Tate & Lyle Plc · LSE:TATE
Tate & Lyle — FY2023 Earnings Presentation
40 slides from Tate & Lyle's earnings presentation, May 25, 2023
Slide 1: Full Year Results, Year ended 31 March 2023
Nick Hampton, Chief Executive Dawn Allen, Chief Financial Officer
Slide 2: Forward-looking statements
Year ended 31 March 2023 This presentation for the Full Year Results for the year ended 31 March 2023 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 uncertaint
Slide 3: Year ended 31 March 2023 summary
Year ended 31 March 2023 ▪ Strong financial performance ▪ Significantly progressed growth-focused strategy ▪ Increased customer solutions capabilities ▪ Financial strength fuels investment for growth ▪ Positioned at the centre of the future of food ▪ Outlook in line with five-year ambition 3
Slide 4: Global leader in sweetening, mouthfeel and fortification
Global leader in sweetening, mouthfeel and fortification 4
Slide 5: Overview, Financial results, Strategic progress and Outlook
Year ended 31 March 2023 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 5
Slide 6: Year ended 31 March 2023 key metrics
Year ended 31 March 2023 Revenue EBITDA1 Return on capital employed Productivity growth growth increase savings 6 1. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation)
Slide 7: Science Solutions Society
Science Solutions Society 7
Slide 8: Science: investment in innovation and solution selling
Year ended 31 March 2023 Increase in investment in Patents granted during Scientific research papers innovation and solution the year with around published e.g. public health selling capabilities 300 pending impact of fibre enrichment 8
Slide 9: Solutions: new business pipeline and wins
Year ended 31 March 2023 Increase in value of Solutions by value Targeted campaigns to new business pipeline1 from new business develop new ways of wins up 2ppts working with customers on solutions 9 1. Probability weighted by value
Slide 10: Society: sustainability metrics and targets
Year ended 31 March 2023 Tonnes of sugar removed by low/ Meals donated to food Leadership and management no-calorie sweeteners and fibres1 banks in local communities 1 roles held by women1 (2025 target: 9.0m) (2025 target: 3.0m) (2025 target: 50%) Scope 1 & 2 Scope 3 Waste beneficially used3 Acres o
Slide 11: Innovation driving environmental improvements
Year ended 31 March 2023 Innovation driving environmental improvements ▪ Developed new process for producing CLARIA® reduction in carbon footprint1 ▪ Innovative and more environmentally friendly ▪ Same functionality as existing CLARIA® reduction in water consumption1 ▪ Reviewing starch portfolio for
Slide 12: Agenda: Financial results
Year ended 31 March 2023 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 12
Slide 13: Overview of the year
Year ended 31 March 2023 ▪ Delivered strong growth in a challenging external environment ▪ Increased investment across pillars of Science, Solutions, Society ▪ Maintained financial discipline and focus on cash generation ▪ Strong balance sheet provides flexibility for further investment ▪ Generating
Slide 14: Year ended 31 March 2023 financial results
Year ended 31 March 2023 Revenue Adjusted EBITDA Adjusted profit before tax £1,751 million £320 million £253 million Adjusted earnings per share Return on capital employed Free cash flow 49.3 pence 17.5% £119 million 14 See descriptions of adjusted results in full-year results for year ended 31 Marc
Slide 15: Drive growth, attractive returns, optimise
Year ended 31 March 2023 Drive growth Attractive returns Optimise Growing Broadly flat Declining High-single digit over time Low-double digit Percent per annum Percent per annum 15 1. Percentage of Group revenue in year ended 31 March 2023
Slide 16: Food & Beverage Solutions
Year ended 31 March 2023 ▪ Revenue 19% higher at £1,438m Revenue1 £1,438m ▪ Double-digit revenue growth in every region Volume (7)% ‒ +12% North America ‒ +25% Asia, Middle East, Africa and Latin America Price/mix +25% ‒ +28% Europe Acquisitions +1% ▪ Adjusted EBITDA 21% higher at £271m ‒ Solution s
Slide 17: Food & Beverage Solutions drivers
Year ended 31 March 2023 ▪ Intentionally focusing on revenue growth and margin expansion ‒ Solution selling, mix management and pricing through of inflation ▪ Volume lower due to: ‒ Prioritising revenue and margin expansion ‒ Supply chain disruption, exit of low margin business and industrial action
Slide 18: Sucralose
Year ended 31 March 2023 ▪ Revenue 2% higher Revenue1 £184m ‒ Pricing ‒ Good customer mix Volume (4)% ▪ Adjusted EBITDA at £58m (5)% lower ‒ Impact of inflation across range of inputs ‒ Multi-year customer contracts limit recovery of cost increases Price/mix +6% ▪ Industry demand remains robust Reve
Slide 19: Primary Products Europe
Year ended 31 March 2023 ▪ Revenue 25% higher Revenue1 £129m ‒ Improved pricing from favourable market conditions Volume (19)% ▪ Lower volume ‒ Industrial action at facility in the Netherlands in first half Price/mix +44% ‒ Ongoing transition to speciality ingredients Revenue change 1 +25% ▪ Adjuste
Slide 20: Adjusted EBITDA bridge
Year ended 31 March 2023 £35m £11m £320m £12m £43m (£3m) £43m £285m £233m FY22 Food & Sucralose Primary Products FY23 FX FY23 Adj EBITDA Beverage Europe Adj EBITDA Adj EBITDA Solutions Constant Currency 20 EBITDA is earnings before interest, tax, depreciation and amortisation See descriptions of adj
Slide 21: Productivity savings programme
Year ended 31 March 2023 ▪ US$21m productivity savings delivered ▪ Ambition to deliver US$100m savings in five years to 31 March 2028 ‒ Includes initiatives to leverage digital to enhance end-to-end customer experience, and to drive supply chain and cost efficiencies ‒ Expect costs to deliver progra
Slide 22: Finance costs, tax, exceptional items and dividend
Year ended 31 March 2023 60bps higher £(28)m 18.5p per share ▪ Adjusted effective tax rate 19.9% ▪ £(25)m costs for separation ▪ Recommending final dividend and disposal of Primient of 13.1p, a 2.5% increase ▪ Increase in adjusted effective tax rate reflects higher profits ▪ £(3)m restructuring cost
Slide 23: Primient relationship and dividends
Year ended 31 March 2023 ▪ Positive relationship with KPS Capital Partners, LP ‒ 20-year supply arrangements operating effectively ▪ Received US$76m cash dividends from Primient ‒ US$30m Primient dividend in fiscal 2023 ‒ US$31m on profits of a former joint venture pre-disposal ‒ US$15m to settle ta
Slide 24: Focus on cash generation
Year ended 31 March 2023 Focus on cash generation £80m £(37)m ▪ Adjusted free cash flow £119m (up £47m) £7m £(3)m ▪ Working capital £37m higher £119m ‒ Impact of input cost inflation mitigated by cash conversion optimisation activities £72m ▪ Capital expenditure slightly higher ‒ Expected to be £90m
Slide 25: Increased capacity to invest for growth
Year ended 31 March 2023 Increased capacity to invest for growth Net debt movement 31 March 2022 to 31 March 2023 ▪ Net debt £238m (£388m lower) £119m +£1.0bn ‒ £1.0bn net receipts from Primient sale £(626)m ‒ £497m special dividend paid ‒ £192m1 for acquisitions £(36)m £(192)m £(238)m ▪ Primient ca
Slide 26: Financial summary
Year ended 31 March 2023 ▪ Delivering on our growth strategy and financial ambition ▪ Investing for the future alongside productivity and cost discipline ▪ Strong balance sheet fuelling investments for growth 26
Slide 27: Agenda: Strategic progress and Outlook
Year ended 31 March 2023 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 27 <Footer>
Slide 28: Re-positioned at centre of the future of food
Year ended 31 March 2023 ▪ Re-positioned at centre of the future of food ▪ Increased solution selling and customer collaboration ▪ Investment in R&D, innovation and customer-facing capabilities ▪ Strengthened portfolio and customer offering 28
Slide 29: New Tate & Lyle capabilities and trends
New Tate & Lyle Population growing Healthy People living longer Tasty Capabilities Convenient Climate change Sustainable On demand society Affordable 29
Slide 30: Consumer trends
Consumer trends ▪ Sugar and calorie reduction ▪ Nutrition improvement Healthy ▪ Label improvement Sweetening ▪ Cost optimisation Tasty ▪ Enhance texture and mouthfeel experience Convenient ▪ Clean label Mouthfeel Mouthfeel ▪ Stability ▪ Cost optimisation Sustainable ▪ Increase nutrition from fibres
Slide 31: New Tate & Lyle
New Tate & Lyle New Products as % of Food & Investment1 in innovation Solutions2 revenue from new Beverage Solutions revenue and solutions selling business wins to double to of revenue growth per annum out of new business pipeline 31 1. Investment is operating expense in the income statement and exc
Slide 32: New Products as a % of FBS revenue
Year ended 31 March 2023 New Products as a % of FBS revenue £239m Fortification 1ppt higher £113m Mouthfeel New Product revenue growth Sweetening Year ended 31 March 2023 2020 2021 2022 2023 32
Slide 33: Solutions capabilities, insights and infrastructure
Year ended 31 March 2023 Solutions capabilities Solutions insights Solutions infrastructure Building customer-facing capabilities Increasing investment in Expanding global network of and resources including nutrition, consumer and category insight Customer Innovation and sensory and regulatory in ke
Slide 34: Solutions revenue from new business wins
Year ended 31 March 2023 ▪ Close customer collaboration Solutions revenue from new business wins 1 ▪ Higher value of ingredients ▪ ‘Stickier’ sale +2ppts2 ▪ Often leads to new business Growth in all regions 34 1. Revenue value from new business wins coming out of the new business pipeline 2. Year en
Slide 35: Quantum Hi-Tech and Nutriati acquisitions
Year ended 31 March 2023 Quantum Hi-Tech Nutriati ▪ Leading dietary fibre business ▪ Chickpea protein and flour ▪ Science-driven business ▪ Strengthens fortification platform ▪ Expands plant-based solutions ▪ Strengthens fortification offering ▪ Strong customer traction ▪ Majority of revenue within
Slide 36: New Tate & Lyle five-year ambition
New Tate & Lyle Revenue EBITDA Return on capital employed Productivity growth per annum growth per annum increase per annum on average benefits Potential for further growth acceleration through M&A 36
Slide 37: Outlook
Tate & Lyle We expect to deliver progress in line with our five-year ambition to 31 March 2028 with, in constant currency: ▪ Revenue growth of 4% to 6% ▪ EBITDA growth of 7% to 9% We also expect stronger profits from our minority holding in Primient 37
Slide 38: Agenda: Summary and Q&A
Year ended 31 March 2023 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 38
Slide 39: Summary
Year ended 31 March 2023 ▪ Strong financial performance ▪ Delivering on growth-focused strategy ▪ Investing in R&D, innovation and growth capacity ▪ Increasing solutions-based relationships with customers ▪ Positioned at the centre of future of food 39
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