Johnson Matthey, a global leader in sustainable technologies, has been working to commercialise its range of high nickel cathode materials, principally for the automotive Industry.
Following a detailed review and ahead of reaching a number of critical investment milestones, we have concluded that the potential returns from our Battery Materials business will not be adequate to justify further investment.
Whilst demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers. Consequently, this is rapidly turning into a high volume, commoditised market.
In recent months, as JM has been exploring strategic partnerships, it has also become clear that their capital intensity is too high compared with other more established large scale, low-cost producers.
The Board has therefore decided to pursue the sale of all or parts of this business with the ultimate intention of exiting. We will move swiftly to determine the best outcome for all of our stakeholders and intend to make a further announcement as soon as possible.
JM is making good progress in its other growth areas, such as in hydrogen technologies, circularity and the decarbonisation of the chemicals value chain. These are attractive opportunities that we will now accelerate with greater focus and investment. In addition, in a world that increasingly needs solutions to address the challenges faced by climate change, we will continue to pursue opportunities across other areas that are closely aligned to our core capabilities.
Robert MacLeod, Chief Executive said:
“While the testing of our eLNO battery materials with customers is going well, the marketplace is rapidly evolving with increasing commoditisation and lower returns. We have concluded that we will not achieve the returns necessary to justify further investment.
“This decision will allow us to accelerate our investment and focus on more attractive growth areas, especially where we have leadership positions such as in hydrogen technologies, circularity and the decarbonisation of the chemicals value chain.”
Johnson Matthey will announce its first-half results on 24th November, which are in line with market expectations. The trading outlook for the full year ending 31st March 2022, assuming current precious metal prices and foreign exchange rates are towards the lower end of market expectations. This is primarily due to the widespread supply chain shortages affecting the automotive industry and the consequential impact on precious metals prices, together with acute labour shortages in the US that are adversely impacting our Health business, which is subject to strategic review.