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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -20.00 | -1.12% | 1,765.00 | 1,766.00 | 1,769.00 | 1,789.00 | 1,765.00 | 1,789.00 | 26,389 | 12:51:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Chemicals & Chem Preps, Nec | 14.97B | 276M | 1.5064 | 11.74 | 3.24B |
From Apr 2021 to Apr 2024
TIDMJMAT
RNS Number : 8485B
Johnson Matthey PLC
15 June 2021
15(th) June 2021
Johnson Matthey Plc
(the "Company")
Annual Report and Accounts
The Company announces that it has today published the 2021 Annual Report and Accounts and Notice of Annual General Meeting. Both documents are available on the Company's website, matthey.com .
In accordance with Listing Rule 9.6.1, copies of both documents, together with the Form of Proxy, have been submitted to the National Storage Mechanism and will shortly be available for viewing at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
The Annual General Meeting of the Company will be held at 11.00 am on Thursday 29(th) July 2021 in the Great Hall, JP Morgan, 60 Victoria Embankment, London EC4Y 0JP. A live webcast and conference call will also be available and details of how to join are in the Notice of Annual General Meeting.
The information in the Appendix below should be read in conjunction with the Company's preliminary results for the year ended 31(st) March 2021, issued on 27(th) May 2021. That information, together with the Appendix below, is provided in accordance with Rule 6.3.5R of the Disclosure Guidance and Transparency Rules in full unedited text. This announcement is not a substitute for reading the full Annual Report and Accounts. Page and note references in the text below refer to those in the 2021 Annual Report and Accounts.
APPIX
Risks and uncertainties
JM's principal risks and uncertainties
Principal risks are regularly reviewed to ensure that JM meets the challenges facing the business and strategic objectives. To understand the current risk universe for JM, GMC risk sponsors have assessed changes to their risks, prioritising principal risks as required, with focused mitigation plans. This has been enabled by the risk management process facilitated by the Group Assurance and Risk function.
The following provide an insight into the way we have further shaped our risk coverage, and clarity on opportunities and relevant actions in 2020/21:
-- Climate change is an important part of our risk management process, driving certain principal risks, such as 'Future growth', 'Environment, health and safety' and 'Supply failure'. We recognise that we must manage our climate change risks effectively if we are to deliver our growth strategy and inspire confidence in our stakeholders. The rate and extent of change in our key markets in response to climate change is subject to extensive scenario planning as part of our TCFD preparations and we are carrying out further analysis on the validity of a stand alone risk for this area.
-- We refined our 'Failure of operations' risk to focus specifically on 'Asset failure'. This better reflects the primary cause of this risk and the level of potential exposure across the business. Following discussions with our sectors and other principal risk owners, we have put in place sector focused actions to reduce our exposure.
-- We reviewed our 'Quality' risk and developed sector specific views to acknowledge the different applications of this risk. We continued to work with sectors to help them own the risk, monitor its likelihood and ensure any specific actions are tracked.
-- Cyber attacks remain a significant risk because of the evolving external landscape and a rise in the number and sophistication of those attacks. Under our 'Information technology and cyber security' risk (previously Applications, systems and cyber) we continue to develop our controls in line with good industry practice to help us respond to these new challenges. We developed our ongoing programme of work with independent oversight and will track and report progress within this risk.
-- Following an assessment of JM's legal risk landscape, we have introduced 'Customer contract liability' as a new principal risk. This risk recognises our potential exposure to loss or damage because of existing or future customer contracts having potentially unfavourable terms against the backdrop of increasing regulation and collective actions, particularly in the automotive and pharmaceutical sectors.
-- The Precious Metal Management (PMM) team has continued to enhance the governance procedures over our metal management. Despite initial disruption caused by the pandemic it has not had an immediate impact on our supply positions and JM has benefited from the volatile and higher than average precious metal prices. In addition, significant advances have been made in reducing the amount of working capital which has been assisted by the advances made by reducing our refinery backlogs.
The table below sets out our principal risks and uncertainties and the actions we have put in place to mitigate them. The risks discussed below, either individually or in combination, could have a material adverse effect on our strategy, business, financial performance, operations, cash flows and liquidity, prospects, shareholders value and reputation. We analyse the extent of the mitigation plans we need, knowing that our risk profile and the potential impact of each risk changes over time. JM's strategic risks are listed first followed by operational risks. Each principal risk is also linked to one or more of our three strategic priorities:
Hot Features
Premium
I Invest in growth areas targeted at climate change and circularity
M Manage our established businesses to support growth
P Promote a fast paced, efficient business and high performance culture
up Increased since 2020 annual report
- No change
down Decreased since 2020 annual report
n/a Risk movement not applicable as new risk
1 Existing market outlook
GMC sponsor: Robert MacLeod - I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We continue to execute our strategic planning process report
Changing assumptions to assess and understand external trends and the Coverage of this risk
in our key markets associated effects on our sectors. This includes the has evolved to reflect
could have an unplanned balance, scale and focus of our investments. potential unforeseen
or unforeseen impact changes
that we are not in our key existing
agile enough to * We regularly review our portfolio to ensure that each markets
respond to. This part of the business is providing value to the group. and our ability to respond
risk includes the In turbulent times the resilience of our portfolio at speed. We have split
potential impact demonstrates its benefits. our risk scoring into
of legislative changes, two categories: 'normal'
other market movements fluctuations in the
outside of our * We monitor key viability and liquidity metrics, such business
predictions, as balance sheet strength, as part of our budgeting cycle that are identified
the extended impact and going concern testing. through our strategic
of global pandemics, planning, and lower
and emerging trends, frequency
such as tariffs, * We monitor changes to key drivers, such as GDP and 'black swan' events, such
as well as regional market assumptions, carry out scenario planning and as COVID-19, which are
and global slowdowns adjust our business plans accordingly. intrinsically
to which our business unforeseeable.
may be sensitive. As a result, we have
* We have developed response mechanisms to ensure that strengthened
we can react quickly when unforeseen market events our market intelligence
take place. across all sectors and
we continue to monitor
global macroeconomic
factors
and are improving our
sensitivity analysis
through
our strategic planning
and budgeting process.
Furthermore, we have
improved
our ability to react to
unexpected market changes.
2 Future growth
GMC sponsor: Christian Günther down I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We continually review our strategy in light of new report
Ineffective execution information, and our Strategic Transformation Office We have further refined
of our strategic tracks our execution via a business review process. this risk to focus not
initiatives and just on the growth
investments could opportunities
lead to failure * We review and monitor new technologies and market we see in our two main
to deliver planned competitiveness on an ongoing basis. core businesses (Clean
growth and create Air and Efficient Natural
value. Resources) but also on
* We invest in research and development, capital the key growth platforms
projects and people with the specific skills we need that relate to our Battery
to deliver our strategy. Materials, Hydrogen and
Fuel Cells businesses.
Our future growth is in
* We work proactively with current and potential part driven by global
customers, as well as industry bodies, such as the macro trends, including
Hydrogen Council, to understand future needs and climate change, acceleration
potential product and market evolution. of EV penetration and
fuel cells, and an increase
in the rate of decarbonisation
* Our dedicated group capital projects team conducts that, on balance, create
regular reviews of all strategic capital projects. a suite of opportunities
for JM.
To drive growth, we recognise
that we need to leverage
our core businesses to
support our growth platforms,
identifying opportunities,
strengthening our IP positions,
developing the products
and services that customers
need and building the
skills we need to deliver
our strategy. We also
recognise the inherent
level of risk that embarking
on new growth areas creates,
including securing customer
platforms.
Overall, our net scoring
(currently mitigated position)
has reduced, recognising
our regular monitoring
and increased control
through the Transformation
Office. However, our appetite
(desired position) has
increased to reflect the
alternative growth streams
required and the higher
percentage of revenue
at risk as we balance
our portfolio, expanding
from our existing core
businesses.
3 Competitive advantage
GMC sponsor: Maurits van Tol - I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We maintain strong customer relationships through our report
Failure to maintain technical proposition, good market reputation and a We have processes in place
our competitive high level of technical service. to enable effective decisions
advantage in existing to allocate innovation
markets and, as resource and capital.
a result, not meeting * We conduct research and development and use our Through our innovation
customers' evolving capital management process to ensure resources are excellence programme,
needs as effectively prioritised against the areas of greatest we continually improve
and profitably as opportunity. the processes that further
our competitors. expand JM's product,
application
* We maintain a strong innovation portfolio using our and technology toolbox.
new technology platform and product development We added further mitigating
process. actions to ensure we have
the capabilities to 'place
the right innovation bets'
and respond to emerging
opportunities at pace.
4 Environment, health and safety (EHS)
GMC sponsor: Ron Gerrard - P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We have embedded a health and safety culture across report
Like other high the business. This includes clear policies, The health and safety
hazard manufacturing guidelines and standards, continual training and of our employees is our
companies, our business awareness activities and audits. priority. COVID-19 has
operations are subject continued to affect the
to a wide range way in which many of our
of challenging health, * We continue to conduct process safety reviews at employees work and we
safety and environmental applicable sites. have adapted our processes
laws, standards to ensure that training,
and regulations online hazard studies
set by government * We carry out investigations to determine the root and other assessments
and non-governmental cause of incidents and accidents and develop can continue despite the
bodies around the remediation plans to address the issue. pandemic.
world. We have updated this risk
If we fail to operate to clearly articulate
safely, we could * We manage and report on environmental data associated how we manage our exposure
injure our people with our sites. to health and safety risks,
or breach applicable and to specifically include
laws, which could all relevant areas, such
have a negative as our environmental
impact on our employees. impact.
This could result
in lost production
time and potentially
attract negative
interest from the
media and regulators.
5 Supply failure
GMC sponsor: Jane Toogood (metal) and Ron Gerrard (other sourcing)
- M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We manage our supplier relationships through regular report
The nature of JM's reviews and discuss their constraints and quality We have continued to
operations means management processes. implement
there are limited our procurement strategy
suppliers from which and have further sharpened
to source certain * Where appropriate, we carry strategic stocks of raw our supply chain
strategic raw materials materials and regularly monitor our levels against understanding
including precious changes in the external landscape. across the sectors,
metals. Any significant including
breakdown in the our capital projects supply
supply of these * We regularly investigate alternative materials as chain.
materials would part of our research and development. We continue reviewing
lead to an inability critical direct raw material
to manufacture our suppliers to meet our
products and satisfy * We continue to invest in our pgm refining business to product portfolio
customer demand. ensure access to recycled precious metals. strategies.
We have also continued
to reduce the precious
* We conduct ongoing market research to understand and metal backlogs in our
monitor the impact of short term events on the longer refineries, reducing
term supply of metal. pressure
on our precious metal
sources.
6 People
GMC sponsor: Annette Kelleher up P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * Our values and behaviours are embedded in all our report
To successfully internal processes, including hiring and performance We have increased our
execute our strategy reviews. scoring to reflect the
and deliver growth, pandemic and also the
we need an appropriate level of change we are
culture and a breadth * We run culture focused sessions with our leaders and currently undertaking.
and depth of leadership have developed a culture statement roadmap. We have continued to
skills to drive prioritise
a motivated, inclusive our employees' health
and engaged workforce, * We run ongoing leadership development and wellbeing and safety, maintaining
underpinned by adequate programmes for our employees. social distancing measures
people data. and supporting many
homeworking
* We conduct a global employee engagement survey every employees. We have a series
two years and intermediate pulse surveys. We then of leadership engagement
develop targeted action plans based on the feedback and employee communications
from them. planned on a regular basis
to support colleagues
in times of uncertainty
and maintain motivation
across the group.
7 Security of metal / highly regulated substances
GMC sponsor: Jane Toogood - P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We have delivered the first year of a three year report
We store and transport security improvement roadmap to further strengthen Our level of control
significant quantities the function. continues
of high value precious to increase through the
metals or highly delivery of the security
regulated substances. * We continue to implement and apply our Group Security improvement roadmap, which
Loss or theft due policies across all sites. includes implementation
to a failure of of control measures across
our associated security our critical sites.
management systems * We regularly carry out security assessments and With the increase in metal
may result in financial audits at sites. prices comes a potential
loss and / or a increase in the risk and
failure to satisfy we adapt our controls
our customers, which * We are members of intelligence groups that help us in line with the changing
could reduce customer carry out regular threat evaluation and horizon security risks to our
confidence or result scanning. materials.
in legal action.
* We run ongoing security awareness campaigns and
training, including rigorous follow up of thefts and
continuous learnings.
8 Intellectual property management
GMC sponsor: Maurits van Tol - I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We carry out an annual review of our intellectual report
Failure to adequately property portfolio against JM's strategic priorities The intellectual property
manage our own, to ensure continued alignment. landscapes for the
and third party, technologies
intellectual property, in which JM operates
knowledge and information * We regularly review our sector level intellectual continue
could lead to a property strategy to ensure consistent monitoring of to be inherently
loss in business intellectual property activity. challenging
advantage, loss as, for example,
of freedom to operate sustainable
and reputational * We actively manage our intellectual property technology development
damage associated portfolio and use digital tools to support is a very dynamic space.
with litigation. governance. To continue reducing our
risk exposure, we are
developing and implementing
* We continue to provide training on, and raise a trade secret management
awareness of, our Information Classification Policy. policy to ensure JM has
a register of all its
trade secrets and key
* Intellectual property lawyers provide specialist knowhow. This will allow
guidance, including on the use of intellectual us to better manage our
property as a business tool. intellectual property
and guard against loss,
either inadvertent or
deliberate.
9 Asset failure
GMC sponsor: Ron Gerrard - M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We are implementing robust asset management report
We may experience programmes and rigorous operational technology We have changed 'Failure
critical asset failures support systems. of operations' to 'Asset
resulting in a material failure' to avoid
impact on the supply, duplication
performance, share * We have developed and embedded engineering standards. and reflect the level
value and reputation of our exposure if not
of JM. mitigated.
* We are prioritising key insurance review actions and Overall, even with
business continuity planning. mitigations
in place, there is further
work required to reach
* We are detailing and prioritising critical spares and tolerance. Group scoring
capital expenditure for ageing assets and reflects the level of
infrastructure. exposure within the PGM
Services (PGMS) business
due to the nature of the
* We are delivering competency programmes. business with the highest
potential impact. A multi
year investment programme
is underway in PGMS to
renew assets that require
replacing due to them
approaching end of life.
Part of this investment
includes a new state of
the art refinery at our
PGMS Royston site.
10 Ethics and compliance
GMC sponsor: Nick Cooper - P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We have shared our Code of Ethics and compliance report
Failure to comply policies with employees and provide regular training As the ethics and
with ethical and on them. Our senior leaders set the tone from the compliance
regulatory standards top. landscape continues to
could lead to reputational evolve and risk management
damage, and leave techniques become more
the company or individuals * Internal and external subject matter experts identify sophisticated, we continue
open to potential risks, set standards and provide advice and training. to adapt our programme.
criminal or legal During the last 12 months
action. we have continued to
* Our third party due diligence programme assesses and monitor
manages the risks associated with various the heightened compliance
counterparty relationships. risk due to the additional
financial pressures that
people and companies may
* We continued the 'speak up' facility for employees to be suffering because of
raise concerns. Our Ethics Panel investigates any COVID-19.
reported issues and recommends actions to address the In addition, we have
issue, as needed. increased
our focus on ethical risks
that may not have direct
regulatory consequences
by creating a new role
of Head of Business
Ethics.
11 Business transition
GMC sponsor: Robert MacLeod down I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * The setup of the Strategic Transformation Office in report
Failure to manage April 2020 has ensured appropriate governance across Our Strategic Transformation
and deliver change key initiatives to coordinate and drive delivery of Office has driven delivery
in a controlled change in a controlled manner. of the expected benefits
manner to achieve in a controlled manner,
expected business thereby reducing the overall
benefits. * We continue to monitor JM wide risks and risk compared with last
interdependencies associated with our transformation year.
. We have put new processes,
tools, controls, governance,
and focus on business
* We carry out independent assurance on key change change in place this year,
programmes. which has lowered the
overall risk in our workstreams.
This year we will continue
* We have introduced a project management and business to use these measures
change framework across all key initiatives. across our sectors and
in new workstreams and
across asset disposal
and sustainability.
The model of the Strategic
Transformation Office
has been replicated in
many of our sectors to
manage the overall group
risk.
12 Product quality
GMC sponsor: Joan Braca up M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We monitor and report on quality performance, taking report
Customers use our corrective action where needed. The regulatory environment
products in a wide continues to tighten,
range of their own and our customers are
end products, processes * We continue to develop robust manufacturing and experiencing greater
and systems. It preventative maintenance systems supported by scrutiny.
is crucial, therefore, standardised processes. We note an increase in
that our products risk profile due to better
work properly and understanding of our
meet the established * We embed global quality management systems across our sector
quality criteria. business and provide training and regular quality programmes and
Performance failure communications to help employees understand how to relevant exposures. Our
or quality defects use them. risk strategy has been
could cause harm to apply the highest
to consumers or exposure
leave us exposed * We adopt 'quality by design' in our new product across our sectors which
to liability claims. introduction and product change management processes. is driven predominantly
This could lead by the Health Sector.
to loss of future We have strengthened our
business, licence ability to recognise
to operate and continuous
reputational improvement opportunities
damage. and how we apply
inherently
different quality
management
systems across our
sectors.
13 Information, technology and cyber security
GMC sponsor: Ron Gerrard - M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * We continue to raise employee awareness and run report
Failure to adapt technology training programmes. We have refreshed this
our IT systems to risk to reflect wider
changing business IT risks in line with
requirements, significant * We have enhanced key cyber security technologies to good industry practices
disruption to those increase our ability to predict, prevent, detect and and it now includes
systems or a major respond to cyber threats. innovation
cyber security incident and digital areas.
could adversely We continue to invest
affect our financial * We continue to deliver our Cyber Security and heavily in our cyber
position, harm our Infrastructure Improvement Programme (CSIIP) to security
reputation and lead increase our organisational resilience. Controls have and IT general controls
to regulatory penalties, been increased in areas where we perceive a providing better
or non-compliance heightened risk. visibility
with laws. and governance to support
a more efficient business.
* We have introduced key policies and standards across We maintain a high level
JM. of communication and
awareness
activities ensuring our
* We receive continued support and assurance from third employees continue to
party specialists. be alert to the external
risk associated with the
exploitation of the
COVID-19
pandemic.
14 Customer contract liability
GMC sponsor: Nick Cooper n/a I M P
Risks, opportunities Key mitigations Changes since 2020 annual
and impact * Our in house legal team and commercial function work report
Unfavourable customer together to negotiate terms and liabilities within Following an assessment
contract terms could our customer contracts. of our legal risks landscape
lead to significant and exposures we have
loss or damage and concluded that the group's
expose us to high * We provide ongoing legal training and activities to risk in relation to customer
or unlimited liability, raise awareness. contract liability should
as well as other be tracked.
broader negative This is primarily due
consequences. * Contracts that meet specific high risk triggers are to increasing regulation
subject to approval by our Legal Risk Committee. and collective actions,
particularly in the
automotive
* Sector General Counsels are part of Sector Executive and pharmaceutical sectors,
Committees and advise senior leadership teams on raising our overall risk
legal risk within their sectors. exposure.
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:
-- Patrick Thomas, Chair -- Robert MacLeod, Chief Executive -- Stephen Oxley, Chief Financial Officer -- John O'Higgins, Non-Executive Director -- Jane Griffiths, Non-Executive Director -- Xiaozhi Liu, Non-Executive Director -- Chris Mottershead, Non-Executive Director -- Doug Webb, Non-Executive Director
states that to the best of his or her knowledge:
-- The group financial statements, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the group.
-- The parent company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets, liabilities, financial position and profit of the parent company.
-- 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.
-- As at the date of this report there is no relevant audit information of which the company's auditor is unaware. Each director has taken all the steps he or she should have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
ENDS
Enquiries: Victoria Barlow Deputy Company Secretary 020 7269 8431
Johnson Matthey Plc is listed on the London Stock Exchange (JMAT)
Registered in England & Wales number: 00033774
Legal Entity Identifier number: 2138001AVBSD1HSC6Z10
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