Tim Stevenson gives an overview of performance, strategic focus, culture and values

In summary

  • Proposed ordinary dividend of 75 pence, up 5% on last year
  • Board focused on working with the executive team to deliver the strategy
  • Johnson Matthey is well positioned to deliver long term performance for our shareholders
Celebrating Johnson Matthey at 200

I am extremely proud to be Chairman of Johnson Matthey in its 200th year. It is remarkable to think that in 1817, when Percival Norton Johnson founded his gold assaying business in London, it would be a further 14 years until Darwin set sail on the voyage that would crystallise his theory of evolution. The company has a long and fruitful history and has made a significant contribution to the modern world: supplying platinum for the first electric light bulbs and fuel cell electrocatalysts for NASA space missions; developing platinum therapies to treat cancer and, of course, emission control catalysts that make a major impact on global air quality. Being part of the team which looks after the business to pass on to others in the future is a great privilege. We are celebrating our 200th anniversary with our employees, customers and other partners by working together to develop solutions to some of the most pressing global challenges that we face today.

Group Performance

We saw an improving performance this year despite some tough markets, as we benefited from our technology strengths and from the decisive action taken last year to improve our efficiency. Our strong, customer focused technology enabled us to outperform in key markets, particularly in Emission Control Technologies. We have made good progress in building our platforms in future growth drivers; active pharmaceutical ingredients for improved health and high energy battery materials to enable zero emission vehicles and cleaner air.

As always, it is our employees around the world that have delivered the inspiring science that has enhanced people's lives. On behalf of all our shareholders, I'd like to thank them for their hard work and commitment over the past 12 months. And it is fitting, in our anniversary year, that we also pay tribute to the many thousands of people who have worked for the company in the past for the part they have played in making Johnson Matthey the great success it is today.

Strategic Focus

The global geopolitical backdrop remains volatile. Over the past year, developments, such as the UK's vote to leave the European Union, reinforce the need for us to remain agile and focused in the way we pursue our strategic goals. We must concentrate on getting the right balance between exploring new opportunities and developing those areas where we are already leaders. It is the board's responsibility to ensure the executive team are making the right business decisions to achieve this.

Towards the end of the year, we undertook a review of the group's strategy and have begun to refine it to ensure Johnson Matthey is robust, yet agile and flexible enough to grow in an uncertain environment. The review reconfirmed the benefits of a more focused and collaborative organisation. I believe this, together with our continued investment in R&D, infrastructure and our people, will help us create long term value for our shareholders.

Values and Culture

A key part of the board's role is to take effective steps in shaping and developing a healthy corporate culture. During the year, we continued to enhance governance and compliance with the ongoing embedding of our code of ethics. Our ethics panel reports to the board, demonstrating our commitment to doing the right thing and holding those who are found lacking in this area accountable.

Health and safety remains a priority. Disappointingly, after several years of improved performance, 2016/17 saw some reversal in the trend. During the year, and recognising the importance of driving continuous improvement, we have continued to emphasise our health and safety culture programme. For 2017 a key goal is to ensure that we translate this into improved performance.

Running a sustainable business has long been at the heart of Johnson Matthey's culture. So when the UN announced its 17 sustainable development goals we knew this was something that was aligned with our aspirations. This major initiative to tackle the world's most serious environmental, economic and social challenges over the next decade calls upon companies to work together and play their part by contributing positively to communities in which they operate.

Board Matters

Today's business world presents a range of risks and opportunities – operational, commercial, geopolitical, environmental and financial. This is why it's essential to maintain the right mix of attributes and skills on the board to effectively monitor and manage these and work with the executive team to deliver the group's strategy. We understand that to do this it is necessary to keep the membership of the board refreshed to meet the changing needs of the business over time.

On behalf of the board, I would like to thank again Den Jones and Dorothy Thompson who both stepped down from the board on 20th July 2016. We wish them well in their future endeavours.

The board is extremely pleased to have welcomed Anna Manz and Jane Griffiths to Johnson Matthey. Both have made early contributions to the board's activities. Anna was appointed Chief Financial Officer on 17th October 2016, joining us from Diageo plc where she held a number of senior financial roles including Group Strategy Director. She brings strong credentials in financial leadership along with international experience and deep commercial awareness to Johnson Matthey.

Jane Griffiths joined the board as a Non-Executive Director on 1st January 2017. Jane is Company Group Chairman of Janssen EMEA, the research based pharmaceutical arm of Johnson & Johnson. She brings a wealth of experience and understanding of the management of global businesses to the board, especially in the pharmaceutical sector, together with a strong interest in diversity.

Chairman Succession

In May 2017, I informed the Nomination Committee of my intention to step down as your Chairman at the latest by 31st December 2018. By then I will have served for over seven years and believe that it will be the right time for me to hand over the Chairmanship of the group. Johnson Matthey is in a strong position for the future and it has been an honour to serve as Chairman of such a great company. The Senior Independent Director, Alan Ferguson, will lead the search for my successor.

Outlook

Johnson Matthey represents the best of science, heritage and industry. Our ability to navigate change and adapt to uncertainty has always been, and continues to be, a huge strength. With that strong foundation we will continue to use our expertise to provide cleaner air, improved health and more efficient use of natural resources. We will achieve this through investing for enduring, long term impact, positioning our businesses to deliver strong, consistent and sustainable results, holding ourselves accountable for our responsibilities and putting our people first.

In that context, 2017/18 will see us further strengthen our business. Johnson Matthey's role in providing solutions to major global challenges of our time is as relevant today as it was in 1817. With 200 years of inspiring science as our foundation and a robust strategy for the future,
I believe that Johnson Matthey is well positioned to deliver long term performance for our shareholders.