Johnson Matthey PLC (LON:JMAT ) said it expects results for the year to end-March 2021 to be at the top end of expectations after a ‘material recovery’ in the second half.
The FTSE100 chemicals group added it started a strategic review of its Health arm to reflect a switch in focus to sustainable technologies.
In the second half, demand in its core car exhaust catalyst business improved so much full-year operating performance will be only moderately behind a year ago, Johnson Matthey said, with margins above 13% due to higher volumes and self-help improvements.
Good progress had been made against the cost-savings target of £225mln by 2022/23, it said, with £60mln of benefit to be seen in the year just ended.
The chemicals group added it had seen little impact on demand from carmakers due to the well-documented global shortage of semiconductor chips.
Fuel Cells continued its rapid growth, with sales expected to be up over 20% for the full year. That includes fuel cell components for a range of automotive, non-automotive and stationary applications, said the statement, and it recently signed a deal with a major European automotive supplier for the long term supply of components for automotive applications.
In addition, Johnson Matthey has existing supply contracts with fuel cell suppliers such as Doosan, SFC, Unilia and Sino Fuel Cell plus a number of joint development programmes in place with automotive and truck OEMs.
Cashflow from established divisions such as autocatalysts and platinum refining is now being 'driven' to fund greener technology developments such as eLNO battery materials and hydrogen technologies, JM added.
Consensus full-year estimates are for underlying operating profit in 2020/21 of £469mln and a range of £405mln to £502mln.