11th Nov 2021 09:18
(Alliance News) - Johnson Matthey PLC on Thursday said annual results will be at the low end of market expectations, while also announcing plans to exit a business and a change in leadership.
Johnson Matthey shares were down 17% at 2,286.00 pence in early trade Thursday, by far the worst FTSE 100 faller.
The speciality chemicals company said that, after a detailed review, it has concluded that the potential returns from its Battery Materials business would not "be adequate to justify further investment".
The Battery Materials unit house Johnson Matthey's eLNO technology. The material is intended to offer more energy density and use less cobalt compared to traditional electric vehicle batteries.
Back in May, Johnson Matthey had said capital expenditure would amount to up to GBP600 million in the financial year, as it sought to ramp up investment in battery materials and hydrogen technology in a bid to serve Europe's growing electric vehicle market.
"Whilst demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers. Consequently this is rapidly turning into a high volume, commoditised market," it said.
Johnson Matthey said it has decided to pursue the sale of all or parts of the business with the intention of exiting "swiftly".
"This decision will allow us to accelerate our investment and focus on more attractive growth areas, especially where we have leadership positions such as in hydrogen technologies, circularity and the decarbonisation of the chemicals value chain," said Chief Executive Robert MacLeod.
Johnson Matthey also said MacLeod will retire early next year, with Liam Condon hired to succeed him. MacLeod will step down in February after eight years and will stay on until July to help with the transition.
Condon, who will join as CEO March 1, is currently a member of the board of management of Bayer AG and president of its Monheim, Germany-based Crop Science Division, a role he has held for nine years. Condon, who was born in Dublin, also is responsible for the Latin America and Africa regions for Bayer Group.
Johnson Matthey said half-year results - to be released on November 24 - will be in line with market expectations, but full-year results will be at lower end of expectations. It cited supply chain shortages for its auto industry customers and labour shortages in the US hurting its Health business. The company noted that the Health business currently is the subject of a strategic review.
By Tom Waite; [email protected]
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