Chemicals giant Johnson Matthey has confirmed that its current boss is stepping down, which tipped a share price dive of more than 19 per cent today.
The London-listed firm also announced that it will be exiting its battery materials business – despite noting the accelerating demand for such goods in its latest trading update.
Current lead Robert MacLeod is set to retire from the helm after nearly eight years, making way for incoming-boss Liam Condon, who will takeover the top position at the beginning of March next year.
The collision of news clearly has investors spooked, with shares sinking to 2,236p per share by market close.
“After nearly eight years as chief executive, the time is right for me to move on,” MacLeon said in a statement. “I am confident in our future growth prospects and the significant benefits our technologies will bring.”
Irish-born Condon, the head of Germany’s Bayer crop science unit, is set to inherit the lofty salary of £950,000, as well as the generous bonus scheme which could include a maximum of 180 per cent of the annual wage.
The incoming boss said: “Living within our planetary boundaries requires an acceleration of decarbonisation and Johnson Matthey has the technology and people to be at the forefront of this massive societal transition.
“I am really excited to join Johnson Matthey and work with our team on accelerating growth and value creation as we push forward towards a more sustainable future.”
Hargreaves Lansdown equity analyst Laura Hoy cautioned that Condon has his “work cut out” as the group “scrambles” to find a new direction as the world transitions towards more sustainable practices and tech.
The chemical giant stepping away from its battery materials business represents Johnson Matthey’s (JM) challenge in replacing earnings in its automotive catalysts which are set to dwindle in the medium-term, according to equity research firm Jefferies.
“The key issue is JM has an overweight EU diesel car catalyst franchise that is going to zero. With the company acknowledging low-returns in the division, we question the ability to realise much value from the £340mn net asset base,” Jefferies said.
Hoy agreed, adding that the move to sell off its eLNO business “was JMAT’s answer to the shift towards electric vehicles and away from combustion engines, for which it makes catalytic converters”.
JM concluded that the potential returns would not be enough to justify further investment, as it is “rapidly turning into a high volume, commoditised market”, the chemicals giant explained.
The market departure will see all segments of the battery materials business sold off, though how much this will be worth is not yet clear.
The chemicals giant added that it will turn its investment attention towards its hydrogen technologies, circularity and the decarbonisation of the chemicals value chain.
“These are attractive opportunities which we will now accelerate with greater focus and investment. In addition, in a world that increasingly needs solutions to address the challenges faced by climate change, we will continue to pursue opportunities across other areas that are closely aligned to our core capabilities,” JM said in a statement.