Johnson Matthey (JMAT) H1 2026 earnings summary

Executive summary

• Underlying operating profit rose 38% year-over-year, driven by cost efficiencies, higher PGM prices, and strong operational execution.

• Clean Air margin improved by 200bps to 12.4%, with further gains targeted; PGM Services and Hydrogen Technologies also showed improved profitability.

• Sale of Catalyst Technologies to Honeywell for £1.8bn is progressing, with £1.4bn of proceeds to be returned to shareholders upon completion in H1 2026.

• The business is transitioning to a leaner, cash-focused model, with significant headcount and cost reductions, including a streamlined executive team.

• Significant turnaround in cash flow, moving from a large outflow last year to a small inflow this half.

Financial highlights

• Sales from continuing operations declined 4% year-over-year to £1,279m, while underlying operating profit increased 38% to £142m.

• Free cash flow improved to a £4m inflow from a £165m outflow in the prior year, despite a £200m stock build and higher metal prices.

• Earnings per share rose 40% to 51.2p; interim dividend maintained at 22.0p per share.

• Net debt increased to £971m, representing 2.0x EBITDA.

• R&D spend reduced to £69m (5% of sales excl. precious metals).

Outlook and guidance

• Full-year underlying operating profit expected at the higher end of mid-single digit growth, with Clean Air margin guidance of 14–15% for 2025/26 and a longer-term goal of 16–18% by 2027–2028.

• Hydrogen Technologies expected to reach break-even run rate by March 2026.

• Sustainable free cash flow of at least £250m targeted by 2027/28.

• Annualised shareholder returns of at least £200m per annum from 2026/27 onwards.

• New PGM refinery commissioning in 2H 2025/26, operational in 2027.