Johnson Matthey Plc (JMAT.L): BCG Matrix [Dec-2025 Updated]

Johnson Matthey's portfolio now pivots around high-value Stars-notably a thriving Catalyst Technologies sale, growing hydrogen mobility and licensing opportunities-backed by steady Cash Cows in Clean Air, PGM Services and Precious Metals that fund returns and selective reinvestment; management is aggressively reallocating capital via divestments (medical, battery, smaller value businesses), targeted investment (refinery, hydrogen testing) and sharp CAPEX discipline in green electrolysers, leaving a couple of Question Marks (electrolysers, CCS) that will test the group's ability to convert tech leadership into scalable profit-read on to see how these choices shape JM's growth and shareholder returns.

Johnson Matthey Plc (JMAT.L) - BCG Matrix Analysis: Stars

Stars

Catalyst Technologies division demonstrates classic Star attributes: high market growth, strong relative market share and premium valuation despite its pending divestment to Honeywell for £1.8bn. For the 2024/2025 fiscal year the division delivered a 24% increase in underlying operating profit to £92m, representing a 13.8% operating margin. The business is supported by a pipeline of over 150 sustainable technology projects and has secured contracts exceeding £350m in booked sales over the next five years. Although classified as a discontinued operation by late 2025, its licensing strength and first-fill catalysts market leadership sustain a dominant competitive position. The announced transaction multiple of 13.3x EBITDA reflects market willingness to pay a premium for growth and leadership.

• Underlying operating profit (FY24/25): £92m
• YoY underlying operating profit growth: 24%
• Operating margin: 13.8%
• Pipeline projects: >150 sustainable technology projects
• Secured multi-year sales: >£350m over 5 years
• Transaction value (Honeywell): £1.8bn
• Transaction multiple: 13.3x EBITDA

Hydrogen Technologies (mobility solutions) occupies a high-growth niche addressing fuel cell and hydrogen internal combustion engine markets via catalyst-coated membranes and related components. Revenue for this unit is currently modest at roughly £71m, but technological leadership, a significant partnership with Bosch for mobility fuel cell components, and targeted capital investments position it as a Star. JM opened a dedicated 600 kW hydrogen engine testing facility in Sweden in late 2025 to accelerate development for heavy-duty vehicles. The segment is projected to reach operating profit breakeven by end-FY2025/26, supported by scale-up of component supply and the broader hydrogen decarbonization market, which is estimated to grow at a CAGR >8% through 2031.

• Current revenues: ~£71m
• Projected operating profit breakeven: end FY2025/26
• Strategic partner: Bosch (long-term mobility fuel cell components)
• Infrastructure investment: 600 kW hydrogen engine test facility (Sweden, late 2025)
• Market CAGR (hydrogen-based decarbonization): >8% to 2031

Sustainable Fuels and Chemicals licensing is a Star-oriented growth sub-segment that leverages Johnson Matthey's proprietary LCH technology for blue hydrogen and sustainable aviation fuel (SAF) production. The unit benefits from structural demand driven by the global net-zero transition - over 90% of global GDP is now covered by some form of net-zero commitment - and a projected 8.6% CAGR in the activated base metal catalysts market between 2025 and 2035. By prioritising licensing and technology provision over capital-intensive manufacturing, the sub-segment preserves high margins and strong capital efficiency, maintaining a defensible position in high-value process licensing and catalyst royalties.

• Technology: LCH for blue hydrogen and SAF
• Global GDP under net-zero commitments: >90%
• Activated base metal catalysts market CAGR (2025-2035): 8.6%
• Business model: high-margin licensing vs. capital-intensive manufacturing

Key Star metrics summary:

Johnson Matthey Plc (JMAT.L) - BCG Matrix Analysis: Cash Cows

Clean Air remains the group's primary profit engine, holding a dominant share in the global autocatalyst market. For the 2024/2025 fiscal year this segment generated £273 million in underlying operating profit. Despite a projected 5% decline in global light-duty vehicle (LDV) production, the division delivered a 12.4% underlying operating margin in H1 2025/2026 and is on track to achieve a full-year margin target of 14-15%. Capital expenditure is strictly controlled at under £40 million per year, underscoring the segment's role as a cash generator rather than a growth-intensive unit. Sales visibility is high, with over 90% of sales through 2027/2028 already secured, providing predictable and stable cash flows.

Key Clean Air metrics:

PGM Services provides recycling, refining and metal management with a high relative market share in the global platinum group metals industry. The business delivered a materially stronger second half in 2025, with operating profit rising from £51 million in H1 to £98 million in H2. JM is investing approximately £100 million in a new world-class refinery, scheduled to be operational by 2027, to improve processing efficiency and working capital recovery. The global PGM market is valued in the multi‑billion dollar range and is forecast to grow at a steady 4.48% CAGR through 2033. Tight integration with Clean Air supplies recycled metals and creates high barriers to entry due to technical know-how, logistics and customer contracts.

Key PGM Services metrics:

Precious Metals Management (PMM) leverages Johnson Matthey's ~200‑year history to provide liquidity, hedging, refining and market insight to automotive and industrial clients. PMM operates in a mature, large global market where JM is among the largest traders and refiners of platinum, palladium and rhodium. The unit benefits from market volatility: a $100/oz move in platinum price impacts annual underlying operating profit by approximately £1 million. PMM requires minimal growth capital, enabling the majority of its earnings to be returned to shareholders or redeployed into higher‑return units. As of December 2025 the group committed to returning at least £130 million to shareholders, largely funded by the steady returns of this division.

Key PMM metrics:

Common cash cow characteristics across these segments:

• High relative market share in core markets (autocatalysts, PGM recycling, refining/trading).
• Stable, predictable cash generation with controlled capex requirements.
• Long‑dated contracts and sales visibility (Clean Air: >90% through 2027/28).
• High operational margins and strong H2 earnings seasonality (PGM Services example).
• Ability to fund shareholder returns and strategic investments (PMM and Clean Air cash flows).

Johnson Matthey Plc (JMAT.L) - BCG Matrix Analysis: Question Marks

Question Marks - Green Hydrogen Electrolyser components and Carbon Capture and Storage (CCS) represent business units with exposure to high-growth markets but currently modest relative market share and uncertain paths to scale within Johnson Matthey.

Green Hydrogen Electrolyser components: JM faces a high-growth electrolyser market while having reduced its financial commitment dramatically. In early 2025 Johnson Matthey cut green hydrogen capital expenditure by 83% to a maintenance envelope of no more than £5.0m per year, after half‑year sales in the segment fell 46% to £20.0m. The commercial environment is characterized by rapid total addressable market (TAM) expansion-industry estimates suggest global electrolyser demand could grow at an annual rate in the mid‑20s to mid‑30s percent range over the remainder of the decade-but JM has shifted from expansionary CAPEX to a de‑risked, low‑investment operating model. The core strategic question for this Question Mark is whether JM can convert technology and intellectual property into significant share without re‑deploying substantial capital.

Key metrics and strategic considerations for Green Hydrogen:

Carbon Capture and Storage (CCS): JM leverages catalyst expertise to address CO2 capture opportunities, including niche applications such as backup generators for data centres. This is a nascent revenue stream for the group: current commercial revenue contribution is low (single‑digit millions relative to group revenues) while the CCS TAM is expected to expand materially over the next decade as regulation tightens and corporate decarbonisation investments increase. Large incumbents in industrial gases and engineering services dominate established project delivery, so JM's route to scale depends on converting R&D and pilot demonstrations into multi‑megatonne CO2 capture contracts and modular solutions.

Key metrics and strategic considerations for CCS:

Operational and portfolio implications for both Question Marks:

• Investment posture: current low CAPEX stance constrains rapid market share gains for electrolysers; selective, de‑risked project funding preferred.
• Commercialisation focus: converting pilot R&D into repeatable, scalable contracts is critical for CCS and electrolyser components.
• Partnerships and alliances: strategic alliances with OEMs, EPC contractors, or offtakers could enable share capture without heavy balance sheet deployment.
• Financial impact: continued low revenue scale keeps margin contribution limited; successful conversion could drive material long‑term growth.

Johnson Matthey Plc (JMAT.L) - BCG Matrix Analysis: Dogs

Medical Device Components was identified as a low-growth, non-core business and was successfully divested in H1 2025. The disposal generated a profit on disposal of £482 million, contributing materially to the group's reported operating profit of £538 million for the period. The unit operated in a highly competitive and fragmented market that did not align with Johnson Matthey's core focus on PGM chemistry and sustainable technologies. The divestment formed a central part of the group's transformation program to exit businesses with insufficient returns on capital, and supported a reduction in net debt to £799 million as at March 2025.

Battery Materials was exited because it required extremely high capital investment to reach meaningful scale while the market was becoming increasingly commoditised. The business had consumed significant cash with no clear path to achieve the group's target return on invested capital, particularly in a market dominated by large-scale Asian manufacturers. JM sold the majority of these assets for approximately £50 million, recognising that its relative market share was too low to compete effectively. The exit avoided planned capital expenditure measured in the hundreds of millions of pounds that would otherwise have been required to reach commercial scale.

Value Businesses comprised a collection of small, non-core product lines across mature or declining end-markets. These operations typically generated low margins, low market share and limited growth prospects. The systematic divestment or closure of these units contributed a cumulative benefit of £200 million to the group's transformation outcomes between 2021 and late 2025, enabling concentration on higher-return activities.

• Proceeds and one-off benefits: £482m profit from Medical Device sale; ~£50m from Battery Materials disposals; £200m cumulative transformation benefit (2021-2025).
• Reported operating profit linkage: One-off gains helped report operating profit of £538m (period referenced to H1 2025 reporting).
• Leverage and liquidity: Net debt reduced to £799m by March 2025 following disposals and cash generation from divestments.
• Capital avoidance: Exit of Battery Materials avoided CAPEX in the range of hundreds of millions of pounds required for commercial scale.
• Strategic refocus: Divestments allowed reallocation of management attention and capital to Clean Air and PGM Services, supporting a target cash conversion rate of 80% for 2026/2027.

Removing these 'Dogs' has been integral to the group's transformation program, improving balance sheet metrics and freeing up cash and management bandwidth for core, higher-return operations. The financial impacts are quantifiable in one-off disposal gains, reduced net debt and avoided future capital commitments, while operationally enabling a sharper strategic focus on PGM chemistry, Clean Air technologies and high-return service lines.