Johnson Matthey half year results 30th Sept 2021

Nov 24 2021 07:00 GMTSource: RNS

RNS Number : 3398T

Johnson Matthey PLC

24 November 2021

Half year results for the six months ended
30^th September 2021

24^th November 2021

Resilient performance in the first half

Underlying performance¹^,²
·	Sales of £1.9 billion, up 21%, driven by a strong recovery in Clean Air and Efficient Natural Resources
·	Underlying operating profit of £293 million, up 102% and ahead of pre-pandemic levels, driven by strong sales growth and higher average precious metal prices
·	Underlying EPS of 114.8 pence, up materially reflecting higher underlying operating profit and lower net finance costs
·	Free cash flow of £189 million, benefiting from continued strong management of working capital (1H 2020/21: £256 million)
·	Strong balance sheet with net debt of c.£700 million as lower auto demand benefited working capital; net debt to EBITDA of 0.9 times
·	Return on invested capital (ROIC) of 17.7%, up from 10.4% in the prior year driven by higher underlying operating profit

Reported results
·	Revenue increased 23% primarily driven by higher average precious metal prices
·	Following the announcement of our intention to exit Battery Materials, the assets have been impaired by £314 million
·	Operating profit of £20 million, reflecting the one-off impairment in Battery Materials
·	Loss before tax of £9 million, driven by lower operating profit
·	Reported loss per share of 14.8 pence
·	Cash inflow from operating activities of £412 million (1H 2020/21: £482 million)
·	Interim dividend of 22.0 pence per share, up 10%
·	Share buyback of £200 million, beginning in the New Year

		Reported results			Underlying results¹
		Half year ended 30^th September		% change	Half year ended 30^th September		% change	% change, constant rates
		2021	2020	% change	2021	2020	% change	% change, constant rates
Revenue	£ million	8,586	6,979	+23
Sales excluding precious metals³	£ million				1,938	1,679	+15	+21
Operating profit	£ million	20	68	-71	293	151	+94	+102
(Loss) / profit before tax	£ million	(9)	26	n/a	264	109	+142
(Loss) / earnings per share	pence	(14.8)	12.3	n/a	114.8	47.7	+141
Interim dividend per share	pence	22.0	20.0	+10

Key developments
·	A resilient trading performance, with strong sales growth driven by a recovery in Clean Air and Efficient Natural Resources
·	Portfolio changes - agreed the sale of Advanced Glass Technologies for £178 million, and in discussions about a potential sale of Health
·	Announced intention to exit Battery Materials
·	Good momentum across our hydrogen businesses of Fuel Cells and Green Hydrogen
		·	New five-year framework contract with EKPO (ElringKlinger Plastic Omnium JV) to supply fuel cell components into commercial vehicle applications
		·	Following the completion of our hydrogen technologies capacity expansion in the UK and China, planning further expansion across these regions
·		Increasing pipeline of opportunities in blue hydrogen - now over 20 projects - including HyNet which continues to move towards commercialisation in 2025
·		In Clean Air, on track for strong cash generation in 2021/22
·		Delivered £42 million of cost savings, from our total programme of £110 million per annum by 2023/24

Robert MacLeod, Chief Executive, commented:

We delivered a resilient trading performance in what has been a challenging environment, given the supply chain volatility which has affected a number of our end markets.

Looking forward, the changing world around us means that Johnson Matthey has never been more relevant. Our metal expertise and process technologies are critical to many new markets focused on climate change solutions and give us a strong competitive advantage. We have strong foundations in Clean Air and in Efficient Natural Resources and exciting opportunities to drive our future growth in circularity, hydrogen and decarbonisation.

To ensure we are focusing our resources on these core growth opportunities we have taken some strategic decisions around our portfolio. In particular, we announced our intention to exit Battery Materials as we concluded that this business would not generate adequate returns for us. In addition, today we are announcing that we have agreed the sale of Advanced Glass Technologies and are in discussions about the potential sale of our Health business.

After eight years in the role, I will be stepping down as Chief Executive, with Liam Condon joining as my successor from 1^st March 2022 and I wish him well in leading Johnson Matthey through the next stage of its evolution.

Outlook for the year ending 31st March 2022

Our expectations on guidance for the year ending 31^st March 2022 are unchanged from our trading update on 11^th November.

Demand remains strong in many of our end markets. However, supply chain volatility especially the shortage of semi-conductors is affecting production for a number of our auto and truck customers. Global auto production is now forecast to decline 5% for our fiscal year which is a 14% reduction since our trading update in July⁴. Consequently, precious metal prices have also declined, largely because of the lower demand from the automotive industry. We are also experiencing acute temporary labour shortages in the US that are adversely impacting our Health business.

For 2021/22 we expect growth in underlying operating performance to be low single digit at constant precious metals prices⁵ and constant currency.

If precious metals prices remain at their current level⁶ for the rest of this year, we would expect a full year net benefit of c.£45 million.

At current foreign exchange rates⁷, translational foreign exchange movements for the year ending 31^st March 2022 are expected to adversely impact underlying operating profit by
c.£15 million.

Our capital expenditure is now expected to be c.£450 million for the year⁸ given our intended exit from Battery Materials.

Dividend and share buyback

The board approved an interim dividend of 22.0 pence per share, an increase of 10% against the prior year (1H 2020/21: 20.0 pence per share). The interim dividend will be paid on 1^st February 2022 to shareholders on the register at 3^rd December 2021.

The board has also approved a share buyback of £200 million that will commence in the New Year.

Chief Executive Announcement

As previously announced, Robert MacLeod will step down as Chief Executive and from the board on 28^th February 2022. Robert will stay on to support the transition process until the Company's Annual General Meeting on 21^st July 2022, when he will then retire from JM. Liam Condon will succeed Robert MacLeod, joining as Chief Executive on 1^st March 2022.

Group Management Committee Change

Joan Braca, Chief Executive Clean Air, has decided to leave Johnson Matthey. Joan's last day will be on 31^st December 2021.

Enquiries:
Investor Relations
Martin Dunwoodie Louise Curran Jane Crosby	Director of Investor Relations Senior Investor Relations Manager Investor Relations Manager	+44 20 7269 8241 +44 20 7269 8235 +44 20 7269 8242
Media
Barney Wyld Harry Cameron	Group Corporate Affairs Director Tulchan Communications	+44 20 7269 8001 +44 7799 152148

Notes:
1.	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, major impairment and restructuring charges and, where relevant, related tax effects. For definitions and reconciliations of other non-GAAP measures, see pages 46 to 50.
2.	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 2020/21 results converted at 2021/22 average rates. In 1H 2021/22, the translational impact of exchange rates on group sales and underlying operating profit was negative c.£71 million and c.£6 million respectively.
3.	Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers.
4.	As forecast by external consultants - IHS (October 2021).
5.	Based on actual precious metal prices in 2020/21.
6.	Based on current precious metal prices as at 22^nd November 2021.
7.	Based on foreign exchange rates as at 22^nd November 2021.
8.	Our previous guidance was for capital expenditure of up to £600 million for the year, which included our investment in Battery Materials.

Sustainable solutions as we create a cleaner, healthier world
Our vision is for a cleaner, healthier world, and we have an exciting opportunity to apply our deep expertise in complex metal chemistry to develop technologies which enable the four essential transitions the world needs for a sustainable future: transport, energy, decarbonisation of industry and the creation of a circular economy.

We have set out our own sustainability goals (see page 7) but the real difference we make to society is in the products and technology we supply to our customers - not just today but in the new technologies of tomorrow.

In Clean Air, we continue to play a vital role in reducing harmful emissions generated by internal combustion engines, and in Efficient Natural Resources our technology and leading segment positions give us a strong base from which to pivot into new areas - helping our customers decarbonise their chemical value chains and create a circular economy through recycling scarce critical materials. These businesses provide the group with a strong foundation, underpinned by our core science.

Focusing capital on climate change solutions
At our heart is complex metal chemistry, particularly pgm and nickel metal expertise, which is used across the group. It has been developed over decades, is hard to replicate and critical to many of the new technologies which address climate change. We are focusing capital allocation on high growth, high return opportunities that leverage our core competencies.

1.	PGM Services (circularity solutions) - in Efficient Natural Resources
2.	Hydrogen Technologies (fuel cells and green hydrogen) - in New Markets
3.	Catalyst Technologies (decarbonisation of chemicals) - in Efficient Natural Resources

These opportunities are underpinned by our strong balance sheet and sustained cash generation from Clean Air.

Clean Air on track to deliver at least £4 billion of cash over the coming ten years
Clean Air continues to play a vital role in reducing harmful emissions generated by internal combustion engines. As the powertrain evolves, Clean Air is undergoing a major transformation programme to drive greater efficiency and reduce costs. Our new simplified operating model is now in place and performing well, and we continue to execute footprint changes with the transfer of production away from less efficient sites into our newer plants. This includes the closure of our plant in the UK over the next two years. We remain confident that our strategy will deliver cash generation of at least £4 billion over the coming ten years¹.

1. PGM Services: creating a circular economy and underpinning the group
Platinum group metals (pgms) and other scarce metals are critical to many low carbon technologies such as hydrogen powered fuel cell vehicles and green hydrogen electrolysers. Recycling these metals will be crucial in providing low carbon routes to manufacture. The carbon intensity of recycled platinum group metals is c.2%² that of mined metals. It is also a competitive advantage to be able to offer our customers recycling solutions in conjunction with our fuel cell and green hydrogen offerings as well as security of supply for these scarce metals. We are already the world leader in pgm recycling, twice the size of the next nearest player. This position and skillset gives us a strong foundation to capture more value over time from our existing recycling capabilities and expand our offering to develop new technologies which will enable the circular economy and help our customers meet their sustainability goals.

Notes:

At least £4 billion over the coming ten years from 1^st April 2021.

Source: IPA.

2. Hydrogen Technologies: a new business to accelerate growth

Hydrogen - as a fuel source and energy carrier - has a huge role to play in reaching net zero, and the move to hydrogen is accelerating, with the number of large-scale hydrogen projects announced almost doubling since January 2021³.

We already have an established hydrogen business. We are well positioned to enable both the decarbonisation of transport through our hydrogen fuel cell technology and also energy through our hydrogen production technologies.

Our competitive advantage is founded on our core capabilities in pgm catalysis, electrochemistry and surface chemistry. This enables us to produce high performance components for fuel cells and green hydrogen electrolysers. We are positioned across the value chain, which includes manufacture of catalysts, membranes, catalyst coated membranes (CCM) and membrane electrode assemblies (MEA), enabling us to optimise to our customers' needs. Our customers also value the security of supply and the potential to offer recycling solutions and reduce their carbon footprint.

We created a new business - Hydrogen Technologies - which combines our Fuel Cells and Green Hydrogen businesses, accelerating our growth and scale-up in both markets. We are expanding our Hydrogen Technologies manufacturing capacity and, following the completion of our expansion last year, we now have 2GW capacity in the UK and China. We are planning further expansion in these regions to ensure we are able to meet growing demand.

Fuel Cells

We have been a leader in fuel cells and active for well over two decades, with our technology used as far back as the US Apollo moon landings. Our success is based on our pgm expertise, with these metals critical to producing efficient, high performance fuel cell components.

We have a track record of success, supplying components (CCMs and MEAs) which sit at the heart of the fuel cell stack. We have good relationships with many leading fuel cell system integrators and OEMs, and already supply Doosan, SFC Energy, REFIRE/Unilia and SinoHytech/Sino Fuel Cell. In addition, we signed a development and long-term supply agreement commencing in 2022 with a major German automotive supplier for the supply of next generation catalyst coated membranes into the global automotive market.

We continue to make good progress with customers. We recently signed a new five-year framework contract with EKPO Fuel Cell Technologies (a joint venture between ElringKlinger AG and Compagnie Plastic Omnium SE) - a tier one stack manufacturer - to supply CCMs into the global commercial vehicle market. Our customer pipeline includes more than 10 major truck and auto OEM platforms, for which we will supply fuel cell components, due to launch between c.2022 to 2025.

Green Hydrogen

Our Green Hydrogen business is based on the same CCM technology, pgm expertise and recycling capability as Fuel Cells. Given the commonality of technology, Fuel Cells and Green Hydrogen use the same manufacturing capacity and share expertise in developing key components, such as catalysts and CCMs. The strength of our existing position in Fuel Cells has enabled us to create this business in 18 months.

We are making good progress and expect our first commercial sales in 2022. We are testing with leading electrolyser manufacturers and in May 2021 we signed a memorandum of understanding (MoU) with Plug Power and more recently, with Hystar to develop key components for electrolysers. Hystar is a newly established Norwegian company, a high-tech spin-out from SINTEF, one of Europe's largest independent research institutions.

Notes:
3.	Large-scale projects defined as projects larger than 1MW or equivalent. Hydrogen Council, McKinsey & Company

3. Catalyst Technologies: decarbonising chemicals and fuels

In Catalyst Technologies we are focused on the decarbonisation of chemical value chains. We are a well-established and leading provider of process technology and catalysts to the chemicals and energy sectors, notably within syngas which today is at the heart of many chemical value chains and used to manufacture a range of consumer products. Our process technology enables customers to decarbonise by re-engineering their processes to use sustainable feedstocks such as surplus carbon dioxide, biomass and renewable energy to create sustainable fuels and chemicals. This is an opportunity that offers structural growth as our customers focus on how they will decarbonise. Over the medium term we expect high single digit growth in this business which reflects growth in our existing markets, together with new technologies that will help the world decarbonise and move towards net zero. Our growth areas include:

Blue hydrogen: We are seeing increasing interest from customers around the world. Our technology has been selected as part of the UK's HyNet project, one of the world's most progressed blue hydrogen projects, which continues to move towards commercialisation. HyNet was recently named as a Track 1 cluster by the UK government, which means that this project will begin decarbonising industry from 2025. We are working on a global pipeline of opportunities which is growing and now totals over 20 projects.

Sustainable fuels and chemicals: This comprises a range of technologies which enable the production of fuels and chemicals from sustainable sources of hydrogen and carbon, replacing fossil fuel feedstocks. This plays to our strengths in syngas technology where we are one of the world's leading players.

We are making progress in this nascent market and recently supplied and supported the loading of the first catalyst for Fulcrum, for the production of sustainable aviation fuels. Also in this space, we recently signed an engineering agreement with Repsol and Aramco to enable the conversion of renewable energy to liquid fuels. In addition, our methanol technology was selected for the Haru Oni project in Chile, where we will also supply the catalyst, engineering and equipment. The JM designed unit will take atmospheric carbon dioxide as a feedstock for conversion to e-methanol to power gasoline vehicles. In the sustainable fuels and chemicals area, we are working on a pipeline of c.20 projects.

Low carbon solutions: We have a strong position at the heart of many chemical value chains and our customers need to decarbonise their existing processes. There is a large installed base that utilises our existing technology that needs to be decarbonised, and for which we can offer low carbon solutions.

Capital allocation

We have a disciplined capital allocation framework. Our approach is designed to invest capital with a balance of appropriate shareholder return and risk, whilst maintaining a strong balance sheet given the working capital requirements of our metal refining businesses. We will target investment opportunities that will deliver superior returns. Where we have excess cash beyond our investment requirements, we will return that to shareholders.

Our forecast year end net debt position shows gearing returning towards our target level of net debt to EBITDA of 1.5-2.0 times, excluding the benefit of the proceeds from the sale of Advanced Glass Technologies (AGT). Consequently we will return excess capital (including proceeds from the sale of AGT) to shareholders in the form of a share buyback of £200 million beginning in the New Year.

Intention to exit Battery Materials

As announced on 11^th November, following a detailed review and ahead of reaching a number of critical investment milestones, we have concluded that the potential returns from our Battery Materials business will not be adequate to justify further investment. The board has therefore decided to pursue the sale of all or parts of this business with the ultimate intention of exiting. We will move swiftly to determine the best outcome for all of our stakeholders and intend to make a further announcement as soon as possible.

Given the uncertainty of the outcome of this sales process, we have taken a prudent position and fully impaired the carrying value of our Battery Materials assets as at
30^th September 2021, resulting in a charge of £314 million.

In the month of October, we reduced expenditure but still incurred an additional c.£26 million capex. Following the announcement of our intention to exit on 11^th November, we took action to reduce further expenditure.

Portfolio changes

As we focus the group towards our core growth areas, we take an active approach to capital allocation and will continue to review our portfolio to focus on the areas of greatest opportunity with returns that are attractive to shareholders.

Strategic review of Health

We are in discussions about a potential sale and we will provide an update on its conclusion in due course.

Sale of Advanced Glass Technologies

We have agreed the disposal of Advanced Glass Technologies - reported in Other Markets (Value Businesses) - to Fenzi S.p.A for £178 million, with completion expected in the second half. AGT sales were £66 million in the year ended 31^st March 2021.

Sustainability of our own operations

We have developed a sustainability framework and targets which focus on current and future technologies fundamental to addressing climate change.

We recently announced our goal to be net zero by 2040 as well as new, ambitious sustainability targets for 2030. Details of our goals and targets which are set out under three key pillars - Products and services, Operations, People - can be found in our 2021 annual report. We are signed up to the UN Global Compact's Business Ambition for 1.5°C and introduced science-based targets which have recently been independently verified by the Science Based Targets initiative (SBTi):

Absolute reduction in Scope 1 and Scope 2 greenhouse gas emissions of at least 33% by 2030 (baseline 2019/20)⁴

Absolute reduction of Scope 3 greenhouse gas emissions of at least 20% by 2030 (baseline 2019/20)⁴

We are increasingly being recognised by stakeholders for our efforts on sustainability. Recently, we were awarded a Platinum rating by EcoVadis - a leading provider of business sustainability ratings - which puts us in the top 1% of companies they assess.

To oversee our sustainability goals and process, we established a new board committee - the Societal Value Committee - which met for the first time in May 2021 and established a Sustainability Council within the company to manage the implementation of our strategy.

Notes:
4.	Scope 1 covers direct greenhouse emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes purchased goods and services.
Summary of underlying operating results
Unless otherwise stated, commentary refers to performance at constant rates. Percentage changes in the tables are calculated on rounded numbers

Sales (£ million)	Half year ended 30^th September		% change	% change, constant rates
Sales (£ million)	2021	2020¹	% change	% change, constant rates
Clean Air	1,196	1,003	+19	+24
Efficient Natural Resources	523	411	+27	+33
Health	83	119	-30	-26
Other Markets	191	191	-	+5
Eliminations	(55)	(45)
Sales	1,938	1,679	+15	+21

Underlying operating profit (£ million)	Half year ended 30^th September		% change	% change, constant rates
Underlying operating profit (£ million)	2021	2020¹	% change	% change, constant rates
Clean Air	150	77	+95	+103
Efficient Natural Resources	197	88	+124	+129
Health	(4)	15	n/a	n/a
Other Markets	(11)	(2)	n/a	n/a
Corporate	(39)	(27)
Underlying operating profit	293	151	+94	+102

Reconciliation of underlying operating profit to operating profit (£ million)	Half year ended 30^th September
	2021	2020
Underlying operating profit	293	151
Amortisation of acquired intangibles	(3)	(5)
Major impairment and restructuring charges²	(314)	(78)
Gain on significant legal proceedings²	44	-
Operating profit	20	68

¹Restated following change to reporting segments and removal of inter-segment Copper Zeolites sales

² For further detail on these items please see page 18.

Operating results by sector

Clean Air

Clean Air recovered strongly
·	Global sales were up 24% as we saw a strong performance across all regions, despite the impact of OEM supply chain disruption caused principally by shortages of semi-conductor chips
·	Underlying operating profit increased 103%. Whilst margins increased materially, driven by operational leverage and benefits from our transformation programme, they were held back by the impact of chip shortages
·	ROIC increased to 19.9% reflecting higher operating profit and the continued good management of working capital
·	On track for strong cash generation in 2021/22

	Half year ended 30^th September		% change	% change, constant rates
	2021	2020
	£ million	£ million
Sales
Light duty diesel	498	420	+19	+22
Light duty gasoline	270	260	+4	+8
Heavy duty diesel	428	323	+33	+40
Total sales	1,196	1,003	+19	+24

Underlying operating profit	150	77	+95	+103
Margin	12.5%	7.7%
Return on invested capital (ROIC)	19.9%	11.4%
Reported operating profit	149	42

A strong recovery in demand, but seeing impact from supply chain disruption

Clean Air provides catalysts for emission control after-treatment systems used in light and heavy duty vehicles powered by internal combustion engines. Global sales increased 24%, reflecting a strong recovery in demand in Europe and the Americas, against a prior period that was materially impacted by temporary customer shutdowns due to the pandemic.

Market demand remains strong across all regions. However, there was supply chain disruption across the industry principally due to the shortage of semi-conductor chips. This affected our volumes in our first half, with a more pronounced impact in our second quarter. Due to these shortages, we expect continued volume constraints on production levels through the second half. We are actively mitigating the impact through a combination of adjusting shift patterns, optimising production across our manufacturing footprint and working closely with customers to reduce the impact on our operations. To support our long-term performance and cash generation, we have already secured some Euro 7 business and are actively bidding on further platforms to meet this legislation.

Light duty catalysts - diesel and gasoline

Our light duty business provides catalysts for emission control after-treatment systems used in cars and other light duty vehicles powered by diesel and gasoline engines. Diesel accounts for c.65% of our light duty business, which is mostly in Europe.

Light duty diesel

In light duty diesel, global sales were up 22%. In Europe, where we hold a significant share of the light duty diesel market, sales growth was well ahead of market production due to a favourable platform mix. In Asia, sales grew in line with market production, and in the Americas, we saw strong sales growth and outperformed the market due to a beneficial platform mix.

Light duty gasoline

Sales in light duty gasoline were up 8%, above global vehicle production in aggregate due to a favourable platform mix. This outperformance was partially offset by the loss of two platforms in the Americas and in Europe, in line with our selective strategy.

Heavy duty diesel catalysts

In heavy duty diesel catalysts, we provide catalysts for emission control after-treatment systems for trucks, buses and non-road equipment. Sales recovered strongly, up 40% in the half, with growth in all regions.

In our Americas heavy duty business, where we hold a significant share of the market, we saw strong sales growth in line with market production which is benefiting from a cyclical recovery in the US Class 8 truck cycle. In Europe, heavy duty sales growth outperformed market production and was driven by a favourable platform mix. Heavy duty Asia sales grew very strongly in a market that declined, as we benefited from increased market share and increased value from tighter legislation in China.

Underlying operating profit

Underlying operating profit increased 103% and margin increased to 12.5%. Whilst margins increased materially, driven by operational leverage and benefits from our transformation programme, they were held back by the impact of chip shortages.

Return on invested capital (ROIC)

ROIC increased by 8.5 percentage points to 19.9%, reflecting higher operating profit and continued good management of working capital.

Efficient Natural Resources

Strong performance driven by PGM Services and a recovery in Catalyst Technologies
·	Sales grew 33% reflecting a strong performance in PGM Services benefiting from volatile and higher average precious metal prices, and increased refinery volumes. Catalyst Technologies grew well driven by higher refill catalysts, principally ammonia and methanol
·	Underlying operating profit up 129% and margin expanded 16.3 percentage points. This reflected strong growth in PGM Services (higher average pgm prices and increased volumes), strong performance in Catalyst Technologies, and efficiency benefits
·	ROIC grew 34.2 percentage points to 53.9% reflecting higher operating profit and continued good management of working capital

	Half year ended 30^th September			% change	% change, constant rates
		2021	2020¹
		£ million	£ million
Sales
PGM Services		300	215	+40	+46
Catalyst Technologies		223	196	+14	+19
Total sales		523	411	+27	+33

Underlying operating profit		197	88	+124	+129
Margin		37.7%	21.4%
Return on invested capital (ROIC)		53.9%	19.7%
Reported operating profit		239	67

¹Restated following change to reporting segments and removal of inter-segment Copper Zeolites sales.

PGM Services

PGM Services is the world's leading secondary 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. These circular solutions are set to become increasingly important for customers as they seek metals with a lower carbon footprint. PGM Services also provides a strategic service to the group, supporting Clean Air and Hydrogen Technologies with security of metal supply in a volatile market.

PGM Services grew strongly, benefiting from higher average pgm prices

Sales in PGM Services increased 46% as we benefited from volatile and higher average precious metal prices and we saw increased volumes as we managed our refinery intakes in the prior period to optimise working capital.

Our other businesses in PGM Services also saw good performance. Sales grew in chemical products, primarily driven by Clean Air which uses pgm materials in its catalyst products. Industrial products containing pgms also grew well. In addition, following a recent change to our reporting structure Life Science Technologies (formerly part of New Markets) is now part of PGM Services. Life Science Technologies provides advanced pgm based catalysts to the pharmaceutical and agricultural chemicals markets. Sales were up strongly in this business due to phasing of orders.

Refinery backlogs remain at low levels

Refinery backlogs remain at low levels, which reflects our continued strong operational focus and efficient management of precious metal working capital. This supports the group's balance sheet efficiency.

Catalyst Technologies

Catalyst Technologies is focused on enabling the decarbonisation of chemical value chains. This business licenses key, proven and efficient process technology solutions and manufactures high value speciality catalysts and additives principally for the chemical and energy industries. We have leading positions in key end segments including syngas, methanol, ammonia, hydrogen and formaldehyde. Given our strong position in these important value chains, our technology can help customers decarbonise their operations by re-engineering their processes and using sustainable feedstocks.

Our main revenue streams in this business comprise refill catalysts (recurring business which makes up the majority of sales), first fill catalysts and licensing income. Overall, sales were up 19% primarily driven by higher demand for refill catalysts whilst additives were flat as demand for some fuels remained subdued. First fill catalysts also grew well, benefiting from catalyst sales for new technology. Our licensing business was marginally up and our project pipeline remains strong.

Refill catalysts grew double digit, with higher demand across key segments

Sales of refill catalysts grew double digit, with higher demand across our key segments. We saw continued good performance in ammonia whilst sales of methanol refills recovered as we benefited from orders which had been delayed due to the pandemic. Performance was also good in segments more impacted by COVID-19 in the prior year, such as formaldehyde which is largely used in construction.

First fills grew well, with the supply of the first catalyst for sustainable aviation fuel

Sales of first fill catalysts are driven by the start-up of new plants. They are a lead indicator of future refill catalyst demand. In the period, sales grew well. Although small in value at this stage, we supplied the first catalyst used by our Fischer Tropsch (FT) CANS™ technology to Fulcrum for one of the world's first plants for the production of sustainable fuel from municipal solid waste.

Licensing marginally up in the period and a strong pipeline

Our licensing business is dependent on new plant builds and revenue is recognised over the period of construction. In the period, sales were marginally up reflecting income from recent licence wins, particularly oxoalcohol and methanol projects based in China.

Licensing activity remains good and we signed two new licences in the period (1H 20/21:
2 licences). We have a strong pipeline of projects and are working with customers on a number of future opportunities focused on our decarbonisation technology, including sustainable aviation fuel and low carbon blue hydrogen solutions. See more detail on our future growth in our strategy section (page 6).

During the period, we recognised a non-underlying gain of £44 million in relation to damages and interest from a company found to have unlawfully copied one of our technology designs. We received the cash for this in the half and the related profit was taken outside of underlying operating profit.

Underlying operating profit

Underlying operating profit up 129% and margin expanded 16.3 percentage points. This reflected strong growth in PGM Services (higher average pgm prices (+c.£60 million) and increased volumes), strong performance in Catalyst Technologies and efficiency benefits.

ROIC

ROIC grew 34.2 percentage points to 53.9% reflecting higher operating profit and continued good management of working capital.

Health

Weak performance - labour shortage in the US and supply chain constraints
·	Performance across both Generics and Innovators is being impacted by acute temporary labour shortages in the US pharma market and global supply chain constraints
·	Lower sales of speciality opiates in our Generics business (-43%) due mainly to pricing pressure and COVID-19 related delays to elective medical procedures affecting demand
·	We continue to make progress with the development of our pipeline of new products, but we are no longer of the view that the business will achieve £100 million of additional operating profit by 2026
·	We are in discussions about a potential sale and we will provide an update on its conclusion in due course

	Half year ended 30^th September		% change	% change, constant rates
	2021	2020	% change	% change, constant rates
	£ million	£ million
Sales
Generics	40	70	-43	-40
Innovators	43	49	-12	-4
Total sales	83	119	-30	-26

Underlying operating (loss) / profit	(4)	15	n/a	n/a
Margin	-4.8%	12.6%
Return on invested capital (ROIC)	2.6%	4.6%
Reported operating (loss) / profit	(4)	4

Generics

Our Generics business develops and manufactures generic active pharmaceutical ingredients (APIs) for a variety of treatments. The majority of our business is controlled APIs.

In the period, sales declined 40% primarily driven by speciality opiates. In speciality opiates, sales of opioid addiction therapies were lower reflecting pricing pressure in the US as the market genericises and opioid analgesics decreased due to the delay of elective medical procedures. In addition, we also saw increased demand in the prior year for some products due to COVID-19. We also saw weaker performance across a number of other products due to new competitors entering the market and timing of orders.

Innovators

Our Innovators business provides customised development and manufacturing services for active ingredients of new drugs during their lifecycle, including for initial clinical evaluation and subsequently for commercial supply post regulatory approval.

Innovators slightly declined in the period, with sales down 4%. We continue to benefit from our multi-year contracts with Gilead and Sarepta, and commercial demand remains strong. Sales in the half were lower because of key raw material shortages due to global supply chain disruption and temporary US labour shortages which meant that we had a shortage of skilled operators. For Gilead, we supply an immuno-oncology drug linker used in a treatment for triple negative breast cancer, and remain excited by our future prospects given Gilead's approval from the FDA (Food and Drug Administration) for a further indication of the drug for the treatment of bladder cancer.

These sales declines were partly offset by a modest increase in clinical development work, where we undertake customised development and manufacturing services. We were also impacted in the prior period due to COVID-19 related shutdowns.

Strategic review update

We are in discussions about a potential sale and we will provide an update on its conclusion in due course.

Underlying operating loss

Underlying operating loss reflecting weaker sales in Generics and manufacturing challenges in both businesses due to temporary US labour market shortages and supply chain disruption.

ROIC

ROIC declined 2 percentage points to 2.6% due to an operating loss in the half. ROIC remains positive in the first half due to being measured over a rolling 12-month period.

Other Markets

Announced intention to exit Battery Materials, commercialising opportunities in Hydrogen at pace and driving value from non-core businesses
·	Sales grew 5% driven by a strong recovery in Value Businesses. We saw lower sales in Fuel Cells primarily due to temporary manufacturing issues as we ramped up our new facilities, and we used a proportion of our capacity for new customer testing
·	We continue to invest in the commercialisation of our new growth businesses, resulting in an underlying operating loss of £11 million
·	On 11^th November, we announced the intention to exit our Battery Materials business
·	Sale of our glass coatings business Advanced Glass Technologies announced for a total consideration of £178 million

	Half year ended 30^th September		% change	% change, constant rates
	2021	2020¹
	£ million	£ million
Sales
New Markets	16	25	-36	-36
Value Businesses	175	166	+5	+11
Total sales	191	191	-	+5

Underlying operating loss	(11)	(2)	n/a	n/a
Margin	-5.8%	-1.0%
Return on invested capital (ROIC)	-1.4%	3.0%
Reported operating loss	(325)	(15)

¹Restated following change to reporting segments

New Markets

New Markets comprises Hydrogen Technologies (Fuel Cells and Green Hydrogen) and Battery Materials.

In Fuel Cells, we continue to see increased interest for automotive and truck applications from customers principally in Asia and Europe. In Green Hydrogen, we are working at pace to commercialise key components used in green hydrogen electrolysers and expect our first commercial sales in 2022.

Our Battery Materials business includes our lithium iron phosphate materials, and high nickel eLNO cathode materials. We announced on 11^th November our intention to exit Battery Materials. Whilst testing with customers is progressing well, this market is developing into a high volume, commoditised market and it has become clear that our capital intensity is too high compared with more established large scale, low cost producers. We have concluded that the potential returns from battery materials will not be adequate to justify further investment and have therefore announced our intention to exit this business.

New Markets sales declined 36% in the period, largely due to lower sales in Fuel Cells. We were impacted by temporary manufacturing issues as we ramped up our new facilities, which have now been resolved. We also used a proportion of our capacity for new customer testing.

Value Businesses

Value Businesses is managed to drive shareholder value from activities considered to be non-core to JM, and currently comprises Battery Systems, Medical Device Components, Diagnostic Services and Advanced Glass Technologies (AGT). Sales were up 11% in the half, trending back towards pre-pandemic levels. As we actively manage to drive value, we saw an improved performance in these businesses.

AGT mainly provides black obscuration enamels and silver paste for automotive glass applications. Sales were higher as we saw a strong rebound in automotive markets following pandemic disruption in the prior period. On 24^th November 2021, we announced the disposal of this business to Fenzi S.p.A for £178 million and it is now classified as held for sale.

Our Battery Systems business saw a partial recovery in sales following a weak prior period that was impacted by disruption caused by the pandemic. In the half, we saw an impact from shortages of semi-conductor chips.

Medical Device Components performed well and saw good sales growth following the postponement of some elective medical procedures in 2020 due to the pandemic.

Diagnostic Services saw a good recovery in the half although performance remains impacted by the pandemic.

Underlying operating loss

We reported an underlying operating loss of £11 million. This was due to increased investment into our New Markets growth businesses such as Hydrogen Technologies and lower sales in Fuel Cells.

ROIC

ROIC declined by 4.4 percentage points to -1.4% due to higher assets as we invest for growth, and an operating loss.

Corporate

Corporate costs were £39 million, an increase of £12 million from the prior period, primarily due to building capability across our group functions and upgrading our core IT systems.

Financial review

Research and development (R&D)

R&D spend was £109 million in the half, including £20 million of capitalised R&D. This was up from £96 million in the prior period and represents c.5% of sales excluding precious metals. R&D spend was higher in the period, primarily driven by increased investment in Hydrogen Technologies as we commercialise our fuel cell and green hydrogen offerings, as well as Battery Materials which will now cease.

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 75% of the non-sterling denominated underlying operating profit in the half year ended 30^th September 2021, were:

	Share of 1H 2021/22 non-sterling denominated underlying operating profit	Average exchange rate Half year ended 30^th September		% change
		Average exchange rate Half year ended 30^th September
		2021	2020
US dollar	27%	1.39	1.27	+9
Euro	30%	1.16	1.12	+4
Chinese renminbi	18%	8.95	8.86	+1

For the half, the impact of exchange rates decreased sales by £71 million and underlying operating profit by £6 million.

If current exchange rates (£:$ 1.34, £:€ 1.19, £:RMB 8.57) are maintained throughout the year ending 31^st March 2022, foreign currency translation will have a negative impact of approximately £15 million on underlying operating profit. A one cent change in the average US dollar and euro exchange rates and a ten fen change in the average rate of the Chinese renminbi each have an impact of approximately £1 million on full year underlying operating profit.

Efficiency savings

We are transforming our organisation to create a more simple and efficient group, allowing us to act with greater agility and pace in a dynamic external environment. This includes the consolidation of our Clean Air manufacturing footprint and the implementation of a new group operating model, which will deliver savings of £110 million per annum by 2023/24.

Initiative £ million	Delivered to 2020/21	Delivered in half	Total delivered to date	Annualised benefits by 2023/24
Total active efficiency programmes	37	42	79	110

Items outside of underlying operating profit
Major impairment and restructuring costs Following the announcement of our intention to exit our Battery Materials business, the associated Battery Materials' assets were impaired by £314 million. The impairment comprises property, plant and equipment (£216 million), right-of-use assets (£5 million), other intangible assets (£78 million) and trade and other receivables (£15 million). Related to our efficiency savings which will deliver savings of £110 million per annum by 2023/24, we incurred £230 million of one-off costs in total recognised outside of underlying operating profit in prior periods. Of these costs, £78 million were incurred in the first half of the prior year.

Gain on significant legal proceedings During the period, the group recognised a gain of £44 million in relation to damages and interest from a company found to have unlawfully copied one of JM's technology designs.

Finance charges
Net finance charges in the period amounted to £29 million, down from £41 million in the first half of 2020/21. Due to the focus across the group on maintaining efficient levels of precious metal working capital and sustained lower borrowings, we have seen finance costs gradually decrease.

Taxation
The tax charge on underlying profit before tax for the half year ended 30^th September 2021 was £42 million, an effective underlying tax rate of 16.0%, slightly up from 15.6% in the first half of 2020/21. The tax rate on underlying profit for the year ending 31^st March 2022 is estimated to be c.16-17%.

The effective tax rate on reported profit for the half was 189.6%, up from 7.8% in the prior period. This represents a tax charge of £19 million, up from £2 million in the prior year. The increased effective rate is due to a major impairment arising in the first half, the majority of which arises in a jurisdiction where no tax relief is available.

Post-employment benefits
IFRS - accounting basis
At 30^th September 2021, the group's net post-employment benefit position was a surplus of £203 million.

The cost of providing post-employment benefits in the period was £25 million, up from £21 million in the same period last year.

Actuarial - funding basis
The UK pension scheme has a legacy defined benefit career average section which was closed to new entrants on 1^st October 2012, when a new defined benefit cash balance section was opened.

The last triennial actuarial valuation of the career average section as at 1^st April 2018 revealed a deficit of £34 million, or a surplus of £9 million after taking account of the future additional deficit funding contributions from the special purpose vehicle set up in January 2013. The valuation results as at 1^st April 2018 allowed for the equalisation of Guaranteed Minimum Pension. The triennial actuarial valuation of the scheme as at 1^st April 2021 is currently underway and the results are expected by the end of the year.

The last triennial actuarial valuation of the cash balance section as at 1^st April 2018 revealed a surplus of £0.2 million.

The latest actuarial valuations of our two US pension schemes showed a surplus of £9 million as at 1^stJuly 2021, an improvement from a £7 million surplus as at 1^st July 2020.

Capital expenditure
Capital expenditure was £228 million in the half, 2.4 times depreciation and amortisation (excluding amortisation of acquired intangibles). In the period, projects included:
·	In Efficient Natural Resources, investing to increase the resilience and capacity of our pgm refining assets
·	Development and commercialisation of eLNO, our portfolio of high nickel cathode materials within Battery Materials
·	Upgrading our core IT business systems

Strong balance sheet
Net debt at 30^th September 2021 was £699 million, a decrease of £76 million from 31^st March 2021 and £179 million from 30^th September 2020. Net debt is £39 million higher at £738 million when post tax pension deficits are included. The group's net debt (including post tax pension deficits) to EBITDA was 0.9 times (30^th September 2020: 1.6 times), below our target range of 1.5 to 2.0 times.

As part of our continued focus on working capital management, we have maintained an efficient balance sheet and low levels of working capital. In the half, supply chain disruption across automotive and truck production resulted in a precious metal working capital volume benefit of c.£300 million, which will unwind as production recovers.

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. These amounted to £223 million at 30^th September 2021 (31^st March 2021: £437 million, 30^th September 2020: £367 million).

Free cash flow and working capital
Free cash flow was £189 million in the half, compared to £256 million in the prior period, largely reflecting higher non-precious metal working capital.

Excluding precious metal, average working capital days to 30^th September 2021 decreased to 40 days compared to 70 days to 30^th September 2020. The prior period was higher due to the lower average sales volume through the period. Our target range for average non-precious metal working capital days is between 50 and 60 days over the medium term.

Going concern
The group maintains a strong balance sheet with around £1.7 billion of available cash and undrawn committed facilities. Cash generation was strong during the period with free cash flow of around £189 million lowering net debt by £76 million since year end. As set out on page 28, the directors have reviewed the base case 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 half-yearly accounts. In arriving at this view, the base case scenario was stress tested to a severe but plausible downside case which assumed a lower demand profile and slower recovery in end user market growth. Additionally, the group considered scenarios including the impact from metal price volatility, a short-term refinery shutdown and increases in the amount of metal that we would have to hold.

Under all scenarios, the group has sufficient headroom against committed facilities and key financial covenants are not in breach during the going concern period. The directors are therefore of the opinion that the group has adequate resources to fund its operations for the period of twelve months following the date of this announcement and so determine that it is appropriate to prepare the accounts on a going concern basis.

Risks and uncertainties

The principal risks and uncertainties, together with the group's strategies to manage them, are set out on pages 88 to 96 of the 2021 annual report. Updated risks are:

Existing market outlook - Changing assumptions in our key markets could have an unplanned or unforeseen impact that we are not agile enough to respond to. Since the publication of the 2021 annual report, this risk has been revised to reflect the impact of climate change and our transition to a low carbon economy. As we transition to a low carbon economy, there is a risk JM is unable to make and or sell products demanded by customers.

This risk includes the potential impact of legislative changes, including carbon pricing or taxation legislation, other market movements outside of our predictions, the extended impact of global pandemics, and emerging trends such as tariffs, as well as regional and global slowdowns to which our business may be sensitive.

Future growth - Ineffective execution of our strategic initiatives and investments could lead to failure to deliver planned growth and create value. Our intention to exit Battery Materials changes this risk profile in that we will have less exposure to a highly capital intensive and potentially low margin segment, but removes one of our strategic growth initiatives.

Competitive advantage - Failure to maintain our competitive advantage in existing markets and, as a result, not meeting customers' evolving needs as effectively and profitably as our competitors, particularly around increasing customer demand for net zero products.

Environment, health and safety (EHS) - Like other high hazard manufacturing companies, our business operations are subject to a wide range of challenging health, safety and environmental laws, standards and regulations set by government and non-governmental bodies around the world. If we fail to operate safely, we could injure our people or breach applicable laws, which could have a negative impact on our employees. This could result in lost production time and potentially attract negative interest from the media and regulators.

Supply failure - The nature of JM's operations means there are limited suppliers from which to source certain strategic raw materials including precious metals. Any significant breakdown in the supply of these materials would lead to an inability to manufacture our products and satisfy customer demand. Through our work on climate change impacts, we acknowledge that increased frequency of extreme weather events and natural disasters (drought, floods, storms, cyclones, heavy rain, sea level rise, heatwaves) may lead to disruption to supply chains across JM's value chain (upstream and downstream) resulting in disrupted delivery of raw materials and products and increased costs.

People - To successfully execute our strategy and deliver growth, we need an appropriate culture and a breadth and depth of leadership skills to drive a motivated, inclusive and engaged workforce, underpinned by adequate people data. This is especially important as we pivot away from more traditional areas of the business to ones that are higher growth and by implication higher risk.

Security of metal / highly regulated substances - We store and transport significant quantities of high value precious metals or highly regulated substances. Loss or theft due to a failure of our associated security management systems may result in financial loss and / or a failure to satisfy our customers, which could reduce customer confidence or result in legal action.

Intellectual property management - Failure to adequately manage our own, and third party, intellectual property, knowledge and information could lead to a loss in business advantage, loss of freedom to operate and reputational damage associated with litigation.

Asset failure - We may experience critical asset failures resulting in a material impact on the supply, performance, share value and reputation of JM. In addition, we recognise that increased frequency of extreme weather events and natural disasters (drought, floods, storms, cyclones, heavy rain, sea level rise, heatwaves) may lead to disruption of JM operations resulting in increased costs and detrimental effects on employee wellbeing.

Ethics and compliance - Failure to comply with ethical and regulatory standards could lead to reputational damage, and leave the company or individuals open to potential criminal or legal action.

Business transition - Failure to manage and deliver change in a controlled manner to achieve expected business benefits.

Product quality - Customers use our products in a wide range of their own end products, processes and systems. It is crucial, therefore, that our products work properly and meet the established quality criteria. Performance failure or quality defects could cause harm to consumers or leave us exposed to liability claims. This could lead to loss of future business, licence to operate and reputational damage.

Information, technology and cyber security - Failure to adapt our IT systems to changing business requirements, significant disruption to those systems or a major cyber security incident could adversely affect our financial position, harm our reputation and lead to regulatory penalties, or non-compliance with laws.

Customer contract liability - Unfavourable customer contract terms could lead to significant loss or damage and expose us to high or unlimited liability, as well as other broader negative consequences.

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

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

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

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

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

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


The responsibility statement was approved by the Board of Directors on 23^rd November 2021 and is signed on its behalf by:



Patrick Thomas
Chairman

Independent Review Report

to Johnson Matthey Plc

Report on the condensed consolidated accounts

Our conclusion

We have reviewed Johnson Matthey Plc's condensed consolidated accounts (the "interim financial statements") in the half year results of Johnson Matthey Plc for the 6 month period ended 30^th September 2021 (the "period").

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

What we have reviewed

The interim financial statements comprise:

· the Condensed Consolidated Balance Sheet as at 30^th September 2021;

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

· the Condensed Consolidated Cash Flow Statement for the period then ended;

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

· the explanatory notes to the interim financial statements.

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

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The half year results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the half year results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

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

What a review of interim financial statements involves

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

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

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

PricewaterhouseCoopers LLP

Chartered Accountants

London

23^rd November 2021

Condensed Consolidated Income Statement

for the six months ended 30^th September 2021


			Six months ended
			30.9.21	30.9.20
		Notes	£ million	£ million

Revenue		2, 3	8,586	6,979
Cost of sales			(8,038)	(6,587)
Gross profit			548	392
Distribution costs			(57)	(54)
Administrative expenses			(198)	(187)
Amortisation of acquired intangibles		4	(3)	(5)
Gain on significant legal proceedings		4	44	-
Major impairment and restructuring charges		4	(314)	(78)
Operating profit			20	68
Finance costs			(38)	(77)
Finance income			9	36
Share of losses of joint ventures and associates			-	(1)
(Loss) / profit before tax			(9)	26
Tax expense		5	(19)	(2)
(Loss) / profit for the period			(28)	24

			pence	pence

(Loss) / earnings per ordinary share
	Basic	6	(14.8)	12.3
	Diluted	6	(14.8)	12.3

Condensed Consolidated Statement of Total Comprehensive Income

for the six months ended 30^th September 2021


			Six months ended
			30.9.21	30.9.20
		Notes	£ million	£ million

(Loss) / profit for the period			(28)	24
Other comprehensive income
Items that will not be reclassified to the income statement
	Remeasurements of post-employment benefit assets and liabilities	13	59	(103)
	Fair value gains on equity investments at fair value through other comprehensive income		1	6
	Tax on items that will not be reclassified to the income statement		(5)	21
			55	(76)
Items that may be reclassified to the income statement:
	Exchange differences on translation of foreign operations		40	(11)
	Amounts credited / (charged) to hedging reserve		13	(6)
	Fair value losses on net investment hedges		(2)	-
	Tax on items that may be reclassified to the income statement		(3)	1
			48	(16)
Other comprehensive income / (expense) for the period			103	(92)
Total comprehensive income / (expense) for the period			75	(68)

Condensed Consolidated Balance Sheet

as at 30^th September 2021


		30.9.21	31.3.21
	Notes	£ million	£ million

Assets
Non-current assets
Property, plant and equipment	8	1,326	1,424
Right-of-use assets		65	74
Goodwill		557	554
Other intangible assets	9	307	359
Investments in joint ventures and associates		2	2
Investments at fair value through other comprehensive income		54	53
Other receivables	10	30	50
Interest rate swaps	19	17	20
Deferred tax assets		113	140
Post-employment benefit net assets	13	249	194
Total non-current assets		2,720	2,870

Current assets
Inventories		2,004	1,814
Current tax assets		9	13
Trade and other receivables	10	1,916	2,422
Cash and cash equivalents	19	746	581
Interest rate swaps	19	3	-
Other financial assets		61	44
Assets classified as held for sale	12	52	-
Total current assets		4,791	4,874
Total assets		7,511	7,744

Liabilities
Current liabilities
Trade and other payables	11	(3,050)	(3,325)
Lease liabilities	19	(11)	(11)
Current tax liabilities		(95)	(147)
Cash and cash equivalents ─ bank overdrafts	19	(42)	(36)
Borrowings and related swaps	19	(309)	(26)
Other financial liabilities		(28)	(18)
Provisions		(29)	(35)
Liabilities classified as held for sale	12	(13)	-
Total current liabilities		(3,577)	(3,598)

Non-current liabilities
Borrowings and related swaps	19	(1,054)	(1,252)
Lease liabilities	19	(48)	(51)
Deferred tax liabilities		(28)	(28)
Employee benefit obligations	13	(100)	(98)
Provisions		(26)	(27)
Other payables	11	(5)	(5)
Total non-current liabilities		(1,261)	(1,461)
Total liabilities		(4,838)	(5,059)
Net assets		2,673	2,685

Equity
Share capital		221	221
Share premium		148	148
Shares held in employee share ownership trust (ESOT)		(24)	(29)
Other reserves		49	-
Retained earnings		2,279	2,345
Total equity		2,673	2,685

Condensed Consolidated Cash Flow Statement

for the six months ended 30^th September 2021


		Six months ended
		30.9.21	30.9.20
	Notes	£ million	£ million

Cash flows from operating activities
(Loss) / profit before tax		(9)	26
Adjustments for:
Share of losses of joint ventures and associates		-	1
Depreciation		77	76
Amortisation		22	13
Impairment losses		314	16
Loss on sale of non-current assets		-	1
Share-based payments		9	5
Increase in inventories		(179)	(177)
Decrease / (increase) in receivables		532	(347)
(Decrease) / increase in payables		(339)	840
(Decrease) / increase in provisions		(8)	49
Contributions less than / (in excess of) employee benefit obligations charge		5	(5)
Changes in fair value of financial instruments		8	(37)
Net finance costs		29	41
Income tax paid		(49)	(20)
Net cash inflow from operating activities		412	482

Cash flows from investing activities
Interest received		6	33
Purchases of property, plant and equipment		(141)	(139)
Purchases of intangible assets		(43)	(36)
Proceeds from sale of non-current assets		2	-
Net cash outflow from investing activities		(176)	(142)

Cash flows from financing activities
Proceeds from borrowings		63	288
Repayment of borrowings		-	(4)
Dividends paid to equity shareholders	7	(96)	(60)
Interest paid		(40)	(77)
Principal element of lease payments		(7)	(7)
Net cash (outflow) / inflow from financing activities		(80)	140

Net increase in cash and cash equivalents		156	480
Exchange differences on cash and cash equivalents		3	(1)
Cash and cash equivalents at beginning of year		545	273
Cash and cash equivalents at end of period	19	704	752

Cash and deposits		223	197
Money market funds		523	573
Bank overdrafts		(42)	(32)
Cash and deposits transferred to assets classified as held for sale		-	14
Cash and cash equivalents	19	704	752

Condensed Consolidated Statement of Changes in Equity

for the six months ended 30^th September 2021


		Share	Shares
	Share	premium	held in	Other	Retained	Total
	capital	account	ESOT	reserves	earnings	equity
	£ million	£ million	£ million	£ million	£ million	£ million

At 1^st April 2020	221	148	(32)	142	2,345	2,824
Total comprehensive expense for the period	-	-	-	(10)	(58)	(68)
Dividends paid (note 7)	-	-	-	-	(60)	(60)
Share-based payments	-	-	-	-	9	9
Cost of shares transferred to employees	-	-	3	-	(7)	(4)
At 30^th September 2020	221	148	(29)	132	2,229	2,701
Total comprehensive (expense) / income for the period	-	-	-	(132)	150	18
Dividends paid (note 7)	-	-	-	-	(39)	(39)
Share-based payments	-	-	-	-	7	7
Cost of shares transferred to employees	-	-	-	-	(3)	(3)
Tax on share-based payments	-	-	-	-	1	1
At 31^st March 2021	221	148	(29)	-	2,345	2,685
Total comprehensive income for the period	-	-	-	49	26	75
Dividends paid (note 7)	-	-	-	-	(96)	(96)
Share-based payments	-	-	-	-	12	12
Cost of shares transferred to employees	-	-	5	-	(8)	(3)
At 30^th September 2021	221	148	(24)	49	2,279	2,673

Notes to the Accounts

for the six months ended 30^th September 2021

Basis of preparation and statement of compliance

On 31^st December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The group transitioned to UK-adopted International Accounting Standards in its consolidated financial statements on 1^st April 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework. This condensed consolidated interim financial report for the half-year reporting period ended 30^th September 2021 has been prepared in accordance with the UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. The accounting policies applied are consistent with the accounting policies applied by the group in its consolidated accounts as at, and for the year ended, 31^st March 2021, with the exception of the adoption of amended accounting policies and standards as explained below.

These condensed consolidated accounts do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The interim report does not include all of the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31^st March 2021, which has been prepared in accordance with both International Accounting Standards (IAS) in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), adopted pursuant to Regulation (EC) No 1606/2002 as it applies to the European Union, including the interpretations issued by the IFRS Interpretations Committee.

Information in respect of the year ended 31^st March 2021 is derived from the company's statutory accounts for that year which have been delivered to the Registrar of Companies. The auditor's report on those statutory accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain any statement under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

The half-yearly accounts are unaudited, but have been reviewed by the auditors. They were approved by the board of directors on 23^rd November 2021.

Going concern

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

As at 30^th September 2021, the group maintains a strong balance sheet with around £1.7 billion of available cash and undrawn committed facilities. Cash generation was strong during the period with free cash flow of around £189 million lowering net debt by £76 million since 31^st March 2021 to £699 million. Net debt (including post tax pension deficits) to EBITDA, was below our target range at 0.9 times.

Overall, 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 forecasts for our base case scenario. The base case scenario was stress tested to a severe but plausible downside case which assumed a lower demand profile and slower recovery in end user market growth.

Additionally, the group considered scenarios including the impact from metal price volatility, a short-term refinery shutdown and increases in the amount of metal that we would have to hold. Whilst the combined impact would reduce profitability and EBITDA against our latest forecast, our balance sheet remains strong.


1	Basis of preparation and statement of compliance (continued)

Going concern (continued)

The group has a robust funding position comprising a range of long-term debt and a £1 billion five year committed revolving credit facility maturing in March 2026 which was entirely undrawn at 30^th September 2021. There was £555 million of cash held in money market and bank deposits. Of the existing loans, around £255 million of term debt matures in the period to December 2023 which has been included 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 should it need to. The group also has a number of additional sources of funding available including uncommitted lease facilities that support precious metal funding. Whilst we would fully expect to be able to utilise the metal lease facilities, they are excluded from our going concern modelling.

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

The directors are therefore of the opinion that the group has adequate resources to fund its operations for the period of twelve months following the date of this announcement and so determine that it is appropriate to prepare the accounts on a going concern basis.

Non-GAAP measures

The group uses various measures to manage its business which are not defined by generally accepted accounting principles (GAAP). The group's management believes these measures provide valuable additional information to users of the accounts in understanding the group's performance. The group's non-GAAP measures are defined and reconciled to GAAP measures in note 19.

Amended standards adopted by the group

The IASB ratified the IFRIC update on Configuration and Customisation ('CC') costs in a Cloud Computing Arrangement (IAS 38, Intangible Assets) in April 2021. The group reports 'CC' in cloud computing arrangements according to these updates.

The IASB has issued other amendments resulting from improvements to IFRS that the group considers do not have any impact on the accounting policies, financial position or performance of the group. The group has not early adopted any standard, interpretation or amendment that was issued but is not yet effective.

The group has elected not to apply the exemption granted in the 'COVID-19 related rent concessions' amendment to IFRS 16, Leases, as the group has not received material COVID-19 related rent concessions as a lessee.

Interest Rate Benchmark Reform Phase 2 - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The IBOR reform, Phase 2 amendments were effective for annual periods beginning on or after the 1^st January 2021. The Phase 2 amendments address issues that arise from implementation of the reforms, including the replacement of one benchmark with an alternative one. A practical expedient is provided such that the change to contractual cash flows for financial assets and liabilities (including lease liabilities) is accounted for prospectively by revising the effective interest rate. In addition, hedge accounting will not be discontinued solely because of the IBOR reform. The amendments are not expected to have a material impact on the results or financial position of the group.

The group has one IFRS 9 designated hedge relationship: the 3.26% $150 million Bonds 2022 which have been swapped into floating rate US dollars. This swap references six-month US dollar LIBOR, however the swap matures in 2022, before the amendments are effective for the group. The group does have access to a revolving credit facility which remains undrawn, the contract has been amended so that USD and GBP drawings will be subject to the new Secured Overnight Financing Rate (SOFR) and Sterling Overnight Index Average (SONIA) respectively from 30^th November 2021. The implications on the wider business of IBOR reform have been assessed and there are no other arrangements that are materially impacted.


2	Segmental information


	Revenue, sales and underlying operating profit by sector

	As part of the 31^st March 2021 results press release, we announced small changes to our reporting segments to reflect how we are managing the business and increase visibility of our new growth businesses. Efficient Natural Resources now includes Life Science Technologies (formerly part of New Markets) and excludes Diagnostic Services and Advanced Glass Technologies (now part of Other Markets). Excluding Corporate costs, the group has four reporting segments, aligned to the needs of our customers and the global challenges we are tackling.
	Clean Air - provides catalysts for emission control after-treatment systems to remove harmful emissions from vehicles and non-road equipment powered by diesel and gasoline.
	Efficient Natural Resources - provides products and processing services for the efficient use and transformation of critical natural resources including oil, gas, biomass and platinum group metals to enable the decarbonisation of chemical value chains and provide circular economy solutions.
	Health - develops and manufactures active pharmaceutical ingredients (APIs) for a variety of treatments and new drugs during their lifecycle, including for initial clinical evaluation and subsequently for commercial supply post regulatory approval.
	Other Markets - a portfolio of businesses with particular focus on potential growth and value realisation opportunities. This includes Battery Systems, Fuel Cells, Diagnostic Services, Battery Materials and Green Hydrogen.
	The Group Management Committee (the chief operating decision maker as defined by IFRS 8, Operating Segments) monitors the results of these operating sectors to assess performance and make decisions about the allocation of resources. Each operating sector is represented by a member of the Group Management Committee. These operating sectors represent the group's reportable segments and their principal activities are described on pages 42 to 57 of the 2021 Annual Report. The performance of the group's operating sectors is assessed on sales and underlying operating profit (see note 19). Sales between segments are made at market prices, taking into account the volumes involved.
	Six months ended 30^th September 2021
			Efficient
		Clean	Natural			Other
		Air	Resources	Health		Markets		Corporate		Eliminations		Total
		£ million	£ million	£ million		£ million		£ million		£ million		£ million

	Revenue from external customers	3,748	4,514	83		241		-		-		8,586
	Inter-segment revenue	1	2,617	1		-		-		(2,619)		-
	Revenue	3,749	7,131	84		241		-		(2,619)		8,586

	External sales¹	1,195	470	82		191		-		-		1,938
	Inter-segment sales	1	53	1		-		-		(55)		-
	Sales¹	1,196	523	83		191		-		(55)		1,938
	Underlying operating profit¹	150	197	(4)		(11)		(39)		-		293


	Six months ended 30^th September 2020
			Efficient
			Natural			Other
		Clean	Resources			Markets				Eliminations
		Air	(restated)	Health		(restated)		Corporate		(restated)		Total
		£ million	£ million	£ million		£ million		£ million		£ million		£ million

	Revenue from external customers	2,888	3,743	122		226		-		-		6,979
	Inter-segment revenue	2	1,965	-		-		-		(1,967)		-
	Revenue	2,890	5,708	122		226		-		(1,967)		6,979

	External sales¹	1,002	367	119		191		-		-		1,679
	Inter-segment sales	1	44	-		-		-		(45)		-
	Sales¹	1,003	411	119		191		-		(45)		1,679

	Underlying operating profit¹	77	88	15		(2)		(27)		-		151

	¹Sales and underlying operating profit are non-GAAP measures (see note 19 for reconciliation to GAAP measures). 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.

	The comparative period is restated to reflect the group's updated reporting segments and revised inter-segment revenue and sales for Efficient Natural Resources and eliminations for copper zeolite sales. The overall group total is as previously reported.


2	Segmental information (continued)

	Net assets by sector

	At 30^th September 2021
					Efficient
			Clean		Natural				Other
			Air		Resources		Health		Markets		Corporate		Total
			£ million		£ million		£ million		£ million		£ million		£ million

	Segmental net assets		1,481		542		494		197		482		3,196

	Net debt (see note 19)												(699)
	Post-employment benefit net assets and liabilities												149
	Deferred tax net assets												85
	Provisions and non-current other payables												(60)
	Investments in joint ventures and associates												2


	Net assets												2,673


	At 31^st March 2021
					Efficient
					Natural				Other
			Clean		Resources				Markets
			Air		(restated)		Health		(restated)		Corporate		Total
			£ million		£ million		£ million		£ million		£ million		£ million

	Segmental net assets		1,480		603		469		412		353		3,317

	Net debt (see note 19)												(775)
	Post-employment benefit net assets and liabilities												96
	Deferred tax net assets												112
	Provisions and non-current other payables												(67)
	Investments in joint ventures and associates												2


	Net assets												2,685

	The comparative period is restated to reflect the group's updated reporting segments. The overall group total is as previously reported.

2	Segmental information (continued)

	Impact of exchange rate movements on sales and underlying operating profit by sector

The main impact of exchange rate movements on sales and underlying operating profit is from the translation of the results of foreign operations into sterling.



	Six months ended
Average exchange rates	30.9.21	30.9.20

US dollar / £	1.39	1.27
Euro / £	1.16	1.12
Chinese renminbi / £	8.95	8.86

							Six months ended 30.9.20
					Six months		At last			At this				Change at
					ended		year's rates			year's rates				this year's
					30.9.21		(restated)			(restated)				rates
					£ million		£ million			£ million				%


	Clean Air				1,196		1,003			964				24%
	Efficient Natural Resources				523		411			393				33%
	Health				83		119			112				-26%
	Other Markets				191		191			182				5%
	Elimination of inter-segment sales				(55)		(45)			(43)
	Sales¹				1,938		1,679			1,608				21%


	Clean Air				150		77			74				103%
	Efficient Natural Resources				197		88			86				129%
	Health				(4)		15			14				n/a
	Other Markets				(11)		(2)			(2)				n/a
	Unallocated corporate expenses				(39)		(27)			(27)
	Underlying operating profit¹				293		151			145				102%

	¹Sales and underlying operating profit are non-GAAP measures (see note 19 for reconciliation to GAAP measures). 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.

	The comparative period is restated to reflect the group's updated reporting segments and revised inter-segment revenue and sales for Efficient Natural Resources and eliminations for copper zeolite sales. The overall group total is as previously reported.


3	Revenue

	Products and services

	The group's principal products and services by operating sector and sub-sector 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-sector	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

	Efficient Natural Resources
	Catalyst Technologies	Chemicals / oil and gas	Speciality catalysts and additives					Point in time					On despatch or delivery

			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

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

			Other precious metal products					Point in time					On despatch or delivery

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

			Advanced catalysts					Point in time					On despatch or delivery

	Health
	Generics	Pharmaceuticals	Manufacture of active pharmaceutical ingredients					Point in time					On despatch or delivery

	Innovators	Pharmaceuticals	Development and manufacture of active pharmaceutical ingredients					Over time					Based on costs incurred

	Other Markets
	Advanced Glass Technologies	Automotive	Precious metal pastes and enamels					Point in time					On despatch or delivery

	Battery Materials	Automotive	Battery materials					Point in time					On despatch or delivery

	Fuel Cells	Automotive	Fuel cell technologies					Point in time					On despatch or delivery

	Battery Systems	Consumer goods	Battery systems for a range of applications					Point in time					On despatch or delivery

	Medical Device Components	Pharmaceuticals	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

	¹Revenue recognition depends on whether the licence is distinct in the context of the contract.
3	Revenue (continued)

	Revenue from external customers by principal products and services

	Six months ended 30^th September 2021
						Efficient
				Clean		Natural						Other
				Air		Resources			Health			Markets				Total
				£ million		£ million			£ million			£ million				£ million


	Metal			2,553		4,044			1			50				6,648
	Heavy Duty Catalysts			413		-			-			-				413
	Light Duty Catalysts			768		-			-			-				768
	Catalyst Technologies			-		219			-			-				219
	Platinum Group Metal Services			-		251			-			-				251
	Generics			-		-			40			-				40
	Innovators			-		-			42			-				42
	Fuel Cells			-		-			-			10				10
	Battery Materials			-		-			-			6				6
	Battery Systems			-		-			-			77				77
	Advanced Glass Technologies			-		-			-			36				36
	Diagnostic Services			-		-			-			26				26
	Medical Device Components			-		-			-			36				36
	Other			14		-			-			-				14


	Revenue			3,748		4,514			83			241				8,586



	Six months ended 30^th September 2020
						Efficient
						Natural						Other
				Clean		Resources						Markets
				Air		(restated)			Health			(restated)				Total
				£ million		£ million			£ million			£ million				£ million


	Metal			1,885		3,377			3			34				5,299
	Heavy Duty Catalysts			310		-			-			-				310
	Light Duty Catalysts			680		-			-			-				680
	Catalyst Technologies			-		194			-			-				194
	Platinum Group Metal Services			-		172			-			-				172
	Generics			-		-			70			-				70
	Innovators			-		-			49			-				49
	Fuel Cells			-		-			-			19				19
	Battery Materials			-		-			-			6				6
	Battery Systems			-		-			-			76				76
	Advanced Glass Technologies			-		-			-			27				27
	Diagnostic Services			-		-			-			21				21
	Medical Device Components			-		-			-			29				29
	Other			13		-			-			14				27


	Revenue			2,888		3,743			122			226				6,979


	The comparative period is restated to reflect the group's updated reporting segments. The overall group total is as previously reported.


4	Operating profit
											Six months ended
											30.9.21				30.9.20
											£ million				£ million
	Operating profit is arrived at after charging / (crediting):

	Total research and development expenditure										109				96
	Less: Development expenditure capitalised										(20)				(9)

	Research and development expenditure charged to the income statement										89				87
	Less: External funding received from governments										(6)				(5)
	Net research and development expenditure charged to the income statement										83				82

	Depreciation of:
	Property, plant and equipment										70				69
	Right-of-use assets										7				7

	Depreciation										77				76

	Amortisation of:
	Internally generated intangible assets										1				2
	Acquired intangibles										3				5
	Other intangible assets										18				6

	Amortisation										22				13

	Gain on significant legal proceedings										(44)				-

	Major impairment and restructuring charges:
	Property, plant and equipment										216				12
	Right-of-use assets										5				1
	Other intangible assets										78				4
	Inventories										-				1
	Trade and other receivables										15				1
	Trade and other payables										-				(3)

	Impairment losses										314				16

	Restructuring charges										-				62

	Major impairment and restructuring charges										314				78

Gain on significant legal proceedings

During the period, the group recognised a gain of £44 million in relation to damages and interest from a company found to have unlawfully copied one of our technology designs. The gain is reported as non-underlying, see note 19.

Major impairment and restructuring charges

Following a detailed review of our Battery Materials business the group has concluded that the potential future returns from the business would not be adequate to justify further investment. Accordingly, on 11^th November 2021, the group announced its decision to pursue the sale of all or parts of Battery Materials. We have determined an impairment charge of £314m based on our estimate of the recoverable amount of the assets at 30^th September 2021. The impairment charge comprises property, plant and equipment (£216 million), right-of-use assets (£5 million), other intangible assets (£78 million) and trade and other receivables (£15 million).

In the prior period, the group incurred non-underlying major impairment and restructuring charges of £78 million. The charges were in relation to efficiency initiatives that are transforming our organisation to create a more simple and efficient group allowing us to act with greater agility and pace in a dynamic external environment. There have been no further charges in relation to these initiatives in the current period.


5	Tax expense

The charge for taxation at the half year ended 30^th September 2021 was £19 million (1H 2020/21: £2 million), this is after a major impairment charge of £314 million with an associated tax credit of £27 million. The tax charge on underlying profit before tax was £42 million (1H 2020/21: £17 million), an effective tax rate of 16.0% (1H 2020/21: 15.6%). Included in the first half tax charge is a tax credit of £6 million in relation to the UK rate change from 19% to 25%, which was enacted on 24^th May 2021. In addition, there is a tax credit to other comprehensive income of £9 million in respect of the impact of the rate change on post-employment assets. The tax rate on underlying profit for the year ending 31^st March 2022 is estimated to be between 16-17%.


6	(Loss) / earnings per ordinary share

		Six months ended
		30.9.21	30.9.20
		pence	pence

	Basic	(14.8)	12.3
	Diluted	(14.8)	12.3

	(Loss) / earnings per ordinary share have been calculated by dividing (loss) / profit for the period by the weighted average number of shares in issue during the period.


		Six months ended
	Weighted average number of shares in issue	30.9.21	30.9.20

	Basic	192,829,279	192,650,843
	Dilution for long term incentive plans	687,371	211,074
	Diluted	193,516,650	192,861,917


7	Dividends

An interim dividend of 22.00 pence (1H 2020/21 20.00 pence) per ordinary share has been proposed by the board which will be paid on 1^st February 2022 to shareholders on the register at the close of business on 3^rd December 2021. The estimated amount to be paid is £42 million (1H 2020/21 £39 million) and has not been recognised in these accounts.

						Six months ended
						30.9.21		30.9.20
						£ million		£ million

	2019/20 final ordinary dividend paid ─ 31.125 pence per share					-		60
	2020/21 final ordinary dividend paid ─ 50.00 pence per share					96		-
	Total dividends					96		60
8		Property, plant and equipment

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


		Cost
		At 1^st April 2021	667	31	2,310		377		3,385
		Additions	1	-	9		172		182
		Transferred to assets classified as held for sale (note 12)	(15)	(2)	(47)		(1)		(65)
		Reclassification	-	1	47		(48)		-
		Disposals	(1)	-	(20)		-		(21)
		Exchange adjustments	10	-	31		4		45

		At 30^th September 2021	662	30	2,330		504		3,526


		Accumulated depreciation and impairment
		At 1^st April 2021	321	17	1,606		17		1,961
		Charge for the period	10	1	59		-		70
		Impairment losses	9	-	25		182		216
		Transferred to assets classified as held for sale (note 12)	(12)	(2)	(38)		-		(52)
		Disposals	(1)	-	(19)		-		(20)
		Exchange adjustments	4	-	20		1		25

		At 30^th September 2021	331	16	1,653		200		2,200


		Carrying amount at 30^th September 2021	331	14	677		304		1,326

		Carrying amount at 1^st April 2021	346	14	704		360		1,424

Following a review of the business the group concluded the potential future returns from the Battery Materials business did not support the carrying value of the business (see note 4). The carrying value of the assets of the Battery Materials business of £216 million have consequently been fully impaired during the period and included within major impairment charges.

9	Other intangible assets


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


	Cost
	At 1^st April 2021	133	367	65	42	226	833
	Additions	-	25	1	-	20	46
	Exchange adjustments	2	1	-	1	2	6

	At 30^th September 2021	135	393	66	43	248	885


	Accumulated amortisation and impairment
	At 1^st April 2021	108	144	46	41	135	474
	Charge for the period	2	18	-	1	1	22
	Impairments	-	9	15	-	54	78
	Exchange adjustments	3	-	-	1	-	4

	At 30^th September 2021	113	171	61	43	190	578


	Carrying amount at 30^th September 2021	22	222	5	-	58	307

	Carrying amount at 1^st April 2021	25	223	19	1	91	359

Following a review of the business the group concluded the potential future returns from the Battery Materials business did not support the carrying value of the business (see note 4). The carrying value of the assets of the Battery Materials business of £78 million have consequently been fully impaired during the period and included within major impairment charges.

10	Trade and other receivables
		30.9.21	31.3.21
		£ million	£ million
	Current
	Trade receivables	1,394	1,571
	Contract receivables	132	181
	Prepayments	108	88
	Value added tax and other sales tax receivable	69	119
	Advance payments to customers	10	11
	Amounts receivable under precious metal sale and repurchase agreements¹	162	308
	Other receivables	41	144

	Trade and other receivables	1,916	2,422

	Non-current
	Value added tax and other sales tax receivable	2	2
	Prepayments	-	3
	Advance payments to customers	28	45

	Other receivables	30	50

	¹The fair value of the precious metal contracted to be sold by the group under sale and repurchase agreements is £139 million (31^st March 2021: £407 million).

11	Trade and other payables
		30.9.21	31.3.21
		£ million	£ million
	Current
	Trade payables	716	996
	Contract liabilities	292	184
	Accruals	347	369
	Amounts payable under precious metal sale and repurchase agreements¹	1,448	1,442
	Other payables	247	334

	Trade and other payables	3,050	3,325

	Non-current
	Other payables	5	5

	Other payables	5	5

	¹The fair value of the precious metal contracted to be repurchased by the group under sale and repurchase agreements is £1,228 million (31^st March 2021: £1,766 million).
12	Assets and liabilities classified as held for sale

During the half year the group decided to sell its Advanced Glass Technologies business. As at 30^th September 2021, the proceeds less costs to sell for the Advanced Glass Technologies business are estimated to be greater than book value and so no impairment is required. The business is classified as a disposal group held for sale and presented separately on the balance sheet.

The sale of the Advanced Glass Technologies business was agreed on 23^rd November 2021, with proceeds of £178 million.

The major classes of assets or liabilities comprising the businesses classified as held for sale are:

Advanced

Glass

Technologies

At 30^th September 2021

£ million

Non-current assets

Property, plant and equipment

Right-of-use-assets

Goodwill

Current assets

Inventories

Trade and other receivables

Assets classified as held for sale

Current liabilities

Trade and other payables

(11)

Non-current liabilities

Lease liabilities

(1)

Employee benefit obligations

(1)

Liabilities classified as held for sale

(13)

Net assets of disposal group

Post-employment benefits

Background

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

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

	30.9.21		31.3.21
	UK plan	US plans	UK plan	US plans
	%	%	%	%
First year's rate of increase in salaries	3.50	3.00	3.40	3.00
Ultimate rate of increase in salaries	3.50	3.00	3.40	3.00
Rate of increase in pensions in payment	3.15	-	3.05	-
Discount rate	2.00	2.70	2.10	3.00
Inflation	-	2.20	-	2.20
- UK Retail Prices Index (RPI)	3.30	-	3.20	-
- UK Consumer Prices Index (CPI)	2.75	-	2.65	-
Current medical benefits cost trend rate	5.40	2.20	5.40	2.20
Ultimate medical benefits cost trend rate	5.40	2.20	5.40	2.20


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

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

	At 1^st April 2021	186	(6)	(8)		(20)		(25)		(27)		100
	Current service cost - in
	operating profit	(4)	(13)	-		(4)		-		(1)		(22)
	Administrative expenses - in
	operating profit	(2)	-	-		-		-		-		(2)
	Interest	3	(1)	-		-		-		(1)		1
	Remeasurements	55	1	-		4		(1)		-		59
	Company contributions	3	11	-		4		1		1		20
	Benefits paid	-	-	-		-		-		-		-
	Exchange	-	-	-		(2)		(1)		1		(2)
	At 30^th September 2021	241	(8)	(8)		(18)		(26)		(27)		154
13	Post-employment benefits (continued)

	Financial information (continued)
	The post-employment benefit assets and liabilities are included in the balance sheet as follows:
					30.9.21		30.9.21		31.3.21		31.3.21
					Post-				Post-
					employment		Employee		employment		Employee
					benefit		benefit net		benefit		benefit net
					net assets		obligations		net assets		obligations
					£ million		£ million		£ million		£ million

	UK pension - legacy section				241		-		186		-
	UK pension - cash balance section				-		(8)		-		(6)
	UK post-retirement medical benefits				-		(8)		-		(8)
	US pensions				-		(18)		-		(20)
	US post-retirement medical benefits				6		(32)		6		(31)
	Other				2		(29)		2		(29)
	Total post-employment plans				249		(95)		194		(94)
	Other long-term employee benefits						(5)				(4)
	Total long-term employee benefit obligations						(100)				(98)


	Other long-term employee benefits includes £1 million of liabilities transferred to liabilities classified as held for sale (note 12).


14	Fair values

Fair value hierarchy

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

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

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

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

Fair value of financial instruments

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

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

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

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

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

14	Fair values (continued)
						Fair value
				30.9.21	31.3.21	hierarchy
				£ million	£ million	level

	Financial instruments measured at fair value

	Non-current
	Investments at fair value through other comprehensive income			54	53	1
	Interest rate swaps			17	20	2
	Borrowings and related swaps			(3)	(3)	2

	Current
	Trade receivables¹			260	423	2
	Other receivables²			25	58	2
	Cash and cash equivalents - money market funds			523	462	2
	Interest rate swaps			3	-	2
	Other financial assets³			61	44	2
	Other financial liabilities³			(28)	(18)	2


						Fair value
				30.9.21	31.3.21	hierarchy
				£ million	£ million	level

	Financial instruments not measured at fair value

	Non-current
	Borrowings and related swaps			(1,051)	(1,249)	-
	Lease liabilities			(48)	(51)	-

	Current
	Amounts receivable under precious metal sale and repurchase agreements			162	308	-
	Amounts payable under precious metal sale and repurchase agreements			(1,448)	(1,442)	-
	Cash and cash equivalents - cash and deposits			223	119	-
	Cash and cash equivalents - bank overdrafts			(42)	(36)	-
	Borrowings and related swaps			(309)	(26)	-
	Lease liabilities			(11)	(11)	-
	Lease liabilities classified as held for sale			(1)	-	-

	¹ 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.


	² Other receivables with cash flows that do not represent solely the payment of principal and interest.
	³ Includes forward foreign exchange contracts, forward precious metal price contracts and currency swaps.


14		Fair values (continued)

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

			30.9.21		31.3.21
			Carrying	Fair	Carrying	Fair
			amount	value	amount	value
			£ million	£ million	£ million	£ million

		US Dollar Bonds 2022, 2023, 2025, 2027, 2028 and 2030	(675)	(692)	(662)	(689)
		Euro Bonds 2023, 2025, 2028 and 2030	(187)	(191)	(186)	(193)
		Sterling Bonds 2024 and 2025	(110)	(112)	(110)	(116)
		KfW US dollar loan 2024	(37)	(39)	(36)	(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 period end.


15	Precious metal leases

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. At 30^th September 2021, precious metal leases were £223 million at closing prices (31^st March 2021: £437 million). Precious metal leases are not accounted for under IFRS 16 as they qualify as short term leases.


16	Contingent liabilities

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

On a specific matter, the group previously disclosed that it had been informed by two customers of failures in certain engine systems for which the group supplied a particular coated substrate as a component for their customers' emissions after-treatment systems. The particular coated substrate was sold to only these two customers. The group has not been contacted by any regulatory authority about these engine system failures. The reported failures have not been demonstrated to be due to the coated substrate supplied by the group. As previously disclosed, we settled with one of these customers on mutually acceptable terms with no admission of fault.

Having reviewed its contractual obligations and the information currently available to it, the group believes it has defensible warranty positions in respect of its supplies of coated substrate for the after-treatment systems in the affected engines remaining at issue. If required, it will vigorously assert its available contractual protections and defences. The outcome of any discussions relating to the matters raised is not certain, nor is the group able to make a reliable estimate of the possible financial impact at this stage, if any. The group works with all its customers to ensure appropriate product quality and we have not received claims in respect of our emissions after-treatment components from this or any other customer. Our vision is for a world that's cleaner and healthier; today and for future generations. We are committed to enabling improving air quality and we work constructively with our customers to achieve this.


16	Contingent liabilities (continued)

On a separate matter, the group is involved in investigating environmental contamination at a site for which it has been identified as a potentially responsible party under US law. Johnson Matthey Inc. is party to litigation brought by the Pennsylvania Department of Environmental Protection (PaDEP) regarding contamination at a site in Chester County, Pennsylvania, that was operated by Johnson Matthey Inc. between 1951 and 1969, when it sold its interest in the site. A site investigation has been completed, but remediation has not yet commenced. On 24^th September 2021, PaDEP announced a proposed remedy for the site; it is now accepting public comments. Johnson Matthey has asserted various legal defences, but the litigation is currently stayed and these have not yet been addressed. Whether and to what extent Johnson Matthey and other potentially responsible parties (given subsequent use of the site by third-party entities) have any liability for the remediation has not yet been determined. It is the directors' current view that the group cannot reliably assess the outcome of the litigation nor reasonably estimate the quantum of future remediation costs or the group's share of such costs and as such no provision for the remediation has been recognised in these consolidated accounts.


17	Transactions with related parties

There have been no material changes in related party relationships in the six months ended 30^th September 2021 and no related party transactions have taken place which have materially affected the financial position or performance of the group during that period.

18	Events after the balance sheet date

On 11^th November 2021, the group's board announced its decision to pursue the sale of all or parts of the Battery Materials business with the ultimate intention of exiting. An impairment charge of £314 million was recognised against the carrying amount of the assets (see note 4). Capital expenditure incurred since 1^st October 2021 has been reduced and future commitments paused. Depending on the outcome of the sale the group may incur further impairment charges and/or closure costs. There are also £155 million of term loans associated with our Battery Materials investment in Poland which are likely to be prepaid.

On 18^th November 2021, the group's board approved a share buyback of around £200 million which will commence in 2022.

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.

Definitions Measure	Definition	Purpose
Sales¹	Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers.	Provides a better measure of the growth of the group as revenue can be heavily distorted by year on year fluctuations in the market prices of precious metals and, in many cases, the value of precious metals is passed directly on to customers.
Underlying operating profit²	Operating profit excluding non-underlying items.	Provides a measure of operating profitability that is comparable over time.
Underlying operating profit margin^1,2	Underlying operating profit divided by sales.	Provides a measure of how we convert our sales into underlying operating profit and the efficiency of our business.
Underlying profit before tax²	Profit before tax excluding non-underlying items.	Provides a measure of profitability that is comparable over time.
Underlying profit for the year²	Profit for the year excluding non-underlying items and related tax effects.	Provides a measure of profitability that is comparable over time.
Underlying earnings per share^1,2	Underlying profit for the year divided by the weighted average number of shares in issue.	Our principal measure used to assess the overall profitability of the group.
Return on Invested Capital (ROIC)¹	Annualised underlying operating profit divided by the 12 month average equity, excluding post tax pension net assets, plus average net debt for the same period.	Provides a measure of the group's efficiency in allocating the capital under its control to profitable investments. The group has a long-term target of a return on invested capital of 20% to ensure focus on efficient use of the group's capital.
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, 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

²Underlying 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 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.

19	Non-GAAP measures (continued)

Reconciliations to GAAP measures

Sales
See note 2.

Underlying profit measures
		Operating		Profit / (loss)		Tax	Profit / (loss)
		profit		before tax		expense	for the period
Six months ended 30^th September 2021		£ million		£ million		£ million	£ million

Underlying		293		264		(42)	222
Gain on significant legal proceedings		44		44		(4)	40
Amortisation of acquired intangibles		(3)		(3)		-	(3)
Major impairment¹		(314)		(314)		27	(287)
Reported		20		(9)		(19)	(28)

¹ For further detail please see note 4.

		Operating		Profit		Tax	Profit for
		profit		before tax		expense	the period
Six months ended 30^th September 2020		£ million		£ million		£ million	£ million

Underlying		151		109		(17)	92
Amortisation of acquired intangibles		(5)		(5)		1	(4)
Major impairment and restructuring charges		(78)		(78)		14	(64)
Reported		68		26		(2)	24



Underlying earnings per share						Six months ended
						30.9.21	30.9.20

Underlying profit for the period (£ million)						222	92
Weighted average number of shares in issue (million)						192.8	192.7
Underlying earnings per share (pence)						114.8	47.7
19	Non-GAAP measures (continued)

Return on Invested Capital (ROIC)
			Period			Year		Period
			ended			ended		ended
			30.9.21			31.3.21		30.9.20
			£ million			£ million		£ million

Annualised underlying operating profit			646			504		425

Average net debt			1,071			1,294		1,504
Average equity			2,753			2,771		2,774
Average capital employed			3,824			4,065		4,278
Less: Average pension net assets			(206)			(261)		(258)
Less: Average related deferred taxation			37			47		44
Average capital employed (excluding post tax pension net assets)			3,655			3,851		4,064

ROIC (excluding post tax pension net assets)			17.7%			13.1%		10.4%
ROIC			16.9%			12.4%		9.9%

Average working capital days (excluding precious metals)			Six months			Year		Six months
			ended			ended		ended
			30.9.21			31.3.21		30.9.20
			£ million			£ million		£ million

Inventories			2,004			1,814		2,074
Trade and other receivables			1,916			2,422		2,415
Trade and other payables			(3,050)			(3,325)		(3,575)
			870			911		914
Working capital balances classified as held for sale			25			-		6
Total working capital			895			911		920
Less: Precious metal working capital			(356)			(552)		(313)
Working capital (excluding precious metals)			539			359		607

Average working capital days (excluding precious metals)			40			57		70

Free cash flow
						Six months ended
						30.9.21		30.9.20
						£ million		£ million
Net cash inflow from operating activities						412		482
Interest received						6		33
Interest paid						(40)		(77)
Purchases of property, plant and equipment						(141)		(139)
Purchases of intangible assets						(43)		(36)
Proceeds from sale of non-current assets						2		-
Principal element of lease payments						(7)		(7)
Free cash flow						189		256

19	Non-GAAP measures (continued)

Net debt (including post-tax pension deficits) to underlying EBITDA
			30.9.21		31.3.21		30.9.20
			£ million		£ million		£ million

Cash and deposits			223		119		197
Money market funds			523		462		573
Bank overdrafts			(42)		(36)		(32)
Cash and deposits transferred to assets classified as held for sale			-		-		14
Cash and cash equivalents			704		545		752
Borrowings and related swaps - current			(309)		(26)		(371)
Interest rate swaps - current			3		-		-
Borrowings and related swaps - non-current			(1,054)		(1,252)		(1,220)
Interest rate swaps - non-current			17		20		31
Lease liabilities - current			(11)		(11)		(11)
Lease liabilities - non-current			(48)		(51)		(58)
Lease liabilities - transferred to liabilities classified as held for sale			(1)		-		(1)
Net debt			(699)		(775)		(878)

Increase in cash and cash equivalents			156		276		480
Less: Increase in borrowings			(63)		(70)		(284)
Less: Principal element of lease payments			7		14		7
Decrease in net debt resulting from cash flows			100		220		203
New leases, remeasurements and modifications			(4)		(3)		(1)
Disposal of businesses			-		1		-
Exchange differences on net debt			(20)		107		19
Other non-cash movements			-		(6)		(5)
Movement in net debt			76		319		216
Net debt at beginning of year			(775)		(1,094)		(1,094)
Net debt at end of year			(699)		(775)		(878)

Net debt			(699)		(775)		(878)
Add: Pension deficits			(47)		(49)		(58)
Add: Related deferred tax			8		9		11
Net debt (including post tax pension deficits)			(738)		(815)		(925)

Underlying EBITDA for this period			389				235
Underlying EBITDA for prior year			684				705
Less: Underlying EBITDA for prior half year			(235)				(350)
Annualised underlying EBITDA			838		684		590

Net debt (including post tax pension deficits) to underlying EBITDA			0.9		1.2		1.6
19	Non-GAAP measures (continued)

			30.9.21		31.3.21		30.9.20
			£ million		£ million		£ million

Underlying EBITDA			389		684		235
Depreciation and amortisation			(99)		(190)		(89)
Gain on significant legal proceedings			44		-		-
Major impairment and restructuring charges			(314)		(171)		(78)
Finance costs			(38)		(158)		(77)
Finance income			9		73		36
Share of losses of joint ventures and associates			-		-		(1)
Income tax expense			(19)		(33)		(2)
(Loss) / profit for the period			(28)		205		24
At 30^th September 2021 cash and cash equivalents includes £54 million (31^st March 2021: £nil) of restricted amounts relating to cash held in South Africa. The cash has been restricted as a result of a change in company residency status. The group anticipates extracting and/or utilising this in the near term and is reviewing options.

2021

2^nd December

Ex dividend date

3^rd December

Interim dividend record date

2022

1^st February

Payment of interim dividend

26^th May

Announcement of results for the year ending 31^st March 2022

21^st July

131^st Annual General Meeting (AGM)

Cautionary Statement

This announcement contains forward looking statements that are subject to risk factors associated with, amongst other things, the economic

and business circumstances occurring from time to time in the countries and sectors in which the group operates. It is believed that the

expectations reflected in this announcement are reasonable but they may be affected by a wide range of variables which could cause

actual results to differ materially from those currently anticipated.

Johnson Matthey Plc

Registered Office: 5th Floor, 25 Farringdon Street, London EC4A 4AB

Telephone: +44 (0) 20 7269 8400

Fax: +44 (0) 20 7269 8433

Internet address: www.matthey.com

E-mail: jmpr@matthey.com

Registered in England ─ Number 33774

LEI code: 2138001AVBSD1HSC6Z10

Registrars

Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA

Telephone: 0371 384 2344 (in the UK) *

+44 (0) 121 415 7047 (outside the UK)

Internet address: www.shareview.co.uk

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

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Company Announcements

Johnson Matthey half year results 30th Sept 2021