Johnson Matthey plc (OTCPK:JMPLF) Q4 2019 Results Earnings Conference Call May 30, 2019 4:30 AM ET
Johnson Matthey plc（[OTCPK：JMPLF]）2019年第四季度业绩收益电话会议2019年5月30日美国东部时间上午4:30
Robert MacLeod - CEO
Anna Manz - CFO
John Walker - Sector Chief Executive Clean Air & Executive Director
Jane Toogood - Sector Chief Executive of Efficient Natural Resources
罗伯特麦克劳德 - 首席执行官
Anna Manz - 首席财务官
John Walker - 行业首席执行官Clean Air＆Executive Director
Jane Toogood - 高效自然资源部门首席执行官
Sebastian Bray - Berenberg Bank
Andrew Stott - UBS
Ranulf Orr - Redburn
Jean-Baptiste Rolland - Bank of America Merrill Lynch
Adam Collins - Liberum
Marc Elliott - Investec
Chetan Udeshi - JP Morgan
Nicola Tang - Exane BNP Paribas
Charlie Webb - Morgan Stanley
Martin Evans - HSBC
Tom Wrigglesworth - Citi
Sebastian Bray - Berenberg Bank
安德鲁斯托特 - 瑞银集团
Ranulf Orr - Redburn
Jean-Baptiste Rolland - 美国银行美林证券
亚当柯林斯 - Liberum
Marc Elliott - Investec
Chetan Udeshi - 摩根大通
Nicola Tang - Exane BNP Paribas
查理韦伯 - 摩根士丹利
马丁埃文斯 - 汇丰银行
Tom Wrigglesworth - 花旗
Good morning, everybody, and welcome to our 2018-19 results presentation. As we've done previously, Anna and I are going to do this in 3 sections, and I will start with the highlights.
We had clear aims for the year, deliver a strong performance and progress our strategy. And we delivered on these goals. These results are in line with our expectations, and as I will come onto after Anna has taken you through the financials, we continue to make progress with the changes and investments that will strengthen our platform for growth.
In the year, we grew underlying earnings per share by 10% led by Clean Air, which performed strongly as expected. Efficient Natural Resources saw good sales growth and we delivered strong margin improvement from improved efficiency and higher pgm prices.
In Health, the changes we made have improved our footprint, positioning ourselves for growth. And in Battery Materials, we continue to make significant progress. We have leading technology in eLNO and are now investing in its commercialization, which will deliver breakout growth over the medium term.
Our return on invested capital was 16.4% held back by the higher levels of metal inventory we've had over the course of this year as Anna will explain. Given this strong performance and our confidence in the group's prospects, the full year dividend is up 7%.
So now let me hand over to Anna to talk you through the financials, the progress we've made against our focus areas and the outlook.
Thanks, Robert. Good morning, everyone.
Overall, we've had a very good year. And despite challenges in some of our end markets, we're doing exactly what we said we would. At constant rates, our sales were up 10% and underlying operating profit was up 8%. Underlying earnings per share is up 10%. And as Robert mentioned, we increased the final dividend by 7%.
Firstly, looking at sales for the group. Sales were strong throughout the year, up 10%. We saw growth across all of our sectors but particularly Clean Air, which grew double-digit in both our Light and Heavy Duty businesses.
Operating profit was up 8%, towards the upper end of our mid- to high single-digit guidance for operating profit. This was a strong performance led by Clean Air and Efficient Natural Resources. In Health, operating profit declined slightly as expected and New Markets was also lower.
Corporate costs increased due to our investments in various group initiatives which will help drive further efficiencies across our business. Some of these costs are included in the sector's operating profit whilst others sit in corporate. Overall, this was a good operating performance for the group.
Progressing now to my 3 focused areas. As I go through this presentation, I'll be talking about those focused areas. And to remind you what they are, driving increasing business-wide efficiency, disciplined management of working capital and rigorous and transparent resource allocation.
Overall, we've made good progress. However, progress has been impacted by the increase we've seen in precious metal working capital, which was caused by unscheduled downtime in one of our refineries in the year. This will have a temporary impact on some aspects of our performance including finance costs, return on invested capital, cash flow and net debt, and I'll cover more about that later.
We're delivering now as we invest for the future. The 8% growth in operating profit was achieved whilst we incurred cost as we invest to drive improvements across our business. We've invested in the rollout of a single global ERP system, building our procurement function, improving our commercial capability and in other areas, all of which will set us up for sustainable growth.
Growth in our underlying business also includes both the GBP 15 million saving associated with the closure of our Health plant at Riverside and the investments that we're making to improve the efficiency of our footprint in this sector. This net cost in the year will deliver significant benefits in the future. Through driving business-wide efficiency, we're seeing tangible results and expect further benefits in the medium term.
We've made good progress on the number of efficiency initiatives in the year. In procurement, we've continued to invest in building our procurement capability and we're on track to deliver the expected GBP 60 million of savings over 3 years. So far, we've delivered GBP 28 million and expect to deliver the remainder over the next 2 years. As I've said previously, roughly 3/4 will directly benefit the P&L.
营业利润增长8％，达到我们的中高个位数营业利润指标的上限。这是由Clean Air和Efficient Natural Resources领导的强劲表现。在健康方面，营业利润按预期略有下降，新市场也较低。
Our group restructuring program that we started last year is now substantially complete, generating annualized cost savings of around GBP 25 million. And in Health, we've optimized our Manufacturing footprint by closing our Riverside plant and expect savings of GBP 20 million.
This is just the start. We're continually identifying opportunities to run our business more efficiently and this enables to reinvest, driving further growth. All of this will strengthen our platform for the future.
Moving on now to the sectors in more detail, and I'll cover our performance in the year and strategic progress. Robert will give you the forward-looking view and a sense of our priorities.
Clean Air performed well, delivering sales growth of 11% driven by double-digit growth in both Light and Heavy Duty. And this was in a year when we saw a decline in global auto production.
Starting with Light Duty, as expected, growth was driven both by diesel and gasoline in our European business. Our diesel catalyst sales grew 22% in a market that declined 9% driven by respective market share gains. We achieved a 20 percentage point increase in our Light Duty diesel market share in Europe which increased from 45% at the start of the year to around 65% by the end.
Our gasoline business in Europe grew 18%. This was ahead of the market and largely due to a positive sales mix with more gasoline particulate filters being sold. Our Asian Light Duty business grew ahead of the market production in most markets, and our Americas Light Duty business slightly underperformed the market.
In Heavy Duty, we saw double-digit growth and we outperformed the truck market in Europe and the Americas and we were in line in Asia. Our growth is driven by the Americas where we grew 19%, and this reflects a strong performance in the U.S. Class 8 and 47 truck markets. We continue to expect high levels of activity in the U.S. Class 8 market with production peaking in the middle of the 2019 calendar year.
Our European Heavy Duty business grew 4% in a low-growth market driven by non-road. And in Asia Heavy Duty, our sales were broadly flat.
Clean Air's operating profit grew 13%, with a 20 basis point increase in margin largely due to volume leverage particularly in Europe. Overall, this is a strong performance this year.
In addition, I'm really pleased with our strategic progress. As expected, our European Light Duty business has driven growth in the short term and we achieved our planned share gains in Light Duty diesel, a significant milestone due to our technology leadership.
And to support this growth, we're taking steps to expand our manufacturing footprint. In the year, we broke ground and made good progress on our new manufacturing facilities in China and in Poland. We'll be ramping up both of these plants through 2020. And we're also building a plant in India, which will cost around GBP 50 million to meet the increasing demand in that region from Bharat IV which comes into force in April 2020. And of course, we remain focused on maintaining a margin of around 14% through delivering planned efficiencies and optimizing our manufacturing footprint.
Looking forward to '19-'20, we expect a year of more modest growth. Growth will be weighted to the first half as we realize the benefit of the annualized share gains partly offset by reinvestment into R&D and the new manufacturing capacity. We anticipate that these investments for growth and efficiency will lead to a slightly lower margin than prior year.
Beyond '19-'20, we expect sales and operating profit growth to be increasingly driven by the introduction of newer legislation both in China and in India.
Looking at Efficient Natural Resources. Sales grew 4%, driven by the growth in our refill business in Catalyst Technologies and Pgm Services. Overall, Catalyst Technologies was broadly flat. We saw double-digit sales growth in refill catalysts offset by lower sales from first fill catalysts, while licensing was flat.
Refill catalysts and additives are reoccurring in nature. These sales make up the majority of our Catalyst Technologies business and we outperformed our markets in aggregate.
First fill catalysts are one-off in nature and are driven by the timing and number of new plants being commissioned. As expected, licensing income was flat as activity around new builds especially for the technologies we license remains subdued. We signed 5 new licenses in the year, so there were some signs of improvement. But as revenue is recognized over the period of plant construction, we won't see a material impact in the near term. In PGM Services, sales grew 10%, benefiting from higher more volatile average precious metal prices, slightly offset by lower sales of industrial products.
Moving now to operating profit, this was up 15% and the margin improved 1.8 percentage points. We benefited from higher pgm prices, a GBP 16 million impact in the year. Additionally, we saw net benefits from improved efficiency due to initiatives across a number of areas including procurement and restructuring. Most of these efficiency benefits are ongoing, although around GBP 5 million will not repeat.
Of course, we've made good progress in running our business more efficiently, we are investing to improve the safety, resilience and efficiency of our pgm refineries. Our pgm refineries are critical in ensuring that we have security of supply for Clean Air as well as for our external customers, and that's why we're investing around GBP 100 million over the next 3 years. This investment is already included in our CapEx guidance. So overall in the year, ENR performed well.
Taking a step back and looking at our strategic progress to date, we've taken some significant actions within this business to support the delivery of our strategy. For example, a lot of work has gone on behind the scenes to simplify our product portfolio with the removal of a significant number of products. This will optimize our offering to the market and improve our cost to serve our customers.
We're making good progress in commercializing newly developed sustainable technologies. For example, we've signed a large new license in the year for mono ethylene glycol. At the same time, we're also seeing benefits from our focus on efficiency. I've talked about the restructuring savings that we've achieved in the year and we'll continue to look for further improvement as we drive profit growth ahead of sales.
看高效的自然资源。由于我们在Catalyst Technologies和Pgm Services的补充业务增长，销售额增长了4％。总体而言，Catalyst Technologies基本持平。由于首批填充催化剂的销售额下降，我们看到再填充催化剂的销售额实现两位数增长，而许可证则持平。
Looking to '19-'20, we drive these*,* as we drive these efficiencies in our business and continuing to focus on higher growth segments, we expect sales growth and with operating profit growth ahead of sales growth. This guidance assumes metal prices remain at current levels.
In Health, we saw sales growth of 3%. In our Generics business, sales were broadly flat. Sales of controlled APIs, that's active pharmaceutical ingredients, grew slightly, with growth in bulk and specialty opiates, while sales of ADHD APIs were flat.
Sales of noncontrolled APIs declined. This was largely due to lower sales of dofetilide, an antiarrhythmic drug, as new competitors for our customer entered the market, and we expected this. Our Innovator business has performed well with sales up 14%. We had increased sales from APIs where our customers are moving into late-stage testing ahead of commercialization.
Moving now to operating profit. As expected, this was slightly down and the margin declined by 1.3 percentage points. This was primarily driven by the change in product mix as our current portfolio moves through its natural life cycle. Additionally, we saw higher costs from our manufacturing footprint optimization as we restructure our business to support our future growth which offset the GBP 15 million of savings achieved in the year from the closure of Riverside.
As we execute our strategy, we've made significant progress in restructuring our assets. The closure of the Riverside plant in the U.S. is now complete and we're ramping up our UK plant in Annan. This is in line with our focus on complex, high-value, low-volume APIs rather than bulk-quantity manufacturing that Riverside was designed for. Over the medium term, this optimization will deliver annualized benefits of GBP 20 million and provide the efficient platform to deliver value for our global product portfolio.
As you know, we've been investing in our new product pipeline across both Generic and Innovators. We're also on track to deliver an additional GBP 100 million in operating profit from our pipeline by 2025. At the end of March 2019, we've got 46 products in our Generic pipeline and we've included the slide in the appendix showing our progress in the year.
Our Innovator pipeline is also progressing well with 3 products in late-stage development and nearing commercial launch. And finally, looking to '19-'20, we expect sales to be broadly stable whilst operating profit will grow double-digit driven by the cost savings that we've made from the closure of Riverside.
In New Markets, we saw strong sales growth, up 17% driven by alternative powertrain which includes battery systems, fuel cells as well as the LFP and eLNO cathode materials businesses. Alternative powertrain sales were driven by demand for nonautomated applications within battery systems, such as e-bikes; and growth in demand within our fuel cell business, which is now profitable. The development and commercialization of eLNO is on track and have made good progress during the year. Robert will speak more about eLNO later in the presentation.
In the year, operating profit declined, primarily due to further investments in our Battery Materials business, eLNO, and weaker profitability in medical device components. Looking forward to '19-'20 we expect new markets to deliver both sales and operating profit growth.
Moving down the income statement, as expected finance charges increased in the year, primarily driven by the higher precious metal funding costs associated with the pgm refinery downtime. Next year, we anticipate that the finance charges will be significantly higher.
As guided, our underlying tax rate decreased to 15.9% following the lowering of the U.S. corporate tax rate and our mix of profits by country. In '19-'20, we expect the underlying tax rate to remain about 16%. Underlying EPS was up 10% to 228.8p benefiting from better operating profit and the lower tax charge.
Our reported results were impacted by a number of one-off items, the largest of which was a legal settlement. We recognized a charge of GBP 17 million in respect of a settlement with one customer in relation to an issue we previously highlighted in our contingent liability note with no admission of fault.
Free cash flow was an outflow of GBP 13 million due to net working capital outflow of GBP 224 million, the bulk of which relates to precious metals which I'll come to on the next slide. Whilst the working capital outflow is disappointing, the business has strong cash generation characteristics. CapEx in the year was GBP 323 million with cash spend of GBP 300 million.
Disciplined management of working capital is another of my focused areas. And over the next 2 slides, I'll talk through our precious metal and non-precious metal working capital progress.
Starting with precious metal working capital, this has increased as a result of unscheduled downtime in one of our refineries in the year. Since the downtime occurred, we've worked hard to reduce the backlog in ounces. It's a complex process that takes time.
Whilst there's been an improvement since the half year, our progress in reducing the value has been partially masked by higher pgm prices. We expect to make further progress through the course of '19-'20 weighted to the second half and anticipate return to more normalized levels in 2021.
Now looking at nonprecious metal working capital, our continued focus on improving working capital and running the business as efficiently as possible everyday has again resulted in progress in the period.
Average working capital days excluding precious metal improved by 3 to 59. The improvement has been delivered despite specific factors this year, including the preparations that we made ahead of the UK's planned withdrawal from the EU. As you can see, we've had an 11-day improvement since 2016. Overall, we're pleased with progress, and we will continue to drive an underlying improvement in working capital.
Moving to the balance sheet, our net debt increased by GBP 187 million since last year to GBP 866 million reflecting the increase in precious metal working capital. Our balance sheet remains strong with net debt-to-EBITDA of 1.3 times. We target our net debt-to-EBITDA of 1.5 times to 2 times allowing us to invest in value-enhancing opportunities to accelerate future growth and in line with our disciplined capital allocation framework.
And moving now to my final focused area, rigorous resource allocation. We continue to focus on ensuring spend is targeted to higher growth areas. Our annualized return on invested capital excluding net pension assets was 16.4% compared to 17% last year. We took the decision to remove the pension assets and related deferred tax liability from our calculation as it isn't an operating asset and it masks the underlying performance.
For transparency, we've given you return on invested capital using both our old and our new methodology. But on this slide, I'll talk through the movements on the new basis.
Return on invested capital in the year was impacted by our increased precious metal working capital and higher recent metal prices. Over the near term, we will be investing and building assets for growth and therefore you would expect a temporary reduction.
However, following these near term investments, we will begin to realize returns. We've already won the business required to fill our Clean Air plants and are working hard on our plans for eLNO commercialization. We have a clear path to achieve a 20% return on invested capital over the medium term.
Turning to the outlook, we expect growth in operating performance at constant rates to be within our medium-term guidance of mid- to high single-digit growth. Working capital continues to be a focus and we're targeting a further reduction in underlying average working capital days. And we expect CapEx to be up to GBP 500 million next year as we invest for future growth, for example as we commercialize eLNO and we complete our 2 Clean Air plants in Poland and China and our smaller plant in India.
I'll now hand back to Robert who will take you through our strategic progress.
Thank you, Anna. Johnson Matthey's strategy will deliver on our vision for a cleaner, healthier world. This year, we outlined a new sustainable business framework which runs through to 2025 and it's centered around the 6 U.N. Sustainable Development Goals where we can make the biggest impact. The changes and investments that I've continued to drive will create an agile and efficient business for all our stakeholders, and that is what I'm going to talk you through in the next section.
You've seen our results which give you a picture of our performance, but what you can't see is what goes on behind the scenes, is that every day nearly 15,000 people are working to solve the challenges our customers face and deliver our strategy. To do that, we're making fundamental changes across all aspects of our group*,* people, processes and systems*,* to build a more sustainable business going forward. These changes are crucial to our long-term success and will enable us to strengthen our platform for growth.
In a fast-changing world, we would not be able to deliver on our growth promise if we stayed as we were. Our people deliver our strategy and vision, and the executive team and the Board create the culture that drives success.
As we move through different phases of our strategy, I'm building a management team with the right mix of skills, experience and diversity to deliver on our ambitions. Most recently, we have agreed the appointment of a new CEO for Battery Materials who has strong business leadership skills. They will join us in September.
We've also changed a significant proportion of our broader senior management team, those that report into the group management committee. These appointments are a combination of talent developed in-house and recruited from outside.
In addition, we're building capability across the whole of JM and are investing in their development through ongoing leadership programs and other courses as we embed a greater performance culture across the organization.
To enable our people to succeed, we're changing our processes, standard transparent processes will transform the way that we work, but it will substantially reduce complexity and increase our efficiency, allowing more time for our leaders to focus on delivering great products and services for our customers. Better processes, better data and improved visibility allows us to roll our business more effectively and will create even more value across the group.
We have a number of group-wide initiatives, and of those, our procurement program probably has the biggest impact in the short term. Alongside this, our commercial excellence program is about capturing a fair share of the value we create for our customers. It's also about gaining a deeper understanding of our customers' needs and ensuring that we have a clear view of our customer and product profitability.
We do this, for example, through our recently established JM sales academy where we have trained 350 colleagues so far to focus on creating a better awareness of customer needs and where we can apply our capabilities accordingly.
Our systems investments are also key to delivering the efficiency targets we have set ourselves. The rollout of a single global ERP system will underpin everything that we do. And although the pace and level of change is high, our world-class sites remains at the heart of our business. We will continue to invest in our science and technology to maintain our competitive advantage.
But around this core, we will have a business that's more agile and efficient, one that will enable us to deliver for our customers. We will be able to meet their requirements through standard ways of working across all our various plants, which enable us to scale up our business even further. The result will be a business that is better positioned to drive growth in a world that is constantly changing around us.
I now have a broader senior leadership team that is committed to delivering on this promise to all of our stakeholders. Of course, we will deliver our strategy through our sectors, so I want to look at the impact of the changes we're having on each of them.
In Clean Air, we delivered exactly as planned and are on track to achieve the sustained growth and margin as we'd outlined. The growth drivers for this business are the global demand for improving air quality and the tighter emissions legislation which underpins that, especially in Asia.
We'll deliver our strategy through our global leadership with the best technology, our competitive advantage in working with our customers to enable them to meet increasingly stringent legislation and through an efficient manufacturing footprint.
And we have 3 priorities. First, to maintain our technology leadership through our research and development. In Europe, our technology leadership in Light Duty diesel delivered our share gains this year. But given market dynamics, we are now reallocating some research and development spend to gasoline to deliver future share gains.
Second, further legislative change will be a key driver for growth in Clean Air, particularly in China and India with the implementation of China VI and Bharat VI for light and heavy duty vehicles. We will capture this growth to double our Asia business over the medium term and will support our growth through our new capacity, expanding our manufacturing footprint in Europe and Asia.
As we progress through the year, our key priority will be ensuring the smooth ramp-up of our new manufacturing plants in Poland and China, as you can see on this slide. On the left, you can see our new plant in Gliwice, Poland; and in the right, our plant in Zhangjiagang, China.
Both of these plants will be highly flexible and extremely efficient which helps us drive further operational efficiencies across the sector. Our ability to operate efficiently is a key priority in Clean Air and indeed across the group, and this will enable us to keep margins broadly stable as planned.
Almost 2 years ago, we outlined our medium-term projections for Clean Air to 2025. As you've seen from our results, we have delivered the strong growth we projected for the first 2 years. But as we look forward to the next big opportunity, it is in Asia, particularly in China where we'll see a similar transformation as we did in Europe with the Euro 6 legislation for both light and heavy duty.
In China, on the light duty side, we'll see the implementation of China VI from 2020. In the short term, we expect some vehicles to be fitted with a coated filter which could double the value per vehicle to us. But from 2023, when China VIb comes into force, we will see a significant ramp-up in penetration of coated filters.
Whilst in heavy duty, the implementation of China VI is earlier than expected driven by the Chinese government's blue sky legislation which requires early implementation in some provinces from July this year. The adoption of this legislation will ramp up over time and drive a tripling of value to us per vehicle.
We'll also see this tripling of value in the India Heavy Duty segment from April 2020. Therefore, our projections for sustained growth, which we laid out on our Capital Markets Day 2 years ago over the period from 2017 to 2025, are absolutely unchanged. But of course, this depends a little bit on the level of diesel decline in Europe and battery electrical vehicle penetration.
In Efficient Natural Resources, in the year, we continue to make solid progress. Building on this, going forward, we will focus on our technology on higher-growth segments and also look to improve our efficiency.
The growth driver for Efficient Natural Resources is the need for a more sustainable world, one that makes the most efficient use of the world's natural, critical resources. With the growth of population and increasing wealth, the demand for chemicals continues to increase. Our leading market positions in chemical catalyst technologies will benefit from these megatrends.
We'll achieve our strategy through targeted investments in higher-growth segments, a continued focus on efficiency and by extending our capabilities into new technologies. Those targeted investments in new technologies will start with an assessment of the potential for profitable growth. For example, we're assessing whether battery materials recycling is an opportunity for us.
Given the developments of the battery market, this could be a significant for the mid-2020s as there are a greater number of end-of-life batteries available. This closed-lip offering has the potential to be a key part of our customer proposition. We feel confident in our chemistry skills. Recycling and refining is part of our DNA after all. And although the metals involved aren't pgms, we know we have the expertise to succeed in this space.
Another key focus for us will be to expand our newly developed license technologies. As well as the mono ethylene glycol license that Anna mentioned, we're also looking at ways to aviation fuel, a fabulous example of how our technology enables a more sustainable future. This is a really interesting opportunity for us.
We have a license agreement with Fulcrum BioEnergy, a biofuel producer, to support them in converting household waste into diesel and jet fuels. This has the potential to be a significant, particularly as Fulcrum looks to build more and larger plants, and we are seeing interest from customers who want to use this technology in other applications.
And of course, we will drive efficiency across Efficient Natural Resources. Therefore, an important priority in the near term is continued investment in our refineries to ensure their safety and resilience. So overall, I'm confident that the sector will deliver sales growth ahead of the market and operating profit growth above this.
Turning now to Health. In the year, Jason and his team have done a massive amount of work to improve our footprint, build the team and increase our efficiency. The business is now better structured to deliver the breakout growth we've outlined.
The main growth driver for Health is increased health care costs which are driving more targeted and potent APIs. And our strategy is all about enhancing the performance of our existing business, expanding our new product pipeline and building capabilities to better support our customers.
The team will now leverage the work we've done on optimizing our footprint. They will get an immediate operating cost benefit next year from these changes, but the long-term benefit is that we now have production assets matched to our plans. Having built the team, we can now fully focus on our new product pipeline across both Generic and Innovators.
Delivering our pipeline depends on our customers' time frames, our delivery and the time it takes to get regulatory approval and launch. But in Generics, our goal is an additional GBP 100 million in operating profit by 2025.
In Innovators, we do see significant potential in this business due to the nature of these APIs, which can be more complicated requiring deeper expertise and advanced technology capabilities which play to our strengths.
Our Innovator pipeline is progressing well with 3 products in late-stage development and nearing commercial launch. And this year, we announced a strategic partnership for the manufacture of high-potent API used in the production of immuno-oncology treatment for triple negative breast cancer.
And of course, we continue to enhance our capabilities to better support our customers. For example, we're building our capability in particle technology and we're also globalizing our development capabilities through our work with solid form sciences in Cambridge.
This year has seen a lot of change in our Health business. I'm pleased with the progress that has been made and I'm confident this will drive breakout growth in the medium term.
In Battery Materials, we've made good progress in the development and commercialization of our portfolio of leading ultrahigh energy density cathode battery materials which we call eLNO. Our materials are next generation. They're designed to perform ahead of new products, such as NMC811 and will suit a range of electric vehicle applications.
In particular, eLNO has high-performance capabilities enabling greater adoption, long-range battery electric vehicles with longer cycle life, higher safety and higher energy density.
The growth drivers for this business are all about improved air quality and increased battery electric vehicle penetration which requires new technologies. To deliver our strategy, we will maintain our technology leadership in an area of the market where we can add value and we will commercialize and scale up this business.
当然，我们将提高Efficient Natural Resources的效率。因此，近期的一个重要优先事项是继续对我们的炼油厂进行投资，以确保其安全性和适应性。总体而言，我相信该行业将在市场和营业利润增长之前实现销售增长。
To do that, our priorities are to start the construction on our commercial plants and identify the opportunities for scale-up. Our commercial plant in Konin, Poland is close to major customers in the battery electric vehicle supply chain.
At the time that we announced our plant location, we also secured our first supply agreement with Nemaska Lithium for raw materials. These long-term and sustainable relationships are an important step in the road to commercialization.
Building our first 10,000-ton plant is the quickest route to market and preserves our options and we are currently undertaking the preparatory work. The FEED, the front-end engineering design, work should be completed this summer. And we are ordering the long-lead-time items, we have submitted our environmental impact assessment and we started some initial work on clearing the site. Of course, this isn't an exhaustive list, but we've made really good progress so far.
The site also gives us the potential to expand our eLNO manufacturing capacity to up to 100,000 tons per year well below*,* beyond the capacity of our first 10,000-ton commercial plant.
As you know, eLNO is a range of battery materials, all sharing the same high-performance attributes. In addition to these performance characteristics, our customers are increasingly looking for customized solutions to their problems, and this plays right to our strengths. Over the last year, we've been working hard to tailor eLNO to meet specific customer requirements. Our ability to customize is a key differentiator and puts us at the leading edge of technology.
As we work through the various stages of testing, we receive constant feedback from our customers, and I'm pleased to say that this feedback remains positive. And it's great to hear that we're adding value, which goes back to the core of our strategy, we help our customers solve complex problems.
You can see some quotes on the left-hand side which shows that our customers value our willingness and ability to customize, and our commitment to having the best technology.
As we move to full-scale commercialization, we'll continue to work through customer qualification. We've moved from lab scale to our pilot plant which is now complete, and our customers are now looking to test eLNO in their own applications to assess how our material performs against their specific requirements.
To support this, we are building 3 best-in-class customer application centers, 2 in the UK and 1 in Japan, with a plan for further expansion. The first UK center will be completed in 2019 and the remaining 2 in 2020.
These centers will include a range of facilities from laboratories to demonstration cell manufacturing capability and are critical to delivering the tailored solutions our customers are asking for. In the last year, we have achieved some major milestones as we positioned ourselves for success in the global electric vehicle market.
So to conclude, we delivered a strong performance this year, it's in line with our expectations and we've done it while making fundamental changes across almost every aspect of our business. We are investing to strengthen the platform for the future which will enable us to successfully execute on our strategy that we've laid out to you before.
As you've seen, Johnson Matthey has an exciting future ahead. I'm confident that we will deliver, and these results and those over the past couple of years provide you with clear evidence that we can and are.
And if I don't see you beforehand, I look forward to updating you all on our Capital Markets Day in September.
So that concludes our presentation. Thank you for listening. And with that, we'll pause and take any questions you may have.
所以我们的演讲结束了。 谢谢你的收听。 有了它，我们会暂停并接受您可能遇到的任何问题。
Okay, who wants to go first? Should we go*,* let's go over there.
Sebastian Bray of Berenberg Bank. I would have 3 questions, please. The first is on corporate costs. What is the expected development for 2020? Is*,* do some of the one-off items recorded in that line potentially fall away? Or is it a roughly flattish development that we should look for? The second is on the Health portfolio. Why is it that there is no top line growth predicted for next year?
There's quite an ambitious operating profit target even against the backdrop of improving margins to 2025. Is the pipeline very heavily back-end loaded? Or how should we think about this? And the final question on long-term CapEx. Could you give us an idea of how much of the GBP 500 million is dedicated towards eLNO-related activities, and if*,* how to put this, if the Chinese and Polish facilities are effectively done after 2020?
Berenberg Bank的Sebastian Bray。 请问我有3个问题。 首先是企业成本。 2020年的预期发展是什么？ 是，该行中记录的一些一次性物品可能会消失吗？ 或者我们应该寻找一个大致平坦的发展？ 第二个是健康组合。 为什么明年没有预测的收入增长？
即使在利润率提高到2025年的背景下，也有一个雄心勃勃的营业利润目标。管道是否非常后端负载？ 或者我们应该如何看待这个？ 关于长期资本支出的最后一个问题。 您能否告诉我们5亿英镑中有多少用于eLNO相关活动？如果，如何设置，如果中国和波兰的设施在2020年后有效完成？
Okay. Why don't*,* Anna, why don't you take the corporate cost ones. And do want to take the CapEx one as well? And then I'll come back to the Health one.
好的。 为什么不，安娜，你为什么不采取企业成本。 并且还想要获得CapEx一个吗？ 然后我会回到健康之一。
Yes. So corporate costs, specifically what is in corporate. I think*,* because don't confuse it with investment in group initiatives because some of that investment sits in our sectors. Corporate cost has grown in the year and we would expect some further growth, but not at the same level as I look forward. Looking at CapEx, you asked how much of that is in the eLNO. I'm not going to tell you that number exactly, but what I would say*,* and I would have told you already if I was going to, is that Clean Air and eLNO together are well more than half of it. So I would think about it that way. And in terms of the Clean Air plants, Poland and China should be substantially complete this year. We'll still have spend in India looking beyond that.
是。 所以企业成本，特别是企业成本。 我认为，因为不要将其与集团计划的投资混淆，因为其中一些投资属于我们的行业。 公司成本在今年有所增长，我们预期会有一些进一步增长，但与我期待的水平不同。 看看资本支出，你问eLNO有多少。 我不会准确地告诉你这个号码，但是我会说，如果我要去的话，我会告诉你的，清洁空气和eLNO在一起的情况远远超过它的一半。 所以我会这样思考。 就清洁空气工厂而言，波兰和中国今年应该基本完成。 我们仍然会在印度花钱超越这个。
And on the Health pipeline, I wouldn't get too worked up about the sort of sales number for next year because, of course, it all depends upon the mix of the overall portfolio. The new pipeline is coming through. We did talk about there's a few delays in a couple of projects. But the sort of ramp-up to GBP 100 million that we've talked about sometime, we're still positive on that and confident about. But the*,* it's all about the mix of the overall portfolio of products, some come to the end of their lives and so drop off a bit in the sales line and then some come through. And it's a whole mix issue rather than anything else that we're concerned about. So I wouldn't get too worked up about it. Okay, next question. Should we go to*,* Andrew, you put your hand up quickly.
在健康管道上，我不会对明年的销售数量进行过多的研究，因为当然，这完全取决于整体投资组合的组合。 新的管道即将到来。 我们确实谈到了几个项目中的一些延迟。 但是，我们在某个时候谈到的那种上涨到1亿英镑，我们对此持肯定态度并对此充满信心。 但，全部是关于整体产品组合的混合，有些已经到了生命的终点，因此在销售线上稍微下降，然后有些人通过。 这是一个完整的混合问题，而不是我们关注的任何其他问题。 所以我不会对它太过努力。 好的，下一个问题。 我们应该去，安德鲁，你快速举起手来。
Andrew Stott, UBS. A question for John, just appreciate an update on some of the timings of legislation. So start on Euro 6 in light duty in China. I think you said in November, you might get some pull-forward, just wonder where we are with that. And then also you said April 2020 for India on trucks. Can you just remind me of China on the phasing? And broadly when you talk about the doubling and then the tripling, so the timeframe you're thinking about roughly? And then I had a second question for Anna on the interest costs. Can you just remind me how that works? I know that's*,* is that all leasing costs? And then is that just tied to palladium prices primarily? Is that the problem?
瑞银（UBS）安德鲁•斯托特 约翰的问题，只是欣赏一些立法时间的最新情况。 因此，从中国轻型6欧6开始吧。 我想你在十一月说过，你可能会有一些前进，只是想知道我们在哪里。 然后你也说到2020年4月印度用卡车。 你能告诉我中国的分阶段吗？ 当你谈到加倍然后三倍的时候，那么大概是你所考虑的时间框架？ 然后我就安娜的利息成本提出了第二个问题。 你能提醒我这是怎么回事吗？ 我知道那是，是所有租赁费用吗？ 那么这主要与钯价格挂钩吗？ 那是问题吗？
Okay, Andrew. So John, are you happy to take those to start with?
Yes. So on the China 6 legislation, that has been kind of moving around, mostly moving forward. So the blue sky initiative was announced in 13 provinces in China. So on light duty, what that means is that from July of 2019, they're introducing NS 6b, as they call it, but there's no particle number specification and there's no real-world driving. So you know, they're calling it the second standard. They've excluded on the pull-forward the particle number spec, which drives filter fitment and the real-world driving, which isn't more challenging target there, too.
So on the light-duty side of things, that's not going to have a huge impact on our sales. The real impact in China on the first legislation is in heavy duty. And for the blue sky initiative there, that was pulled forward to July '19. And now that's been limited to most of the cities, city-type vehicles, sanitation vehicles, buses, postal service vehicles and things like that. So there's a limit to that. But actually, that's a little bit of an upside compared to what we had in our plan. So we should see a benefit starting in '19-'20 in China from that legislation.
The real doubling of our light-duty business and tripling is when the 6b legislation comes in. And that's when we really get to those levels. And that's not until 2023. So in China, just to finish that story, the translation through there is that more provinces will start adding the 6b legislation without real-world driving in January of 2020. And then the 6b*,* full 6b comes in, in July of 2023, okay? So*,* and then in India, it's the same kind of a thing, they have what they call kind of first stage and second stage of the legislation.
First stage comes in, in April 2020. And that's for everything. That's for gasoline, diesel, heavy duty, non-road and motorcycles, okay? So it affects the whole product mix. And so in there, again the first stage of this legislation doesn't include any particle number specifications. So there's very little filter fitment on light duty. And then when the stage 2 comes in 2023, that's when you add the particle number standard and the real-world driving. And that's going to begin to put filters on light-duty gasoline vehicles and will be the full system on heavy duty. So sorry, that's a little bit of a complex story, but there's a lot going on there.
I know some of you like data. And hopefully, that was enough data for you. You can get more data if you want to. There is actually a chart on Slide 34 of the presentation which gives some of that legislation map and does tie in with those dates that John talked about. The key thing to understand is that real-world driving, and there's a tighter regulation on particle number things, is in the sort of b's, sort of the 6bs is when that changes*,* drives the principal change. But some people are pulling forward.
And whereas in the U.S., we tended to have a prebuy of old technology. If you remember that happened in 2010 when we went to U.S. 2010 regulations, not very imaginatively named. And then we pulled forward old technology in China, happens the other way around. They tended to want to try and pull forward new technology because they're particularly worried about resale value of the vehicle. So it's a slightly different dynamics. You do get some of that pull-forward. But as John said, it's particularly going to come through as we get closer to '23. And Anna, our interest costs?
Interest costs. So we will be running with higher precious metal because of the backlogs that we're working down through a chunk of the fiscal year. And we've got to fund that metal. And we do that through leases and so that hits the interest line. So that's really what's going on. So it's a factor of higher ounces and higher prices.
利息成本。 因此，我们将使用更高的贵金属，因为我们在本财年的大部分时间都在积压。 我们必须资助这种金属。 我们通过租赁来实现这一目标，从而达到利益线。 所以这才是真正发生的事情。 所以它是更高的盎司和更高的价格的一个因素。
Okay. Can we just pass the phone to Ranulf Orr.
好的。 我们可以把电话传给Ranulf Orr吗？
Ranulf Orr of Redburn. So another question for John actually. On the margin outlook in Clean Air, can you just run through some of the pluses and minuses in terms of the dynamic over the next 12 months, please, as you see them? And the second question is on the ENR division. The first fill catalyst drop of GBP 30-odd million in the year. Can you give us some quantum of what is left in the full year sales figure in terms of first fill catalysts because it continually seems to go south? And so I wonder if there's much left.
Redburn的Ranulf Orr。 实际上约翰的另一个问题。 关于清洁空气的利润率前景，你能否在未来12个月内看到一些优势和优势，请看，如你所见？ 第二个问题是关于ENR部门。 今年第一次填充催化剂下降了30多万英镑。 你能否给我们一些关于第一次填充催化剂在全年销售数字中留下的数量，因为它似乎一直向南？ 所以我想知道是否剩下多少。
John, do you want to answer the first one?
Yes. So on the pluses on margin, we're consolidating our position in Europe on the share gains in diesel. So that will be continuing throughout the year. But the real plus is going to be the increases in our sales value of the beginnings of what's happening in China. So that's pretty much the 2 positives, I guess, that are going to come from that. And then on the things that are drawing us down, I think Anna alluded to all those in her talk. We have our increased R&D investment, which is adding more investment on the gasoline side.
We have the beginnings of some of the systems that are coming out, where Clean Air is one of the early adopters of those. So some of that stuff in terms of depreciation starting to hit our P&L. And then we have 2 new big plants coming onstream. So we have all the start-up costs from the new plants.
是。 因此，在保证金上涨的情况下，我们将巩固我们在欧洲的市场份额，以增加柴油的份额。 所以这将持续一整年。 但真正的优势在于我们在中国发生的事件开始时的销售额增长。 因此，我认为这几乎是两个积极的因素。 然后在那些让我们失望的事情上，我认为安娜在谈话中提到了所有人。 我们增加了研发投入，增加了对汽油方面的投资。
我们已经开始推出一些系统，其中Clean Air是其中的早期采用者之一。 因此，折旧方面的一些东西开始影响我们的损益。 然后我们有两个新的大型工厂投入运营。 因此，我们承担了新工厂的所有启动成本。
And I think I would say longer-term guidance may change, around about 4%. We said that*,* sorry, 4%? 14%, sorry. Right, not 4%, 14%. And so no change there at all. And I think there's always a little bit of*,* actually the big movement is, of course, that the new plants that come onstream. And some of the benefits, John talked about the ERP system. Until we've got 1 plant, 2 plants, 3 plants, the benefits come as you start to roll out multiple plants. You end up with a sort of depreciation in a way coming in early. And the benefits coming in a little bit later. So you'll see the benefits coming through. But in the short one, you've got a sort of a cost coming into the*,* and the same is true with the new plant.
And on Efficient Natural Resources, I mean the first fill numbers came down quite a bit as you said. It's principally due to a pretty large order, one very large order last year. But it's driven by licensing in many ways. And so as we got relatively steady licenses, depending on when those plants come onstream, you'll then have new first fills accordingly. But we don't tend to split out the amount of first fills, the amount of refills. Although as Anna said, the bulk of those sales in the catalyst side, well, all these businesses are on refills. Yes, huge bulk. Right. Should we just*,* since the mic is just in front of*,* we'll come*,* don't worry, guys, we'll come back to you.
Jean-Baptiste Rolland, Bank of America Merrill Lynch. 3 questions, please. The first one on North American Class 8 trucks. I can see that net orders seems to be approaching trough levels. And I was wondering when would you expect this to filter through your P&L and also maybe what is baked into your guidance for next year. Second question on Clean Air in Asia, I was wondering if there is any development against Asian competitors. And finally on Battery Materials, what's the current market dynamic in LFP? It seems that the switch to NMC in Chinese e-buses is sort of halting. And I'm just wondering if you're seeing any sort of renewed interest in the technology.
Jean-Baptiste Rolland，美国银行美林证券。 请问3个问题。 第一辆北美8级卡车。 我可以看到净订单似乎接近低谷水平。 而且我想知道你什么时候会期望这可以过滤你的损益，也可能是你明年的指导。 关于亚洲清洁空气的第二个问题，我想知道是否有针对亚洲竞争对手的任何发展。 最后是电池材料，LFP目前的市场动态是什么？ 看来中国电动公交车转向NMC有点停滞不前。 而我只是想知道你是否对这项技术有了新的兴趣。
I guess we'll start with the Clean Air ones first. I mean, John, I mean I think Class 8, what we said, we expect it to carry on through this summer of this year?
Class 8 will carry on to this summer. I mean the extension now is filling some of the backfill that some of the orders that have been building up. But we expect it to start to tail off this summer. But that's been an extension of what is called a normal cycle.
8级将继续到今年夏天。 我的意思是扩展现在正在填补一些已经建立的订单的回填。 但我们预计它将在今年夏天开始关闭。 但这是所谓的正常周期的延伸。
And that's what's embedded in our plans and everything with the projections and guidance that we've been giving is based on that. But I think in...
I didn't understand the second question.
The second question was about Asia. And any competitive dynamics changed? No, not really. I mean it hasn't changed. And we've won the business that we expected to win and was in our strategic plan and the guidance that we had. So everything is on track for wherever we expected it to be when we talked to you at the Capital Markets Day, was it 2 years ago, in Asia. On the LFP dynamic, yes, look, it's*,* the business has been*,* we had a tough time in last year or so in LFP. There are areas and opportunities for us to continue to have LFP growth.
But it's not going to be a large part of the business. It's still relatively small, relatively tamed. But our plant in China is we've got commitments from our customer there. And we'll continue to fill*,* to use the plant in Canada that we have for other technologies. And there are some really interesting opportunities for us out there. But it's never going to be a large part of the business. And I wouldn't expect to see a sudden massive growth in that portfolio. Okay. Should we go over to*,* why don't we go to the back. We've got a couple sitting next to each other. Where's the mic going to come from? It's going to come from*,* I think it's coming from my right, your left.
It's Adam Collins from Liberum. I have 3 questions as well. First one is on R&D. Forgive me if you talked about that. But what's the sort of direction of travel in terms of R&D spending? Will it increase from 5%? And could you talk a little bit about the capitalized R&D component with GBP 19 million last year? So not a big number, but where was that? And will capitalized R&D develop, too, over time? On U.S. truck, I think you're being sensible in predicting a decline for mid-year. Historically, that's been quite a cyclical business, where there have been volume declines, they have been sometimes quite significant.
And I have a sort of slight concern that the U.S. business doesn't have a light-duty opportunity like we see perhaps from Royston to fall back on. So in the event that we do see a significant volume decline, what would be the contingency planning there? To what extent are there offsets? And then just finally on precious metals refining, it strikes me that industry is pretty tight today. We've seen some decommissions in Europe from BASF and Vale. The other 2 main players in that area have had outages in the last year, yourself and Umicore. So it looks to be like market conditions are pretty benign there. Would you concur?
Well, good questions, Adam. Let me just make sure we can have the mic so that Jane can answer the last question. And we've got mic here. So we'll come back to you, Jane, in a second. On the first one on R&D, look, we invested last year around about GBP 200 million in R&D. It wasn't exactly GBP 200 million.
好吧，好问题，亚当。 让我确保我们可以拥有麦克风，以便简可以回答最后一个问题。 我们这里有麦克风。 所以我们会在一秒钟内回到你的身边。 关于研发的第一个，看起来，我们去年投入了大约2亿英镑的研发费用。 这不完全是2亿英镑。
GBP 190 million.
GBP 190 million. I expect it will grow a little bit this year. But it will be within the range of 5% to 5.5% of sales, which is where we've guided for some time. And it will continue to grow with that sort of level. But this year, the year we're now in, I expect it will grow a little bit ahead of that, driven partly by the increased investment that John has talked about in gasoline but partly run*,* and eLNO as well, where I think we'll see a little bit more investment.
On the capitalized development side, the largest part of capitalized development, I think, is in Health as we developed the pipeline. And that's gone up over the last year. Of course again, that's the amount of investment on that pipeline ahead of the growth that will come through into the next few years. And we're putting something*,* we're capitalizing some of the eLNO development, too. On the U.S. truck cycle, John, I mean we're used to truck cycle. It's alive and well and been there for decades.
1.9亿英镑。 我预计今年它会有所增长。 但它将在销售额的5％到5.5％范围内，这是我们已经指导了一段时间的地方。 并且它将继续以这种水平增长。 但是今年，即我们现在所处的那一年，我预计它会比这更快一点，部分原因是约翰谈到的汽油增加的投资，但部分运行，和eLNO， 在哪里，我认为我们会看到更多的投资。
在资本化的发展方面，我认为，资本化发展的最大部分是在我们开发管道时的健康。 这在过去一年里上升了。 当然，这是在未来几年内将会出现的增长前的管道投资额。 而且我们正在投入一些东西**，我们也正在利用一些eLNO开发资本。 在美国卡车周期中，约翰，我的意思是我们已经习惯了卡车循环。 它活得很好，已经存在了几十年。
I think we're quite experienced in that. And we, I guess, have a lot more flexibility in North America to scale up our business and scale down our business depending on what the demand is on the plants. So we've got 3 manufacturing facilities there. And we're quite experienced in being able to use those efficiencies to be able to move the footprint around to optimize that. So I don't think this is going to be*,* I don't disagree with everything you said. But I think we've got quite a lot of experience there.
我认为我们在这方面很有经验。 我想，我们在北美拥有更大的灵活性，可以扩大我们的业务，并根据对工厂的需求来缩减业务。 所以我们在那里有3个制造工厂。 我们在能够利用这些效率来移动足迹以优化它方面具有丰富的经验。 所以我认为这不会是，我不同意你所说的一切。 但我认为我们在那里有很多经验。
And remember, of course, about 75% of our costs are variables. So you never see a great operational leverage on the upside. But on the other hand, you don't see much operational deleverage on the downside either. Now, I've given you a bit of time to think, Jane. And I'm sure you didn't need it. But over to you, Jane.
当然，请记住，我们大约75％的成本是变量。 因此，您永远不会看到良好的运营杠杆作用。 但另一方面，您也没有看到下行的操作去杠杆化程度。 现在，我给了你一点时间思考，简。 我相信你不需要它。 但对你来说，简。
Is it working now?
Yes, okay. So thanks for the question. So with respect to the refining question was, is the market benign? I mean I don't describe market as benign really. But it's true that we've been very busy in our refinery. And our refinery has a very important strategic position for JM because we're making sure that we've got that secured availability of pgms for the JM group because that's our fundamental purpose of having refining activity. And one of the reasons it's taken time to work off our backlogs is because we're optimized the whole time in demand and also our supplies. So we're full and we're busy all the time.
It's also true across the palladium market is seeing quite a bit of change this year with increasing prices. So we have managed to also increase our returns in the business. And that's been a positive dynamic for us. So it's been an interesting year with respect to the markets. And I'm sure it'll continue to be very volatile going forward. But an interesting period. I can't say*,* I don't know who asked the question, I couldn't see there. Thank you very much. So an interesting period for us, but it just underlines the importance of having a refining business for JM.
Thanks, Jane. So you just pass the mic to your right.
Marc Elliott, Investec. Just a quick couple of questions. I noticed rare earths have been dragged into the trade dispute at the moment. And I think back in 2011, it was somewhat problematic for the autocat business because you used a bit of it. Is that something you're preparing for? Are you able to pass on sort of cost that may come through or may not come through? Or is there any sort of working capital that needs to be considered on that side?
And also just a little bit about raw material sourcing, I think Umicore signed up a deal with Glencore the other day on cobalt. You've got the deal with Nemaska. Are there any cost implications? Because Nemaska, I think, is struggling a little bit at the moment with financing and so forth. Is there any implication if they sort of don't get through? And lastly on eLNO, I was just curious to know. 811 struggles a little bit with charge rates. It obviously has high-energy density. Does eLNO have quite a good charge rate characteristics so to give it a further advantage?
而且还有一点关于原材料采购的问题，我认为优美科前几天与钴公司签订了一项关于钴的协议。你和Nemaska达成了协议。是否有任何成本影响？我认为，因为Nemaska目前正在融资等等。如果他们没有通过，有任何暗示吗？最后在eLNO上，我只是很想知道。 811与收费率有点挣扎。它显然具有高能量密度。 eLNO是否具有相当好的充电率特性，从而为其提供进一步的优势？
I thought for a minute, you were going to have 2 questions and everybody else has had 3. So it feels like you were going to miss out on your third question, but you threw one in there at the end. Well done. So just very briefly on eLNO, the answer is yes. It does have good charge characteristics.
And that's one of the things that our customers like about it. And not just it's energy density and safety, but some of the other characteristics that it has as well. And of course, they're looking at a whole suite of characteristics, not just one. It's just not about energy density or whatever metric. And so there's a wide range of things they look at of which charging capabilities is one. So that's good for eLNO, which is one of the things that customers like.
And of course, one of the things we talked about as well is that customization piece because every customer is different. Every customer wants something separate. And so the ability to customize a product and give each individual customer what they particularly want is something that we think we can differentiate. And eLNO enables us to do that. We talked about raw material sourcing. And do you want to answer that one, Anna, because you've been involved in the sourcing group?
Yes. I think we're in good place on sourcing. So we've got*,* we moved into the Nemaska Lithium to secure the lithium contract. I think we are quite confident we can see a route through that. In terms of the other metals, right now we buy big quantities of nickel anyway, so we're well sorted around that. And we have done for very many decades in Jane's business so that's not a new thing for us. Cobalt, our levels of acquisition of cobalt are relatively low. But we're building onto the relationships at the moment. We don't want to move into long-term sourcing agreements too early. You need to have the volumes there to secure the best deal.
是。 我认为我们在采购方面处于有利地位。 所以我们已经，我们进入Nemaska Lithium以获得锂合约。 我认为我们相信我们可以看到通过它的路线。 就其他金属而言，我们现在仍然购买大量的镍，因此我们对此进行了很好的分类。 我们在简的业务中已经做了很多年，所以这对我们来说并不是什么新鲜事。 钴，我们对钴的收购水平相对较低。 但我们现在正在建立关系。 我们不希望太早进入长期采购协议。 你需要有那里的卷来确保最好的交易。
The point is that we actually have a group that are looking at and thinking about sourcing and the tactics around that, I think, is an important thing. You should just be aware of that we are monitoring and managing that and how we think about that going forward. And last but not least was the rare earth question. And yes, you're right.
So in 2011, we did have quite a big impact. When the prices went up enormously, we always managed to access the rare earths we needed. And I don't think there's any difference this time. Although we've learned the lessons from that. So we've now got within the sort of our arrangements, we've got multiple sourcing options, multiple sourcing routes.
As well as if prices go up, we've got a price escalator in our contracts. So from a point of view of sourcing, we're quite content at the moment. And if the prices were to spike up again like they did previously, we've got a mechanism in the contracts to manage that risk going forward. Would you want*,* would you add anything else, John?
No. I think we're in pretty good shape on the tariff side. Our rare earth usage as our total global spend in North America is relatively small. And as Robert said, we've got multiple options on some raw materials, which gives us change-out ability if one is a China-sourced material. And we have supply chain options to be able to work around that. So on the tariff side, we are in pretty good shape.
不，我认为我们在关税方面处于良好状态。 我们的稀土用量作为我们在北美的全球总支出相对较小。 正如罗伯特所说，我们在一些原材料上有多种选择，如果一种是中国采购的材料，它可以为我们提供更换能力。 我们有供应链选项，可以解决这个问题。 所以在关税方面，我们的状况非常好。
Okay. I saw some hands*,* a hand over here. So the mic's*,* sorry, we'll come back*,* we'll give you time over here. And then we'll go to the mic over there.
好的。 我看到了一些手，一只手在这里。 所以麦克风，抱歉，我们会回来，**我们会给你时间。 然后我们将去那边的麦克风。
Chetan from JPMorgan. A few questions. On U.S. truck, you said you expected to sort of peak at the middle of this year. So for full year '19-'20, can that business see sales growth? That's number one. Number two question was to Anna, maybe on CapEx. Is there a way to think about GBP 500 million or up to GBP 500 million this year in terms of how much of that may be phasing-related one-offs? Or in other words, what I'm trying to get to is looking beyond this year, is that the sort of run rate number? Or is that sort of just impacted by some phasing of CapEx in different projects?
And the last question is on the guidance for this year in terms of EBIT growth, where you've said you're comfortable with mid- to high single-digit in terms of the range that you have forecasted for the full year. When I look at the second half constant currency EBIT growth, it was 5%, I know and second half sort of already incorporates bulk of the share gains in diesel et cetera. So is there a reason to believe we see a big uplift from that run rate going into this year? Or is sort of 5% the right number to think about for '19-'20?
Okay, thank you for your question. So John, do you want to talk about U.S. truck phasing for this year?
U.S. truck. I mean we had a full year of Class 8 strong sales last year and we're going to have the better part of the half year this year so*,* and I think there's growth in that Class 8 story for '19-'20.
美国卡车。 我的意思是我们去年有一整年的8级强劲销售，我们将在今年的半年中有更好的部分******我认为'19的8级故事的增长 - '20。
But it's not going to fall off a cliff from the 1st of October. I do know that we're seeing a normal cycle and of course you're going to work through the sort of backlogs and stuff like that, the truck orders so*,* and as I said*,* as we said already, we can adjust our cost base very, very quickly.
But from a top line point of view, there's nothing else we can do about it obviously. But from a bottom line point of view, we're pretty immune, but pretty dampened to that volatility.
Anna, on CapEx and EBIT, I mean I think we're looking for very*,* a little precision here and I'm not sure you're going to give it, but I'll...
但是从10月1日起它不会从悬崖上掉下来。 我知道我们正在看到一个正常的周期，当然你会通过那种积压和类似的东西来工作，卡车订单如此，和我说，我们 我们已经说过了，我们可以非常快速地调整我们的成本基础。
I'll try and help. So on CapEx, maybe the way to think about it, Chetan, is that you've got GBP 250 million we're investing in plants in Clean Air. The 2 big ones, China and Poland, will be substantively complete this year. So yes, there'll be continued spend around India next year.
If you look at eLNO, we are breaking ground this year so the spend on the commercial plant, not that demo plants or the application centers, which will be weighted to this year, the spend on the commercial plant will be continuing through next year.
So those were the sort of really big chunky bits and we talked about needing to reinvest in the refineries to ensure their resilience. That will start this year and continue and be weighted towards next year.
So I would suspect that we continue to see higher CapEx growth. Will it be as high? It's sort of a little bit, depends on the phasing. We were quite careful in our wording of up to GBP 500 million in that these are really big and complex projects that go over the year-end based on the build schedule that we have today, which will almost certainly change as we continue to build these projects because it always does. The exact phasing of which year some of this sits in will become clearer as we move through.
But this is, I would kind of argue, good news because, in John's parts, his business is a 30% return on capital business. There's absolutely no reason why this won't be accretive to the group and deliver great ROIC. And of course, the investments in the eLNO, in particular, those are the 2 big investments, will all be about the long-term growth of the company and it's about making sure we get the right return rate and on...
但是，我认为这是一个好消息，因为在John的部分，他的业务是资本业务的30％回报。 绝对没有理由为什么这不会增加该团队并提供很好的ROIC。 当然，对eLNO的投资，特别是那些是两大投资，都是关于公司的长期增长，而且是关于确保我们获得正确的回报率并且......
Will it be 5%, I'm not going to answer that question explicitly. But what I'd say is there is a consensus out there and we have not guided in a way to change consensus because we're broadly happy with it.
Okay. Now get over to the side of the room now.
Nicola Tang from Exane BNP Paribas. I have 2 questions, first, on Clean Air. Thanks for laying out your views on regulatory drivers. Can you talk a little bit about your assumptions on the underlying market, particularly in Light Duty across the globe, how have things been tracking so far because the data doesn't necessarily look that great.
And my second question in Battery Materials or in eLNO, Robert, you hinted that you're doing preparatory work on stages beyond the current investment. Could you talk a little bit in terms of what options you're exploring there? And does the warning from Umicore on a delay and demand for cathode materials concern you at all?
来自Exane BNP Paribas的Nicola Tang。 我有2个问题，首先是关于清洁空气。 感谢您就监管司机提出意见。 您能否谈谈您对基础市场的假设，特别是全球轻量级市场的假设，到目前为止事情如何跟踪，因为数据看起来并不那么好。
我在电池材料或eLNO中的第二个问题罗伯特，你暗示你正在进行超出当前投资阶段的准备工作。 你能谈谈你在那里探索的选择吗？ 优美科对延迟和阴极材料需求的警告是否会引起您的关注？
Okay. John, do you want to talk a little bit about the underlying market, what you're seeing so far?
So I just think, in general, I would agree that we have kind of global outlook of a couple of percent growth in Asia. Much of that growth in China, in particular, is electric vehicles. But the point of our business is that our growth is coming from legislation. So I don't want to say that if car sales are 0 growth for the rest of the lifetime, that our business is going to fall apart. But with very little growth in the market, our sales are going to grow and I think that has been our story, that the growth that's built into our plans is for legislation growth and that's where the growth is coming from in our business.
所以我想，总的来说，我会同意我们对亚洲几个百分点增长的全球展望。 特别是中国的大部分增长都是电动汽车。 但我们的业务重点是我们的增长来自立法。 所以我不想说，如果汽车销售在其余生命中增长0，我们的业务就会崩溃。 但由于市场增长很少，我们的销售额将会增长，我认为这是我们的故事，我们计划中的增长是立法增长，而这正是我们业务增长的来源。
Okay. And on eLNO, I mean I'm not obviously going to talk about Umicore's announcement, that's their announcement. I mean*,* but didn't change anything to do with our plans and our thinking. Our thinking is very much we need to be the best technology and the technology leadership end of the market where the market is looking at*,* I mean look at all the data, it would suggest when you get into the middle of the decade, certainly the middle of the next decade, that's when the demand for ultra-high-energy density material is really going to grow and that's where our opportunity is because that's where we play, at the high end of the market and the customized emissions. So nothing's particularly changed. We need to make sure we scale up at the right pace with the right pace in the market.
I'm not really going to go into the details of our scale-up strategy at this stage. I think that's probably something we can talk a little bit more about maybe at the Capital Markets Day. We're on the results day today. But all I would say is we are thinking about it, we've got a plan*,* we're developing our plans about how we would scale up this business and move away from sort of development phase of the business, which is where we were for the last couple of years into very much the sort of commercialization and scale-up of the business.
Can you go and just pass to the left, yes.
Charlie Webb from Morgan Stanley. Just maybe a few on new markets, so just following up on eLNO. When do you think your move to A sampling? Is that a 2019 event or do you see that in a bit later? So I think that's still ahead of you.
Secondly, on the CapEx for eLNO that you kind of originally guided to, is that still unchanged in the medium term or has that increased?
And then on fuel cells, you obviously saw significant growth there. Can you perhaps tell us what the backlog looks for you in that business today versus last year? Or at least give a kind of idea of that change? That'd be very helpful.
And then just a couple of others, really quick ones. On restructuring costs, what should we expect as we look into next year versus the GBP 30-odd million that we had in FY '19?
And then just on working capital, given the kind of continued improvement if we kind of strike at current pricing, would you expect an inflow in '20 or is it still expect to be an outflow?
来自摩根士丹利的查理韦伯。 可能只是新市场的一些，所以只需跟进eLNO。 你认为什么时候搬到A采样？ 那是2019年的事件，还是稍后会看到？ 所以我认为这仍然领先于你。
然后在燃料电池上，你显然看到了显着的增长。 你能否告诉我们今天该业务与去年相比你的积压什么？ 或者至少给出一种改变的想法？ 那会非常有帮助。
Okay. Anna, I'll ask you to answer the second two. We've got 5 questions in there. But look, the eLNO is sort of one, new markets is one.
So look, A sampling, I wouldn't get to*,* sometimes it's not very black-and-white with customers where you're going from A to B to C. But we're really pleased with the progress we're making. We're moving in very much into the next stage of testing with them, with the customers, and that's one of the reasons why we're building our application centers because that will give us the capability ourselves to do the testing and validation work, which they often will then rely on because they trust our data. So the progress we're making is absolutely in line with what we expected. Was it A sample or not, it's quite hard to judge. Different customers have different terminologies. But are we making the progress we expected to make? Yes, we are.
On the CapEx question with eLNO. The guidance we said was really we talked about the demo plant and the commercial plant. We didn't talk about the application centers, which clearly are, I mean, much, much smaller numbers. So there's a bit more CapEx*,* that's right, we didn't talk numbers for that. We talked numbers for the main commercial plant. Look, until we finish the whole front-end engineering design, we don't know exactly what the CapEx spend is going to be. That's what you do with the design. And so when that work is finished, we'll be able to articulate it more. But the overall spend because we didn't talk about them and we didn't talk about the application centers, will be a bit larger than we talked about before.
And on fuel cells, I'll keep going on then. On fuel cells, look, it's a tiny part of the business at the moment but it is a profitable part of the business. And for those of you who have been around for a while, followed JM for many years, you'll remember we used to spend GBP 10 million*,* have losses of about GBP 10 million a year from this business. It's now profitable, they're not big numbers, but at least going in the right direction. And with what's going on with the whole need for the hydrogen economy to grow and the opportunity for fuel cells, we are going to invest more in the fuel cell business over the next few years, initially probably for demand in China but then for opportunities in Europe, too.
The backlog is*,* much of our sales for this year are secured or at least very much on track, but I don't think you're going to suddenly see becoming meaningfully for the whole group at this stage. I think the longer-term opportunity for fuel cells is absolutely quite exciting actually, and the level of investment required for fuel cells versus the level of investment for our business versus batteries is quite different. So it's a really exciting adjunct to the whole zero-emission vehicle opportunity for us.
Restructuring and working capital?
I'm not going to be that helpful, I'm afraid. So we guide*,* so you're after what sits below operating*,* underlying operating profit. And there, were we to foresee anything, we would have explained it and announced it. At this point, I don't foresee anything. But as we've had a legal settlement this year, there may be things that come up through the course of the year. And if and when they do, we will share those with you.
With respect to cash flow, again, we don't guide on cash flow, but we do talk through the pieces. We will expect to see working capital return to a more normalized level on metals so you should see that benefit through the year. But of course, there will be cash outflow associated with that CapEx cost. I'll let you work it through.
我不会那么有帮助，我害怕。 因此，我们引导，因此您将追踪低于运营，基本营业利润。 在那里，如果我们预见到任何事情，我们会解释它并宣布它。 在这一点上，我没有预见到任何事情。 但是，由于我们今年已经达成了法律解决方案，因此今年可能会出现一些问题。 如果他们这样做，我们将与您分享。
关于现金流，我们再次没有指导现金流，但我们确实在讨论这些问题。 我们预计营运资金将恢复到金属更为正常的水平，因此您应该看到全年的利益。 但当然，会有与该资本支出成本相关的现金流出。 我会让你解决它。
I mean on the restructurings, I mean what goes outside of underlying is, of course, the major restructurings. We're always doing things in the business all the time, but they're all above the line, because they're just normal activities. There's not any of the sort of bigger ones that we would talk about outside of underlying and then I would reach out exactly what I understand. We would have talked about it if there was one planned.
How are we doing? Martin hasn't asked one yet so should we go to the front to Martin and then, Adam, I think you wanted*,* do you get another three? No, not sure. You only get one when you came for a second time around.
我的意思是重组，我的意思是除了潜在的东西，当然是重大的重组。 我们一直在做生意，但他们都在线上，因为他们只是正常的活动。 我们不会在底层之外谈论任何更大的那些，然后我会完全理解我的理解。 如果有计划，我们会谈论它。
我们怎么样？ 马丁还没有问过一个人，所以我们应该前往马丁，然后，亚当，我想你想要，你又得到另外三个吗？ 不，不确定。 你第二次来的时候才会得到一个。
Martin Evans, HSBC. I guess, for Anna, just on these procurement savings of GBP 26 million in the year, which is a useful figure. Will you just remind me, we normally*,* or you at the end of that procurement sort of prices now, and how easy has it been to achieve those versus how the company functioned before?
And secondly, in the press release, which I'm quoting in front of us. I saw something about IT systems and SAP, which sent a shudder of sort of past recollections of how companies have come a little bit unstuck on implementing SAP. Again, can you say what you're aiming to do there and how far advanced that is?
汇丰银行马丁埃文斯。 我想，对于安娜而言，这一年的采购节省额为2600万英镑，这是一个有用的数字。 您是否只是提醒我，我们通常，或您现在采购的那种价格，以及实现这些与公司之前的运作方式相比有多容易？
其次，在新闻稿中，我在我们面前引用。 我看到了一些关于IT系统和SAP的信息，这让人们对公司如何在实施SAP方面有所失措感到不解。 再一次，你能说出你的目标是什么，以及它的进步程度是多少？
Anna, yes, you want to take both of them?
Yes. So we've guided to there being an opportunity of GBP 60 million in procurement savings. We delivered GBP 28 million to date, of which about GBP 7 million is in CapEx, the majority of the rest hitting the P&L. Look, we've gone from purchasing at the site level to purchasing globally. And that touches a vast number of our 15,000 people. They walk up to work differently. So I'm hugely pleased with the progress that we've made to liberate these savings. I would say we're relatively early in our procurement journey.
There is more opportunity here yet, and there will be further opportunity once we've got the group on SAP wall to wall because today, just to give you an example, I've got 44 ledger systems and multiple instances of those. So if I want to know how much we're procuring, for example, methanol, no idea in that each system calls it something different. And the only way to get that data is to suck the data out of those systems and aggregate it, which is how we're delivering these procurement savings. Once we've got a single global way of doing things, we will have real-time data and we'll be able to go faster. So this is the beginning of a journey and it's going to be consistent improvement year-on-year.
In terms of SAP, it's right to send a shudder. It should send a shudder. I'm appropriately paranoid. We've got our first site live though. We've got Clean Air in Royston live on our single global instance. Royston is a big and complex side. The number of users on that site is over 1,000, and we've been successful in that first go-live. We've got 8 more go-lives coming in the next 12 to 18 months, and we're well on track.
So I think we've already done in some ways our hardest site, which maybe wasn't the most sensible place to start, but we're in good shape. So now we just roll out from there. So we remain appropriately paranoid, but therefore you shouldn't be.
And the good news is that we're doing it on a site-by-site basis, so there's no big bang or anything like that and there have*,* other companies being*,* done a big bang, and of course, that's a very wary place to be. As you've done the first one, the first one is the hardest because people didn't know what they were looking*,* couldn't practice really on what it was they were going to use. So the next site, several of you can come to Royston, and as you see it, live with the people and talk to the people about what happened. So it doesn't make it easy, but we should be getting quicker and quicker about how*,* and then we should be able to roll out this ledger across the over all organization. Look, it's something that nobody really wants to do, but actually, it's...
好消息是我们是在逐个站点的基础上进行的，所以没有大爆炸或类似的东西，有，其他公司，做了大爆炸， 当然，这是一个非常谨慎的地方。 当你完成第一个时，第一个是最难的，因为人们不知道他们在看什么，无法真正实践他们将要使用的东西。 所以下一个网站，你们中的一些人可以来到罗伊斯顿，如你所见，与人们一起生活，并与人们讨论发生的事情。 所以它并不容易，但我们应该更快更快地了解，然后我们应该能够在整个组织中推出这个分类帐。 看，这是没人真正想做的事情，但事实上，它是......
I quite like it.
Well, it's a lot of hard work for an awful lot of people. It touches virtually the whole organization. And so it's a big change for the organization. And a lot of effort going into do that. But the benefits that come from it , well, are really important and we'd drive those through, and we will do.
Have you got a mic, Adam? So we go over here since there's a mic just nearby and then we'll come back to you.
嗯，对于很多人来说，这是一项艰苦的工作。 它实际上涉及整个组织。 所以这对组织来说是一个很大的变化。 并且需要付出很多努力。 但是，它带来的好处是非常重要的，我们会把它们驱逐出去，我们会这样做。
Sorry, Adam. Is this working? Tom Wrigglesworth at Citi. So just one question on your calling out increasing R&D on gasoline. Is there something you're seeing in the outlook for gasoline that JMAT is particularly well positioned to solve or a new hurdle, a new challenge there that's leading to that R&D? If you could elaborate, that'd be helpful.
对不起，亚当。 这管用吗？ 花旗的Tom Wrigglesworth。 所以只有一个问题就是你要求增加对汽油的研发。 JMAT在汽油的前景中是否看到了一些特别有利于解决的新问题或新的障碍，那里的新挑战正在导致研发？ 如果你能详细说明，那会很有帮助。
Sure. John, do you want to give a bit of color there?
I think there's always new challenges. Especially if you're a technology person, that's how they live. But I think our focus on gasoline is that I guess we strive to be #1 in everything. Right now, we feel that our gasoline is on par with our competitors, and we want to be clearly the leader. And when we put our mind to doing that, I think we've demonstrated that we succeed pretty much all the time. So that's what we're trying to do.
我认为总有新的挑战。 特别是如果你是一个技术人员，那就是他们的生活方式。 但我认为我们对汽油的关注是，我想我们力争在所有方面成为第一。 现在，我们觉得我们的汽油与竞争对手相当，我们希望成为明显的领导者。 当我们想到这一点时，我想我们已经证明我们一直都在取得成功。 这就是我们正在努力做的事情。
And as the market is shifting with diesel to gasoline, more towards gasoline, so I mean it just makes sense that we shift some of our R&D.
Yes. I had a question in relation to the leadership changes in the business. There's been a couple of things going on in the last year that I'd be interested in your views on. The first one is, of course, on the appointment of the CEO for Battery Materials and the standing down of the CTO role. And then on the business development director side, you've had a couple of changes in as many years. It strikes me the first one maybe has something to do with the transition from research to commercialization in Battery Materials. But the second one sort of speaks to some dissatisfaction around the business development function. I wondered what your take was on what's happened here and the rationale.
是。 我对业务领导层的变化提出了疑问。 去年有一些事情我会对你的看法感兴趣。 当然，第一个是任命电池材料首席执行官和CTO角色。 然后在业务开发总监方面，您在多年后发生了一些变化。 第一个可能与电池材料从研究到商业化的转变有关。 但第二种说法是对业务发展功能的一些不满。 我想知道你对这里发生的事情以及基本原理的看法。
So well, look, on Battery Materials one, 1 year ago, we've made*,* I made a decision that we needed to move from technology development into business scale-up and so we wanted to bring in somebody into the organization who is a business leader, and as I said already, they'll join in September. Can't announce who they are at the moment, but they'll come in September. So the previous incumbent, Alan, as you know, was going to get back to CTO, but he decided he wanted to go work in a bigger organization as CTO. Disappointed to lose him, but the right thing for our business is to drive Battery Materials successfully going forward and we are, of course, going to replace that CTO role and we're well advanced in the process of doing that.
On the other role, look, not every role works perfectly every time, and maybe it does in your organization. But some you win, some you don't win so it's better to just sort of get the right people at the right time and then move on and get the right team in place. And I'm very happy with the team we have now. It's now a question of continuing to move forward from here.
I thought for a minute we were done, but not quite yet. One more question over here?
Charlie from Morgan Stanley. Just a quick couple...
You've already asked 2 questions last time. So you get your third.
Yes. No, just the*,* on Clean Air, just thinking about diesel market share, do you think you can push on from 65% you have today further and then continue to grow share in that market over time? Or do you think that's kind of done for now? That's really the only one.
是。 不，只是清洁空气的，，只考虑柴油市场份额，你认为你可以从今天的65％继续推进，然后随着时间的推移继续增加该市场的份额吗？ 或者你认为现在这样做了吗？ 那真是唯一一个。
Yes. Don't worry, I'm not putting pressure on only 3, if you have another one, please do ask. No, okay. So John, I know what you're going to say, but go on.
是。 别担心，我不打压只有3，如果你有另一个，请问。 不，好的 约翰，我知道你要说什么，但继续。
We're going to consolidate our position for now. We're working on some of the Euro 7 stuff. There are still diesel bids that are in Euro 7. I know the skeptics are saying diesel is going to die, but car companies are still offering request for quotes for new business. And we'll see. I'm not going to commit to say we can go beyond 65% because I don't think that's a long-term sustainable position. But we're going to hold on to it as long as we can.
我们现在要巩固我们的立场。 我们正在研究一些欧元7的东西。 目前仍有6欧元的柴油报价。我知道持怀疑态度的人说柴油即将消亡，但汽车公司仍在提供新业务报价请求。 我们会看到。 我不会承诺说我们可以超过65％，因为我不认为这是一个长期可持续的立场。 但是，只要我们能够坚持下去，我们就会坚持下去。
I think the OEMs have very powerful procurement functions. And whilst it's a technology buy, there is still that sort of*,* they don't want to be relied on to 1 company only. So they always do try to make sure that they have multiple sources, particularly on the light duty side. Heavy duty side, you can be more*,* it's more often that you can be a sole supplier. So John's got 65%. I mean the challenge initially is to keep it for as long as we can. And the numbers that we presented back 2 years ago assumed that, that would decline back down to a more normalized level. So if we can keep that at 65%, for longer, that would be upside to where we are in our current plan.
Great. Sorry, Martin, go on. You just sneaked out just as I was about to say*,* call the time, but...
我认为OEM拥有非常强大的采购功能。 虽然这是一项技术性购买，但仍有那种，他们不希望只依赖于1家公司。 所以他们总是尽力确保他们有多个来源，特别是在轻型工作方面。 重型方面，你可以更多，你经常可以成为唯一的供应商。 所以约翰有65％。 我的意思是最初的挑战是尽可能长时间地保持它。 我们在2年前提出的数字假设，这将下降到更正常的水平。 因此，如果我们能够保持65％的时间，那么这将是我们当前计划中的优势所在。
大。 对不起，马丁，继续。 你就像我要说的那样偷偷溜走，打电话给时间，但......
It's the last question, probably slightly unfair. I was just going to ask about how you're getting on with the new Chairman given his, and I'm sure he's watching this somewhere, given his extensive experience in the chemical industry and with investors. Do you feel he's brought a sort of new approach or new dynamism to the Board?
这是最后一个问题，可能有点不公平。 我只是想问一下你是如何与新任主席相提并论的，鉴于他在化学工业和投资者方面的丰富经验，我确信他正在某处观看。 你觉得他给董事会带来了一种新的方法或新的活力吗？
What do you expect me to say? Of course, we're getting on very*,* but genuinely, we are getting along very well. And look, he's got tremendous experience and very relevant experience. What we wanted was somebody as Chairman who deeply understood the chemical industry and deeply had an affinity to it. And I think all those of you who have met him would really deeply understand that he does. And he brings that experience to bear to help us, to challenge us, to move us forward.
And absolutely, that's what he's doing. Look, he's only been chairman now for not even a year. So you'll start to see some of that coming through, I'm sure, in the future. But we're pushing forward quite well anyway, but this is just another little bit of a gentle nudge and support, which I think is a good thing.
Great. Thank you very much. We're obviously*,* thank you for your time. Very nice to see you all. And we've got our Capital Markets Day in the middle of September, and you'll get more invitations about that soon. Thanks very much, everybody.
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