Tate & Lyle Plc · LSE:TATE
Tate & Lyle — FY2022 Earnings Presentation
34 slides from Tate & Lyle's earnings presentation, Jun 9, 2022
Slide 1: Tate & Lyle's Results for the Year Ended 31 March 2022
TATE & LYLE’S RESULTS FOR THE YEAR ENDED 31 MARCH 2022 Nick Hampton, Chief Executive Dawn Allen, Chief Financial Officer
Slide 2: Cautionary Statement
Year ended 31 March 2022 Cautionary Statement This presentation for the Full Year Results for the year ended 31 March 2022 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and forecasts involv
Slide 3: Agenda
Year ended 31 March 2022 Agenda Key Financial Looking Strategy Summary Highlights Results Ahead Update and Q&A 3
Slide 4: Major strategic milestone passed
Year ended 31 March 2022 Major strategic milestone passed Two strong companies well-positioned to realise their potential New Tate & Lyle Primient Focused on higher growth markets KPS1 with operational and Board control Creating value for shareholders • US$1.4 billion gross cash proceeds • Ongoing c
Slide 5: More ambitious purpose: Transforming Lives through the Science of Food
New Tate & Lyle More ambitious purpose Transforming Lives through the Science of Food Supporting Healthy Living Building Thriving Communities Caring for our Planet 5
Slide 6: New Tate & Lyle: Focused on growth
New Tate & Lyle Focused business New Tate & Lyle: • Purpose-led, science-driven, customer-obsessed business Focused on growth • Global leader in sweetening, mouthfeel and fortification • Solutions meet consumer demand for healthier food and drink • Established track record of innovation and scientif
Slide 7: New Tate & Lyle: Positive growth momentum in 2022 financial year
Year ended 31 March 2022 Key headlines New Tate & Lyle: • Double-digit revenue and profit growth1 Positive growth momentum in • Strong innovation acceleration 2022 financial year • Effective management of cost inflation • Investment in long-term growth • Continued progress on purpose targets 1 Growt
Slide 8: Financial highlights: Strong financial results
Year ended 31 March 2022 Financial highlights Continuing operations1 New Tate & Lyle: Revenue Revenue Adjusted Adjusted profit before tax Adjusted Adjusted diluted EPS profit before tax diluted EPS Strong financial results +18% +14% +4% Total operations1 Adjusted profit before tax Adjusted diluted E
Slide 9: Double-digit revenue growth across all regions
Year ended 31 March 2022 Financial highlights New Tate & Lyle: 25% Double-digit revenue growth 19% 19% 18% 16% across all regions 13% FY22 vs FY211 North America Asia, Middle East, Europe Food & Beverage Sucralose Continuing Africa and Latin Solutions operations America 2Yr CAGR 7% 11% 8% 9% 1% 7% F
Slide 10: Living our purpose: Good progress against 2025 targets
Living our purpose Good progress against 2025 targets Progress in two years ended 31 March 2022 − total operations unless stated otherwise Improving nutrition Preventing hunger Equity, diversity and inclusion 4.0m 2.9m 42% Tonnes of sugar removed from diets by our Meals donated to local food banks/p
Slide 11: Living our purpose: Caring for our Planet
Living our purpose Caring for our Planet Progress over two years from 2019 baseline unless stated otherwise Scope 1 and 2 GHG emissions Scope 3 GHG emissions Sustainable corn Absolute reduction Absolute reduction Acres supported1 12% 4% 1% 5% 1.4m Total operations Continuing operations Total operati
Slide 12: Strategic progress: Building strong platform for future growth
Year ended 31 March 2022 Strategic progress New Tate & Lyle: • Positive top-line momentum Building strong • New Products accelerating to 14%1 of FBS revenue platform for future growth • Acquisitions strengthen key platforms: − Quantum: Leading dietary fibre business in China − Nutriati: Chickpea pro
Slide 13: Financial highlights: Continuing operations underpins performance
Year ended 31 March 2022 Financial highlights Continuing operations Continuing Adjusted Adjusted free operations Revenue profit before tax cash flow underpins performance +18% +14% £72m Discontinued operations Total operations2 Adjusted Adjusted Return on capital Profit after tax 1 diluted EPS emplo
Slide 14: Food & Beverage Solutions segment – Continuing operations
Year ended 31 March 2022 Food & Beverage Solutions segment – Continuing operations STRONG TOP-LINE GROWTH Volume Revenue1 • Revenue1 +19% (£1,212m) benefiting from volume growth, strong mix and pricing through of inflation ‒ +16% North America ‒ +25% Asia, Middle East, Africa and Latin America +5% +
Slide 15: Sucralose segment – Continuing operations
Year ended 31 March 2022 Sucralose segment – Continuing operations HIGHER DEMAND IN BEVERAGES Volume Revenue1 • Volume +15% higher ‒ Recovery in out-of-home consumption, particularly in beverages +15% +13% ‒ Benefit of production optimisation • Revenue1 increased by +13% to £163m impacted Adjusted o
Slide 16: Adjusted profit before tax – Continuing operations
Year ended 31 March 2022 Adjusted profit before tax – Continuing operations £9m In-line £22m In-line £(11)m £154m £(9)m £145m £134m +14% FY21 Food & Sucralose Central costs Primary Products Interest FY22 FX FY22 Adj PBT Beverage Europe Adj PBT Adj PBT Solutions Constant Currency See descriptions of
Slide 17: Inflation – Continuing operations
Year ended 31 March 2022 Inflation – Continuing operations Effectively managed cost inflation • Broad-based inflation of £100m during the year £100m inflation offset • Pricing actions: Pricing − 2022 calendar year contracts renewed with aim of at least maintaining absolute unit margins Productivity
Slide 18: Taxation and Exceptional items – Continuing operations
Year ended 31 March 2022 Taxation and Exceptional items – Continuing operations Taxation Exceptional items Adjusted effective tax rate 7.2ppts higher Pre-tax exceptional charges of £(93)m • Adjusted effective tax rate of 19.3% • £79m costs for separation and disposal of Primient • £13m impairments f
Slide 19: Disposed Primary Products business (Primient) – Discontinued operations
Year ended 31 March 2022 Disposed Primary Products business (Primient) – Discontinued operations CHALLENGING YEAR Volume Adjusted operating profit1 • Adjusted operating profit1 (16)% lower at £142m Total • Sweeteners and Starches adjusted operating profit1 (42)% lower ‒ Increased operational costs f
Slide 20: Productivity programme – Total operations
Year ended 31 March 2022 Productivity programme – Total operations Target exceeded two years ahead of schedule • Six-year programme to deliver US$150m of benefits by March 2024 • US$34m (£25m) benefits in the 2022 financial year − US$26m from projects in operations − US$8m from SG&A • US$158m total
Slide 21: Adjusted free cash flow
Year ended 31 March 2022 Adjusted free cash flow Timing of Primient disposal completion impacts cash flow • Total operations Continuing operations ‒ Adjusted free cash flow of £16m, £(234)m lower £(60)m £153m • Continuing operations ‒ Adjusted free cash flow at £72m (£81m lower) ‒ £41m impact from b
Slide 22: Balance sheet – Other items
Year ended 31 March 2022 Balance sheet – Other items Capital expenditure1 Net debt and liquidity Net debt to EDITDA ratio Dividends £75m (£626)m 1.3 times c.£500m 2022 financial year Net debt at 31 March 2022 31 March 2022 Special dividend paid on 16 May 2022 £90m − £100m ~£1bn <1.0 times 12.8p 2023
Slide 23: Looking ahead
Year ended 31 March 2022 Looking ahead • Entered 2023 financial year with: Outlook ‒ Strong top-line momentum ‒ Innovation gathering pace ‒ Productivity programme continuing to deliver benefits For year ended 31 March 2023 • Customer demand remains strong We expect further progress with adjusted pro
Slide 24: New Tate & Lyle well-positioned to serve food and beverage consumer trends
Year ended 31 March 2022 New Tate & Lyle well-positioned to serve food and beverage consumer trends Being in control Conscious wellbeing Joy seeking Value and convenience Consumer empowerment and choice Food as a foundation for good health Food creating memorable experiences Busy lifestyles and cost
Slide 25: Strategic framework driving growth
New Tate & Lyle Strategic framework driving growth Accelerate Innovation Portfolio Expansion • Increase investment in R&D • Build on existing strong platforms • Expand open innovation • Expand into new platforms • Leverage deep scientific knowledge • Deliver value enhancing M&A Customer Integrated S
Slide 26: Strong New Products acceleration
Year ended 31 March 2022 Strong New Products acceleration New Products revenue as a percentage New Products revenue of Food & Beverage Solutions revenue 5-year target 20% +24% CAGR £173m Ex-Primary 16% Products Europe 14% 14% £133m 12% £113m FY20 FY21 FY22 FY20 FY21 FY22 FY27 FY means financial year
Slide 27: Growth aligned to consumer demand for healthier food
Year ended 31 March 2022 Growth aligned to consumer demand for healthier food Strong momentum across all regions being driven by consumer demand for healthier products North Latin Europe Asia Global America America SUGAR REDUCTION Food & Beverage Solutions revenue growth for ingredients +35% +49% +2
Slide 28: Stepping up investment in infrastructure, capabilities and technology
Year ended 31 March 2022 Stepping up investment in infrastructure, capabilities and technology Capabilities and Chickpea infrastructure Protein • New Customer Innovation and Collaboration Centres • Acquired Nutriati, ingredient technology business in Dubai and Chile developing and producing chickpea
Slide 29: Strengthening our fortification platform
Year ended 31 March 2022 Strengthening our fortification platform Acquisition of Quantum Hi-Tech • Leading prebiotic fibre business in China • FOS/GOS represents 25% of global fibres market1: − Estimated growth2 ~6% p.a. globally; ~10% p.a. in China • Adds new, complementary products to fortificatio
Slide 30: Integrated solutions for customers
Year ended 31 March 2022 Integrated solutions for customers New team translating ingredient technology into category Building solutions-based capabilities and applications to provide customer solutions at a local level new ways of working with customers New Global Applications team Technical service
Slide 31: New Tate & Lyle – strong platform for future growth
Four years ending 31 March 2022 New Tate & Lyle – strong platform for future growth Food & Beverage Solutions Innovation Revenue1 Profit1,2 New Products3 10% 8% CAGR 21% CAGR CAGR £173m £1111m £190m £177m £970m £133m £942m £889m £162m £113m £143m £97m 2019 2020 2021 2022 2019 2020 2021 2022 2019 202
Slide 32: Performance underpins 5-Year ambition
New Tate & Lyle Performance underpins 5-Year ambition Ambition for 5 years to 31 March 2027 Organic revenue Operating margin R&D spend as % of FBS revenue At least Mid-single digit 50 to 100 bps percent growth per annum >4% expansion per annum on average per annum Organic return on Further accelerat
Slide 33: Conclusion
Year ended 31 March 2022 Conclusion • Major strategic milestone passed to reposition Tate & Lyle as growth-focused business • Good financial performance in a year of significant change • Managing inflation and supply chain challenges through pricing, productivity and cost discipline • Purpose and en
Slide 34: Questions
QUESTIONS TATESLYLE *