Report of the Directors
Business Review

Chief Executive’s Statement

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After another year of strong growth, the group is well positioned for the year ahead. However, once again, it is difficult to assess with any degree of confidence how the global economy, especially in Europe, will develop in the short term. This uncertainty has resulted in a substantial fall in precious metal prices over the last few months, despite robust demand. Nonetheless, we remain confident that our strong position in markets with structural growth will allow us to make further progress in Environmental Technologies and Fine Chemicals in 2012/13. This, however, will be offset by a weaker performance from Precious Metal Products, if precious metal prices remain at current levels.

The outlook for our Environmental Technologies Division remains positive. Emission Control Technologies should benefit from the continued development of the heavy duty diesel catalyst market and anticipated growth in light duty vehicle production in North America and Asia. However, we remain cautious about the outlook for European car and truck markets. Notwithstanding that, the removal of the headwinds in the first half of 2011/12 associated with higher rare earth material prices and the Japanese earthquake should ensure that ECT will perform well in the first six months of this year. Process Technologies is also well placed for another year of growth, benefiting from the ongoing strong demand for DPT’s licences and for additives.

Precious Metal Products Division’s performance is, as we have outlined before, more dependent upon precious metal prices and their recent falls, if maintained, will impact the division’s Services businesses. In addition, these businesses suffer from relatively tough comparatives as metal prices and refining intakes were strong in the first half of 2011/12. Therefore, if precious metal prices remain at current levels, the performance of the Services businesses in the first half of 2012/13 will be significantly lower than in 2011/12. The Manufacturing businesses are expected to make progress during 2012/13.

The performance of our Fine Chemicals Division in 2011/12 exceeded our expectations and the strong drivers for the business remain in place. Continued demand for our existing APIs, the introduction of new products and further geographic expansion of our Research Chemicals business’ footprint should ensure that we have another strong year.

In the longer term, we are continuing to expand our manufacturing capacity around the world and to invest in R&D. Together, this should enable us to provide products that satisfy tightening global legislation and that meet the growing demand from our customers. We have strong positions in markets that will see structural growth over the next few years and, despite current global economic uncertainties, we are confident of the group’s continuing growth potential.

Neil Carson
Chief Executive

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