Strong performance whilst strengthening our platform for growth
Robert MacLeod, Chief Executive, commented:
We had another good year with strong sales and operating profit growth, as we progress our strategy to deliver our vision for a cleaner, healthier world.
In the year, Clean Air performed strongly and we are investing in new plants to satisfy future demand, particularly from Asia which will be our next key growth driver. We remain excited by the growth opportunity in Battery Materials and commercialisation of eLNO®, our leading ultra-high energy density cathode material, continues at pace. We made further investments in Health to develop our pipeline of products and in Efficient Natural Resources we continue to drive efficiencies whilst focusing on high growth market segments. To support our long term growth and as we broaden our presence in sustainable technologies, we are also developing innovative solutions for fuel cells and battery materials recycling.
Delivery of our strategy is underpinned by the fundamental changes we are making across all aspects of the group. Our business is becoming more agile and efficient, with greater capability to deal with the fast changing world around us. We have invested in safety, people, systems and processes whilst continuing to target further improvement. The ongoing roll out of our single global ERP system which will standardise processes and transform the way we work is an example. Together, all of these actions are enabling us to strengthen our platform for growth.
In light of our strong performance, continued delivery against our strategy and confidence in the group’s future growth prospects, we are proposing a 7% increase in the ordinary dividend for the full year. For 2019/20, we expect growth in operating performance at constant rates to be within our medium term guidance of mid to high single digit growth.
|Reported results||Year ended 31st March|
|Operating profit||£ million||531||359||+48|
|Profit before tax (PBT)||£ million||488||320||+53|
|Earnings per share (EPS)||pence||215.2||155.2||+39|
|Ordinary dividend per share||pence||85.5||80.0||+7|
|Underlying performance2||Year ended 31st March|
|2019||2018||% change||% change, constant rates3|
|Sales excluding precious metals (Sales)4||£ million||4,214||3,846||+10||+10|
|Operating profit||£ million||566||525||+8||+8|
|Profit before tax||£ million||523||486||+8||+7|
|Earnings per share||pence||228.8||208.4||+10|
- Sales grew 10% and underlying operating profit grew 8% at constant rates3 driven by strong growth in Clean Air.
- Underlying EPS was up 10% and ahead of operating profit, benefiting from a lower tax rate.
- Free cash was an outflow of £13 million impacted by platinum group metal (pgm) refinery downtime, driving higher precious metal working capital and higher capex.
- Average working capital days excluding precious metals improved by three days to 59 days.
- Return on invested capital (ROIC), excluding net pension assets, decreased from 17.0% to 16.4% mainly due to higher precious metal working capital.
- Strong balance sheet with net debt of £866 million; net debt to EBITDA of 1.3 times.
Martin Dunwoodie, Director of Investor Relations 020 7269 8241
Louise Curran, Senior Investor Relations Manager 020 7269 8235
Jane Crosby, Investor Relations Manager 020 7269 8242
Sally Jones, Director of Corporate Relations 020 7269 8407
David Allchurch, Tulchan Communications 020 7353 4200
1. Revenue for the year ended 31st March 2018 has been restated
2. Underlying is before profit or loss on disposal of businesses, gain or loss on significant legal proceedings together with associated legal costs, amortisation of acquired intangibles, major impairment and restructuring charges and, where relevant, related tax effects and significant tax rate changes. For definitions and reconciliations of other non-GAAP measures
3. Unless otherwise stated, sales and operating profit commentary refers to performance at constant rates. Growth at constant rates excludes the translation impact of foreign exchange movements, with 2017/18 results converted at 2018/19 average exchange rates
4. Revenue excluding sales of precious metals to customers and the precious metal content of products sold to customers
eLNO is a trade mark of Johnson Matthey Public Limited Company