Johnson Matthey reclassifies Catalyst Technologies after Honeywell sale agreement
Johnson Matthey has confirmed that Catalyst Technologies will be treated as a discontinued operation for the 2025/26 financial year, reflecting the previously announced sale of the business to Honeywell International Inc. The company says regulatory approvals and the carve-out are progressing, with completion expected by the first half of calendar year 2026.
Practically, this means the group’s headline numbers – sales and underlying operating profit – will exclude Catalyst Technologies. To help investors compare against prior periods, JM has provided a pro-forma breakdown for the year ended 31 March 2025. That context matters for tracking performance on a like-for-like basis.
Pre-close trading update: strong H1 underlying operating profit
For the half year to 30 September 2025, JM expects a strong performance in group underlying operating profit, excluding Catalyst Technologies and the now-divested Value Businesses. Management credits ongoing efficiency improvements across the group and strong trading in PGM Services.
Momentum appears solid, and the emphasis on execution – cost and efficiency – suggests recent self-help initiatives are feeding through.
Efficiency gains and PGM Services in the driving seat
PGM Services (the division handling platinum group metals) is flagged as a key contributor. That aligns with last year’s pro-forma mix, where PGM Services delivered a meaningful share of profit. Clean Air also remains a substantial earnings anchor on the pro-forma view.
Free cash flow: still an outflow, but improving sharply
Free cash flow for the first half will still be an outflow, but JM expects a significant year-on-year improvement versus the £169 million outflow in 1H 2024/25. As working capital measures bed in, the company expects a material step up in free cash flow for the full year compared with the prior year’s £59 million inflow.
That is encouraging, but the H1 outflow is a reminder that the turnaround in cash generation is a journey, not a switch. Working capital execution will be the watch-for into H2.
Full-year outlook nudged to the top end
For the full year (excluding Catalyst Technologies and Value Businesses), JM now guides to the higher end of its initial outlook for mid single digit growth in underlying operating profit (on a constant precious metal prices and constant currency basis). Performance will remain second-half weighted.
In short: better-than-expected H1, confidence intact for H2, and guidance tightening towards the top of the previous range.
Precious metals and FX now a small net tailwind
Assuming precious metal prices and FX rates stay at current levels (as at 31 August 2025), JM now expects around a £10 million net benefit to full-year operating performance compared with last year. This is a material swing from the £5 million net adverse impact guided in May 2025.
- Metals: If current precious metal prices persist, there is a c.£15 million full-year benefit versus last year.
- FX: At £:$ 1.35, £:€ 1.16, £:RMB 9.62, £:INR 119, translational FX is expected to reduce underlying operating profit by c.£5 million.
- Sensitivities: A US$100 per troy ounce change in average annual prices impacts PGM Services underlying operating profit by approximately £1 million (platinum), £1 million (palladium) and £0.5 million (rhodium), assuming no FX movement.
Net-net, metals are doing the heavy lifting, partially offset by a modest FX drag. If spot holds, the external backdrop is a help, not a hindrance.
Catalyst Technologies: H1 weaker, pipeline still healthy
Catalyst Technologies, now treated as a discontinued operation, is expected to be “materially down” year-on-year in the first half. The drivers are weaker catalyst demand and the timing of licensing wins in key end markets.
Importantly, JM highlights additional large-scale project wins in the half and a healthy pipeline in sustainable technologies. That underpins the strategic rationale for the buyer, even if near-term profitability is softer.
What the 2024/25 pro-forma baseline looks like
JM has provided a clear baseline for analysing performance without Catalyst Technologies and the divested Value Businesses (Battery Materials, Battery Systems and Medical Device Components). Note that “sales excluding precious metal” is revenue excluding the cost of precious metals to customers and the precious metal content of products sold.
Sales excluding precious metal (£ million, FY 2024/25)
| Business | FY |
|---|---|
| Clean Air | 2,319 |
| PGM Services | 481 |
| Hydrogen Technologies | 60 |
| Eliminations | (66) |
| Total (pro-forma) | 2,794 |
| Catalyst Technologies (discontinued) | 652 |
| Eliminations (discontinued) | (13) |
| Value Businesses (divested) | 37 |
| Total (as reported) | 3,470 |
Underlying operating profit (£ million, FY 2024/25)
| Business | FY |
|---|---|
| Clean Air | 273 |
| PGM Services | 151 |
| Hydrogen Technologies | (39) |
| Corporate | (87) |
| Total underlying operating profit (pro-forma) | 298 |
| Catalyst Technologies (discontinued) | 90 |
| Value Businesses (divested) | 1 |
| Total underlying operating profit (as reported) | 389 |
Why this matters for investors
- Positive: H1 underlying operating profit is strong, with efficiency gains and PGM Services performing well. Guidance now points to the higher end of mid single digit growth for the year.
- Positive: External factors have shifted in JM’s favour. Metals and FX now imply a c.£10 million net benefit to full-year operating performance versus last year.
- Balanced: Free cash flow is still an H1 outflow, but the year-on-year improvement and a guided step up for the full year are reassuring. Execution on working capital remains key.
- Watch-for: H2 weighting introduces delivery risk. Hydrogen Technologies was loss-making last year on the pro-forma view, so the path to scale and profitability there remains important.
- Mixed: Catalyst Technologies’ H1 profit is materially down, although the order pipeline looks robust. It will be reported separately as the sale progresses towards completion by H1 2026.
Key dates and what’s next
JM will report half year results on 20 November 2025. Expect a fresh look at free cash flow progress, the cadence into a second-half weighted year, and any updates on metals/FX sensitivities and the Catalyst Technologies disposal timeline.
