Outlook.

The group’s performance in the first half of the year was good and this has continued into the early part of the second half. The short term prospects for the global economy are difficult to predict. Nonetheless we believe that Johnson Matthey is well placed and we currently anticipate that the group’s results in the second half will be slightly ahead of those for the first six months of the year.

Notwithstanding current macroeconomic uncertainties, the drivers for our business remain robust. In addition, we continue to increase our investment in research and development to position the group for longer term growth.

Environmental Technologies

Despite uncertainty about economic growth prospects, particularly in Europe since August, global light duty vehicle sales have so far remained stable but our visibility of future demand is limited. Johnson Matthey is well placed to respond to any changes in demand and our results in the second half will benefit from agreements reached with our customers with respect to rare earth prices. Heavy duty diesel vehicle production in Europe and North America has grown strongly during the last six months and the second half of the year has started well.

Davy Process Technology had an exceptionally strong start to the year and the outlook for its business in the second half of the year is good. The demand for our petrochemical and refineries products is harder to predict but we remain close to full capacity and the performance of our AMOG business is expected to follow its normal seasonal pattern.

As a whole, assuming in particular that light duty vehicle production stays at or around current levels, Environmental Technologies Division’s operating profit in the second half of 2011/12 is expected to be well ahead of the first half of this year.

Precious Metal Products

In September, precious metal prices dropped sharply but industrial demand has remained robust. Overall, our Precious Metal Manufacturing businesses are currently trading well, although order visibility, which was already limited, has reduced further in the last few months. Refining intakes also remain good but the results of our Precious Metal Services businesses will ultimately depend upon pgm prices during the period. At current pgm prices, the performance of our Precious Metal Products Division is expected to be lower than the first half, but still ahead of the second half of last year.

Fine Chemicals

Our API Manufacturing businesses had a good start to the year. These businesses are driven by demographics and developments in healthcare and we are confident that the division will continue to perform well in the second half of 2011/12.