Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 FY2024 Earnings Presentation
35 slides from Tate & Lyle's earnings presentation, Nov 9, 2023
Slide 1: Results for six months to 30 September 2023
RESULTS FOR SIX MONTHS TO 30 SEPTEMBER 2023 Nick Hampton, Chief Executive Dawn Allen, Chief Financial Officer
Slide 2: Cautionary Statement
Six months to 30 September 2023 Cautionary Statement This presentation for the Half Year Results for the six months to 30 September 2023 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and fo
Slide 3: Agenda
Six months to 30 September 2023 Agenda 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 3
Slide 4: Key headlines
Six months to 30 September 2023 Key headlines ▪ Robust financial performance ▪ Strategic re-positioning progressing well ▪ Positive progress on customer solutions ▪ Investing for long-term growth 4
Slide 5: Delivering our strategy
Six months to 30 September 2023 Delivering our strategy Managing the short-term Investing for the long-term ▪ Macro economic environment ▪ Portfolio expansion ▪ Consumer demand softness ▪ Solutions capabilities ▪ Customer de-stocking ▪ Growth capacity Continue to deliver revenue and profit growth 5
Slide 6: Performance: delivering on our growth-focused strategy
Six months to 30 September 2023 Performance Delivering on our growth-focused strategy Revenue EBITDA1 Free cash flow Productivity 4% 7% +£15m US$17m growth growth increase savings 6 1. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) 2. Percentage changes are in constan
Slide 7: Performance: Science, Solutions, Society
Six months to 30 September 2023 Performance SCIENCE SOLUTIONS SOCIETY 11% 22% 7.0m Increase in investment in Solutions by value from Tonnes of sugar removed from diets by our innovation and solution selling new business wins low- and no-calorie sweeteners and fibres1 7 1. Since 1 April 2020
Slide 8: Increasingly positive customer perception of new Tate & Lyle
Six months to 30 September 2023 Increasingly positive customer perception of new Tate & Lyle Views Tate & Lyle as a leader1 Recommends Tate & Lyle2 Ingredient Net promoter innovation Sustainability score 81% 80% 61 (2022: 74%) (2022: 70%) (2022: 52) 8 1. Customers and prospective customers aware of
Slide 9: Agenda
Six months to 30 September 2023 Agenda 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 9
Slide 10: Key headlines
Six months to 30 September 2023 Key headlines Delivering on our growth ambition ▪ Robust revenue and profit growth ▪ Increased investment across pillars of Science, Solutions, Society ▪ Strong cash performance and cash conversion ▪ Robust balance sheet provides flexibility for further investment 10
Slide 11: Financial highlights
Six months to 30 September 2023 Financial highlights Delivering on our key measures Revenue1 EBITDA1 EBITDA margin1 4% 7% 70bps £857 million £178 million 20.8% Profit before tax1 Earnings per share1 Free cash flow1 16% 19% +£15m £156 million 30.1 pence £77 million 1. Adjusted metric; See description
Slide 12: Food & Beverage Solutions
Six months to 30 September 2023 Food & Beverage Solutions Drive growth Revenue +5% ▪ Revenue 5% higher at £707m ‒ (2)% from volume and price mix By driver By region o 6% mix management and solution selling o (8)% volume impact of consumer demand Volume (8)% North America 2% softness and customer de-
Slide 13: Food & Beverage Solutions: impact of inflation and deflation on revenue
Six months to 30 September 2023 Food & Beverage Solutions Impact of inflation and deflation on revenue ▪ High input cost inflation accelerated revenue growth over last two years ‒ 19% revenue growth in Food & Beverage Solutions in both fiscal 2023 and 2022 ▪ H1 inflation recovery contributed 7ppts t
Slide 14: Sucralose
Six months to 30 September 2023 Sucralose Attractive returns ▪ Underlying performance steady Revenue (5)% ‒ Comparative period benefited from orders phased into the half Volume (8)% ▪ Revenue 5% lower at £89m ‒ Lower volume from more normal phasing in H1 FY24 ‒ Inflation recovery Price mix 3% ▪ Adju
Slide 15: Primary Products Europe
Six months to 30 September 2023 Primary Products Europe Optimise ▪ Revenue 2% lower at £61m Revenue (2)% ‒ Improved pricing from favourable market conditions ‒ Recovery of input cost inflation Volume (25)% ▪ Lower volume and price mix ‒ Ongoing transition to speciality ingredients ‒ Lower co-product
Slide 16: EBITDA performance
Six months to 30 September 2023 EBITDA performance £11m £14m £(5)m £3m £(6)m £184m £178m £172m +7% H1 FY23 Food & Sucralose Primary Products H1 FY24 FX H1 FY24 Adj EBITDA Beverage Europe Adj EBITDA Adj EBITDA Solutions Constant Currency 16 EBITDA is earnings before interest, tax, depreciation and am
Slide 17: Productivity savings
Six months to 30 September 2023 Productivity savings Strong performance in first half Key areas of savings Six months to 30 September 2023 Selling, General and ▪ Delivered US$17m of productivity savings Operational Administrative Efficiencies 23% Expenses 40% ▪ Expect productivity savings in fiscal
Slide 18: Taxation and Exceptional items
Six months to 30 September 2023 Taxation and Exceptional items Adjusted effective tax rate Pre-tax exceptional charges 21.9% £(8)m ▪ In-line with the comparative period ▪ £(7)m restructuring costs to drive organisational improvements and productivity benefits ▪ Effective tax rate for fiscal 2024 exp
Slide 19: Minority holding in Primient joint venture
Six months to 30 September 2023 Minority holding in Primient joint venture Volume ▪ Share of adjusted profit 32%1 higher at £17m ‒ Strong commercial performance and sweetener demand ‒ Improving operational performance ‒ Higher finance charges ‒ Lower share of profits from joint ventures ▪ Received U
Slide 20: Free cash flow
Six months to 30 September 2023 Free cash flow Adjusted free cash Free cash Adjusted free cash flow H1 FY24 vs H1 FY232 flow £77m conversion 69%1 +£15m +14ppts £47m £(20)m £(17)m £(1)m ▪ Working capital £47m lower £6m £77m ‒ Strong cash conversion optimisation activities £62m ▪ Capital expenditure £
Slide 21: Net debt and interim dividend
Six months to 30 September 2023 Net debt and interim dividend Net debt Interim dividend £249m 6.2p per share ▪ Net debt up £11m from 31 March 2023 ▪ 0.8p per share increase ‒ Represents one third of prior year’s full-year ▪ Flexibility to invest in growth dividend ‒ 0.8x net debt to EBITDA ratio ‒ O
Slide 22: Resilient first half performance
Six months to 30 September 2023 Resilient first half performance ▪ Delivering on our growth strategy ▪ Strong cash flow, productivity and cost discipline ▪ Investing for long-term growth 22
Slide 23: Agenda
Six months to 30 September 2023 Agenda 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 23
Slide 24: Key headlines
Six months to 30 September 2023 Key headlines Continued strategic progress ▪ Business re-positioned at centre of the future of food ▪ Deeper solutions-based partnerships with customers ▪ Investing in R&D, innovation, sustainability and growth capacity 24
Slide 25: Positioned at the centre of the future of food
Tate & Lyle Positioned at the centre of the future of food Structural Consumer mega-trends food demands Population growing Healthy People living longer Tasty Capabilities Convenient Climate change Sustainable On demand society Affordable 25
Slide 26: Portfolio directly aligned to meeting consumer trends
Consumer trends Portfolio directly aligned to meeting consumer trends Consumer preference Solutions required Delivered by Tate & Lyle ▪ Sugar and calorie reduction ▪ Nutrition improvement Healthy ▪ Label improvement Sweetening ▪ Cost optimisation Tasty ▪ Enhance texture and mouthfeel experience Conv
Slide 27: Investing in innovation
Six months to 30 September 2023 Investing in innovation New Products revenue +18% Launching New Products (like-for-like basis1) ▪ Patented breakthrough in stevia technology ▪ Premium taste and clean label ▪ 200x solubility of Reb M and D ▪ Applications include beverage concentrates and dairy ▪ Use a
Slide 28: Investing in technology
Six months to 30 September 2023 Investing in technology Leveraging AI and digital to accelerate innovation Predictive modelling of sensory data to New automated lab in Singapore to increase Enhanced technical knowledge accelerate adoption of customer solutions speed-to-market of mouthfeel solutions
Slide 29: Investing in solutions
Six months to 30 September 2023 Investing in solutions Building solutions-based partnerships with customers Increased investment in innovation Opened new Customer Innovation and Strengthened capabilities in areas and solution selling by 11% Collaboration Centre in Jakarta, Indonesia such as sensory
Slide 30: Investing in growth capacity
Six months to 30 September 2023 Investing in growth capacity Investing in fibre solutions ▪ New capacity for Non-GMO PROMITOR® Soluble Fibres ▪ Coming on-line at facility in Boleráz, Slovakia in mid-2024 ▪ €25m investment represents first part of programme to add fibre capacity at Boleráz ▪ Meet dem
Slide 31: Investing in sustainability
Six months to 30 September 2023 Investing in sustainability Expanding use of renewable energy ▪ In Brazil, Guarani site powered entirely by renewable energy ▪ In the UK, Netherlands and Italy, production facilities moved to purchase 100% electricity from renewable sources Promoting sustainable agric
Slide 32: Outlook
Tate & Lyle Outlook We expect to deliver progress in-line with our five-year ambition to 31 March 2028 with revenue reflecting both strategic momentum and the impact of the expected pass through of input cost deflation in the second half. For the year ending 31 March 2024, in constant currency, we e
Slide 33: Agenda
Six months to 30 September 2023 Agenda 01. Overview 02. Financial results 03. Strategic progress and Outlook 04. Summary and Q&A 33
Slide 34: Summary
Six months to 30 September 2023 Summary ▪ Robust financial performance ▪ Delivering on growth-focused strategy ▪ Increasing solutions-based business with customers ▪ Investing in R&D, innovation, growth capacity and sustainability ▪ Positioned at the centre of the future of food 34
Slide 35: Q&A
Q&A 35