
14
Total non-derivative financial liabilities
2,562
166
938
590
4,256
Forward foreign exchange contracts –
payments
322
27
5
–
354
Forward foreign exchange contracts –
receipts
(310)
(25)
(5)
–
(340)
Currency swaps – payments
1,026
–
–
–
1,026
Currency swaps – receipts
(1,012)
–
–
–
(1,012)
Cross currency interest rate swaps -
payments
5
5
139
81
230
Cross currency interest rate swaps -
receipts
(7)
(7)
(154)
(81)
(249)
Interest rate swaps – payments
5
5
78
81
169
Interest rate swaps – receipts
(2)
(2)
(73)
(80)
(157)
Total derivative financial liabilities
27
3
(10)
1
21
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
28 Financial risk management (continued)
Offsetting financial assets and liabilities
The group offsets financial assets and liabilities when it currently has a legally enforceable
right to offset the recognised amounts and it intends to either settle on a net basis or realise
the asset and settle the liability simultaneously. The following financial assets and liabilities are
subject to offsetting or enforceable master netting arrangements:
At 31st March 2024
Gross
financial
assets /
(liabilities)
Amounts
set off
Net
amounts
in balance
sheet
Amounts
not set off1
Net
£m
£m
£m
£m
£m
Non-current interest rate swaps
15
–
15
(5)
10
Other financial assets - current
53
–
53
(7)
46
Other financial liabilities - current
(11)
–
(11)
7
(4)
Non-current borrowings and
related swaps
(1,339)
–
(1,339)
5
(1,334)
At 31st March 2023
Gross
financial
assets /
(liabilities)
Amounts
set off
Net amounts
in balance
sheet
Amounts
not set off1
Net
£m
£m
£m
£m
£m
Non-current interest rate swaps
20
–
20
(5)
15
Other financial assets - current
47
–
47
(11)
36
Other financial liabilities - current
(27)
–
(27)
11
(16)
Non-current borrowings and
related swaps
(1,460)
–
(1,460)
5
(1,455)
1. Agreements with derivative counterparties are based on an ISDA Master Agreement. Under these arrangements, whilst the group does not
have a legally enforceable right of set off, where certain credit events occur, such as default, the net position receivable from or payable to a
single counterparty in the same currency would be taken as owing and all the relevant arrangements terminated.
29 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 years.
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Financial statements
Other information
29 Fair values (continued)
30 Share-based payments
PSP
RSP
Notes on the Accounts for the year ended 31st March 2024 continued
2024
£m
2023
£m
Fair value
hierarchy
Level
Note
Financial instruments measured
at fair value
Non-current
Investments at fair value through other
comprehensive income1
40
49
1
–
Interest rate swaps - assets
15
20
2
–
Other financial assets2
34
48
2
18
Interest rate swaps - liabilities
(10)
(15)
2
–
Borrowings and related swaps
(3)
(5)
2
20
Current
Trade receivables3
178
329
2
17
Other receivables4
3
21
2
17
Cash and cash equivalents - money
market funds
334
521
2
–
Cash and cash equivalents - cash and deposits
12
–
2
–
Other financial assets2
53
47
2
18
Other financial liabilities2
(11)
(27)
2
18
Financial instruments not measured
at fair value
Non-current
Borrowings and related swaps
(1,336)
(1,455)
–
20
Lease liabilities
(24)
(31)
–
12
Trade and other receivables
60
57
–
17
Other payables
(2)
(2)
–
19
Current
Amounts receivable under precious metal
sale and repurchase agreements
398
222
–
17
Amounts payable under precious metal sale
and repurchase agreements
(797)
(838)
–
19
Cash and cash equivalents - cash and deposits
196
129
–
–
Cash and cash equivalents - bank overdrafts
(12)
(13)
–
–
Borrowings and related swaps
(110)
(155)
–
20
Lease liabilities
(8)
(9)
–
12
Trade and other receivables
926
1,075
–
17
Trade and other payables
(1,235)
(1,478)
–
19
1. Investments at fair value through other comprehensive income are quoted bonds purchased to fund pension deficits (£35 million) and
investments held at fair value through other comprehensive income (£5 million).
2. Includes forward foreign exchange contracts, forward precious metal price contracts and currency swaps.
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.
The fair value of financial instruments, excluding accrued interest, is approximately equal to
book value except for:
2024
2023
Carrying
amount
£m
Fair
value
£m
Carrying
amount
£m
Fair
value
£m
US Dollar Bonds 2023, 2025, 2027, 2028,
2029 and 2030
(507)
(474)
(648)
(618)
Euro Bonds 2023, 2025, 2028, 2030
and 2032
(348)
(320)
(368)
(340)
Sterling Bonds 2024, 2025 and 2029
(145)
(137)
(145)
(137)
KfW US Dollar Loan 2024
(40)
(38)
(40)
(39)
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 year end.
The total expense recognised during the year in respect of equity-settled share-based
payments was £17 million (2023: £18 million).
The group currently operates various share-based payment schemes; a Performance share
plan (PSP), a Restricted share plan (RSP), a Deferred bonus scheme and a Share Incentive
Plan (SIP). Further details of the directors’ remuneration under share-based payment plans
are given in the Remuneration Report.
From 2017, shares are awarded to certain of the group’s executive directors and senior
managers under the PSP based on a percentage of salary and are subject to performance
targets over a three-year period. The performance targets are based on underlying EPS
growth, and Total Shareholder Return, and strategic and sustainability targets.
Subject to the performance conditions being met the shares will vest after which the directors
will be required to hold any vested shares until the fifth anniversary of the award. The
Remuneration Committee is entitled to claw back the awards to the executive directors in
cases of misstatement or misconduct.
From 2017, shares are awarded to certain of the group’s executive directors and senior
managers under the RSP based on a percentage of salary. Awards under the RSP are not
subject to performance targets. The shares are subject only to the condition that the employee
remains employed by the group on the vesting date (ranging from one to three years after the
award date).
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
30 Share-based payments (continued)
Deferred bonus
A proportion of the bonus payable to executive directors and senior managers is awarded as
shares and deferred for three years. The Remuneration Committee is entitled to claw back the
deferred element in cases of misstatement or misconduct or other relevant reason as
determined by it.
All employee share incentive plan (SIP) – UK and overseas
Under the SIP, all employees with at least one year of service with the group and who are
employed by a participating group company are entitled to contribute up to 2.5% of base pay
each month, subject to a £125 per month limit. The SIP trustees buy shares (partnership
shares) at market value each month with the employees’ contributions. For each partnership
share purchased, the group purchases two shares (matching shares) which are awarded to
the employee.
In the UK SIP, if the employee sells or transfers partnership shares within three years of the
date of award, the linked matching shares are forfeited.
In the overseas SIP, partnership shares and matching shares are subject to a three-year
holding period and cannot be sold or transferred during that time.
During the year, 374,840 (2023: 311,260) matching shares under the SIP were awarded to
employees. These are nil cost awards on which performance conditions are substantially
completed at the date of grant and, consequently, the fair value of these awards is based on
the market value of the shares at that date.
Activity in the year in relation to these share plans is shown below:
Year ended 31st March 2024
Year ended 31st March 2023
PSP
RSP
Deferred Bonus
PSP
RSP
Deferred Bonus
Outstanding at the start of the year
1,728,934
996,190
211,310
1,434,911
1,258,698
149,136
Awarded during the year
1,349,149
53,614
145,794
798,488
320,907
102,961
Forfeited during the year
(204,808)
(49,890)
–
(243,093)
(130,601)
–
Released during the year
(533,508)
(510,535)
(32,385)
(261,372)
(452,814)
(40,787)
Outstanding at the end of the year
2,339,767
489,379
324,719
1,728,934
996,190
211,310
Year ended 31st March 2024
Year ended 31st March 2023
PSP
Exceptional RSP1
Exceptional RSP1
Exceptional RSP1
Deferred Bonus
PSP
RSP
Exceptional RSP
Deferred Bonus
Fair value of shares awarded (pence)
1,634.9
1,634.9
1,685.7
1,738.0
1,585.7
1,916.8
1,916.8
2,059.6
1,849.1
Share price at the date of award (pence)
1,792.0
1,792.0
1,792.0
1,792.0
1,792.0
2,135.0
2,135.0
2,135.0
2,135.0
Dividend rate
3.07%
3.07%
3.07%
3.07%
3.07%
3.61%
3.61%
3.61%
3.61%
1. The group awarded three exceptional RSP schemes on 1st August 2023 of duration one, two, and three years.
The fair value of shares awarded was calculated using a modified Black Scholes model based on the share price at the date of award adjusted for the present value of the expected dividends that will
not be received at an expected dividend rate.
At 31st March 2024, the weighted average remaining contracted life of the awarded PSP shares is 1.7 years (2023: 1.4 years) and 0.6 years (2023: 1.0 years) for the awarded RSP shares.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
31 Commitments
Capital commitments - future capital
expenditure contracted but not provided
Group
Parent company
2024
2023
2024
2023
£m
£m
£m
£m
Property, plant and equipment
68
106
28
32
Other intangible assets
14
25
14
25
At 31st March 2024, precious metal leases were £197 million (31st March 2023: £138 million)
at year end prices.
32 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 16th 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.
33 Transactions with related parties
The group has a related party relationship with its associates, its post-employment benefit
plans (note 24) and its key management personnel (below). Transactions between the
Company and its subsidiaries, which are related parties of the Company, have been eliminated
on consolidation and are not disclosed in this note.
During the year the group had sales of £17 million (2023: £6 million) with Veranova.
The amounts owed by Veranova were £1 million at 31st March 2024 (31st March 2023:
£3 million).
The key management of the group and parent company consist of the Board of Directors and
the members of the Group Leadership Team (GLT). During the year ended 31st March 2024,
the GLT had an average of 13 members (2023: 12 members). The only transactions with any
key management personnel was compensation charged in the year which was:
2024
£m
2023
£m
Short term employee benefits
9
10
Share-based payments
1
1
Non-executive directors' fees and benefits
1
1
Total compensation of key management personnel
11
12
There were no balances outstanding as at 31st March 2024 (31st March 2023: £nil).
Information on directors’ remuneration is given in the Remuneration Report.
Guarantees of subsidiaries’ liabilities are disclosed in note 47.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
34 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.
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 margin1, 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 share1, 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.
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, gain or loss on significant legal proceedings, together with associated legal costs, 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.
As noted in our 2023 annual report, our strategy involves making substantial investment in the coming years to support the growth and transformation of the group. Our businesses have different investment and return profiles and therefore we no longer use a group measure of Return on Invested
Capital as a key performance indicator.
Underlying profit measures exclude the following non-underlying items which are shown separately on the face of the income statement:
• (Loss) / profit on disposal of businesses, The group recognised £9 million loss on the disposal of businesses (2023: £12 million profit), see note 27.
• Amortisation of acquired intangibles, Amortisation and impairment of intangible assets which arose on the acquisition of businesses totalled £4 million (2023: £5 million).
• Gains and losses on significant legal proceedings, The group recognised £nil loss on significant legal proceedings (2023: £25 million loss).
• Major impairment and restructuring charges, The group recognised £148 million in major impairment and restructuring charges (2023: £41 million), see note 6.
• Share of losses of associates, The group recognised £3 million for its share of losses of associates (2023: £1 million), see note 15.
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
34 Non-GAAP measures (continued)
Reconciliations to GAAP measures
Sales
2024
£m
2023
£m
Revenue (note 3)
12,843
14,933
Less: sales of precious metals to customers (note 3)
(8,939)
(10,732)
Sales
3,904
4,201
Underlying profit measures
Year ended 31st March 2024
Operating
profit
Profit before
tax
Tax expense
Profit for the
year
£m
£m
£m
£m
Underlying
410
328
(68)
260
Loss on disposal of businesses
(9)
(9)
–
(9)
Amortisation of acquired intangibles
(4)
(4)
1
(3)
Major impairment and restructuring charges
(148)
(148)
15
(133)
Share of losses of associates
–
(3)
–
(3)
Underlying tax provisions
–
–
(4)
(4)
Reported
249
164
(56)
108
Year ended 31st March 2023
Operating
profit
Profit before
tax
Tax expense
Profit for the
year
£m
£m
£m
£m
Underlying
465
404
(78)
326
Profit on disposal of businesses
12
12
(1)
11
Amortisation of acquired intangibles
(5)
(5)
1
(4)
Gains and losses on significant legal
proceedings
(25)
(25)
5
(20)
Major impairment and restructuring charges
(41)
(41)
(7)
(48)
Share of losses of associates
–
(1)
–
(1)
Reported
406
344
(80)
264
Underlying earnings per share
2024
2023
Underlying profit for the year (£ million)
260
326
Weighted average number of shares in issue (number)
183,392,681
183,012,301
Underlying earnings per share (pence)
141.3
178.6
Average working capital days (excluding precious metals) - unaudited
2024
£m
2023
£m
Inventories
1,211
1,702
Trade and other receivables
1,718
1,882
Trade and other payables
(2,209)
(2,497)
720
1,087
Working capital balances classified as held for sale
44
22
Total working capital
764
1,109
Less: Precious metal working capital
(174)
(622)
Working capital (excluding precious metals)
590
487
Average working capital days (excluding precious metals)
60
42
Free cash flow from continuing operations
2024
£m
2023
£m
Net cash inflow from operating activities
592
291
Interest received
62
28
Interest paid
(137)
(94)
Purchases of property, plant and equipment
(301)
(253)
Purchases of intangible assets
(67)
(63)
Purchases of investments held at fair value through other
comprehensive income
–
(17)
Government grant income
5
7
Proceeds from sale of businesses
41
187
Proceeds from sale of non-current assets
5
8
Proceeds from sale of investment in joint ventures
–
2
Principal element of lease payments
(11)
(14)
Less: Free cash inflow from discontinued operations
–
(8)
Free cash flow
189
74
Johnson Matthey Annual Report and Accounts 2024
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
34 Non-GAAP measures (continued)
Net debt (including post tax pension deficits) to underlying EBITDA
2024
£m
2023
£m
Cash and deposits
208
129
Money market funds
334
521
Bank overdrafts
(12)
(13)
Cash and cash equivalents
530
637
Interest rate swaps - non-current assets
15
20
Interest rate swaps - non-current liabilities
(10)
(15)
Borrowings and related swaps - current
(110)
(155)
Borrowings and related swaps - non-current
(1,339)
(1,460)
Lease liabilities - current
(8)
(9)
Lease liabilities - non-current
(24)
(31)
Lease liabilities - current - transferred to liabilities classified as held
for sale
(1)
(1)
Lease liabilities - non-current - transferred to liabilities classified as
held for sale
(4)
(9)
Net debt
(951)
(1,023)
(Decrease) / increase in cash and cash equivalents
(102)
287
Less: Increase in cash and cash equivalents from discontinued
operations
–
(8)
Less: Decrease / (increase) in borrowings
150
(391)
Less: Principal element of lease payments
11
14
Decrease / (increase) in net debt resulting from cash flows
59
(98)
New leases, remeasurements and modifications
(11)
(13)
Other lease movements
1
–
Disposals
11
–
Exchange differences on net debt
13
(53)
Other non-cash movements
(1)
(3)
Movement in net debt
72
(167)
Net debt at beginning of year
(1,023)
(856)
Net debt at end of year
(951)
(1,023)
Net debt
(951)
(1,023)
Add: Pension deficits
(22)
(21)
Add: Related deferred tax
3
2
Net debt (including post tax pension deficits)
(970)
(1,042)
2024
£m
2023
£m
Underlying operating profit
410
465
Add back: Depreciation and amortisation excluding amortisation of
acquired intangibles
188
182
Underlying EBITDA
598
647
Net debt (including post tax pension deficits) to
underlying EBITDA
1.6
1.6
2024
£m
2023
£m
Underlying EBITDA
598
647
Depreciation and amortisation
(192)
(187)
Gains and losses on significant legal proceedings
–
(25)
Major impairment and restructuring charges
(148)
(41)
(Loss) / profit on disposal of businesses
(9)
12
Finance costs
(146)
(110)
Investment income
64
49
Share of losses of associates
(3)
(1)
Income tax expense
(56)
(80)
Profit for the year from continuing operations
108
264
35 Events after the balance sheet date
On 30th April 2024, the group completed the sale of its Battery Systems business. Refer to note
26 for further information.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Parent Company Statement of Financial Position
as at 31st March 2024
Notes
2024
£m
2023
£m
Assets
Non-current assets
Property, plant and equipment
37
449
350
Right-of-use assets
9
5
Goodwill
38
113
113
Other intangible assets
39
257
247
Investments in subsidiaries
40
2,108
2,074
Other receivables
41
682
1,040
Interest rate swaps
15
20
Other financial assets
42
34
48
Deferred tax assets
11
–
Post-employment benefit net assets
43
150
196
Total non-current assets
3,828
4,093
Current assets
Inventories
44
482
821
Taxation recoverable
3
1
Trade and other receivables
41
2,335
2,012
Cash and cash equivalents
370
540
Other financial assets
42
57
51
Total current assets
3,247
3,425
Total assets
7,075
7,518
Liabilities
Current liabilities
Trade and other payables
45
(4,235)
(3,747)
Lease liabilities
(2)
(2)
Cash and cash equivalents - bank overdrafts
(6)
(3)
Borrowings and related swaps
46
(105)
(151)
Other financial liabilities
42
(14)
(33)
Provisions
47
(76)
(91)
Total current liabilities
(4,438)
(4,027)
Notes
2024
£m
2023
£m
Non-current liabilities
Borrowings and related swaps
46
(1,339)
(1,460)
Lease liabilities
(8)
(4)
Deferred tax liabilities
–
(4)
Interest rate swaps
(10)
(15)
Employee benefit obligations
43
(6)
(7)
Provisions
47
(1)
(12)
Trade and other payables
45
(5)
(489)
Total non-current liabilities
(1,369)
(1,991)
Total liabilities
(5,807)
(6,018)
Net assets
1,268
1,500
Equity
Share capital
48
215
215
Share premium
148
148
Treasury shares
(17)
(19)
Other reserves
48
72
71
Retained earnings1
850
1,085
Total equity
1,268
1,500
1. The parent company's loss for the year is £34 million (2023: £314 million profit).
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Parent Company Statement of Changes in Equity
for the year ended 31st March 2024
Share
capital
Share
premium
account
Treasury
Shares
Other
reserves
(note 48)
Retained
earnings
Total
equity
£m
£m
£m
£m
£m
£m
At 1st April 2022
218
148
(24)
(19)
1,024
1,347
Profit for the year
–
–
–
–
314
314
Remeasurements of post-employment benefit assets and liabilities
–
–
–
–
(143)
(143)
Exchange differences on translation of foreign operations
–
–
–
–
(8)
(8)
Amounts charged to hedging reserve
–
–
–
114
–
114
Tax on other comprehensive (expense) / income
–
–
–
(27)
37
10
Total comprehensive income
–
–
–
87
200
287
Dividends paid (note 48)
–
–
–
–
(141)
(141)
Purchase of treasury shares (note 48)
(3)
–
–
3
(1)
(1)
Share-based payments
–
–
–
–
13
13
Cost of shares transferred to employees
–
–
5
–
(10)
(5)
At 31st March 2023
215
148
(19)
71
1,085
1,500
Loss for the year
–
–
–
–
(34)
(34)
Remeasurements of post-employment benefit assets and liabilities
–
–
–
–
(66)
(66)
Exchange differences on translation of foreign operations
–
–
–
–
(14)
(14)
Amounts charged to hedging reserve (note 48)
–
–
–
2
–
2
Tax on other comprehensive (expense) / income
–
–
–
(1)
17
16
Total comprehensive expense
–
–
–
1
(97)
(96)
Dividends paid (note 48)
–
–
–
–
(141)
(141)
Share-based payments
–
–
–
–
10
10
Cost of shares transferred to employees
–
–
2
–
(7)
(5)
At 31st March 2024
215
148
(17)
72
850
1,268
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
36 Accounting policies - parent company
Basis of accounting and preparation - parent company
The accounts are prepared on a going concern basis in accordance with Financial Reporting
Standard (FRS) 101, Reduced Disclosure Framework, issued in September 2015 and the
Companies Act 2006 applicable to companies reporting under FRS 101. The parent company
applies the recognition, measurement and disclosure requirements of international
accounting standards in conformity with the requirements of the Companies Act 2006, but
makes amendments where necessary to comply with the Act and has set out below the FRS
101 disclosure exemptions taken by the parent company:
• the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2, Share-based Payment;
• the requirements of IFRS 7, Financial Instruments: Disclosures;
• the requirements of paragraphs 91 to 99 of IFRS 13, Fair Value Measurement;
• the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114,
115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15, Revenue from Contracts with
Customers;
• the requirement in paragraph 38 of IAS 1, Presentation of Financial Statements, to present
comparative information in respect of: paragraph 73(e) of IAS 16, Property, Plant and
Equipment; and paragraph 118(e) of IAS 38, Intangible Assets;
• the requirements of paragraphs 10(d), 38A, 38B, 40A, 40B, 40C, 40D, 111 and 134 to 136
of IAS 1, Presentation of Financial Statements;
• the requirements of IAS 7, Statement of Cash Flows;
• the requirements of paragraphs 30 and 31 of IAS 8, Accounting Policies, Changes in
Accounting Estimates and Errors;
• the requirements of paragraph 17 of IAS 24, Related Party Disclosures;
• the requirements in IAS 24, Related Party Disclosures, to disclose related party transactions
entered into between two or more members of a group, provided that any subsidiary which
is a party to the transaction is wholly owned by such a member; and
• the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d), 134(f) and 135(c) to 135(e)
of IAS 36, Impairment of Assets.
The accounts are prepared on the historical cost basis, except for certain assets and liabilities
which are measured at fair value as explained below.
The parent company has not presented its own income statement, statement of total
comprehensive income and related notes as permitted by Section 408(3) of the Companies
Act 2006. Profit for the year is disclosed in the parent company statement of financial position
and statement of changes in equity.
In the parent company statement of financial position, businesses acquired from other
group companies are recognised at book value at the date of acquisition. The difference
between the consideration paid and the book value of the net assets acquired is reflected in
retained earnings.
Material accounting policies
The group’s and parent company’s accounting policies have been applied consistently during
the current and prior year, other than where new policies have been adopted (see note 1).
The group’s and parent company’s material accounting policies are consistent (see note 1)
with the exception of the following parent company accounting policies:
Investments in subsidiaries
Investments in subsidiaries are stated in the parent company’s balance sheet at cost less any
provisions for impairment. If a distribution is received from a subsidiary, the investment in that
subsidiary is assessed for an indication of impairment.
Provisions and contingencies
Where the parent company enters into financial guarantee contracts to guarantee the
indebtedness of other companies within its group, these guarantee contracts are considered
to be contingent liabilities until such time as it becomes probable that the company will be
required to make a payment under the guarantee.
Sources of estimation uncertainty and judgements made in applying
accounting policies
The group’s and parent company’s sources of estimation uncertainty and judgements made in
applying accounting policies are consistent – see note 1 for further information.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
41
Notes on the Accounts for the year ended 31st March 2024 continued
37 Property, plant and equipment
Land
and
buildings
Leasehold
improvement
s
Plant and
machinery
Assets in
the course of
construction
Total
£m
£m
£m
£m
£m
Cost
At 31st March 2023
129
2
683
157
971
Additions
–
–
18
111
129
Reclassification
1
–
27
(28)
–
Disposals
–
–
(7)
–
(7)
At 31st March 2024
130
2
721
240
1,093
Accumulated depreciation
and impairment
At 31st March 2023
86
2
534
(1)
621
Charge for the year
3
–
29
–
32
Impairment losses
–
–
(3)
–
(3)
Disposals
–
–
(7)
1
(6)
At 31st March 2024
89
2
553
–
644
Carrying amount at
31st March 2024
–
168
240
449
Carrying amount at
31st March 2023
43
–
149
158
350
Finance costs capitalised were £3 million (2023: £1 million) and the capitalisation rate used
to determine the amount of finance costs eligible for capitalisation was 3.3% (2023: 4.0%).
38 Goodwill
As at 31st March 2024 and 31st March 2023, the cost of goodwill was £123 million with an
accumulated impairment of £10 million resulting in a carrying amount of £113 million.
The parent company’s goodwill balance of £113 million relates to the Catalyst Technologies
cash-generating unit. Refer to note 5 for further information on the impairment
testing performed.
39 Other intangible assets
Compute
software
£m
Patents,
trademarks
and licences
£m
Acquired
research and
technology*
£m
Development
expenditure
£m
Total
£m
Cost
At 31st March 2023
427
20
5
13
465
Additions
50
–
–
–
50
Disposals
–
(11)
(5)
–
(16)
At 31st March 2024
477
9
–
13
499
Accumulated amortisation
and impairment
At 31st March 2023
181
16
4
17
218
Charge for the year
40
–
–
–
40
Disposals
–
(12)
(4)
–
(16)
At 31st March 2024
221
4
–
17
242
Carrying amount at
31st March 2024
256
5
–
(4)
257
Carrying amount at
31st March 2023
246
4
1
(4)
247
Carrying amount at
1st April 2022
233
3
1
(4)
233
* The disposals balances in acquired research and technology relate to Battery Materials and should have been transferred to assets held for sale
in the prior year.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
40 Investments in subsidiaries
Cost of
investments in
subsidiaries
£m
Accumulated
impairment
£m
Carrying
amount
£m
At 31st March 2023
2,336
(262)
2,074
Additions
34
–
34
At 31st March 2024
2,370
(262)
2,108
The parent company’s subsidiaries are shown in note 49.
41 Trade and other receivables
2024
£m
2023
£m
Current
Trade receivables
110
160
Contract receivables
33
23
Amounts receivable from subsidiaries
1,655
1,479
Prepayments
36
37
Value added tax and other sales tax receivable
35
49
Amounts receivable under precious metal sale and repurchase
agreements
417
222
Other receivables
49
42
Trade and other receivables
2,335
2,012
Non-current
Amounts receivable from subsidiaries
653
1,015
Advance payments to customers
29
25
Other receivables
682
1,040
Of the parent company’s amounts receivable from subsidiaries, £140 million is impaired
(2023: £140 million). Future expected credit losses on intercompany receivables
are immaterial.
Trade receivables and contract receivables are net of expected credit losses.
42 Other financial assets and liabilities
The parent company non-current other financial assets are consistent with the group balances
- see note 18.
2024
£m
2023
£m
Current assets
Forward foreign exchange contracts designated as cash flow hedges
10
15
Forward precious metal price contracts designated as cash flow
hedges
41
30
Forward foreign exchange contracts and currency swaps at fair value
through profit or loss
6
6
Other financial assets
57
51
Current liabilities
Forward foreign exchange contracts designated as cash flow hedges
(8)
(19)
Forward foreign exchange contracts and currency swaps at fair value
through profit or loss
(4)
(14)
Foreign exchange swaps designated as hedges of a net investment
in foreign operations
(2)
–
Other financial liabilities
(14)
(33)
43 Post-employment benefits
The parent company is the sponsoring employer of the group’s UK defined benefit pension
plan and the UK post-retirement medical benefits plan. There is no contractual agreement or
stated policy for charging the net defined benefit cost for the plans to the individual group
entities. The parent company recognises the net defined benefit cost for these plans and
information is disclosed in note 24.
44 Inventories
2024
£m
2023
£m
Raw materials and consumables
44
46
Work in progress
374
729
Finished goods and goods for resale
64
46
Inventories
482
821
Write-downs of inventories amounted to £nil (2023: £13 million). These were recognised as
an expense during the year ended 31st March 2024 and included in cost of sales in the
income statement.
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
45 Trade and other payables
2024
£m
2023
£m
Current
Trade payables
258
236
Contract liabilities
33
53
Amounts payable to subsidiaries
2,865
2,340
Accruals
169
170
Amounts payable under precious metal sale and repurchase
agreements
810
813
Other payables
100
135
Trade and other payables
4,235
3,747
Non-current
Amounts payable to subsidiaries
4
488
Other payables
1
1
Trade and other payables
5
489
46 Borrowings and related swaps
The parent company's non-current borrowings and related swaps are consistent with the
group balances with the exception of the cross currency interest rate swaps of £3 million
(2023: £5 million) which are designated as fair value hedges instead of net investment
hedges - see note 20.
2024
£m
2023
£m
Current
2.99% $165 million Bonds 2023
–
(133)
2.44% €20 million Bonds 2023
–
(18)
3.57% £65 million Bonds 2024
(65)
–
3.565% $50 million KfW loan 2024
(40)
–
Borrowings and related swaps
(105)
(151)
47 Provisions
Restructuring
provisions
Other
provisions
Total
£m
£m
£m
At 31st March 2023
33
70
103
Charge for the year
8
1
9
Net sale of metal
–
(14)
(14)
Utilised
(14)
–
(14)
Released
(4)
(3)
(7)
At 31st March 2024
23
54
77
2024
£m
2023
£m
Current
76
91
Non-current
1
12
Total provisions
77
103
The restructuring provisions are part of the parent company’s efficiency initiatives.
The other provisions include provisions to buy metal to cover short positions created by the
parent company selling metal to cover price risk on metal owned by subsidiaries. Amounts
provided reflect management's best estimate of the expenditure required to settle the
obligations at the balance sheet date.
The parent company also guarantees some of its subsidiaries’ borrowings and its exposure at
31st March 2024 was £2 million (2023: £4 million).
Johnson Matthey Annual Report and Accounts 2024
205
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
48 Share capital and other reserves
Share capital and dividends
The group and parent company disclosures relating to share capital, dividends and purchase of treasury shares are the same. Refer to note 25 for further information.
Other reserves
Hedging reserve
Capital
redemption
reserve
Forward
currency
contracts
Cross
currency
swaps
Forward
metal
contracts
Total
other
reserves
£m
£m
£m
£m
£m
At 1st April 2022
10
(5)
–
(24)
(19)
Cash flow hedges — (losses) / gains taken to equity
–
(9)
9
72
72
Cash flow hedges — transferred to revenue (income statement)
–
4
–
38
42
Cash flow hedges — transferred to cost of sales (income statement)
–
7
–
–
7
Cash flow hedges — transferred to foreign exchange (income statement)
–
–
(7)
–
(7)
Cancelled ordinary shares from share buyback
3
–
–
–
3
Tax on items taken directly to or transferred from equity
–
–
(1)
(26)
(27)
At 31st March 2023
13
(3)
1
60
71
Cash flow hedges — gains / (losses) taken to equity
–
8
(4)
27
31
Cash flow hedges — transferred to revenue (income statement)
–
4
–
(31)
(27)
Cash flow hedges — transferred to cost of sales (income statement)
–
(5)
–
–
(5)
Cash flow hedges ─ transferred to foreign exchange (income statement)
–
–
2
–
2
Tax on items taken directly to or transferred from equity
–
(6)
–
6
–
At 31st March 2024
13
(2)
(1)
62
72
Johnson Matthey Annual Report and Accounts 2024
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Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
49 Related undertakings
A full list of related undertakings at 31st March 2024 (comprising subsidiaries, joint ventures and associates) is set out below. Those held directly by the parent company are marked with an asterisk
(*) and those held jointly by the parent company and a subsidiary are marked with a cross (+). All the companies are wholly owned unless otherwise stated. All the related undertakings are
involved in the principal activities of the group. Unless otherwise stated, the share class of each related undertaking comprises ordinary shares only. As permitted by section 479A of the Companies
Act 2006, the Company intends to take advantage of the audit exemption in relation to the individual accounts of the companies marked with a hash (#).
Entity
Registered address
+
Johnson Matthey Argentina S.A.
Tucumán 1, Piso 4, C1049AAA, Buenos Aires, Argentina
Johnson Matthey (Aust.) Ltd
64 Lillee Crescent, Tullamarine VIC 3043, Australia
Johnson Matthey Holdings Limited
64 Lillee Crescent, Tullamarine VIC 3043, Australia
+
Johnson Matthey Belgium
Pegasuslaan 5, 1831 Diegem, Belgium
The Argent Insurance Co. Limited
Rosebank Centre, 5th Floor, 11 Bermudiana Road, Pembroke HM 08, Bermuda
Johnson Matthey Brasil Ltda
Avenida Macuco, 726, 12th Floor, Edifício International Office, CEP04523-001, Brazil
Johnson Matthey Argillon (Shanghai) Emission Control Technologies Ltd.
Ground Floor, Building 2, No. 298, Rongle East Road, Songjiang Industrial Zone, Shanghai 201613, China
Johnson Matthey Battery Materials (Changzhou) Co., Ltd.
A10 Building, No.2 Xinzhu Road, Xinbei District, Changzhou, China
Johnson Matthey Chemical Process Technologies (Shanghai) Company Limited
Room 1066, Building 1, No 215 Lian He Bei Lu, Fengxian District, Shanghai, China
Johnson Matthey (China) Trade Co., Ltd
1st, 2nd and 3rd Floor, Building 2, No. 598 Dongxing Road, Songjiang Industrial Zone, Shanghai, China
Johnson Matthey Clean Energy Technologies (Beijing) Co., Ltd
Unit 01/14th Floor, Pacific Century Place, 2A Gong Ti Bei Lu, Chaoyang District , Beijing, China
Johnson Matthey (Shanghai) Catalyst Co., Ltd.
586 Dongxing Road, Songjiang Industry Zone, Shanghai, 201613, China
Johnson Matthey (Shanghai) Chemicals Limited
588 and 598 Dongxing Road, Songjiang Industry Zone, Shanghai, 201613, China
Johnson Matthey (Shanghai) Hydrogen Technologies Co., Ltd
JTChinaJT7575, Room108, Floor 1, Building 1, 6988 Jiasong North Road, Anting, Jiading, Shanghai, China
Johnson Matthey (Shanghai) Trading Limited
Room 1615B, No. 118 Xinling Road, Shanghai Pilot Free Trade Zone, China
Johnson Matthey (Tianjin) Chemical Co., Ltd.
Room 2007, No. 16, Third Avenue, Tianjin Economic-Technological Development Zone, Tianjin, China
Johnson Matthey (Zhangjiagang) Environmental Protection Technology Co., Ltd No. 9 Dongxin Road, Jiangsu Yangtze River International Chemical Industrial Park, Jiangsu Province, China
Johnson Matthey (Zhangjiagang) Precious Metal Technology Co., Ltd.
No. 48, the west of Beijing Road, Jingang Town, Yangtze River International Chemical Industrial Park, Jiangsu, China
Johnson Matthey A/S
c/o Lundgrens Advokatpartnerselskab, 4., Tuborg Boulevard 12, 4., 2900 Hellerup, Denmark
*
AG Holding Ltd (in liquidation)
30 Finsbury Square, London, EC2A 1AG, England
*
Cascade Biochem Limited1
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*
JMEPS Trustees Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
Johnson Matthey Battery Systems Engineering Limited (in liquidation)
30 Finsbury Square, London, EC2A 1AG, England
*
Johnson Matthey Battery Materials Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*
Johnson Matthey Davy Technologies Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*
Johnson Matthey Hydrogen Technologies Limited1
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
#
Johnson Matthey Investments Limited (01004368)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*+ Johnson Matthey (Nominees) Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*
Johnson Matthey Precious Metals Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
Johnson Matthey South Africa Holdings Limited
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
#
Johnson Matthey Tianjin Holdings Limited (5391061)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*# Johnson Matthey UK Holdings Limited (14090567)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
+# Matthey Finance Limited (301279)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
*# Matthey Holdings Limited (03130188)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
#
MDC Global Topco Limited (15068261)
5th Floor, 25 Farringdon Street, London, EC4A 4AB, England
Johnson Matthey Battery Materials Finland Oy
c/o Asianajotoimisto, Krogerus Oy, Unioninkatu 22, Helsinki, 00130, Finland
Johnson Matthey Finland Oy (in liquidation)
c/o Accountor Taloshallintopalvelut Oy, William Ruthin Katu 1, Kotka, 48600, Finland
Johnson Matthey SAS
Les Diamants - Immeuble B, 41 rue Delizy, 93500 Pantin, France
Johnson Matthey Battery Materials GmbH
Ostenriederstrasse 15, 85368 Moosburg a.d. Isar, Germany
Johnson Matthey Annual Report and Accounts 2024
207
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Governance
Financial statements
Other information
Notes on the Accounts for the year ended 31st March 2024 continued
49 Related undertakings (continued)
Entity
Registered address
Johnson Matthey Catalysts (Germany) GmbH
Bahnhofstrasse 43, 96257 Redwitz an der Rodach, Germany
Johnson Matthey Chemicals GmbH
Wardstrasse 17, D-46446 Emmerich am Rhein, Germany
Johnson Matthey Deutschland GmbH
Otto-Volger-Strasse 9b, 65843 Sulzbach, Germany
Johnson Matthey Management GmbH
Otto-Volger-Strasse 9b, 65843 Sulzbach, Germany
Johnson Matthey Pacific Limited2
Room 803-6, 909 Cheung Sha Wan Road, Kowloon, Hong Kong
Johnson Matthey Process Technologies Holdings Hong Kong Limited
Room 803-6, 909 Cheung Sha Wan Road, Kowloon, Hong Kong
Johnson Matthey Tracerco Holdings Hong Kong Limited
Room 802-6, 909 Cheung Sha Wan Road, Kowloon, Hong Kong
MDC Pacific Limited
4603-4609, 46th Floor, Jardine House, One Connaught Place Central, Hong Kong
+
Johnson Matthey Chemicals India Private Limited
Plot No 6A, MIDC Industrial Estate, Taloja, District Raigad, Maharashtra 410208, India
Johnson Matthey India Private Limited
Regus Business Centre, 5th Floor, Caddie Commercial Tower - Aerocity, New Delhi, 110037, India
Johnson Matthey Limited
13-18 City Quay, Dublin 2, D02 ED70, Ireland
Johnson Matthey Italia S.r.l.
Corso Trapani 16, 10139, Torino Italy
Johnson Matthey Fuel Cells Japan Limited
5123-3 Kitsuregawa, Sakura-shi, Tochiqi, 329-1412, Japan
Johnson Matthey Japan Godo Kaisha
5123-3 Kitsuregawa, Sakura-shi, Tochiqi, 329-1412, Japan
Johnson Matthey Global Business Services Lithuania UAB
Upės str. 23, 08128, Vilnius, Lithuania
*
Johnson Matthey Sdn. Bhd.
Suite 16-03. Level 16, Wisma UOA II, 21 Jalan Pinanq, 50450 Kuala Lumpur, Malaysia
Johnson Matthey Services Sdn. Bhd.
Suite 16-03. Level 16, Wisma UOA II, 21 Jalan Pinanq, 50450 Kuala Lumpur, Malaysia
Johnson Matthey de Mexico, S. de R.L. de C.V.
c/o Cacheaux, Cavazos and Newton, No. 437 Col, Colinas del Cimatario, CP 76090 Queretaro, Mexico
Johnson Matthey Servicios, S. de R.L. de C.V.
c/o Cacheaux, Cavazos and Newton, No. 437 Col, Colinas del Cimatario, CP 76090 Queretaro, Mexico
Intercat Europe B.V.
Gelissendomein 8, KB 103, 6229GJ Maastricht, Netherlands
Johnson Matthey International Management Services B.V.
Gelissendomein 8, KB 103, 6229GJ Maastricht, Netherlands
Johnson Matthey Netherlands 2 B.V.
Gelissendomein 8, KB 103, 6229GJ Maastricht, Netherlands
Matthey Finance B.V.1
Gelissendomein 8, KB 103, 6229GJ Maastricht, Netherlands
Johnson Matthey DOOEL Skopje
Technological Industrial Development Zone, Skopje 1, Ilinden 1041, Republic of North Macedonia
Johnson Matthey Battery Systems Spółka z organiczoną odpowiedzialnocścia
Ul. Alberta Einsteina 36, 44-109, Gliwice, Poland
Johnson Matthey Poland Spółka z organiczoną odpowiedzialnocścia
Ul. Alberta Einsteina 6, 44-109, Gliwice, Poland
Johnson Matthey Battery Materials Poland Spółka z organiczoną
Ul. Hutnicza 1, 62-510 Konin, Poland
+
Macfarlan Smith Portugal, Lda
Largo de São Carlos 3, 1200-410 Lisboa, Portugal
Johnson Matthey Arabia for Business Services
PO Box 26090, Riyadh 11486, Saudi Arabia
*
Johnson Matthey General Partner (Scotland) Limited
c/o DWF LLP, 103 Waterloo Street, Glasgow G2 7BW, Scotland
*
Johnson Matthey (Scotland) Limited Partnership2
c/o DWF LLP, 103 Waterloo Street, Glasgow G2 7BW, Scotland
Johnson Matthey Singapore Private Limited
50 Raffles Place, #19-00, Singapore Lane Tower, Singapore 048623
Johnson Matthey (Proprietary) Limited
Corner Henderson and Premier Roads, Germiston South Ext 7, Gauteng, South Africa
Johnson Matthey Research South Africa(Proprietary) Limited
Corner Henderson and Premier Roads, Germiston South Ext 7, Gauteng, South Africa
Johnson Matthey Salts (Proprietary) Limited
Corner Henderson and Premier Roads, Germiston South Ext 7, Gauteng, South Africa
Johnson Matthey Catalysts Korea Limited
(Yeongdeok-dong) Towerdong A-804, 13 Heungdeok 1-ro, Giheung-gu, Yongin-si, Gyeonggi-do, Republic
of Korea
Johnson Matthey Korea Limited
(Taepeyongro-1ga), S8020, 8F, 136 Sejong-daero, Jung-gu, Seoul, Republic of Korea
Johnson Matthey AB
Viktor Hasselblads gata 8, 421 31 Västra Frölunda, Göteborg, Sweden
Johnson Matthey Formox AB
SE-284 80, Perstorp, Sweden
Johnson Matthey & Brandenberger AG
Glatttalstrasse 18, 8052 Zurich, Switzerland
Johnson Matthey Finance Zurich GmbH (in liquidation)
Glatttalstrasse 18, 8052 Zurich, Switzerland
LiFePO4+C Licensing AG
Hertensteinstrasse 51, 6004 Lucerne, Switzerland
Johnson Matthey Services (Trinidad and Tobago) Limited
Queen's Park Place, 17-20 Queens Park West, Port of Spain, Trinidad and Tobago
Stepac Ambalaj Malzemeleri Sanayi Ve Ticaret Anonim Sirketi
Güzeloba Mah. Rauf Denktaş Cad., No.56/101, Muratpaşa/Antalya, Turkey
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Notes on the Accounts for the year ended 31st March 2024 continued
49 Related undertakings (continued)
Entity
Registered address
Johnson Matthey Holdings, Inc.
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Johnson Matthey Hydrogen Technologies, Inc.
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, United States
Johnson Matthey Inc.4
Corporation Service Company, 2595 Interstate Drive, Suite 103 PA 17110, USA
Johnson Matthey Medical Device Components LLC
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Johnson Matthey Process Technologies, Inc.
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Johnson Matthey Stationary Emissions Control LLC
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Johnson Matthey USA Holdings Inc.
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Red Maple LLC (50.0%)5
Corporation Service Company, 251 Little Falls Drive, Wilmington DE 19808, USA
Veranova Parent Holdco L.P. (30.0%)5
1209 Orange Street, New Castle County, Wilmington, Delaware, 19801, USA
In some jurisdictions in which the group operates, share classes are not defined and in these instances, for the purpose of disclosure, these holdings have been classified as ordinary shares.
1. Ordinary and preference shares.
2. Ordinary and non-cumulative redeemable preference shares.
3. Limited partnership, no share capital.
4. Ordinary and series A preferred stock.
5. Joint Venture / Associate.
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In this section
Basis of reporting – non-financial data
210
Independent Limited Assurance Report to Johnson Matthey Plc
216
Shareholder information
219
Company details
Back cover
Basis of reporting – non-financial data
This integrated report has been prepared in accordance with the GRI Standards for the period
1st April 2023 to 31st March 2024. Our last annual report was published in June 2023. All
non-financial performance data is reported on a financial year basis unless otherwise stated.
Johnson Matthey compiles, assesses and discloses non-financial information to demonstrate
to its stakeholders that it conducts its business in an ethical, responsible and sustainable
manner and where there is a legal obligation to do so (for example, in accordance with the
UK Companies Act, UK Stream-lined Energy and Carbon reporting (SECR) regulations, UK
Modern Slavery Act).
This report has been developed to incorporate the group’s significant economic,
environmental and social impacts and is set within the context of the United Nations
Brundtland definition of sustainability (1987) and our own sustainable business goals to
2030. The principles of inclusivity, materiality and responsiveness help to shape the structure
of the report and to set priorities for reporting. The report also explains how we continue to
build sustainability into our business planning and decision-making processes and how,
through our governance processes, we manage social, environmental and ethical matters
across the group.
Performance data covers all sites that are under the financial control of the group, including
all manufacturing, research and warehousing operations of Johnson Matthey Plc and its
subsidiaries. Joint ventures where we have a minority share are not included.
For the purposes of reporting, separate businesses resident at the same location are counted
as separate sites. Data from 76 sites was included in this report, 45 are manufacturing sites,
15 are R&D sites and 16 are offices. Data from new facilities is included from the point at
which the facility becomes owned by JM and operational. Selected non-financial data has been
third-party limited assured to ISAE 3000 (Revised) standard as described on page 216-218.
Certain employee data is included in the financial accounts and is also subject to the financial
data third-party audit described on page 133.
Other information
Rebaselining of previous years’ data
During the year we divested several businesses as going concerns, including our Health,
Advanced Glass Technologies and our Battery Materials businesses.
In accordance with the recommendations of the greenhouse gas (GHG) Protocol and
SECR reporting guidance, we have removed their historical contribution to our operational
KPIs for all years from 2019/20, which is our baseline for our 2030 sustainability targets.
This specifically includes our historical data for Scope 1, 2 and 3 GHG emissions, water
consumption, waste and emissions to air.
This report contains only rebaselined numbers.
Restatements of previous years’ data in this report
In addition to rebaselining, there have been some restatements of data to account for
improvements in methodology, coverage and quality of available data. JM’s materiality
threshold for variance is 5%. We have made restatements of environmental performance
data for the following KPIs this year:
• Emissions for Scope 3 Category 4 restated due to refinement in methodology.
• Emissions for Scope 3 Category 6 restated due to improvements in methodology.
• Emissions for Scope 3 Category 8 restated due to refinements in data quality.
• NOx, SOx and VOCs coverage restated due to improvements in methodology.
• Recycled PGMs restated due to calculation refinements post 2021/22 ARA publication.
• Following a review of the methodologies for calculating process CH4 emissions at our
Savannah Site values have been restated for all years from baseline year (2019/20).
• Calculation for Scope 1 emissions from Natural Gas has been refined following the
divestment of our West Deptford Pharmaceutical site in 2023. All data going back to
baseline year has subsequently been amended.
• During the annual assurance process a source of water use at our Royston site was noted to
be missing from data. This has been corrected and all data going back to baseline year has
subsequently been amended.
Material Topics
In July 2022 we partnered with a third party
to refresh our materiality assessment. They
reviewed public domain opinions of our
investors, customers and social media users,
as well as interviewing leaders inside JM.
Our material topics were identified as:
• Climate Change
• Air Emissions
• Water and wastewater
• Waste management
• Circularity and product innovation
• Health and Safety
• Human rights
• Diversity and inclusion
• Community impact
• Responsible sourcing
• Governance and risk management
These were approved at the SVC meeting in September 2022.
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Other information
Calculation methodologies for Key Performance Indicators (KPIs)
relating to our sustainability targets for 2030
Planet: Protecting the climate
Our goal: Drive lower global greenhouse gas (GHG) emissions
This KPI is a measure of the tonnes of GHG emissions avoided during the year by using
technologies enabled by JM’s products and solutions, compared to conventional offerings.
The KPI captures one year’s impact for all qualifying technologies that have been operational
during the year, as sold since 2020/21.
Our methodology for calculating avoided GHG emissions was developed in-house and
independently verified by EcoActTM for all product families contributing towards our target
to ensure it complies with industry best practice. EcoAct concluded that our approach
complied with recognised public guidelines and considered our calculations to be both fairly
stated and representative of a balanced view of our contribution in enabling avoided
emissions through relevant technologies. EcoAct also determined that our calculations follow
industry best practice for measurement. Their full statement is available on request.
For each qualifying JM technology solution, we first determine its functional unit.
The functional unit is used to determine the boundary of the analysis, to ensure that the
scope of the calculation covers the relevant life-cycle stages leading to the avoided emissions.
Performance comparisons for our technology solution scenario are then made against
identified reference scenarios, which represent current day, conventional technologies
dominant in the market, which our emerging technologies are seeking to improve upon.
The following table gives examples of the JM technology solution families included in this
KPI and the reference scenarios used for the calculations.
JM’s technology solution
Functional unit
Reference scenario
Solution scenario
Sustainable
Aviation Fuel/
Fischer-Tropsch
tonnes CO2e
/ tonne jet
fuel
produced
Conventional fossil-based
jet fuel
Jet fuel produced from
municipal waste using
Fischer Tropsch
technology
Low Carbon
Solutions (LCS)
tonnes CO2e
/ tonne
syngas
produced
Syngas plant without LCS
(powered by fossil fuels)
Syngas plant with LCS
(powered by fossil fuels)
Hydrogen
Electrolysers
tonnes CO2e
/ TWh
produced
Energy generated by
natural gas combustion
Energy generated by
electrolysers (in form of
hydrogen) powered by
100% renewable
electricity
Stationary
electricity
generation
tonnes CO2e
/ TWh
produced
Energy generated
from fossil fuel sources
(in the US)
Energy generated from
hydrogen combustion
(steam reforming
process)
Non-road
applications
tonnes CO2e
/ TWh
produced
Energy generated
from fossil fuel sources
(in the US)
Fuel cell powered
forklifts in US market
Automotive
– heavy and
light duty
tonnes CO2e
/ vehicle
Internal combustion
engine – diesel vehicle
Fuel cell electric vehicle
powered by average
China electricity grid mix
The lifetime of the technology is also considered to discount any impacts from the sale
of previous years’ technologies if these are no longer operational and, where applicable,
adjustments to capture changing performance over time are made.
No allocation between value chain partners is applied, since there are no established
guidelines for this. However, our products and solutions are vital to realising the benefits
of the technologies being used, and our KPI aims to accurately reflect JM’s role, in that
we enable avoided GHG emissions via the use of such technologies.
Technologies that were previously included in this metric from businesses that have been
divested during the year (Battery Materials) have been removed from the calculation and
historical years’ performance re-baselined.
Basis of reporting – non-financial data continued
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SASB Resource efficiency indicator
We have also identified revenues aligned to the SASB Chemicals Sustainability Accounting
Standard definition of products designed for use-phase resource efficiency, which includes
products that “through their use – can be shown to improve energy efficiency, eliminate or
lower greenhouse gas (GHG) emissions, reduce raw materials consumption, increase product
longevity, and/or reduce water consumption”. Qualifying products are those that either:
• increase the efficiency of a product during its use phase (for example, our battery
materials and fuel cell components); or
• increase the efficiency of the manufacturing process used to make a product (for example,
our catalysts and additives for the chemical, oil and gas industries).
Products beyond the scope of this assessment include those specifically designed to meet
environmental regulatory requirements, and any product where a use-phase resource
efficiency benefit is unclear. Revenues aligned to the use-phase resource efficiency criteria
represent sales excluding precious metals.
Our goal: Achieve net zero by 2040
Our operational carbon footprint is reported in tonnes of carbon dioxide equivalent (CO2e)
according to the GHG Protocol corporate standard 2015 revision, www.ghgprotocol.org and
in with the UK Stream-lined Energy and Carbon Reporting (SECR) April 2019 requirements
of the UK Companies Act 2006 (Strategic and Directors’ Reports) Regulations 2013.
Scope 1 GHG emissions
Our Scope 1 GHG emissions are generated by the direct burning of fuel (predominantly
natural gas), performing chemical reactions in our manufacturing processes and driving
company-owned or leased vehicles. They are calculated in tonnes CO2e using conversion
factors for each energy source as published by DEFRA in June 2023 and subsequently
amended in January 2024 – we have used the amended version. We include carbon dioxide
(CO2), nitrous oxide (N2O), refrigerant and methane (CH4) process emissions to air in our
Scope 1 calculations. We don’t believe we have any material Scope 1 GHG emissions of PF5
and SF6. When calculating Global Warming Potentials (GWP) for our gaseous emissions of
GHG we use the values published in the 6th AR from the Intergovernmental Panel on Climate
Change (IPPC).
Scope 2 GHG emissions
Our Scope 2 GHG emissions arise from the use of electricity and steam procured from third
parties for use at our facilities. They are calculated using the ‘dual reporting’ methodology
outlined in the GHG Protocol corporate standard 2015 revision.
For the location-based method of Scope 2 accounting, for all facilities outside the US, we use
national carbon intensity factors related to the consumption of grid electricity in 2021 made
available in the 2023 edition of the world CO2 emissions database of the International Energy
Agency. They were purchased under licence in December 2023 for sole use in company
reporting. For US facilities we use regional carbon factors published by the Environmental
Protection Agency in January 2024 edition of, eGRID data 2022.
Basis of reporting – non-financial data continued
For the market-based method of Scope 2 accounting, we have applied the hierarchy of
sources for determination of appropriate carbon intensity factors, as outlined in table 6.3
on page 48 of the GHG Protocol Scope 2 Guidance. We have successfully obtained carbon
intensity factors directly from our grid electricity suppliers in the EU, US and Australia.
However, it has not been possible to obtain this information from all suppliers in China,
India, South Africa and non-OECD Europe.
Scope 3 GHG emissions
Our annual Scope 3 GHG emissions are reported according to the methodology of the GHG
Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. A variety
of accounting techniques were used depending on the availability of data. All value chain
emissions over which JM has financial control are included; therefore, our Scope 3 reporting
does not include raw materials where JM is a toll manufacturer i.e. when raw materials used
in our factories always remain in the financial ownership of our customer.
When calculating the GHG footprint of each Scope 3 category, our principle of using the
most accurate data sources was applied in the following order:
• GHG footprint data obtained directly from value chain partners
• Mass based calculations using carbon intensity factors from respected databases, such
as DEFRA’s GHG reporting conversion factors and EcoInvent
• Financial allocation using Accenture’s proprietary Input-Output (EEIO) model.
This combines economic data from central banks and treasury departments with research
data from the World Bank, OECD and other leading environmental agencies.
Scope 3 GHG category as
defined by GHG Protocol
Calculation methodology
1. Purchased goods and
services
Where mass of purchased goods was available, this was
used in combination with GHG intensity factors obtained
either from suppliers or EcoInvent. For the remaining
goods and for purchased services a financial allocation
(EEIO model) was used
2. Capital goods
Financial allocation (EEIO model) using geographical
breakdown of data shown in Accounting note 11
“Property, plant & equipment” on page 168
3. Fuel- and energy-
related activities
DEFRA’s GHG reporting conversion factors 2023 were
used to calculate well-to-tank GHG emissions from fuel
usage, transmission and distribution losses from
purchased electricity, and well-to-tank and transmission
and distribution losses of energy from steam
4. Upstream
transportation and
distribution
Emissions data was provided by our suppliers where
available. Otherwise, a financial allocation was made
based on spend and intensity factors from the EEIO model
5. Waste generated in
operations
Where GHG footprints were available from waste service
providers they were used, otherwise DEFRA’s GHG
reporting conversion factors 2023 were used according to
mass of waste disposal by destination see page 43
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Scope 3 GHG category as
defined by GHG Protocol
Calculation methodology
6. Business travel
Footprint business travel for air was obtained from our
business travel service providers, where possible. For all other
travel – related items, distance was preferentially used for
personal car mileage, and airfare in combination with
DEFRA’s GHG reporting conversion factors 2023. Otherwise,
a financial allocation was made for car rentals, hotel stay,
and public transport based on expenses spend and intensity
factors from the EEIO model. Accounting is by date of
financial transaction report.
7. Employee
commuting
Data is obtained through an annual employee survey
of distance travelled per week by modes of transport.
DEFRA’s GHG reporting conversion factors 2023 are used
to calculate the GHG intensity of each transport type
and IEA emissions factors 2023 are used to calculate
homeworking GHG intensity.
8. Upstream leased
assets
Financial allocation (EEIO model) using floor space and
geographical location
9. Downstream
transportation and
distribution
Where JM takes responsibility for the downstream
distribution of goods, it was included in the upstream
category calculation. Where our customers takes
responsibility, no data is available
10. Processing of sold
products
Where possible, calculations have been made using the mass
of products sold and attributing an emissions conversion
associated with a catalyst activation step by downstream
customers for products requiring this. For Clean Air products,
an emission factor associated
with manual handling/canning was used in conjunction with
a proportion of customer Scope 1 & 2 figures from CDP data.
11. Use of sold
products
We have removed Use of sold products from our footprint by
agreement with SBTi, as it determined that the emissions we
reported in this category were ‘indirect’ and should not,
therefore, be included.
12. End of life
treatment of sold
products
Given no visibility of the end-of-life treatment/use of JM
products, the mass of sold products have been mapped
against an emission factor associated with the recycling of
PGMs to retain the precious metals, with remainder mass
associated with GHG emissions for combustion of waste.
13. Downstream
leased assets
Included in Upstream leased assets category
Basis of reporting – non-financial data continued
Scope 3 GHG category as
defined by GHG Protocol
Calculation methodology
14. Franchises
JM does not have any franchises
15. Investments
GHG footprints from our Pensions trustee providers were
used, where available, and scaled to represent JM’s global
employee count. Financial allocation (EEIO model) using
geographical breakdown of investment revenues from
each entity
Planet: Protecting nature and advancing the circular economy
Our goal: Conserve scarce resources
Our KPI to monitor how we are advancing the circular economy is a measurement of all %
recycled platinum group metals in our manufactured goods on a mass basis.
We include use of five PGMs – platinum, palladium, rhodium, ruthenium and iridium in our
target. This is defined as the weighted global average of all PGM sponge used to manufacture
goods in our plants over the course of the reporting year and includes metal that is both
sourced and funded by JM and metal sourced and funded by our customers. We define
primary metal as metal from a mine or originating outside of the refining loop. This is
measured by recording the amount of metal matching this description that has been used
in product manufacturing over the given time-period.We define secondary or recycled
metal as platinum-group metal-bearing material that has come from an end use
(including post-consumer product scrap and waste materials) and has not come to
JM in the form of ingot, concentrate or matte directly from a mining process.
This makes up the balance of metal that has been used in product manufacturing over the
given time-period. Refining “intake” figures are based on estimated assays, based on the
scrap etc that is sent in from customers and sampled, prior to the Refining process.
The assay amounts are finalised throughout the year, and adjustments are periodically made
to the reporting figures to account for any differences between the original estimated
numbers vs. the final numbers.
Our goal: Minimise our environmental footprint
Total hazardous waste produced
This KPI is a record of how much hazardous waste we generate from our operations
that can no longer be used by Johnson Matthey and has to be sent off site for treatment.
We define hazardous waste in line with local regulatory requirements in the particular
territory where the waste is generated. For example, in Europe we consider the EU Waste
Framework Directive (Directive 2008/98/EC of the European Parliament and of the Council).
We measure the amount of solid and liquid hazardous waste and report in metric
tonnes of material. We measure the total weights sent off site, including any entrained
water, and we consider all material waste no longer of use to Johnson Matthey.
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Basis of reporting – non-financial data continued
We categorise its destination in the following ways:
• Sent outside JM for beneficial reuse.
• Sent outside JM for recycling.
• Sent outside JM for incineration with energy recovery.
• Sent outside JM for incineration or treatment without energy recovery.
• Sent outside JM for landfill disposal.
Net water usage
This KPI is a record of how much water we withdraw through our operations.
The KPI includes all freshwater sources – mains supplied water that we receive from
municipalities, public or private utility companies, ground water that is extracted from below
the earth’s surface and fresh surface water that we extract from rivers, wetlands, lakes etc.
We do not include rainwater or any brackish surface water. We subtract any water that
is returned to the source from which it is extracted at the same or better quality.
Freshwater consumed in regions of high or extremely high baseline
water stress
We use the World Resource Institute’s (WRI) Water Risk Atlas tool to identify facilities which
are located in regions with a high or extremely high baseline water stress level.
People: Promoting a safe, diverse and equitable society
Definition of employees and contractors
These definitions are used when reporting the Health and Safety KPIs on page 45 of this
report. For Employee headcount numbers, only Permanent and Temporary employees are
counted as “Employees“.
Reported as “Employees”
Permanent employees
Temporary employees
Agency employees
Continuously site based
Continuously site based
Continuously site based
Contract signed directly
between JM and individual
and paid regular salary
and other benefits by JM
Fixed term contract signed
directly between JM and
individual. Paid regular
salary and other benefits
by JM
Person employed by an
agency performing tasks
that would normally be
expected to be undertaken
by a JM employee
Work is directly supervised
by JM
Work is directly supervised
by JM
Work is directly supervised
by JM
Reported as “Contractors”
Outsourced function
Specialist service
Projects
Continuously or regularly
site based
One-off project or
regularly based on site
One-off project
Facility management –
catering, cleaning or
grounds maintenance; IT;
and occupational health,
where outsourced
Small scale building or
ground works; repairing
specialist plant or
equipment; low level
maintenance; small scale
repairs to offices or other
buildings; stack
monitoring
Construction work, capital
project work, major
maintenance activities
Work is supervised by
contractor and monitored
by JM
Work is supervised by
contractor and monitored
by JM
Work is supervised by
contractor and monitored
by JM
Our goal: Keep people safe
Total recordable injury and illness rate (TRIIR) is defined as the number of recordable cases
per 200,000 hours worked in a rolling year and includes cases affecting both our employees
and contractors.
A recordable case (as defined under the US Occupational Safety and Health Administration
(OSHA) Regulations) is defined as a work related accident or illness that results in one or
more of the following: absence of more than one day; medical treatment beyond first aid;
death; loss of consciousness and restricted work or transfer to another job.
TRIIR
=
annual employee + temp + cont recordable injury/illness events x 200,000
annual employee + temp + cont hours worked
The OSHA severity rate is a calculation that gives a company an average of the number
of lost days and restricted days per recordable incident.
OSHA severity rate
=
Total lost days and restricted days in the year x 200,000
Total hrs worked during the year
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Basis of reporting – non-financial data continued
Lost Time Case is a work-related injury or illness case that requires an employee to spend one
or more full days away from work other than the day of injury or illness.
Lost time injury frequency
rate (LTIFR) employees
=
annual employee + temporary employees lost time
injury events x 1,000,000
annual employee + temporary employees hours worked
LTIFR contractors
=
annual contractor lost time injury events x 1,000,000
annual contractor hours worked
Occupational illness
frequency rate (OIFR)
=
annual employee + temporary employees occupational
illness events x 1,000,000
annual employee + temporary employees hours worked
The process safety event severity rate (PSESR) is measured according to the methodology
approved by International Council of Chemical Associations (ICCA). The metric first requires
a determination that the event is to be included in the process safety event severity rate
(PSESR) calculation and then determining the severity using the severity table.
In determining this rate, 1 point is assigned for each Level 4 incident attribute, 3 points
for each Level 3 attribute, 9 points for each Level 2 attribute, and 27 points for each Level 1
attribute. The PSESR is recorded as a 12 month rolling number. Total worker hours include
employees, temporary employees and contractors.
Theoretically, a process safety event could be assigned a minimum of 1 point
(i.e. the incident meets the attributes of a Level 4 incident in only one category) or a
maximum of 135 points (i.e. the incident meets the attributes of a Level 1 incident in
each of the five categories).
ICCA process safety event severity rate (Level 1 to Level 4) =
Total severity score for all events per 200,000 hrs worked during the year
A Tier 1 Process Safety Event (T-1 PSE) is a loss of primary containment (LOPC) with
the greatest consequence as defined by American Petroleum Institute recommended
practice (RP) 754.
Tier 1 rate
=
annual Tier 1 process safety events x 1,000,000
total annual hours worked
Our goal: Create a diverse, inclusive and engaged company
Employee Engagement
All permanent and fixed term contract employees are invited to voluntarily complete an
employee survey at regular intervals to determine the engagement and wellbeing of staff
using a standard methodology defined by Workday Peakon – an independent third party
used by companies globally. All responses are submitted confidentially to Workday Peakon
and results are independently analysed and shared with all managers who met the minimum
response threshold of five responses from their team.
For reporting we use the latest survey available at the end of the fiscal year. Engagement
level is tracked at both the Annual Survey and the Pulse Surveys, where the latter is a subset
of questions asked to all JM employees.
Through the surveys we measure attributes on a scale of 0 to 10. The surveys measure
employee engagement through three questions:
1. to what extent they would recommend JM as employer to others,
2. to what extent they intend to stay with JM,
3. in general how satisfied they are with their employment at JM.
Female representation across all management levels
This is the percentage of all management level employees (all employees whether they are a
people manager or not, at a minimum compensation grade) who self-disclosed as female on
the 31st March in the reporting year.
For the purposes of reporting, we use the identifiers ‘female’ and ‘male’ for the category of
gender as captured in our HR system. Gender is self-disclosed by the individual.
Invest in our local communities
We record the total number of employee volunteering days undertaken by permanent
employees within their local communities, in accordance with JM’s global Employee
Volunteering Policy. The volunteering is recorded in days, the recorded volunteering days
may have been completed either on company time or on paid company leave. Volunteering
done on unpaid leave, or outside normal working hours, is not included in the reported
numbers. In determining the in-kind contribution of employees’ volunteering we take the
number of volunteering days reported in the year and multiply it by the group average cost
of one day of employee time.
Calculation for indirect expenditure in community investment
Number of working days in a year is five days per week for 50 weeks per year.
Average cost of one day of
employee time
=
Total employee benefits expense in year
Number of working days in year x Average number of
permanent employees
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Other information
ERM Certification and Verification Services Limited (“ERM CVS”) was engaged by Johnson Matthey plc (“Johnson Matthey”) to provide limited assurance in relation to the selected information
set out below and presented in the Johnson Matthey Annual Report and Accounts 2024 and Sustainability Performance Databook 2024 (together the “Reports”).
Engagement summary
Scope of our assurance
engagement
Whether the 2023/24 selected information as indicated in the following Selected Information table are fairly presented in the Reports, in all material
respects, in accordance with the reporting criteria.
Our assurance engagement does not extend to information in respect of earlier periods or to any other information included in the Reports.
Reporting period
1st April 2023 – 31st March 2024.
Reporting criteria
• The GHG Protocol Corporate Accounting and Reporting Standard (WBCSD/WRI Revised Edition 2015) for Scope 1 and Scope 2 GHG emissions
• The GHG Protocol Scope 2 Guidance (An amendment to the GHG Protocol Corporate Standard (WRI 2015) for Scope 2 GHG emissions
• The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) for Scope 3 GHG emissions
• Occupational Safety and Health (OSHA) regulations
• Johnson Matthey’ Basis of reporting –non-financial data found in the ‘ther information’ section of Johnson Matthey’s Annual Report and Accounts 2024
Assurance standard and
level of assurance
We performed a limited assurance engagement, in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised) ‘Assurance
Engagements other than Audits or Reviews of Historical Financial Information’ and in accordance with ISAE 3410 for Greenhouse Gas data issued by the
International Auditing and Assurance Standards Board.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable assurance
engagement and consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would
have been obtained had a reasonable assurance engagement been performed.
Respective
responsibilities
Johnson Matthey is responsible for preparing the Reports and for the collection and presentation of the information within it, and for the designing,
implementing and maintaining of internal controls relevant to the preparation and presentation of the Selected Information.
ERM CVS’ responsibility is to provide a conclusion to Johnson Matthey on the agreed scope based on our engagement terms with Johnson Matthey, the
assurance activities performed and exercising our professional judgement.
Our conclusion
Based on our activities, as described overleaf, nothing has come to our attention to indicate that the 2023/24 data and information for the disclosures listed under ‘Scope’ above are not fairly
presented in the Reports, in all material respects, in accordance with the reporting criteria.
Independent Limited Assurance Report to Johnson Matthey PLC
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Our assurance activities
Considering the level of assurance and our assessment of the risk of material misstatement of
the Selected Information a multi-disciplinary team of sustainability and assurance specialists
performed a range of procedures that included, but was not restricted to, the following:
• Evaluating the appropriateness of the reporting criteria for the selected information;
• Interviewing management representatives responsible for managing the selected issues;
• Interviewing relevant staff to understand and evaluate the management systems and
processes (including internal review and control processes) used for collecting and
reporting the selected disclosures;
• Reviewing a sample of qualitative and quantitative evidence supporting the reported
information at corporate level;
• Performing an analytical review of the year-end data submitted by all locations included in
the consolidated 2023/24 group data for the selected disclosures which included testing
the completeness and mathematical accuracy of conversions and calculations, and
consolidation in line with the stated reporting boundary;
• Conducting in person site visits to six Johnson Matthey facilities; JM Testing Taylor
(MI, USA), Royston R&CE (UK), Swindon (UK), Panki (India), Perstorp (Sweden) and CA
Zhangjiagang (China), to review source data and local reporting systems and controls;
• Evaluating the conversion and emission factors and assumptions used; and
• Reviewing the presentation of information relevant to the scope of our work in the Reports
to ensure consistency with our findings.
The limitations of our engagement
The reliability of the assured information is subject to inherent uncertainties, given the
available methods for determining, calculating or estimating the underlying information. It
is important to understand our assurance conclusions in this context.
For the total Scope 1 and 2 carbon intensity (market-based) and year-on-year change in
Scope 1 and 2 carbon intensity metrics, we reviewed the accuracy of the calculation based on
the final, assured scope 1 and 2 data and the tonne sales figure for 2023/24 provided by
Johnson Matthey. We did not separately assure the tonne sales used in the calculation of
these metrics.
Independent Limited Assurance Statement to Johnson Matthey PLC continued
Our independence, integrity and quality control
ERM CVS is an independent certification and verification body accredited by UKAS to ISO
17021:2015. Accordingly we maintain a comprehensive system of quality control, including
documented policies and procedures regarding compliance with ethical requirements,
professional standards, and applicable legal and regulatory requirements. Our quality
management system is at least as demanding as the relevant sections of ISQM-1 and ISQM-2
(2022).
ERM CVS applies a Code of Conduct and related policies to ensure that its employees
maintain integrity, objectivity, professional competence and high ethical standards in their
work. Our processes are designed and implemented to ensure that the work we undertake is
objective, impartial and free from bias and conflict of interest. Our certified management
system covers independence and ethical requirements that are at least as demanding as the
relevant sections of the IESBA Code relating to assurance engagements.
ERM CVS has extensive experience in conducting assurance on environmental, social, ethical
and health and safety information, systems and processes, and provides no consultancy
related services to Johnson Matthey in any respect.
Gareth Manning
Partner, Corporate Assurance
London, United Kingdom
22nd May 2024
On behalf of:
ERM Certification and Verification Services Limited
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Other information
Selected Information table
Metric name
Unit of Measure
2023/24 total figure
Total Scope 1 GHG emissions
tonnes CO2e
215,429
Total Scope 2 GHG emissions (market-based)
tonnes CO2e
66,974
Total Scope 2 GHG emissions (location-based)
tonnes CO2e
196,812
Total Scope 1 and 2 GHG emission (market-based)
tonnes CO2e
282,403
Total Scope 1 and 2 carbon intensity (market-based)
tonnes CO2e/tonne
sales
2.6
Year on year change in Scope 1 and 2
carbon intensity
%
-18%
Total energy consumption
MWh
1,211,683
Total non-renewable energy consumption
kWh
936,278,140
Total renewable energy purchased or generated
kWh
275,404,458
Certified renewable electricity consumption
%
57%
Total Scope 3 (Category 1) Purchased Goods and
Services GHG emissions
tonnes CO2e
2,531,576
Total Scope 3 (Category 3) Fuel and Energy-related
GHG emissions
tonnes CO2e
38,687
Total freshwater withdrawal (all sources)
m3
1,791,727
Total water discharged back to original source
m3
36,477
Net freshwater consumption
000’s m3
1,755
Freshwater consumed in regions of high
or extremely high baseline water stress
000’s m3
402
Average direct Chemical Oxygen Demand
of wastewater (COD)
mg/L
264
Coverage for COD reporting
%
90%
Total waste recycled/reused
tonnes
37,610
Total waste sent off site to landfill
tonnes
3,338
Total waste sent offsite for incineration with
energy recovery
tonnes
1,213
Total waste sent offsite for incineration or
treatment without energy recovery
tonnes
23,064
Metric name
Unit of Measure
2023/24 total figure
Total waste sent off site
tonnes
65,225
Total hazardous waste recycled/reused
tonnes
25,263
Total hazardous waste sent off site to landfill
tonnes
1,373
Total hazardous waste sent offsite for incineration
with energy recovery
tonnes
201
Total hazardous waste sent offsite for incineration
or treatment without energy recovery
tonnes
15,463
Total hazardous waste sent off site for treatment
tonnes
42,300
Total solid waste disposed off site
tonnes
3,571
Total solid waste generated for treatment off site
tonnes
15,257
Total solid waste sent off site to be reused or recycled
tonnes
11,687
Nitrogen oxides (NOx) emissions to air
tonnes
318
Sulphur oxides (SOx) emissions to air
tonnes
36
Volatile organic chemicals (VOCs) emissions to air
tonnes
45
Coverage for NOx reporting
%
88%
Coverage for SOx reporting
%
68%
Coverage for VOCs reporting
%
80%
Tonnes of GHGs avoided by using JM technology
tonnes
1,110,057
% of recycled PGMs (Platinum Group Metals) in JM
manufactured products
%
69%
Lost Time Injury Frequency Rate (LTIFR) employees
n/million hrs
0.84
Lost Time Injury Frequency Rate (LTIFR) contractors
n/million hrs
0.95
Occupational Illness Frequency Rate (OIFR)
n/million hrs
0
Tier 1 Process Safety events rate
Tier 1
events/1,000,000 hrs
0.11
Total Recordable Injury and Illness Rate(TRIIR)
employees + contractors
n/200,000 hrs
0.36
ICCA Process Safety Event Severity Rate (PSESR)
PSESR/200,000 hrs
0.88
% of female representation at all management levels
30%
Independent Limited Assurance Statement to Johnson Matthey PLC continued
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Other information
Key shareholder facts
Johnson Matthey share price as at 31st March
2019
2020
2021
2022
2023
2024
3,142p
1,798p
3,013p
1,879p
1,983p
1,789p
Shareholder information
By location
Number
of shares1
Percentage
UK and Eire
112,400,762
61.11%
USA and Canada
30,910,176
16.80%
Continental Europe
33,289,382
18.10%
Asia Pacific
3,630,755
1.97%
Rest of World
3,069,310
1.67%
Unidentified
639,586
0.35%
Total
183,939,971
100.00%
By category
Number
of shares1
Percentage
Investment and unit trusts
90,876,630
49.40%
Pension funds
13,401,272
7.29%
Individuals
90,694
0.05%
Custodians
31,247,414
16.99%
Insurance companies
11,503,737
6.25%
Sovereign wealth funds
12,367,273
6.72%
Charities
287,343
0.16%
Other
24,165,608
13.14%
Total
183,939,971
100.00%
By size of holding
Number of
holdings
Percentage of
holders
Percentage
of issued
capital1,2
1 – 1,000
3,704
76.59%
0.58%
1,001 – 10,000
865
17.89%
1.26%
10,001 – 100,000
145
3.00%
2.91%
100,001 – 1,000,000
79
1.63%
15.25%
1,000,001 – 5,000,000
34
0.70%
34.69%
5,000,001 and over
9
0.19%
45.31%
Total
4,836
100.00%
100.00%
Dividend – pence per share
2019
2020
2021
2022
2023
2024
Interim
23.25
24.50
20.00
22.00
22.00
22.00
Final
62.25
31.125
50.00
55.00
55.00
55.00
Total ordinary
85.5
55.625
70.00
77.00
77.00
77.00
1. Issued share capital balances exclude treasury shares of 9,649,874.
2. The size of holding figures as a percentage of the issued share capital are approximate due to the liquidity of the register.
The Board is proposing a final dividend for 2023/24 of 55.00 pence, to take the total for the
year to 77.00 pence.
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Other information
Shareholder information continued
Electronic communications
We’re encouraging our shareholders to receive their shareholder information by email and
via our website. This allows us to provide you with information quicker and helps us to be
more sustainable by reducing paper and printing materials.
To register for electronic shareholder communications, visit our registrar’s website
shareview.co.uk.
Dividends
Dividends can be paid directly into shareholders’ bank or building society accounts.
This allows you to receive your dividend immediately and is cost-effective for the company.
To take advantage of this, please contact Equiniti via shareview.co.uk or complete the
dividend mandate form you receive with your next dividend cheque. A Dividend
Reinvestment Plan is also available which allows shareholders to purchase additional shares
in the company.
Matthey.com
You can find information about the company quickly and easily on our website matthey.
com. Here you will find information on the company’s current share price together with
copies of the group’s full-year and half-year reports and major presentations to analysts and
institutional shareholders.
Enquiries
Shareholders who wish to contact Johnson Matthey Plc on any matter relating to their
shareholding are invited to contact the company’s registrars, Equiniti Limited. Their contact
details are included below. Equiniti also offer a share dealing service by telephone: 0345 603
7037 or online shareview.co.uk/dealing.
By phone: +44(0)371 384 2344 Please use the country code when calling from outside
the UK. When you call, please quote your 11-digit Shareholder Reference Number.
Telephone lines are open 8.30am to 5.30pm Monday to Friday excluding public holidays
in England and Wales.
By post: Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Online: shareview.co.uk
Shareholders may also contact the company directly using the details below.
By phone: +44 20 7269 8000
By email: jmir@matthey.com
By post: The Company Secretary, Johnson Matthey Plc, 5th Floor 25 Farringdon Street,
London EC4A 4AB
American Depositary Receipts
Johnson Matthey has a sponsored Level 1 American Depositary Receipt (ADR) programme
which BNY Mellon administers and for which it acts as Depositary. Each ADR represents two
Johnson Matthey ordinary shares. The ADRs trade on the US over-the-counter (OTC) market
under the symbol JMPLY. When dividends are paid to shareholders, the Depositary converts
those dividends into US dollars, net of fees and expenses, and distributes the net amount
to ADR holders.
For enquiries, BNY Mellon can be contacted on 1-888-BNY-ADRS (1-888-269-2377) toll
free if you are calling from within the US. Alternatively, they can be contacted by e-mail
at shrrelations@cpushareownerservices.com or via their website at www.adrbnymellon.com.
Financial calendar 2024
6th June
Ex dividend date
7th June
Final dividend record date
18th July
Annual General Meeting (AGM)
6th August
Payment of final dividend subject to the approval of shareholders at the AGM
27th November
Announcement of results for the six months ending 30th September 2024
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Other information
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is independently certified according to the rules of the Forest Stewardship
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ourselves and evolve our thoughts in this area as well as search for
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in colour, robustness and print quality to produce a clear, crisp report
for our stakeholders. We kindly ask that once you have finished with this
report to share it with someone who it may be of interest to or to recycle
this as we acknowledge that primary fibres from sustainably managed
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matthey.com
Registered Office
Johnson Matthey Plc
5th Floor
25 Farringdon Street
London EC4A 4AB
Johnson Matthey Plc is a public company
limited by shares registered in England and
Wales with the registered number 33774.