Tate & Lyle Plc · LSE:TATE
Tate & Lyle — FY2016 Earnings Presentation
29 slides from Tate & Lyle's earnings presentation, May 26, 2016
Slide 1: Results for the Year Ended 31 March 2016
RESULTS FOR THE YEAR ENDED 31 MARCH 2016
Slide 2: Cautionary Statement
Cautionary Statement This presentation for the Full Year Results for the year ended 31 March 2016 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and forecasts involve risk and uncertainty be
Slide 3: Agenda
Agenda Overview Javed Ahmed Financial Review Nick Hampton Business Update and Outlook Javed Ahmed © Tate & Lyle 2016 3
Slide 4: Overview
Overview Solid Financial Performance Strong Project Delivery • Group profit in line with expectations • SPLENDA® Sucralose restructured • Margin expansion in both divisions • Eaststarch joint venture re-aligned • Good momentum on New Products • Additional SFI capacity on stream Further reshaped, str
Slide 5: Financial Review
FINANCIAL REVIEW Nick Hampton 5
Slide 6: Headline Financial Results
Headline Financial Results Year ended 31 March 2016 Continuing operations1 Restated Constant Currency 2016 £m, unless stated 2015 Change4 Sales 2,355 2,341 (3%) Adjusted operating profit2 - SFI up 5% in constant currency 188 184 (4%) - BI down 3% in constant currency Adjusted profit before tax3 193
Slide 7: Financial Results Summary – Improved Performance
Financial Results Summary – Improved Performance Year ended 31 March 2016 Adjusted Profit before Tax1 – 2016 vs 2015 2015 £184m Speciality Food Ingredients +£14m • Mix management; improved SPLENDA® Sucralose performance Bulk Ingredients +£1m • Core business ahead £30m; Commodities lower by £29m Cent
Slide 8: Solid progress in support of 2020 Ambition
Solid progress in support of 2020 Ambition Delivered Improved Strengthened Major Change Initiatives Executional Disciplines Balance Sheet • SPLENDA® Sucralose restructured • Enhanced global supply and demand • Strong cash management planning processes • European business re-aligned • Cash inflow fro
Slide 9: Speciality Food Ingredients (1)
Speciality Food Ingredients (1) Year ended 31 March 2016 Continuing operations1 Sales change Volume change 2016 Sales £m, unless stated (Constant currency) North America (2%) 327 (2%) Asia Pacific and Latin America (4%) 119 10% Europe, Middle East and Africa 12% 109 13% Total excluding SPLENDA® Sucr
Slide 10: Speciality Food Ingredients (2)
Speciality Food Ingredients (2) Year ended 31 March 2016 2016 % change (Constant currency)2 Continuing operations1 Volume Sales Adjusted Operating Sales Adjusted Operating £m, unless stated change Profit Profit Total excluding SPLENDA® Sucralose 0% 555 105 3% 7% and Food Systems Food Systems 12% 186
Slide 11: Bulk Ingredients
Bulk Ingredients Year ended 31 March 2016 2016 % change (Constant currency)2 Continuing operations1 Volume Sales Adjusted Sales Adjusted £m, unless stated change Operating Profit Operating Profit North American Sweeteners 1% North American Industrial Starches (3%) Core Bulk Ingredients 93 41% Commod
Slide 12: Financial Results – Continuing operations
Financial Results – Continuing operations Year ended 31 March 2016 Continuing operations1 2016 2015 Change5 £m, unless stated (£1 = US$1.51) (£1 = US$1.61) Adjusted operating profit2 - Speciality Food Ingredients & Bulk Ingredients 234 219 2% - Central (46) (35) (31%) Adjusted operating profit2 188
Slide 13: 2016 Exceptional Items – Continuing operations
2016 Exceptional Items – Continuing operations £m SPLENDA® Sucralose and European business restructuring costs (net) (£48m) Re-measurement gain: Slovakia acquisition £5m US litigation costs (£15m) Asset impairment reversal £3m Tate & Lyle Ventures – investment disposal (net) £7m SPLENDA® Sucralose –
Slide 14: Net debt and cash flows
Net debt1 and cash flows Year ended 31 March 2016 £m (130) 254 265 (33) 6 (198) (29) (555) 24 (38) (434) £53m Free cash flow from Continuing Operations before Exceptional cash flows Net Debt Core Working Retirement Capex Dividend Eaststarch Discontinued Exceptional FX and Net Debt March 2015 Operati
Slide 15: Financial Review ‒ Summary
Financial Review ‒ Summary • Solid financial performance in line with expectations • Improved quality of earnings • Strong cash management • Robust balance sheet • Strengthened executional disciplines © Tate & Lyle 2016 15
Slide 16: Business Update and Outlook
BUSINESS UPDATE AND OUTLOOK Javed Ahmed 16
Slide 17: Successful execution of major initiatives strengthens business
Successful execution of major initiatives strengthens business • SPLENDA® Sucralose business repositioned – Value-based strategy – Reset cost base • Business in Europe realigned; now focused on Speciality Food Ingredients – Reduced exposure to more regulated commodity markets – Acquired more special
Slide 18: Progress against 2020 Ambition
Progress against 2020 Ambition 70% of Group profits from 30% of SFI sales from Asia $200m contribution Speciality Food Ingredients1 Pacific and Latin America2 from New Products3 +50 bps +60 bps +34% to 60% to 21% to US$86m • Margin progression • Double digit growth • Volume growth across in core bus
Slide 19: Bulk Ingredients
Bulk Ingredients US regular carbonated soft drinks • Strong performance from core business ‒ Sales volume change (%) (Year to 31 March)1 bulk sweeteners and industrial starches 2014 2015 2016 -0.1 -0.5 • Very challenging Commodities environment -1.8 – Significant deterioration in US ethanol margins
Slide 20: Speciality Food Ingredients
Speciality Food Ingredients North America Europe, Middle East and Africa • Margin focus in fiscal 2016 • Good growth outside Western Europe • New capacity available • Restructuring region to reset cost base • Focus on higher growth sub-categories Asia Pacific • Strong growth in fibres and starches •
Slide 21: New Products continuing good momentum
New Products continuing good momentum Growth from New Products1 Increasing customer collaboration Sales FY12 FY13 FY14 FY15 FY16 ($m) 86 66% 69 Increase in customer projects per month 48% generated from visits to Chicago CAGR Innovation Center since October 2014 48 37 18 27% International visitors (
Slide 22: Summary
Summary • Solid financial performance • Strong execution of structural change initiatives • Early progress on 2020 Ambition • Reshaped, stronger business • Key executional priorities unchanged © Tate & Lyle 2016 22
Slide 23: Outlook for the year ending 31 March 2017
Outlook for the year ending 31 March 2017 Speciality Food Ingredients Bulk Ingredients • Core growth supported by capacity • Margin expansion on core business expansion ‒ depreciation increases • No near term change expected in market conditions in US ethanol • Sucralose: reduced volume/pricing offs
Slide 24: Questions
QUESTIONS 24
Slide 25: Appendices
APPENDICES TATE LYLE
Slide 26: Analysis of Adjusted Profit before Tax
Analysis of Adjusted Profit before Tax Year ended 31 March 2016 Continuing operations1 2016 2015 £m Adjusted profit before tax 193 184 Adjusted for: - SPLENDA® Sucralose & European business re-alignment costs (net) (48) (118) - Re-measurement gain: Slovakia acquisition 5 - - Asset impairment reversa
Slide 27: Discontinued Operations
Discontinued Operations Year ended 31 March 2016 £m 2016 2015 Profit/(loss) for the year - Eaststarch and Morocco 62 26 - Sugars and EU Starch (20) - Profit for the year 42 26 Eaststarch and Morocco • Eaststarch exceptional profit on disposal of £68m • Income tax charge £5m Sugars and EU Starch • £2
Slide 28: Reconciliation from Equity to Proportionate basis of consolidation for Joint Ventures
Adjusted performance: Reconciliation from Equity to Proportionate basis of consolidation for Joint Ventures Year ended 31 March 2016 Year ended 31 March 2015 Adjusted Adjusted Reported Equity Adjusted Reported Equity Adjusted Continuing operations Accounting Proportionate Accounting Proportionate ba
Slide 29: Reporting calendar for 2017 financial year
Reporting calendar for 2017 financial year Q1 trading statement 21 July 2016 Interim statement 3 November 2016 Q3 trading statement 9 February 2017 Full year results 25 May 2017 We will no longer make pre-close statements in early October and April ahead of our Interim and Full Year results © Tate &