For Release at 7

For Release at 7.00 am Wednesday 28^th November 2007

Half year results for the six months ended 30^th September 2007

Summary Results

Half Year to 30^thSeptember

2007

2006

change

Revenue

Sales excluding precious metals

Operating profit

Profit before tax

Total earnings per share

Earnings per share before one-off items

Dividend per share

£3,512m

£840m

£132.4m

£120.1m

41.8p

41.0p

10.6p

£2,922m

£654m

£116.6m

£104.6m

38.3p

9.9p

+20

+28

+14

+15

· Sales revenue up 20% to £3.5 billion reflecting good underlying volume growth and higher precious metal prices

· Sales excluding precious metals up 28% to £840 million with double digit organic growth in all three divisions

· Operating profit up 14% to £132.4 million despite adverse exchange translation which reduced reported profit by £2.8 million. Translated at constant exchange rates operating profit was up 16%

· Profit before tax for the continuing businesses 15% higher at £120.1 million

· Earnings per share (eps) before one-off items up 7% at 41.0 pence. Interim dividend increased by 0.7 pence to 10.6 pence in line with earnings growth

· Debt up £54 million with a net £48 million spent on share buy-backs. Gearing (debt / equity) 39%

Business Overview

Divisional growth rates stated at constant exchange rates (note 3)

· Environmental Technologies Division’s sales excluding precious metals up 41% to £541 million and operating profit up 14% to £65.2 million

· Double digit growth in Emission Control Technologies will continue in the second half, driven by increasing demand for heavy duty diesel catalysts, particulate filters for diesel cars in Europe and expansion in Asia

· Three new factories (in Russia, South Korea and Royston, UK) will be opened in the second half of the year

· High oil price supports growth in Process Technologies with good demand for catalysts and purification materials. Davy Process Technology continues to achieve good growth with continued strong demand in Asia

· Precious Metal Products Division’s sales excluding precious metals up 17% to £151 million and operating profit up 31% to £47.2 million

· In the first half platinum group metal prices have been rising and the division’s manufacturing businesses have achieved good growth. Last year’s second half result included some one-off gains on minor metals which are unlikely to recur, so growth in the second half of this year will be slower than in the first

· Fine Chemicals & Catalysts Division’s sales excluding precious metals up 20% and operating profit up 6% to £31.0 million

· Sales growth was boosted by higher base metal prices, particularly nickel, used in catalysts sold into the division’s end markets. Good growth in opiate sales in the US and in Research Chemicals’ sales in Asia. Operating profit growth in the second half is expected to be similar to or slightly better than the first

Commenting on the results, Neil Carson, Chief Executive of Johnson Matthey said:

"Johnson Matthey has delivered another period of strong growth in the first half of 2007/08. Despite a weak dollar, profit before tax increased by 15% on the back of double digit sales growth in all three divisions.

Prospects for the second half remain encouraging. Heavy duty diesel will benefit from a full six months’ sales to US OEMs. New capacity to meet growing demand for autocatalysts and particulate filters in Asia and Europe will come on stream. Platinum group metal prices are set to remain buoyant. We expect earnings growth in the second half to be similar to that achieved in the first."

Enquiries:

Ian Godwin	Director, IR and Corporate Communications	020 7269 8410
John Sheldrick	Group Finance Director	020 7269 8408
Howard Lee	The HeadLand Consultancy	020 7367 5225
Laura Hickman	The HeadLand Consultancy	020 7367 5227
www.matthey.com

Introduction

Johnson Matthey achieved good growth in the first half of 2007/08. Revenues were well ahead of 2006/07 with strong underlying volume growth and rising precious metal prices.

Last year’s results have been restated for the sale of Ceramics Division which was completed in February 2007. Under International Financial Reporting Standards (IFRS) the results of Ceramics Division are now shown in discontinued operations on a post tax basis. Last year’s segmental results (note 2) have also been restated for the new divisional structure announced in June 2007.

Review of Results

Revenue rose by 20% to £3.5 billion partly as a result of higher precious metal prices. The average price of platinum rose by 7% to $1,293 per ounce. Sales excluding the value of precious metals increased by 28% to £840 million, with double digit organic growth in all three divisions.

Operating profit rose by 14% to £132.4 million despite adverse exchange translation which reduced reported profit by £2.8 million. At constant exchange rates operating profit was 16% up. Net interest was unchanged at £12.5 million with the benefit of lower average borrowings offsetting the effect of higher interest rates. Including £0.2 million of share of profits of associates, profit before tax for the continuing businesses was 15% up at £120.1 million.

Total earnings per share increased by 9% to 41.8 pence. This included a one-off benefit to deferred tax of £1.8 million (0.8 pence per share) arising from the change in the rate of UK corporation tax from 30% to 28% on 6^th April 2008. Earnings per share before one-off items grew by 7% to 41.0 pence.

Dividend

The interim dividend has been increased by 7% to 10.6 pence in line with growth in earnings per share before one-off items.

Operations

Our new Environmental Technologies Division, which comprises Emission Control Technologies (ECT), Process Technologies and Fuel Cells, achieved strong growth in the half year. Revenues increased by 23% to £1,055 million; sales excluding precious metals were 38% up at £541 million; and operating profit was 13% better at £65.2 million. Translated at constant exchange rates, sales excluding precious metals increased by 41% and operating profit was 14% higher.

Emission Control Technologies’ sales excluding precious metals grew by £142 million to £429 million. Sales of heavy duty diesel (HDD) catalysts to original equipment manufacturers (OEMs) accounted for £73 million of the increase, rising from £6 million in the first half of last year to £79 million this year. Sales of light duty products were also well ahead with good growth in Asia and increasing fitment of particulate filters on new diesel cars in Europe.

Return on sales (operating profit / sales excluding precious metals) for ECT was lower than last year reflecting the change in product mix with rapid growth in products using expensive substrates (which are a pass through cost for Johnson Matthey). The cost of substrates for these new products is now beginning to come down. Going forward, ECT’s return on sales is expected to stabilise at current levels despite the continued growth in sales of new products.

Estimated Light Vehicle Sales and Production

		Half year to 30^th September
		2007 millions	2006 millions	change %
North America Europe Asia Global	Sales Production Sales Production Sales Production Sales Production	9.9 7.6 10.6 10.8 8.3 13.0 34.1 35.0	10.2 7.5 10.2 10.1 7.7 12.0 32.8 32.8	-2.9 +1.3 +3.9 +6.9 +7.8 +8.3 +4.0 +6.7
*Source: Global Insight*

Global light duty vehicle sales grew by 4% in the six months to 30^th September 2007 with most of the growth in Asia and Eastern Europe. Sales in North America were slightly down compared with the same period in 2006. Sales in China were up 21% to 3.9 million vehicles while sales in Russia grew by 50% to 1.6 million. In Western Europe, diesel engined cars continued to gain share at the expense of cars with petrol engines. An increasing proportion of diesels are being fitted with particulate filters as standard ahead of legislation.

Growth in car sales in Asia and increasing fitment of particulate filters will continue to drive catalyst demand in the light duty market. Later this year Johnson Matthey will be opening new facilities in South Korea, the Russian Federation and Royston, UK to meet anticipated growth in demand.

The market for HDD catalysts is expected to show substantial growth over the next decade. In 2008 we expect the overall market for HDD catalysts to be worth at least US$700 million (excluding precious metals). New standards are scheduled to be introduced in Europe (Euro V) from 2008 and in the USA and Japan in 2010. Legislation is being introduced into many other countries over the next few years. In 2011, legislation will start for non road vehicles in Europe and North America which will increase the market for HDD catalysts. By the end of 2014 we expect the HDD market to have grown to around US$3 billion of sales excluding precious metals. We have increased our investment in R&D and commercial development to ensure Johnson Matthey is well placed to take a good share of these new markets. Over the next few years we will also be investing in new capacity to meet future demand with further new facilities planned in the USA, Europe and Asia.

Process Technologies’ sales excluding precious metals grew by 7%. The division’s Ammonia, Methanol, Oil and Gas (AMOG) business has continued to experience good demand for catalysts and purification materials for industries where hydrogen or synthesis gas are key intermediaries. Demand for catalysts from methanol producers, where Johnson Matthey has a leading market share, was ahead of prior year. New methanol capacity continues to come on stream, in part due to the high methanol price, with a number of new projects announced in the Middle East and China. In China a significant number of the projects are based on utilising the country’s large coal reserves and thereby reducing its reliance on expensive imported oil.

There also continued to be good growth in catalysts for hydrogen plants, driven by demand for low sulphur fuels from oil refineries around the world. Johnson Matthey has the leading market share of syngas catalysts with the industrial gas companies, the fastest growing segment of this market. Sales of purification materials were also ahead of last year.

Davy Process Technology (DPT), which develops and licenses chemical processes, achieved good growth in the first half winning a number of new contracts in Asia. DPT is benefiting from the strong demand for new petrochemical plants in China and the Middle East driven by continued consumer demand, particularly in Asia, and the strategic use of alternative hydrocarbon feedstocks, including coal.

The net expense of our Fuel Cells business was similar to that in the first half of last year. The order book for the second half of the year is encouraging with continued good demand for membrane electrode assemblies (MEAs), especially for direct methanol fuel cells for portable applications, and increased sales of components for phosphoric acid fuel cells which will be used for combined heat and power applications in public and commercial buildings. There has also been encouraging progress in the automotive sector with cities, such as London, announcing plans to purchase hydrogen fuel cell buses and car manufacturers progressing plans to make limited numbers of fuel cell cars available to the public over the next few years. With increasing sales in the second half the net expense of the business for the full year is expected to continue to fall.

Precious Metal Products Division’s revenues ros