Presentation to Analysts / Investors Johnson Matthey Group Strategy

2nd February 2011 Cautionary Statement

This presentation contains forward looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries and sectors in which Johnson Matthey operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. Introduction and Key Strategic Opportunities

Neil Carson Chief Executive JM Executive Board

Neil Carson Robert MacLeod Chief Executive Group Finance Director

Larry Pentz Bill Sandford Executive Director Executive Director Environmental Technologies Precious Metal Products

4 Other Senior Management

John Fowler Jack Frost Barry Murrer Division Director Director Director Fine Chemicals Fuel Cells Technology Centre

Nick Garner Geoff Otterman John Walker Group Director Division Director Division Director Corporate and Catalysts, Chemicals Emission Control Strategic Development and Refining Technologies

Neil Whitley Ian Godwin Sally Jones Division Director Director Public Relations Manager Process Technologies Investor Relations

5 Programme

13.30 Introduction and Key Strategic Opportunities (Neil Carson)

Emissions Legislation, Energy Security and a Low Carbon Economy (Larry Pentz, Jack Frost) 14.00 Coffee break in this session

Global Drivers for Precious Metal Products (Bill Sandford) 15.50 Coffee break after this session

16.35 Global Drivers for Fine Chemicals (John Fowler) 17.00 Further Growth ‐ R&D Focus (Robert MacLeod, Barry Murrer) 17.25 Summary and Conclusions (Neil Carson) 17.40 Q&A 18.10 Drinks Reception (Restaurant Sauterelle) 19.00 Dinner

6 Purpose of the Day

Present Highlight Explain Detail the results of the the global drivers key growth how research will group’s ten year for the group opportunities be key in delivering strategic review over the next future growth ten years

7 Evolution of the JM Group Sales ex pms

Growth in shareholder value from focus on environmental technologies…

2000/01 2009/10 12%

19%

22% 5% £977m £1,886m

45%

31%

66%

Environmental Technologies Precious Metal Products Fine Chemicals Other

8 Johnson Matthey Today

£2.2bn* ROIC sales (ex pms), target >20% underlying PBT £332m* 1,000 employees 9,000 working people in R&D

7.3% p.a. Global EPS growth in last operations ten years* No.1 or 2 in core segments *Based on Vara consensus estimates for 2010/11 of 17th December 2010 (EPS of 113.7p)

9 JM Attributes

• Common features of a successful JM business Environmental Significant barriers focus, • Provides focus for future investment to entry regulatory driven

Focus on core • NtNot the sole dtdetermi nant of a good JM bbiusiness Leading industry chemistry, positions with high People pgms margin products and and catalysis A leading technology based company culture

Differentiation Good through understanding of technology markets and Investment in customers technology and product development

10 JM’s Key Strengths

Expertise in the fundamental Deep involvement in and Ability to maximise synergies science that underpins our understanding of pgms •E.g. complementary offering of DPT technologies •Expertise spanning refining, pgm technologies and JM’s process catalysts •Catalysis, materials chemistry, chemistry, market dynamics nanothtechno logy, pgms

Trusted partner with customers, Reputation regulators etc. • Fundamental understanding of what our products do for our customers – enables us to make better products •Regulatory understanding, materials hdlhandling – managing pgms, controlle d substances

11 Global Drivers Impacting the Chemical Industry*

Population Environmental Natural Growth Health & Nutrition Factors Resource Urbanisation Climate Change Ageing Population Constraints Increasing Wealth Regulation

Developing Developed Economies World

* Based upon key megatrends identified by Goldman Sachs Global Investment Research 12 Global Drivers Impacting the Chemical Industry

Emission Automotive control catalysts

Obscuration Population Electronics enamels Growth Urbanisation Construction Pgms Increasing Wealth

Bulk Petrochemical catalysts and chemicals processes

13 Global Drivers Impacting the Chemical Industry

APIs

Medical Pharma‐ components ceuticals Health & Nutrition Ammonia synthesis and Ageing Population Agricultural nitr ic acid chemicals catalysts

Fine chemicals

Pgm catalysts

14 Global Drivers Impacting the Chemical Industry

Energy security Gas / coal to products technology Resource Natural efficiency Resource Catalysts Constraints Alternative energy Pgm refining Recycling

15 Global Drivers Impacting the Chemical Industry

Emission Emission Purification control control products catalysts Environmental Factors Abatement Clean fuel Fuel cells Climate Change technologies

Regulation Carbon Low carbon Hydrogen capture and catalysts storage

16 Global Drivers Impacting the Chemical Industry Pgm catalysts

Emission Obscuration Medical control Automotive Electronics APIs enamels components catalysts Pharma‐ Agricultural Petrochemic Population ceuticals Chemicals Ammonia ‐al catalysts Bulk synthesis and Pgms Construction Growth Fine and chemicals Health & Nutrition nitric acid chemicals processes Urbanisation catalysts Ageing Population Increasing Wealth

Environmental Natural Gas / coal to Factors Emission Energy Alternative Emission Abatement products Resource Clean fuel control security energy Climate Change control technologies technology Constraints catalysts Regulation

Pgm Resource Hydrogen PifiiPurification Catalysts Recycling Low carbon refining efficiency catalysts products

Carbon capture and Fuel cells storage JM attributes deliver superior growth (CCS)

17 Our Strategy to Deliver Growth in Value Key Elements Unchanged

Continued core focus Maintain Strong position in Primary focus is on leading edge differentiation pgms remains an organic growth catalysis driven by: through technology intrinsic part of group •Ever improving air • Enhanced investment quality in R&D in core markets •Energy security • Sustainability •Development in emerging markets

18 Our Strategy to Deliver Growth in Value Increased Emphasis on:

Developing new JM attributes Manufacturing People and culture opportunities • Provides focus for excellence • Globalisation drives underpinned by our investment and •High technology, high integration of cultures core chemistry growing new business effic iency expertise • Materials science and surface chemistry

19 Our Strategy – Looking Forward

For first five years: Looking ffhurther ahdhead: •Strength in core segments anticipated to deliver • Good opportunities in existing segments double digit growth in group sales (ex pms) • Step change in development of fuel cell market •Higher growth in catalyst segments •New opportunities through R&D •Mid to high single digit growth in other businesses •Some growth in EBITDA margins (ex substrates)

20 Our Strategy – Looking Forward

Increase total R&D spend: Capital efficiency remains embedded: Existing businesses •ROIC target >20% • Up from £100m pap.a. to £135m pap.a. to • Net debt (incl. pension) / EBITDA between 151.5 to extend technology advantage 2.0 times Targeting new opportunities •Average capital expenditure 1.2 to 1.3 times depreciation • Initially up to £5m p.a. •New structure in place • New £200m pap.a. business in ten years

21 Our Strategy – Sustainability and Manufacturing Excellence

By 2017:

Achieve a zero ‘greater than three day Achieve carbon neutrality accidents’ safety target

Implement ISO 14001 at all manufacturing Achieve zero waste to landfill sites by 2010

Halve key resources consumed per Reduce annual incidence of occupational unit of outttput illness cases by at llteast 30% by 2013/14

22 Summary

Strategy review Major gllblobal trends Key elements of Further focus on emphasised provide strong strategy unchanged growth through R&D attributes and drivers for growth stthtrengths of JM

Group well positioned for long term growth

23 24 Emissions Legislation, Energy Security and a Low Carbon Economy

Larry Pentz Executive Director, Environmental Technologies Key Strategic Opportunities – Emissions, Energy and Low Carbon A convergence of trends supports an environmental strategy…

Global Trends Resulting Focus • Growing population • Increasing wealth Emissions Regulations • Urbanisation • Global warming • Shifting energy sources

• Respiratory health concerns Low Carbon Energy Economy Security

…creating a ‘sweet spot’ for JM technology

26 Emissions Regulations Legislation Drives Growth

Emission • ~50% JM sales ex pms Emission Purification control driven by legislation control products catalysts Environmental • Tighter legislation still to come Factors Abatement Fuel cells Clean fuel technologies • Substantial growth over Climate Change next five years Regulation Carbon Low carbon Hydrogen capture and catalysts storage (CCS)

28 Light Duty Vehicle Production Continues to Grow, Shift to Asia

million 12 0

10 5 . 7

10 0 95.8 92.3 82.4 88.5 80 76.4 73.0

59.4 60 55.8 45.6 47.2 49. 11 39.1 42.3 36.7 40 29.0 23.0 21.3 22.5 25.0 19 . 1 19 . 5 20.1 20 14. 99 15. 66 16 . 5 16 . 3 16 . 8 11. 8 12 . 3 13 . 7 8.6

0 2009 2010 2011 2012 2013 2014 2015 2020 2009 2010 2011 2012 2013 2014 2015 2020 2009 2010 2011 2012 2013 2014 2015 2020 2009 2010 2011 2012 2013 2014 2015 2020 North America Europe Asia Global

Source: IHS Global Insight (December 2010) 29 New and Tighter Regulations Across the World

Light Duty 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 EU Euro 4 Euro 5 Euro 6 Russia Euro 2EuroEuro 3Euro 4 5 United States Tier II LEV III United States ‐ Cal. LEV II LEV III Brazil Euro 3 Euro 4 Japan Japan 2005 Japan 2009 South Korea Diesel Euro 4Euro 5Euro 6 South Korea Gasoline KULEV LEV II China ‐ Taiwan Euro 3 Euro 4 Euro 5 China ‐ Beijing Euro 3Euro 4Euro 5 China ‐ Other Euro 3Euro 4 Euro 5 Australia Euro 3 Euro 4 Malaysia Euro 2 Euro 4 Thailand Euro 3Euro 4 India ‐ Cities BS III BS IV BS V India ‐ National BS II BS III BS IV Indonesia Euro 2 Euro 4

30 Tighter Regulations Drive Increased Value

250 • Lower pollution levels Gasoline Euro 3 200 • Particulate number legislation

150 Euro 4 •More stringent in‐use compliance (mg/km)

HC 100 Euro 5/6 • More didynamic tttest cycle proposed 50

0 •Current and future standards for ROW 0 20 40 60 80 100 120 140 160 NOx (mg/km)

60 Diesel Euro 3 50 • Requires improved catalyst technology 40 /km) gg (m 30 Euro 4 PM 20 Euro 6 10 Euro 5

0 0 100 200 300 400 500 600 NOx (mg / km)

31 OEMs have Options to Achieve Regulations

• Number of catalysts (or volume) / vehicle will vary •Powertrain vs emission control cost trade off •Tighter regulations require improved catalyst technology • Lower pgm lldioading requires idimproved catltalyst thtechno logy • Wide range of catalyst value per vehicle

• Ensures continued catalyst value growth

32 Light Duty Diesel –A European Market

• Particulate matter is a major concern •Potential of markets outside Europe?

• Tightening regulations add additional catalysts:

Urea

DOC DOC DPF DOC DPF SCR Euro 4: Euro 5: Euro 6: Oxidation catalyst (DOC) DOC plus diesel particulate filter (DPF) DOC + DPF plus NOx control

33 Additional Greenhouse Gas Regulations Provide Further Opportunities

Powertrain Additional •CO2 –a new pollutant Development Catalyst Value •A product of combustion Smaller powered engines • Cannot be catalytically transformed X • Can be reddduced by: Hybrid •Consumer decisions – smaller powered engines Direct injection

• Powertrain development Turbocharggging

Start / stop

New engine technologies • Will require emission control modifications • Net benefit in catalyst value Electric vehicles X

34 Heavy Duty Diesel

Heavy Duty VehicleOE VolumesO n R oa Willd M Growark e t But with Annual Volatility

No. of Vehicles (>6t)

million 4

0 2005 2010 2015

Western Europe USA Japan / Korea India / China / Brazil Rest of World

Source: JD Power and IHS Automotive 35 Heavy Duty Diesel OROn Roa dRd Regu ltiDlation Deve lopmen t Tighter Regulations –New Countries, Additional Vehicles

New Models All Models Europe Euro IV 01‐Oct‐05 01‐Oct‐06 Euro V01‐Oct‐08 01‐Oct‐09 0.03 Euro VI 31‐Dec‐12 31‐Dec‐13 JP 05 United States 0.025 US 2007 01‐Jan‐07

hr) US 2010 01‐Jan‐10 ‐ EU V (2008)

WW US 2014? 01‐Jan‐14 0.02 Japan (g/k New Long Term 01‐Oct‐05 0.015 EPA 07 Post New Long Term 01‐Oct‐09 JP16 01‐Oct‐16 EPA 10

Emissions China 0010.01 EU VI JP 09 Beijing – Euro V2012 PM (2014) Rest of country –Euro IV 2013 0.005 JPJP16 16 India BS IV –Major cities 2010 BS IV – Nationwide 2014 0 South Korea 0 050.5 1 151.5 2 252.5 Euro V01‐Jul‐09 01‐Jul‐10 NOx Emissions (g/kW‐hr) Russia Euro IV 01‐Jan‐10 01‐Jan‐12 Brazil Euro V2012

36 Increased Value with Tightening Regulations

• Engine management and emission control trade offs

• Alternative choices but increasing catalyst value per vehicle

DOC SCR CRT®/CCRT® SCRT® US 04 Euro IV US 07 US 2010 Retrofit Euro V Tier 4A Euro VI Tier 4A Tier 4A

37 A $2.5bn Market by the end of 2015

2,500 Non‐road, <56kW Non‐road, 56‐130kW 2,000 Non‐road, 130‐560kW Brazil

India 1,500 China million

Russia Japan & Korea pms

xx Eastern EuropeEurope e 1, 000

Western Europe

Sales North America 500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: JD Power and JM estimates 38 Technology Investment to Keep Pace with Growth

R&D dimensions: Investment in: •5% sales ex pms • Applied research in materials •Eight R&D facilities •Catalyst formulation design • 50 test cells globally • OEM specific application development • 500 R&D people (11% of ECT) • Manufacturing techniques

Development of:

More efficient Lower pgm usage Combination of Greater focus on catalysts technologies ‘in‐use’ emissions

39 40

emphasis Number

VII

EU PM

V compliance

Come Stage

use Further

EU road ‐ HDD

to to

US Non

Marine Marine

III III

Next Tier Tier

IMO 4 III

pollutants

4B LEV

Tier

Up Up

US Tier

Catch Catch

road ‐ Tightening added

Locomotive ROW ROW

Non be Secondary US

and

– Further

control

NOx

particulate \ Focus

Regulations

2016 2017 2018 2019 2020 occurring,

fixed

not

Cars Other Trucks Emissions Discussions timing Emissions Regulations – Opportunities for Process Technologies

H2 O H O S 2 2

Global tightening Methanol Alternative fuel Oil refining And for fuel cells – of sulphur levels in substitution in mandates discharge limits zero emission fuels transportation •Biofuels, natural e.g. SOx, NOx, Hg vehicle fuels gas, GTL diesel etc. requirements

41 Tightening Regulations Drives Hydrogen Market

•Low sulphur fuel, heavier oil, diesel demand drive Share of Market Growth by Region hdhydrogen (72.7 billion cubic met)ters)

•Hydrogen demand increases, particularly in Asia US 10.6% •Hyygdrogen installed catalyst market of $800m All Other –averages $200m p.a. 31.5%

•Expect hydrogen market growth of 6 to 8% p.a. Other over next five years Asia / Pacific 29.4%

Western Europe • 35% average market share today 6.5%

• Strong presence in Asia China 22.0% • Good relationships with major industrial gas suppliers Source: Freedonia Group Inc.

42 Emissions Regulations – Summary

• Legislation drives growth • Vehicle volumes expected to be up in both light and heavy duty vehicles •Fuel efficiency requirements offer new opportunities • Tig hter lliltiegislation provides added value for JM • Substantial growth over next five years

43 Energy Security Opportunities in Energy Drive Growth

Energy security Gas / coal to products • ~10% JM sales driven by technology natural resource utilisation Resource Natural efficiency • Energy security concerns Catalysts result in increased interest Resource in coal / gas to products Constraints Alternative energy • Double digit sales growth Pgm over next five years refining Recycling

45 More Value from Coal

•Coal is an abundant and key strategic resource Proved Reserves at end 2009 (Thousan d million tt)onnes) • Primarily used to produce electricity and for (anthracite and bituminous coal shown in brackets) industrial consumption •Energy consumption gggrowing in China •Power generation technology improving

• New processes use coal as substitute for natural gas and oil

Middle East 1.4 (1.4) S. and Cent. America 15.0 (7.0) Africa 32.0 (31.8) North America 246.1 (113.3) AiAsia PifiPacific 259.3 (155. 8) Europe and Eurasia 272.2 (102.0) Source: BP Statistical Review of World Energy 2010 46 Increase in Useable Natural Gas Reserves

• Rapid deployment of new drilling technique • Projected shale gas will supply 40% of US gas by 2020 • Shale formations found around the world •Improved natural gas transport infrastructure •Gas pricing decoupled from oil

• Growth potential as a feedstock for chemicals and fuels

Source: EIA 47 Coal, Gas and Biomass to Products

TiTransportation ffluel Hydrogen Steam Water Gas Traditional markets (refineries) Reforming Shift Traditional markets (formaldehyde etc.) Methanol Gasoline blending

Olefins Ammonia Propylene Gasifier Sour Shift DME Fischer‐ Tropsch Diesel

Substitute Pipeline Natural Gas (SNG) Wood Crops Alcohol Landfill Garbage Fuels Gas

Fuels Chemicals / Refineries

48 Alternative to Oil Based Feedstocks

• Substitute for transportation fuels • Alternative routes to petrochemical products •Trade off between financial cost and reduced imports

• Development and growth of process technology and catalysts

49 Methanol Demand Remains Significant in China

• Shift towards energy Demand for Methanol ‘000 tonnes 2005 – 2015E •Fuel blending –M5, M15, M85, M100 40,000 35,000

• Methanol to Olefins now proven (Shenhua) 30,000 • Glo ba l methano l iitlldnstalled catltalys t markktet of 25,000 $400m –averages $100m p.a. 20,000 15,000

10,000

5,000

0 • 45% average market share today 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E • China focusing on larger more efficient plants Asia North America South America Europe Rest of World China • Well positioned with new market leading JM Source: MMSA Apico catalyst and technology

50 Coal to Substitute Natural Gas (SNG)

• China is short of natural gas •SNG can utilise natural gas pipeline infrastructure •Potential outside of China – US, Korea

• Initial licensing and catalyst sales • Catalyst replacement beyond • JM awarded four projects to date (three in 2010/11)

51 Energy Security Drives Growth for Process Technologies

•Coal to substitute natural gas (SNG) •Coal to methanol •Coal / gas to liquids and compact GTL • IdIncreased gas processing and purifica tion •Biomass conversion

• Double digit growth over next five years

Photo courtesy of Shenhua 52 Low Carbon Economy New Opportunities from a Low Carbon Economy

• Developing markets –some Emission Emission Purification early commercialisation control control products catalysts Environmental • Technologies play to JM’s strengths Factors Abatement Fuel cells Clean fuel technologies • Potentially large markets Climate Change e.g. fuel cells Regulation Carbon Low carbon Hydrogen capture and catalysts storage (CCS)

54 Low Carbon Economy

JM has a range of core technologies which will develop over the next five years…

CCS C

Energy and resource CbCarbon capture and GhGreenhouse gas RblRenewable and low efficiency storage abatement carbon energy technologies • Advanced gas heated •Syngas technology for •New markets for N2O reformer precombibustion and abatement catalyst • Advanced biofuels capture •Process and catalyst •Coal methane technology and improvements abatement catalysts thtechno logy •Fuel cell vehicles • Silver inks for photovoltaics •Fuel cells for CHP applications

55 The Low Carbon Economy – Fuel Cells

Jack Frost Director, Fuel Cells Fuel Cells

H2 O

H2 O2

Fuel cells JM and fuel cells Fuel cells and cars •A clean efficient electricity •Targeted the key catalytic •Electric cars set to grow in generation technology components of the fuel cell – importance driven by: the membrane electrode •Central to the development of •Zero emission regulations assembly (MEA) as our the low carbon economy, primary product • Decarbonisation of the reducing urban emissions and transport sector providing energy diversity and • Strong parallels with our security vehicle emission control •Energy security catalysis business • Good fit with JM core skills in catalysis, technology and precious metals and with our strategic focus

57 The Nature of Electric Cars

H2 Electric cars Batteries are an Consensus1 that electric Hydrogen supply • Quiet, very efficient and important technology vehicle fleet will be a infrastructure non‐polluting at the for electric cars but… combination of… • Cheaper than a battery point of use • Limited range, heavy, •Plug in hybrid electric charging infrastructure • Electricity can be long refuelling times vehicles (PHEV) with an •Only a small fraction (5%) produced from a variety internal combustion of the total cost of of fuels including low engine (ICE) ownership of a FCEV carbon fuels • BttBattery elltiectric vehic les (BEV) •Fuel cell electric vehicles (()FCEV)

1 A portfolio of power trains for Europe –a fact based study, McKinsey 2010 http://www.iphe.net/docs/Resources/Power_trains_for_Europe.pdf 58 Power Train Costs Converge Rapidly

Total Cost of Ownership – excluding tax EUR/km

1 C/D SEGMENT FCEV 0.8 BEV PHEV ICE 0.6

0.4

0.2

0 2010 2015 2020 2025 2030

Ranges based on data variance and sensitivities (fossil fuel prices varied by +/‐ 50%; learning rates varied by +/‐ 50%) Source: McKinsey

59 Fuel Cells for Larger Cars and Longer Journeys

Lowest Cost CO2 Abatement Solution in 2050

Battery electric vehicle <10

Increasing annual driving 10 ‐ 20 distance (1,000km)

>20 Fuel cell electric vehicle

A/B C/D J

Increasing car size Source: McKinsey 60 Fuel Cell Costs –McKinsey 2010 Fuel cell stack cost EUR per fuel system EUR/kW C/D segment 800 781 81,362 ~90% MEA (excl. catalyst, incl. GDLs) 14,274 Catalyst (incl. 600 6,296 platinum) 500 Structure 22,228 400

252 18,892 200 Periphery 38, 565 2,970 7,475 110 98 3,194 -42% 221 3,212 4,306 43 42 9,516 0 16 2010 2015 2020 2010 2015 2020 2050

FCEV units FC stack lifetime (‘000km) 115 180 247 290 (installed ~1,000 ~100,000 ~1,000,000 cumulative Platinum use (g/kW) 0.93 0.44 0.24 0.11 number) 1 million cars = ~0.1% of global car fleet Ø Fuel cell stack cost EUR/kW 500 110 43

Min 221 42 16 Max 781 252 98 Source: McKinsey 61 Size of Merchant MEA Car Market Value of Car MEA Market (ex pms)

20 s

nn 15 billio

Euro 10

Cumulative 5 1m FCEV 2020

0 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 Year

Source: McKinsey 62 What is JM doing about this Opportunity?

•Fuel cell technology investment •Providesrevenue and learning by doing •Catalysis techhlnology is critical •In the next decade many of these • Participation in early fuel cell markets markets are as large as cars

63 Today’s Markets – Stationary CHP

•Hydrogen generated in‐situ using a range of fuels: natural gas, renewable gas etc.

• Enables clean, quiet, pollution free power generation on a scale from 1kW to MWs

• Large units for combined heat and power for hospitals, hotels and banks. Commercial sales in the US and Korea

• Fuel cells can be scaled to give power to individual houses (or smaller offices, clinics etc.)

•Large government funded programmes underway in Japan and Korea

• First commercial sales underway in US •Large homes in California with expensive electricity

• Forecast a rapid expansion into worldwide markets as costs reduce

64 Markets –Direct Methanol (DMFC)

Readily available fuel, especially at small scale enabling commercial portable devices now

Leisure Military Electronics •Recreational vehicles, leisure craft, • Infantry men, unmanned craft •Near term –stand alone chargers remote cabins offer ing mains autonomy •US infantryman carries >20kg • Dissatisfaction with batteries, solar batteries • Possible future products have and wind significant potential •Low weight, long run times, fast •Noise and pollution of IC generators ‘recharging’ •Battery / fuel cell hybrid laptops, portable electronics, cellphones

65 The Fuel Cell MEA business in 2020

£ million 1,800 MEA market size >£1 billion

1,600 excluding pgm

1,400

1,200 Cars are important… but so are other markets 1,000

800 All marktkets growing rapidly 600 supported by global trends and 400 advancing technology 200

0 2018 2019 2020 2021 2022 JM positioned to participate in each of these markets Cars Electronics Small back‐up and Portable

Other mobile Stationary / CHP

66 67 Key Strategic Opportunities – Emissions, Energy and Low Carbon

• Emissions regulations –a growing global vehicle market with tightening regulations • Energy security –strong interest to get more value Emissions from coal and natural gas Regulations

• Low carbon – didesire to stablise CO2 in the atmosphere using novel low carbon technologies

Low Carbon Energy Economy Security • All require high technology catalytic solutions • JM well placed • Significant growth potential

68 6969 Global Drivers for Precious Metal Products

Bill Sandford Executive Director, Precious Metal Products Global Drivers Impacting the Chemical Industry Pgm catalysts

Emission Obscuration Medical control Automotive Electronics APIs enamels components catalysts Pharma‐ Agricultural ceuticals Chemicals Petrochemic Population Ammonia ‐al catalysts Bulk synthesis and Pgms Construction Growth Fine and chemicals Health & Nutrition nitric acid chemicals processes Urbanisation catalysts Ageing Population Increasing Wealth

Pgm Resource Hydrogen PifiiPurification Catalysts Recycling Low carbon refining efficiency catalysts products

Carbon capture and Fuel cells storage (CCS)

71 Sales Excluding Precious Metals

Manufacturing Precious Metal Services 2009/10 • Noble Metals •Pgm trading and marketing • Colour Technologies 35% • Precious metal •Catalysts and refining Chemicals £420m

65%

Manufacturing Services

72 Our Manufacturing Businesses

Account for 65% or ~£270m of division’s sales ex pms •A wide range of products / applications • 19 manufacturing sites worldwide • Investing in manufacturing excellence / product innovation •All businesses have good ROIC • Some mature products with limited growth potential… •…other products impacted by global drivers have good growth potential

73 Global Drivers Manufacturing Businesses

Global Drivers End Uses

Automotive Agggeing Population

Climate Change Nutrition Nutrition

Growing Wealth Healthcare

74 Automotive

Products End Uses Sales by Product Group

•Glass obscuration enamels •Auto glass protection 8% • Conductive tracks •Heated rear glass

•Pgm alloys •Spark plug tips 53% 33% £85m • Pgm wire / powder • Engine sensors

•Pgm salts •Autocatalysts 6% Enamels and Conductive Tracks •Base metal catalysts • Plastics / polymers Pgm Alloys / Wires / Powder Pgm Salts Base Metal Catalysts

75 Automotive

Accounts for £85m (()31%) sales ex pms

Pgm salts sold to All other prodtducts AiAsia biggest growth CAGR 10% sales ex internal (ECT) and sold to external area pms external customers customers

76 Nutrition

Products End Uses Sales by Product Group

•Pgm catalysts • Fertilisers

•Base metal catalysts •N2O abatement 43%

•Nickel catalysts • Edible oils / sweetners £30m • Pgm scavenger • Food spoilage inhibitor 57%

Accounts for £30m (11%) sales ex pms Fertilisers Catalysts / Scavengers >10% CAGR sales ex pms

77 Nutrition

Fertiliser use driven by population growth • Growing wealth drives meat consumption • Fertiliser demand expected to grow stronggyly in Asia

•By‐product N2O, powerful GHG (310 times CO2)

• Strong growth for N2O abatement but depends on Kyoto replacement, cap and trade etc.

Johnson Matthey has leading share in fertiliser and N2O catalysts

Image Source: Alternative Economiques www.alternatives‐economiques.fr 78 Nutrition e+TM Ethylene Scavenger • Recently developed in collaboration with Anglo Platinum •Huge amount of fruit destroyed due to over ripening • Climacteric fruit emit ethylene on ripening • e+TM postpones ripening process

79 Health and Personal Care

Products End Uses Sales by Product Group

•Pt alloys • Medical device components 19%

•Pgm catalysts • Eyecare 46% •Pharma APIs £65m

•Base metal catalysts • Personal care items 35%

Pt Alloys Accounts for £65m (24%) sales ex pms Pgm Catalysts Base MtlMetal CtlCatalys ts

80 Health and Personal Care

Demand for medical products driven by growing population… •…and also ageing population in wealthy countries • Largest market for medical devices is USA • Other markets growing quickly •Demand for APIs largely in West •Demand and manufacturing moving East •CAGR 9% sales ex pms

81 Precious Metal Services

Accounts for 35% or Provides service to Volume growth will Profitability £150m of division’s Johnson Matthey (largely) reflect influenced by pgm sales ex pms group and its growth in market / prices customers JhJohnson MMtthatthey •Pgm trading and marketing • 65% of group sales group sales are pgm based •Precious metal refining

82 Global Drivers Precious Metal Services

Global Drivers Growing Need for Pgms and Refining

Jewellery and industrial uses of pgms

Population Growth Emission control Growing Wealth

Environmental Factors Fuel cells and low carbon technologies Natural Resource Constraints

Refining

83 Gross Pgm Demand 1996 ‐ 2010

‘000 oz 20,000 18,000 Auto largest sector (51%) 16,000

14,000 Future growth driven by:

12,000 • Population growth 10,000 •Wealth growth 8,000 Heavy •Environmental factors 6,000 DtDuty Off Road Diesel •Engine exhaust catalysis 4,000 •Fuel cells 2,000

0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Platinum Palladium Rhodium

84 Engine Catalysis

97% catalysed 33% catalysed 9% catalysed

Heavy Non‐road Duty Diesel Light Duty Cars

Total Number of Engines 75m 3.5m 2.2m

85 Pgm Trading and Marketing Platinum Demand in Fuel Cells 2001 ‐ 2010

Pt ozs ‘000 20

10 Non‐auto 8 Auto

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Early signs of market Fuel cell loadings* significantly Pt demand sensitive to fuel traction higher than ICE (4‐5g): cell car penetration • 84g in 2011 • 22g towards 2050 • 40g in 2017 • 10g beyond 2050 * Based on McKinsey study 86 Pgm Trading and Marketing Platinum Supply‐Demand

Pt ozs ‘000

70007,000

6,000 RSA main producer

5,000 Significant reserves

4,000 RSA mines having to deal with:

3,000 •Higher capex • Rising operating costs 2,000 •New mining legislation 1,000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

RSA Supply ROW Supply Demand

87 Pgm Trading and Marketing Palladium Supply‐Demand

Pd ozs ‘000 10, 000 9,000 8,000 Russia is largest producer 7,000 6,000 90% of world production is 5,000 by‐product 4,000 3,000 Supplies supplemented by Russian 2,000 stock sales… close to exhaustion? 1,000 0‐ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mine Supply Russian Stock Sales Demand

88 Pgm Refining

“High grade” refineries in UK and USA OhOther • Two key sectors 8% • JM product customers Primary 25% • Autocat recycling JM Product • Profitability strongly influenced by pgm price Customers movements 32%

Autocat Scrap 35%

Outputs: Pt 45t p.a. Pd 50t p.a.

89 Conclusions

Manufdfactured Products Precious Metal SSiervices • Key products with strong drivers • Global drivers support growing demand for pgms • Double digit growth in sales • Volume growth to reflect Johnson Matthey sales / total market •Some mature products with limited growth potential • Profitability impacted by pgm prices •Average sales ex pms CAGR in high single digits

Global Drivers for Fine Chemicals

John Fowler Division Director, Fine Chemicals Global Drivers Impacting the Chemical Industry

APIs

Medical Pharma‐ components ceuticals Health & Nutrition Ammonia synthesis and Ageing Population Agricultural nitr ic acid chemicals catalysts

Fine chemicals

Pgm catalysts

93 Global Trends Driving Fine Chemicals’ Strategy

Global Trends Resulting In • Ageing population • Generics will continue to grow double digit over the next ten years •Longer life expectancies • Emerging markets will see strong growth in •Economic development (BRIC) pharmaceuticals • Expanded access to healthcare • Fine Chemicals’ leading global position in •Drive to lower cost medicines narcotic based pain therapy will benefit

94 Key Business Strengths in Fine Chemicals

Advantage through Investment in R&D Leading market share in Highly regulated broad skills in and technology key therapeutic areas markets with significant chemistry • Critical mass in API •Pain therapy barriers to entry development through •Attention Deficit and Pharma Services Hyperactivity Disorder (ADHD) •Drug addiction treatment • Platinum oncologics

Focused niches Strong customer Diverse and flexible Outstanding record of targeting higher relationships with manufacturing regulatory compliance margin APIs, 20%+ both brand and capability generic companies

95 The Global Pharma Market

Market $800bn $530bn

$30bn

Pharmaceuticals Small Molecule Small Molecule Pharmaceuticals API

Source: IMS, Datamonitor, Business Insights, Pollak, Kalorama, LCM M&I 96 Strategic Focus –Niche APIs

Currently compete in circa 10% of global small molecule API market Delivering API sales growth of 9% p.a. over the last five years vs global pharma market growth of 6%

JM API Sales by Market 2010/11 ()(e) JM API Sales by Region 2010/11 (()e)

16%

3% 3% 2% 1% ~$300m ~$300m 49% 46% 51%

29%

Pain Therapy ADHD Drug Addiction Treatment North America Europe Oncologics Others Asia ROW

97 Strategic Focus –Global Pain Therapy

Significant barriers to entry Opiates Consumption 2008 by Region • Hig hly regulltdated marktkets Percentages in parentheses refer to share of global population •Tight control over import / export of narcotics

ROW North America Globally a key therapeutic area 19% ()(43%) 3%35% ((%)5%) •Codeine third leading therapy class in the US •Ageing population in the West increasing demand

Emerging Growth in emerging markets 12% (45%) • Pressure from WHO to make pain medication more freely available Europe Opiate API market to accelerate from 4% CAGR 34% (7%) to 6% over the next ten years

Source: INCB, IMS and JM data Emerging markets are China, India, Brazil, Russia, Mexico, Turkey and South Korea 98 Global API Market Share by Volume – Opiates

Allblcaliber Rhodes 1% 12% Covidien 18% Weifa‐Norway 3% JM Regional Market Shares Chattem 1% USA 5% Others 4% Top five EU 34% Johnson Matthey 25% Rest of EU 41% Latin America 16%

Noramco ROW 4% 18%

HSK 1% FCC Siegfried 2% Francopia 2% 13%

Source: NRM‐INCB Annual Report 2009 99 Strategic Focus – Generics

• Leadership in terms of volume Total Prescriptions Dispensed (USA) and growth %

100%

• Government healthcare reforms 90%

80% 46 • Insurance bias towards generic usage 50 54 70% 58 63 66 69 75

Share 60% 80

•Current market forecast to grow in ket 50% rr 11 10

excess of 10% p.a. Ma 40% 9 9 9 30% 9 8 20% 43 40 7 37 33 6 28 26 10% 23 • Circa 80% of current JM sales to generic 18 14 0% markets 2004 2005 2006 2007 2008 2009 2010 (e) 2015 (e) 2020 (e) • Ability to leverage R&D for first to file Brands Branded Generics Unbranded Generics opportunities

Source: IMS and JM estimates 100 Strategic Focus – Emerging Markets

•Current CAGR of 15% is forecast to continue Global Sales’ Trends at similar rates through to 2014

1,000 20.0

•Economic development will drive use of 900 18.0

pharmaceuticals 800 16.0 Growth

700 14.0

rate •Pain therapy is under utilised in emerging 600 12.0 (bars)

at markets. Growth forecast at least 15% n

const $b 500 10.0 CAGR US 400 8.0

(lin

Sales 300 6.0 e s) 200 4.0

100 2.0

0 0.0 2004 2009 2010 (f) 2014

Source: IMS Health Market Prognosis, JM estimates Global Sales Global Emerging Markets Emerging markets are China, India, Brazil, Russia, Mexico, Turkey, and South Korea 101 China – Significantly Underserved Narcotics Pain Market

• Only 22 narcotic drugs available in China Illustrative Morphine Per Capita Consumption Between vs 123 in the West China and Other Countries (grams / million population)

•Narcotic consumption has more than 70,000 66,000 tripled over the last five years, albeit from a low base 60,000 50,000

• Historical reticence to the use of opiates 40,000 37,000

is changing 30,000

20,000 • China pharmaceutical growth at 20% 10,000 1,000 0 China France USA • Hebei Aoxing JV established

102 Growth Opportunities

Global market share of Economic development Continued generic opiate APIs will drive pharma growth underpins new •Ageing population will drive growth in emerging API product pipeline steady growth in established markets •Several first to file generic markets • EtblihdEstablished Chinese JV with opportunities in place with •JM’s US market share Hebei Aoxing more being developed growing, capacity in place • Indian narcotic market •High volume, complex APIs with acquisition of Riverside gggrowing rapypidly but access and advanced intermediates plant still limited targeted as a result of addition of Riverside plant capacity

103 Conclusions

Drivers and strategy in place to dlideliver future CiiCritical mass in R&D thhhrough our Pharma growth Services business to support new products

Cost effective manufacturing and capacity in Key business strengths aligned with core place to meet future demand JM attributes

Sales growth over the next five to ten years forecast high single digits

104

Further Growth – R&D Focus

Robert MacLeod Group Finance Director Role of M&A

M&A remains an Will constantly review Focus is on organic element of our strategy and refine existing growth •Bolt‐on acquisitions portfolio as necessary •Scarcity of large acquisition likely – <£100m candidates •Leading market shares limit our opportunities •M&A will be used to accelerate organic growth strategy

107 Balance Sheet Structure

• Target net debt (inc. post tax pension deficit) / EBITDA: 1.5 to 2.0 times •Large working capital swings possible • As business grows, requires substantial working capital •In good times, high working capital exacerbated by higher pgm prices • Requires relatively conservative balance sheet to fund growth •In tougher times, balance sheet boosted by large working capital inflows • Will address balance sheet efficiency as appropriate

108 Further Growth –R&D Driven

• Organic growth prospects in existing businesses are very good •Strategy process has reconfirmed that R&D is a key component of our strategy evidenced by: • ECT market shares •Apico • Identified opportunity to further leverage group’s R&D expertise • Increasing focus upon investing in R&D •Overall R&D spend up from circa £100m to circa £135m p.a.

• Up to £5m pap.a. to target new opportunities in adjacent markets • New structure and investment in place

109 Research and Development

Barry Murrer Director, Technology Centre Overview

Research gives options for A key competence is our Key abilities strengthened ftfuture growth ability to arrange, contltrol by acquiitiisitions and anchor metals on a •E.g. Synetix on base metals nanometre scale • Intercat for refineries •Arises from our catalysis technologies businesses •X‐zymes for enzymic • Will be needed in future but… catalysis •It also gives us options to enter related areas

111 Key Competence Controlling Materials on a Nanometre Scale

A typical heterogeneous Control of particle size Control of particle shape catalyst Pd/C

2 nm Pd partic les 2 nm

50 nm

Small anchored particles, Control of particle size, tunes New shapes can take us highly dispersed, very active, activity and selectivity into new applications best use of expensive metals

112 Markets from Nanoscale Materials Chemistry

Catalysts broad, existing JM business Sensors Photovoltaics

JM competence

Displays Thermoelectrics Printed Batteries Electronics

Core competence allows us to grow in existing business but to develop new opportunities

113 Modelling and Synthesis

Expertise in modelling and synthesis helps us develop materials with better performance

Developing models for core Synthesis of Au/Pd and Pd/Au Alternating layers of Pt/Co shell nanoparticle activity core shell particles

2 nm 2 nm

2 nm

114 Research Projects Nearing Commercialisation

Biomass to flfuel and Syngas and Fisch er‐ Advanced flfuel cell chemicals Tropsch (FT) catalysts catalysis – enabling technology for clean and secure fuels

115 Global Drivers Impacting the Chemical Industry Pgm catalysts

Pgm Resource Hydrogen PifiiPurification Catalysts Recycling Low carbon refining efficiency catalysts products

FT catalysts Carbon capture and Fuel cells storage (CCS)

116 Biomass to Fuels Feedstocks for Next Generation Biofuels

Waste Cellulose Pyrolysis Oil Algae •E.g. wood processing, • Versatile option for biomass •High yield, non‐food energy agricultural residues processing source

JM Opportunity

Syngas purification and Purification Trigldlyceride conversion conversion Deoxygenation Isomerisation CkiCracking

117 Algae to Fuels Conversion of Triglycerides

Further develops JM technology developed in US Department of Energy Advanced Research DARPA project Projects Agency (ARPA‐E) funding awarded • Multifunctional catalysts developed for conversion of •Microbial conversion of hydrogen and carbon dioxide methyl esters and acids to hydrocarbon fuels into biodiesel •Hydrogenation (pgm) centre and zeolite •Three year, $6m project between Johnson Matthey, OPX‐BIO and National Renewable Energy Laboratory

O O R

O R Deoxygenation Linear alkanes Vegetable oil OR Isomerisation Fatty acid O Branched alkanes

JM patent WO 2009095711 118 Syngas and FT Catalysis

Clean and Secure Purification + FT CtlCatalysi s Catalysts + Process Fuels Technology + Diagnostics + Services Chemicals

Fuels

119 Syngas and FT Catalysis Large or Small Scale?

Opportunities are emerging New process technologies JM optimises the catalyst across all scales => new catalyst solutions form to suit the application •Market drivers are complex • Advanced reforming / and geographical, but real combustion products for distributed syngas •Tar reforming and sour shift catalysts for bioderived syngas • Highly active and selective Fischer‐Tropsch catalysts

120 FT Catalysis Timelines

DPT acquisition brings JMTC restarts FT reactor design and catalyst research process technology

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Synetix acquisition brings Projects with customers ‐ FT base metal expertise in FT catalysts for variety of scales, and scale up reactors, feedstocks (BTL, GTL, CTL) Expanded JM research project on pgm promoted cobalt

121 Gas to Liquids (GTL) Fischer‐Tropsch Catalyst R&D

Franz Fischer at work in 1918 Micro reactors used to simulate large scale FT operating conditions •High throughput catalyst screening with fully integrated analysis

122 FT Catalyst Progress

 FT Conditions: P = 20 bar, H2/CO = 2, Temperature = 210 C

100.0 Excellent selectivity Good activity and selectivity 90.0

80.0 Selectivity ++ 70.0 %C5

60.0

50.0 00.511.522.533.54 Relative Activity (to Internal Standard)

123 Advanced Fuel Cell Catalysts Catalyst Layer and Catalyst Structure

124 Cost‐Down and Market Evolution for DMFC Products

In Product 10 Development Next? 9 8 • Bicycles 7 High • Scooters

Cost 6 More current

per 5 durable MEA • Micro‐CHP er 4 Improved catalyst ww catalyst Po 3 Metal •Laptops 2 thrifting 2005 1 • Tablet PCs 0 Time

Leisure Fork lifts Chargers Military Hand‐held

125 126 Conclusions

Many opportuniiities in adjacent markets JM attributes provide focus for R&D effort

Increase emphasis on commercialisation New structure in place and investment budgeted

New business in ten years, sales target circa £200m p.a.

127 128128 Summary and Conclusions

Neil Carson Chief Executive Global Drivers Impacting the Chemical Industry Pgm catalysts

Pgm Resource Hydrogen PifiiPurification Catalysts Recycling Low carbon refining efficiency catalysts products

Carbon capture and Fuel cells storage JM attributes deliver superior growth (CCS)

130 Our Strategy in Summary

Key elements unchanged: Increased emphasis on:

Continued focus on leading edge Developing new opportunities underpinned catalysis by core chemistry

Maintain differentiation through JM attributes provide focus for investment technology

Strong position in pgms remains an Manufacturing excellence Pt intrinsic part of group

Primary focus is organic growth People and culture

131 Conclusions

We believe that the strategy is right

Group well positioned for growth in next Group well positioned for future growth in five years five years + • Strong positions in core markets • Global drivers show good fit for JM technology •Group anticipated to grow at double digit rates •Strategy in place to monitor changing with ROIC >20% landscape • BiBusiness didrivers firm ly in place • CitCapacity to itinvest to maxiiimise bbfitenefit of opportunities • Continued investment in infrastructure and R&D •Proven R&D approach to deliver commercial success

132 133 Glossary

ADHD Attention deficit and hyperactivity disorder CTL Coal to liquids API Active pharmaceutical ingredient DARPA Defense Advanced Research Projects Agency Apico Johnson Matthey’s new methanol synthesis DME Dimethyl ether catalyst DMFC Direct methanol fuel cell ARPA‐E Advanced Research Projects Agency ‐ Energy DOC Diesel oxidation catalyst Au GldGold DPF Diesel particulate filter BEV Battery electric vehicle DPT Davy Process Technology BRIC Brazil, Russia, India, China e+TM Ethylene scavenger that postpones fresh produce BTL Biomass to liquids ripening CCarbon EBITDA Earnings before interest, tax, depreciation and CAGR Compound annual growth rate amortisation CCRT® Coated continuously regenerating trap ECT Emission Control Technologies CCS Carbon capture and storage EPS Earnings per share CHP Combined heat and power EU European Union Co Cobalt FCEV Fuel cell electric vehicle CO Carbon monoxide FT Fischer‐Tropsch GDL Gas diffusion layer CO2 CbCarbon dioxid e CRT® Continuously regenerating trap GHG Greenhouse gas

134 Glossary

GTL Gas to liquids PBT Profit before tax

H2 Hydrogen Pd Palladium HC Hydrocarbon Pgm Platinum group metal Hg Mercury PHEV Plug in hybrid electric vehicle IC Internal combustion PM Particulate matter ICE Internal combustion engine Pms Precious metals INCB International Narcotics Control Board Pt Platinum ISO 14001 Series of standards specifying requirements of R&D Research and development an environmental management system ROIC Return on invested capital JM Johnson Matthey ROW Rest of the world JMTC Johnson Matthey Technology Centre RSA Republic of South Africa JV Joint venture SCR Selective catalytic reduction MEA Membrane electrode assembly SCRT® Selective catalytic reduction + CRT® MW MegaWatt SNG Substitute natural gas N2ONitrous oxide SOx Oxides of sulphur NOx Nitrogen oxides Syngas A mixture of hydrogen and carbon oxides OEM OiiOrigina l equipment manufacturer WHO World Health Organization

135 136