Tate & Lyle Plc · LSE:TATE
Tate & Lyle — FY2020 Earnings Presentation
34 slides from Tate & Lyle's earnings presentation, May 21, 2020
Slide 1: Results for Year Ended 31 March 2020
RESULTS FOR YEAR ENDED 31 March 2020
Slide 2: Overview
Year ended 31 March 2020 Overview • Year of strong performance − Food & Beverage Solutions delivered strong revenue and double-digit profit1 growth SHARPEN − Primary Products profits1 higher despite challenging market conditions − Priorities to ‘Sharpen, Accelerate, Simplify’ underpinning performanc
Slide 3: Financial delivery
Year ended 31 March 2020 Financial delivery Food & Beverage Solutions revenue +5%* Adjusted profit before tax +4%* Food & Beverage Solutions profit1 +10%* Adjusted diluted earnings per share +8%* Primary Products profit1 +3%* Adjusted free cash flow +£35m Final dividend unchanged; full-year dividend
Slide 4: Agenda
Nick Hampton, Chief Executive Imran Nawaz, Chief Financial Officer AGENDA Business Review Financial Results Covid-19 Questions 4
Slide 5: Living our Purpose: Improving Lives for Generations
Living our Purpose Improving Lives for Generations We believe we can successfully grow our business and have a positive impact on society Supporting healthy living Building thriving communities Caring for our planet We help people make healthier and We help build thriving communities We care for our
Slide 6: New commitments: Caring for our Planet
Living our Purpose New commitments Caring for our Planet • 30% absolute reduction in Scope 1 and 2 CO2e emissions by 2030 Air with an ambition to reach 20% absolute reduction by 2025 • 15% absolute reduction in Scope 3 CO2e emissions by 2030 Waste • Establish Science-Based Targets for Scope 1, 2 and
Slide 7: New commitments: Healthy Living and Thriving Communities
Living our Purpose New commitments Supporting Healthy Living Building Thriving Communities By 2025 By 2025 • We’ll have helped improve the lives of over 250,000 • We’ll achieve gender parity in leadership roles people by supporting programmes that promote healthier lifestyles and activities • We’ll
Slide 8: Strategy is delivering: Food & Beverage Solutions
Year ended 31 March 2020 Strategy is delivering Food & Beverage Solutions Strong growth Volume +1% Revenue +5%1 Profit +10%1 Sugar Reduction Clean Label Plant Power Fibres +16% +51% +23% +13% Increase in revenue for ingredients Increase in revenue for Increase in stevia revenue1 Increase in revenue1
Slide 9: Strategy is delivering: Primary Products
Year ended 31 March 2020 Strategy is delivering Primary Products Steady Earnings Volume (2)% Profit +3%1 Challenging market conditions Clear focus and actions • 2.0%2 decline in US regular carbonated • Operational efficiency soft drinks volume • Optimise product and customer mix • Lower exports to M
Slide 10: Three priorities underpinning performance
Year ended 31 March 2020 Three priorities underpinning performance Sharpen focus on customers • New and expanded labs in Sao Paulo and Singapore Customers calls on growth opportunities1 • New ways of collaborating such as fibre symposiums, health benefits workshops • Simplified organisation of custo
Slide 11: Summary
Year ended 31 March 2020 Summary • Strong financial performance • Excellent operational execution • Closer customer collaboration • Faster innovation, more agile • Purpose-led organisation 11
Slide 12: Agenda
Imran Nawaz, Chief Financial Officer AGENDA Business Review Financial Results Covid-19 Questions 12
Slide 13: Financial Highlights
Year ended 31 March 2020 Financial Highlights REVENUE ADJUSTED PROFIT BEFORE TAX STATUTORY PROFIT BEFORE TAX +2%* +4%* +23% £2.9bn £331m £296m ADJUSTED DILUTED EPS ADJUSTED FREE CASH FLOW FULL-YEAR DIVIDEND +8%* +£35m +0.7% 57.8p £247m 29.6p Adjusted results and a number of other terms and performan
Slide 14: Adjusted profit before tax
Year ended 31 March 2020 Adjusted profit before tax £11m £5m £14m In-line £(5)m £(3)m £309m £320m £331m FY19 Food & Sucralose Primary Products Central costs & Joint Ventures FY20 FX FY20 Adj PBT Beverage (incl. Commodities) Interest Adj PBT Adj PBT Solutions Constant Currency See descriptions of adj
Slide 15: Food & Beverage Solutions
Year ended 31 March 2020 Food & Beverage Solutions TOTAL VOLUME REVENUE STRONG GROWTH • +1% volume; North America +2% +1% +5%* • +5%* revenue growth £942m ‒ North America +6%* ‒ Asia Pacific and Latin America +7%* ADJUSTED OPERATING PROFIT NEW PRODUCTS REVENUE ‒ Europe, Middle East and Africa +1%* •
Slide 16: Sucralose
Year ended 31 March 2020 Sucralose TOTAL VOLUME REVENUE SOLID PERFORMANCE • Volume and revenue* 4% lower (4)% (4)%* ‒ Lapping actions taken to optimise inventory in fiscal 2019 £161m ‒ Underlying volume +1% ADJUSTED OPERATING PROFIT ‒ Strong customer mix management • +1%* adjusted operating profit +
Slide 17: Primary Products
Year ended 31 March 2020 Primary Products TOTAL VOLUME SWEETENER VOLUME STEADY EARNINGS • Total volume 2% lower (2)% (2)% ‒ Sweetener volume 2% lower ‒ Industrial starch volume 8% lower • +1%* Sweeteners and Starches adjusted ADJUSTED OPERATING PROFIT ADJUSTED OPERATING operating profit SWEETENERS A
Slide 18: Central, Interest, Taxation and Exceptional Items
Year ended 31 March 2020 Central, Interest, Taxation and Exceptional Items Item Change Comment Central costs £4m higher* • Mainly due to incremental costs for Covid-19 response • Higher reflecting adoption of IFRS 16 leases Net finance charges £1m higher* • Pension interest income to be £5m lower in
Slide 19: Productivity Programme
Year ended 31 March 2020 Productivity Programme Programme summary Productivity Benefits (cumulative) • Delivered US$87m benefits after two years, ahead of expectations • Extended by two years and US$50m to US$150m by March 2024 Actual New benefits target • Cash exceptional costs to increase from US$
Slide 20: Actions to strengthen balance sheet
Year ended 31 March 2020 Actions to strengthen balance sheet • US$200m debt private placement Debt maturity profile2 ‒ Refinancing maturing debt at lower cost $180m • UK pension scheme buy-in completed $150m ‒ £20m annual cash savings from fiscal 2021 $100m $100m • After the end of the 2020 financia
Slide 21: Cash management
Year ended 31 March 2020 Cash management Adjusted free cash flow • Adjusted free cash flow £35m higher at £247m1 ‒ Capital expenditure £36m higher at £166m 12% CAGR £247m • Capital expenditure in the 2021 fiscal year is expected £212m to be between £140m and £160m £196m • Net debt of £451m following
Slide 22: Consistent delivery
Year ended 31 March 2020 Consistent delivery Adjusted profit before tax1,3 Adjusted earnings per share1,2,3 Return on capital employed1,3 6% 8% 65bps average p/yr CAGR CAGR £331m 57.8p 17.5% 17.1% 52.0p 16.2% 49.4p £309m £296m FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 1 See descriptions of adjust
Slide 23: Agenda
Nick Hampton, Chief Executive AGENDA Business Review Financial Results Covid-19 Questions 23
Slide 24: Covid-19 Overview
Covid-19 Overview Key Priorities Purpose at the core of our response Look after Keep our our people operations running • Global Pandemic Response team and communities • Local response teams at each site Serve Maintain our • Daily executive management review our customers financial strength • Extensi
Slide 25: Looking after our people and communities
Covid-19 Looking after our people and communities Hygiene and protective measures at all sites • Social distancing, sanitisation and wearing protective equipment • Minimum number of people on shifts and restructured working areas Workplace assistance for employees • Full pay for colleagues ill with
Slide 26: Keeping our operations running
Covid-19 Keeping our operations running Manufacturing network fully operational during pandemic • Customer orders fulfilled often at very short notice • Modified demand planning process to meet customer needs • Operating highly flexible supply chain • Regular supplier and customer communications • V
Slide 27: Serving our customers
Covid-19 Serving our customers Using innovative ways to stay close to customers Virtual tasting session for a customer in China, • Increased connectivity utilising digital technology hosted in Singapore • Developing new and existing projects by video • Virtual tasting sessions with prototypes sent i
Slide 28: Maintaining our financial strength
Covid-19 Maintaining our financial strength Robust financial position Actions taken in March and balance sheet £$¥€ to reduce costs and preserve cash • Low leverage with net debt / EBITDA ratio 0.9x • Frozen salaries and recruitment • Significant covenant headroom on borrowings • Stopped non-essenti
Slide 29: Trading in April 2020
Covid-19 Trading in April 2020 Food & Beverage Solutions • Volume in line with comparative period • Strong demand from in-home consumption such as packaged foods • Lower demand from out-of-home consumption (15% to 25% of sales) • Sucralose volume 18% higher from phasing of customer orders Primary Pr
Slide 30: Business environment
Covid-19 Business environment Future uncertainties What we are doing • Duration and severity of pandemic • Look after our people and communities • Consumer behaviour on exiting lockdown • Maintain supply chain integrity • Government actions • Stay close to our customers • Resumption of out-of-home d
Slide 31: Priorities for the year ending 31 March 2021
Covid-19 Priorities for the year ending 31 March 2021 Look after our Build stronger Continue Maintain people and customer to progress financial communities relationships strategy strength Emerge a stronger business 31 Internal Use Only
Slide 32: Summary
Year ended 31 March 2020 Summary • Strategy is delivering SHARPEN • Financial discipline and strength • Navigating near-term challenges ACCELERATE • Ambitious Purpose commitments • Highly committed management team SIMPLIFY • Future prospects remain strong 32
Slide 33: Questions
Questions 33 Internal Use Only
Slide 34: Cautionary Statement
Year ended 31 March 2020 Cautionary Statement This presentation for the Full Year Results for the year ended 31 March 2020 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and forecasts involv