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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Johnson Matthey Plc | LSE:JMAT | London | Ordinary Share | GB00BZ4BQC70 | ORD 110 49/53P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-19.00 | -1.06% | 1,766.00 | 1,766.00 | 1,768.00 | 1,789.00 | 1,763.00 | 1,789.00 | 300,226 | 16:29:50 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Chemicals & Chem Preps, Nec | 14.97B | 276M | 1.5064 | 11.72 | 3.24B |
TIDMJMAT
RNS Number : 6065I
Johnson Matthey PLC
20 June 2017
JOHNSON MATTHEY PLC
ANNUAL REPORT & NOTICE OF ANNUAL GENERAL MEETING
Johnson Matthey Plc (the "Company") has today published its 2017 Annual Report and Accounts and Notice of 2017 Annual General Meeting. Both documents are available on the Company's website at www.matthey.com
In accordance with Listing Rule 9.6.1, copies of both documents, together with the Form of Proxy for the 2017 Annual General Meeting, have been submitted to the National Storage Mechanism and will shortly be available for viewing at www.morningstar.co.uk/uk/NSM
The Annual General Meeting of the Company will be held at 11.00 am on Friday 28th July 2017 at The Royal Society, 6-9 Carlton House Terrace, London SW1Y 5AG.
Information required to be made available by the Company under Rule 6.3.5R of the Disclosure Guidance and Transparency Rules, to the extent not already included in the Company's announcement of preliminary results for the year ended 31st March 2017, issued on 1st June 2017, is set out in the Appendix below.
Simon Farrant
Company Secretary
20th June 2017
APPIX
Risks and Uncertainties
The ongoing review of our principal risks ensures that we reflect on the challenges facing our business and the changes we have made to our business in response to those challenges. In April 2017, we announced a change in our group structure. As a consequence of a strategic review, the group moved to managing and reporting the business as four sectors: Clean Air, Efficient Natural Resources, Health and New Markets. These are aligned to the global priorities of cleaner air, the efficient use of natural resources and improved health. This focus provided us with a refreshed framework to consider the identification of new risks, evolution of existing risks and evaluation of control effectiveness. During this exercise we concluded that while many of our risks remain largely unchanged we could describe them more precisely, to ensure focus is on the most important mitigating activities. As a result of this process we have made the following changes to our principal risks and uncertainties:
-- Existing market outlook (previously described as 'growth within our existing business' and 'global economic, political and regulatory uncertainty'). This risk was broadly defined across both external influences on our business as well as internal factors. We have refocused this risk on external influences and will use refined key risk indicators to monitor any movement in the most important underlying assumptions associated with our business plans. The internal factors are picked up in a new risk (risk 3).
-- Future revenue growth (previously described as 'innovation' and 'new business'). Our risk associated with growing our business, both through the identification of opportunities and acting on new opportunities, was predominately focused on potential merger and acquisition activities. We have now amended this to consider the risks associated with investment decisions, including significant capital investment, mergers and acquisitions and research and development activities.
-- Maintaining our competitive advantage in existing markets. This risk was previously captured under the very wide ranging 'growth within our existing business'. The internal aspect of this risk in meeting our customers' evolving technology needs coupled with ongoing process efficiencies to maintain our competitive advantage is reflected in this new risk (risk 3).
-- Product quality. This new risk was previously managed at business and divisional level. With our continuing emphasis on quality and brand we have elevated this risk to ensure greater board visibility.
-- Sourcing of strategic materials. This risk previously covered a wide range of supply chain aspects. We have refocused this risk to consider sourcing of our strategic raw materials, the supply of which is vital to our manufacturing processes.
-- People. This risk has been reassessed in the context of our recent strategic review, which has identified some areas where we need to build additional capability.
-- Business transition. We are evolving the way we run our business. Historically, we have operated as a decentralised organisation and, to drive efficiency, we are in the process of standardising some activities across the group. Directed by strong functional leaders, our business transition will position the group for future growth. The risk has been amended to reflect our current business transition plans.
We also considered the risk landscape for cyber and information systems resilience and determined that this was included within our 'failure of significant sites' risk and as such did not need to be included as a separate principal risk and uncertainty.
Managing Through Brexit
Brexit, whilst not a separate risk, is included within the scope of our existing market outlook risk. As a major manufacturing and exporting business, we have been monitoring developments through a dedicated working group, giving careful consideration as to how best to navigate the situation. There is still a great deal of uncertainty as to what Brexit will mean for Johnson Matthey. The Brexit working group is focused on ensuring that Johnson Matthey is prepared to navigate through and deliver the best outcome for our people, our business and our customers. In addition, we plan to work closely with the UK Government to make the most of the opportunities that Brexit offers, and ensure that our industry can continue to succeed.
The following table sets out the principal risks and uncertainties facing the group, the mitigating actions for each and an update on any change in the profile of each risk during the course of the year. The net risk rating (after mitigating controls) is also shown.
Existing Market Outlook ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 annual The risk of a change * Understanding the key drivers and the range of report to the outlook for possible scenarios. This risk partially our key markets is replaces 'growth within either unplanned or our existing business'. unforeseen and as a * Building plans against those scenarios. This risk is specifically result we are poorly focused on understanding positioned to respond. the external influences * Monitoring changes to those drivers and adjusting which may impact our This risk would include business plans accordingly. business. It is rated legislative change, as high as a result for example as a result of the uncertainty of of Brexit or changes Brexit and the evolving in customer or consumer pace of change in the behaviour impacting BEV/European diesel our business. market, making scenario planning essential. Risk 3 focuses on the related internal factors. Risk rating High (unchanged from risk 1 last year) ------------------------- ---------------------------------------------------------------- ------------------------- Future Revenue Growth ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 annual Failure to grow through * Monitoring and understanding market evolution as part report new opportunities either of our strategic planning process resulting in New growth opportunities as a result of failing opportunity identification. may to identify the be realised through opportunity, different combinations fund or execute * Growth opportunities are executed through targeted of investment including successfully. acquisitions, capital investment and research and acquisition, capital development. Progress is monitored and tracked investment and R&D. against specific key performance indicators (KPIs). As the approach may change based
on the circumstances, we believe the risk is better expressed by focusing on the missed opportunity irrespective of the investment type. Risk rating Medium (unchanged from the innovation risk rating last year) ------------------------- ---------------------------------------------------------------- ------------------------- Maintaining our Competitive Advantage ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 Failure to maintain * Investment in understanding our customers. annual our competitive report advantage This risk was previously in existing markets, * R&D and capital investment processes ensure resource captured under the very and as a result, not is prioritised against the areas of greatest wide ranging 'growth meeting customers' opportunity. within our existing evolving needs as business'. The external efficiently as our aspect of this risk competitors. * Benchmarking business processes' efficiency. is captured in risk 1 and the internal risk of failing to run our business to sustain our competitive advantage is captured here. We have a strong track record of meeting our customers' evolving technology needs, our capability coupled with ongoing process efficiency activity means we have rated this risk as medium. New risk Risk rating Medium ------------------------- ---------------------------------------------------------------- ------------------------- Environment, Health and Safety ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 In common with similar * Understanding of our business risk profile. annual manufacturing companies, report the group operates Health and safety is in a challenging safety * Systems and processes to facilitate adherence to our priority and we environment that is corporate policies, procedures and standards. take our responsibility subject to numerous for environmental impact health, safety and very seriously. Over environmental laws, * Training and awareness activities. the past 12 months we regulations and have worked to refine standards. our mitigating * Risk, audit activities and safety checks. activities. If we fail to operate safely and respond Risk rating to changes made to * Safety culture programme and behavioural standards. Medium applicable laws, regulations or standards we could * Investigations to determine the cause of incidents adversely impact our and accidents and the development of remediation employees, we may plans. lose production time and could attract negative media and * An independent hotline for employees to report regulator interest. concerns. ------------------------- ---------------------------------------------------------------- ------------------------- Sourcing of Strategic Materials ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigating activities Changes since 2016 As Johnson Matthey * Supplier key performance indicators, audits and annual has limited suppliers quality management. report from which to source The prior year risk certain strategic rating was principally raw materials, any * Sourcing from multiple suppliers. driven by the risks breakdown in the supply associated with sourcing of these materials of strategic materials. would lead to an * Research and development alternatives to consider use During the year, we inability of non-strategic materials. have focused on building to manufacture and expertise in supply satisfy customer demand. chain and procurement * Expertise in supply chain, logistics, procurement and and trade export controls. as such have assessed the risk as reducing. * Business continuity management, identification of critical failure risks and plans in place to manage Risk rating these. Medium ------------------------- ---------------------------------------------------------------- ------------------------- People ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 To achieve our strategic * Assessment of skills and capability requirements. annual objectives, we report continually This risk has been assess the skills * Robust talent management processes. reassessed
and capabilities that in the context of our will enable us to recent strategic review, deliver our strategy. * Remuneration strategy with clarity around market best which has identified An inability to recruit practice and Johnson Matthey's position on base pay, some areas where we and retain key skills annual and long term incentives, pensions and need to build additional may result in a slower regional benefits. capability. We have growth trajectory. therefore increased the risk rating. * Transparency of policies. Risk rating Medium ------------------------- ---------------------------------------------------------------- ------------------------- Security of Metal and Highly Regulated Substances ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 On any given day, * Security management systems and site security annual the group has systems. report significant Unchanged from 2016 quantities of high although we have amended value precious metals * Assay and other process controls. the title to reflect or highly regulated the specific risks. substances on site and in transit; loss * Security awareness campaigns and training. Risk rating or theft due to a Low failure of the security management systems * Audits of site security systems. associated with the protection of metal or highly regulated * Stock takes to check inventories. substances may result in performance impact, reduced customer * Use of approved carriers for transit. confidence and potential legal action. * Insurance coverage for losses from theft or fraud. * Liaison with local law enforcement for high risk sites. ------------------------- ---------------------------------------------------------------- ------------------------- Intellectual Capital Management ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 Failure to identify * Business intellectual capital strategy and new annual and protect the group's product introduction process. report intellectual capital Decreased to reflect or failure to identify our increasingly third party intellectual * Portfolio management of intellectual capital. effective capital rights could mitigations. lead to a loss in business advantage, * Monitoring of third party intellectual capital. Risk rating loss of freedom to Medium operate and reputational damage associated * Use of intellectual capital lawyers to provide with litigation. specialist guidance. * Training and awareness. ------------------------- ---------------------------------------------------------------- ------------------------- Failure of Significant Sites ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 Potential risks include * Assessment of critical sites. annual a disruptive event report such as fire, flood No change or earthquake, a major * Business continuity plans in place and annual incident at site level, programme of testing in place. Risk rating such as an explosion, Medium IT systems failure, cyber attack or other * Cyber awareness and monitoring. events such as geopolitical instability. * IT disaster recovery. The consequences associated * Inventory management to provide critical spares and with this risk include inventories. the impact on our ability to manufacture goods and satisfy * Use of external suppliers for key activities and customer demands. services including generators and utilities. * Insurance of sites. ------------------------- ---------------------------------------------------------------- ------------------------- Ethics and Compliance ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 Failure to comply * Code of ethics in place supported by training and annual with ethical and formal acknowledgement. report regulatory This risk is reassessed compliance standards on an ongoing basis leading to reputational * Understanding of key ethics and compliance risks. in the light of the damage, to civil or evolving regulatory criminal legal exposure and business background. for the company or * Use of subject matter experts, internal and external, There is significant for individuals or on legal compliance and risk mitigation matters. mitigation in place to risk of contractual but the risk rating breach. remains unchanged this * Group and local policies and procedures in place year as we embed including full integration with business processes. upgraded third party intermediary processes. * Group control requirements such as supplier on-boarding, counterparty due diligence and payments Risk rating approval. High * Independent confidential speak up hotline for employees, contractors and third parties. * Oversight on contractual provisions and commercial arrangements by legal teams. * Global network of ethics ambassadors. * Emergency response procedures for events such as dawn raids. * Investigation of incidents and allegations of misconduct. ------------------------- ---------------------------------------------------------------- ------------------------- Business Transition ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 To position the group * Communication and employee engagement plans are in annual for future growth place for all programmes with support from the GMC as report and maximise available appropriate. Risk reflects our efficiencies, we are business evolving the way we transition that will
run our business. * Change management processes. position the group for Historically we have future growth. The risk operated as a rating remains unchanged decentralised * Programme management and governance activities with from the business organisation but to KPIs and red, amber, green (RAG) review reports. transition drive efficiency we risk rating last year. are in the process of standardising some * Capital allocation decision making process. Risk rating activities across Medium the group, directed by strong functional leaders in order to ensure best practice is used and maintained across the group. The risk is that we fail to achieve the benefits of these efficiencies, lose our business agility and / or fail to maintain a very high level of customer responsiveness. ------------------------- ---------------------------------------------------------------- ------------------------- Product Quality ---------------------------------------------------------------------------------------------------------------------- Risk and impact Mitigation Changes since 2016 Our products are used * Quality management systems in place supported by annual in a wide range of accreditation and audit. report applications, processes We considered whether and systems. The safety quality management and quality of these * Robust manufacturing processes. should products be a principal risk is crucial to ensuring in 2016. At that time that they operate * Monitoring and reporting of quality performance, we concluded that while as intended. taking corrective action where required. important, it was not significant enough to We may be exposed be considered as a to liability claims * Robust contract terms and conditions. principal should a product fail risk as the impact and to perform as expected. likelihood varied by This could lead to sector according to loss of future business the product produced, and reputational customer and contractual damage. risk. With our continued emphasis on quality and brand we have elevated this risk to ensure greater board visibility. New risk Risk rating Medium ------------------------- ---------------------------------------------------------------- -------------------------
Responsibility Statement of the Directors in Respect of the Annual Report and Accounts
Each of the directors as at the date of the Annual Report and Accounts, whose names and functions are set out below:
-- Tim Stevenson, Chairman -- Robert MacLeod, Chief Executive -- Anna Manz, Chief Financial Officer -- John Walker, Executive Director -- Odile Desforges, Non-Executive Director -- Alan Ferguson, Non-Executive Director -- Jane Griffiths, Non-Executive Director -- Colin Matthews, Non-Executive Director -- Chris Mottershead, Non-Executive Director
states that to the best of his or her knowledge:
-- the group and parent company accounts, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
-- the management report (which comprises the Strategic Report and the Directors' Report) includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
This responsibility statement was approved by the board on 31st May 2017 and is signed on its behalf by Tim Stevenson, Chairman.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACSOKKDQKBKDDAB
(END) Dow Jones Newswires
June 20, 2017 06:43 ET (10:43 GMT)
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