Technology firm Johnson Matthey has reorganised its business following an in-depth review of its operations overseen by incoming CEO Liam Condon.

The firm has simplified its operations, focusing on four key business areas: clean air, catalyst technologies, hydrogen technologies and precious group metal (PGM) services. 

A new efficiency programme aims to deliver £150mn/yr ($188mn) in cost savings by 2024-25, and a new leadership team has been brought in to oversee the changes that includes new business leads for each of the four divisions.

“Our complex business structure and lack of commercial focus is getting in the way of our ability to create significant value. That is why we need to simplify and drive a stronger emphasis on accountability and faster decision-making,” says Condon in the firm’s Q1 2022 results update. Condon took over from outgoing CEO Robert MacLeod on 1 March this year.

As part of the reorientation, the firm has sold the bulk of its battery material division to Australian conglomerate EV Metals for £50mn, as well as divesting its health division. And it has invested €20mn ($21.4mn) in Enapter, a commercial leader in anion-exchange-membrane (AEM) electrolysis as part of a wider plan to invest £1bn in clean hydrogen research, development and deployment technologies by 2030.

£150mn/yr – Forecast cost savings by 2025

Traditionally, Johnson Matthey has made much of its profits from catalytic converters that absorb emissions from petrol and diesel cars, and from battery materials. But the former business has limited potential given the accelerating uptake of electric vehicles, while the latter suffered from competition with alternative material technologies such as mid-nickel and lithium iron phosphate.

“This has been a very challenging year for Johnson Matthey and our shareholders. We took important and necessary strategic decisions with the business portfolio,” says chairman Patrick Thomas on the release of the firm’s results.

Hydrogen technologies

The firm is targeting more than £200mn of sales in its hydrogen technologies division by the end of 2024-/25. It has the goal of winning at least two large-scale strategic partnerships over the next year and ten additional large-scale projects split between its hydrogen technologies and catalyst technologies businesses.

It has also extended a partnership with fuel-cell manufacturer Plug Power. The firms will work together to make advanced components for both fuel cells and electrolysers.

“The collaboration is expected to generate significant value,” says Johnson Matthey. “We aim to become the market leader in high-value performance components that are essential to power fuel cells and green hydrogen electrolysers.”

Former BP executive Mark Wilson will become CEO of the hydrogen technologies division.

Cumulative capex will be c.£1bn for the next three years, focused on core activities in PGM refineries, catalyst technologies and hydrogen technologies.

“We may also consider acquisitions, but we will be highly selective in our approach, with a focus on bolt-on deals to acquire technology or accelerate growth in our core growth businesses,” says the firm.

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Author: Tom Young