Chairman Tim Stevenson gives an overview of Johnson Matthey's performance in 2013/14
I am pleased to report that Johnson Matthey performed well in 2013/14. The group has made good progress in all of its main markets, benefiting from our commitment to long term investment in research and development and our strategy of organic growth complemented by targeted acquisitions. As a result, we have seen underlying earnings per share increase by 16% to 170.6 pence.
However, it has not all been plain sailing. The well publicised change to our long term contracts with Anglo American Platinum Limited came into effect on 1st January this year. Whilst this has impacted revenue and profit in our Precious Metal Products Division in the final quarter of the year, and will continue to do so in 2014/15, Johnson Matthey has weathered the change well; the rebasing is understood by our shareholders, the effect on employees has been kept to a minimum and the company's share price has remained robust during 2013/14. The change has released a strategic constraint. It coincided with our review of group strategy towards the end of 2013 and provided an opportunity for Johnson Matthey to think more broadly about how best to apply its expertise. Whilst concluding that our strategy was sound, we considered that going forward we could embrace a wider range of advanced materials and technology and increase our emphasis on collaboration, customer focus and creating value.
A key role of your board is to ensure successful succession planning. This is fundamental to board effectiveness and is integral to the delivery of Johnson Matthey's strategy. During the year we announced a number of executive level changes.
The board is extremely pleased to have a very able and natural successor in Robert MacLeod
Neil Carson has decided, after a highly successful decade as Chief Executive, to retire in 2014 and in January we announced that Robert MacLeod will succeed Neil as our Chief Executive. Neil has made an outstanding contribution in his 34 years at Johnson Matthey, including as Chief Executive since 2004. He has been the architect of the successful company that is Johnson Matthey today, not only in its financial performance, but also its culture, style, integrity and business approach. Neil will step down from his role on 5th June 2014 and will retire from the company at the end of September. I'd like to personally thank him for his support and remarkable commitment to the good of our business. On behalf of the board, I wish him all the very best for the future.
The board is extremely pleased to have a very able and natural successor in Robert MacLeod. Robert has served as Group Finance Director alongside Neil, developing a knowledge and experience of Johnson Matthey, its culture and markets. Since joining the company in 2009 Robert has played a key role in the group's strategy and new business development as well as in introducing more robust business processes across the company. My board colleagues and I are confident that Robert will be a highly successful Chief Executive, bringing the ability to combine recent outside experience with an understanding of the legacy he is taking over. This combination will enable him to implement a proven strategy that will deliver further growth.
In addition, I am delighted to welcome Den Jones to Johnson Matthey. Den will succeed Robert as Group Finance Director and joins the board on 5th June 2014. Den joins us from BG Group and brings a blend of strong financial leadership credentials, international experience and highly developed commercial awareness to Johnson Matthey.
In April 2014 we announced that Michael Roney, a non-executive director, Senior Independent Director and Chairman of our Management Development and Remuneration Committee, has decided to retire from the board at the close of our annual general meeting on 23rd July 2014. Michael has been a strong and very effective non-executive director during his seven years of service. His deep commercial experience and pragmatic approach will be much missed by his colleagues on the board and we all wish him well for the future.
Following Michael's retirement, Alan Ferguson, a non-executive director and Chairman of our Audit Committee, will be appointed to the role of Senior Independent Director. Dorothy Thompson, a non-executive director, will be appointed as chair of our Management Development and Remuneration Committee.
Diversity in the boardroom, in its broadest sense, is vital to ensuring board effectiveness. During the year we welcomed two new members to the board: Odile Desforges, who brings deep experience of the global automotive industry, joined us in July 2013 as a non-executive director and John Walker joined us in October 2013 as Executive Director for Emission Control Technologies, having been with Johnson Matthey since 1984. Both Odile and John have enhanced the board's mix, balance of experience and skills. As we seek to appoint a new non-executive director following Michael's retirement, we are looking closely at how to optimise further the diversity of the board across all areas, including technical experience that is relevant to our Process Technologies Division.
It is Johnson Matthey's people who, more than any other factor, make the company special; investing in their development is without doubt one of the key investments that we can make in the future of our business. We've reviewed our human resources strategy this year and have identified talent management as a key priority. Work is underway to help accelerate the development of our people with increased emphasis on important growth regions for our business.
It is the responsibility of everyone in Johnson Matthey to ensure the safety, health and wellbeing of our colleagues across the globe. This is an area to which the board has given particular and detailed attention over the course of the year. Whilst we have continued to make progress in some areas this year we recognise the need to reinvigorate our approach. Work is underway to refresh our programmes and processes to drive further improvement in performance.
Over the last 12 months I have had the pleasure of meeting many of our employees around the world and continue to be impressed by their professionalism, competence and the pride they feel in working for Johnson Matthey. On behalf of our stakeholders, I'd like to thank all our people for their hard work and contribution to our performance this year.
And so to conclude, Johnson Matthey has continued to make good progress in building a sustainable business that delivers superior value for its shareholders. The long term drivers for our company remain firmly in place and I am confident that this, together with our robust strategy, should support the continued growth of Johnson Matthey over the years ahead.