Tate & Lyle PLC · LSE:TATE
Tate & Lyle — H1 FY2006 Earnings Presentation
29 slides from Tate & Lyle's earnings presentation, Nov 3, 2005
Slide 1: Interim Results Presentation
Interim Results Presentation 3 November 2005 Interim Results six months ended 30 September 2005 Page 1
Slide 2: Iain Ferguson, Chief Executive
Interim Results Presentation Iain Ferguson Chief Executive 3 November 2005 Good morning ladies and gentlemen and thank you for coming here today for our half- year results. I'd also like to welcome our Chairman Sir David Lees and the other Non-Executive Directors here today. I trust you had an oppor
Slide 3: Key Highlights
Key Highlights • Profit before tax, exceptional items and amortisation of patents up 7% at £136m • SPLENDA® Sucralose sales growth of 19% • Food & Industrial Ingredients Americas PBI* up 20% • Strong balance sheet and financial ratios • £100m expansion in US Loudon and Sagamore facilities announced
Slide 4: Simon Gifford, Group Finance Director
Interim Results Presentation Simon Gifford Group Finance Director 3 November 2005 The results have been prepared for the first time under IFRS and the comparative figures have been restated to reflect this. This has resulted in the restatement of some of our key financial ratios. Some figures are qu
Slide 5: Financial Highlights
Financial Highlights • Progress in profit before tax • Strong balance sheet • Healthy interest cover and net debt/EBITDA • Comparative figures restated for IFRS 5 This year, as you know, is one of consolidation as we invest for future growth. Despite higher interest costs there has been progress in
Slide 6: Income Statement
Income Statement Six Months to September HALF YEAR FIGURES £m 2005 2004 Sales 1,868 1,665 +12% Profit before interest* 153 140 +9% Interest (17) (13) -31% Profit before taxation* 136 127 +7% PBI*/Sales margin 8.2% 8.4% Interest cover* 9.0 x 10.8 x 6 * Before exceptional items and amortisation of pat
Slide 7: Income Statement
Income Statement Six Months to September HALF YEAR FIGURES £m 2005 2004 Profit before taxation* 136 127 Amortisation of patents (2) (2) Exceptional items 1 (42) Taxation (39) (21) Minority interests (2) (3) Profit for the period – equity holders 94 59 Effective tax rate for the year (%) 29.0 28.4 Di
Slide 8: Segmental Analysis
Segmental Analysis Six Months to September 2005 HALF YEAR FIGURES SALES £1,868m PBI* £153m 29% 36% 547 55 394 21% 16% 24 28 18% 724 74 13 39% 129 4% 8% 33 7% Food & Industrial Ingredients, Americas 22% Food & Industrial Ingredients, Europe Sucralose Sugars, Americas & Asia 8 Sugars, Europe * Before
Slide 9: Food & Industrial Ingredients, Americas
Food & Industrial Ingredients, Americas Six Months to September HALF YEAR FIGURES £m 2005 2004 29% Group Sales Sales 547 539 +1% Profit before interest* 55 46 +20% Margin* 10.1% 8.5% +1.6 pts 36% Group PBI* • Good growth in value added food ingredients • Value added industrial ingredients gross marg
Slide 10: Food & Industrial Ingredients, Europe
Food & Industrial Ingredients, Europe Six Months to September HALF YEAR FIGURES £m 2005 2004 21% Group Sales Sales 394 387 +2% Profit before interest* 28 22 +27% Margin* 7.1% 5.7% +1.4 pts 18% Group PBI* • Good growth in value added food ingredients and alcohol • Commodity sweetener selling prices s
Slide 11: Sucralose
Sucralose Six Months to September HALF YEAR FIGURES £m 2005 2004 4% Group Sales Sales 74 62 +19% Profit before interest* 33 26 +27% Margin* 44.6% 41.9% +2.7pts 22% Group PBI* • Underlying profit up £3m • Forecast start-up costs for full year £7m • Small profit improvement anticipated in H2 over H1 •
Slide 12: Sugars, Americas & Asia
Sugars, Americas & Asia Six Months to September HALF YEAR FIGURES £m 2005 2004 7% Group Sales Sales 129 120 +8% Profit before interest* 13 14 -7% Margin* 10.1% 11.7% -1.6 pts 8% Group PBI* • Canada - lower volumes - inventory mark to market gain £2m • Vietnam and Mexico profits in line with comparat
Slide 13: Sugars, Europe
Sugars, Europe Six Months to September HALF YEAR FIGURES £m 2005 2004 39% Group Sales Sales 724 557 +30% Profit before interest* 24 32 -25% Margin* 3.3% 5.7% -2.4 pts 16% Group PBI* • UK adversely affected by higher cost of export licences • Over-supply of sugar in EU caused selling price pressure •
Slide 14: Capital Expenditure & Investments
Capital Expenditure & Investments £m Capital Expenditure Investments Depreciation 140 120 100 80 60 40 20 0 Sep- Mar- Sep- Mar- Sep- Mar- Sep- Mar- Sep- 01 02 02 03 03 04 04 05 05 14 Figures up to and including Mar 04 are stated under UK GAAP As expected, capital expenditure at £111m outpaced deprec
Slide 15: Free Cash Flow
Free Cash Flow Six Months to September 2005 in £m HALF YEAR FIGURES (53) (17) (52) 217 (111) 2 (14) EBITDA* Increase in Interest Tax Capex Other Free Cash Working Outflow Capital 15 * Before exceptional items and total amortisation Operating profit before depreciation, total amortisation and excepti
Slide 16: Net Debt
Net Debt UK GAAP to IFRS in £m HALF YEAR FIGURES (451) (20) (471) (58) (529) Net Debt Mar 05 Proportional Net debt Mar 05 IAS 39 Net Debt 1 Apr 05 UK GAAP Consolidation IFRS Pre IAS 39 Adjustment IFRS Post IAS 39 16 Net debt at 31 March 2005 has been restated due to the proportional consolidation of
Slide 17: Net Debt Increased to £612m
Net Debt Increased to £612m Six Months to September 2005 in £m HALF YEAR FIGURES (529) (14) (65) (4) (612) Net Debt 1 Apr 05 Free Cash Outflow Dividends Other Net Debt Sep 05 IFRS Post IAS 39 17 Net dividend payments totalled £65m. There was an unfavourable movement on Other of £4m, which contained
Slide 18: Summary Balance Sheet
Summary Balance Sheet Total net assets Net debt Net debt / EBITDA § £m Times 1200 2.5 1000 2 800 1.5 600 1 400 200 0.5 0 0 Mar-05 Sep-05 18 § annualised, before exceptional items and total amortisation With net debt at September 2005 being £612m, the annualised net debt/pre-exceptional EBITDA multip
Slide 19: Retirement Benefits
Retirement Benefits Income Statement Charge & Pension Cash Contributions HALF YEAR FIGURES • Income statement charge – First half charge of £9m to operating profit and £2m net finance charge in line with prior year • Pension cash contributions – First half year contributions of £16m (2004: £19m) 19
Slide 20: Retirement Benefits (IAS 19)
Retirement Benefits (IAS 19) Gross Deficit £m Sep 04 * Mar 05 Sep 05 0 50 151 139 133 100 150 200 84 105 114 250 235 244 247 300 Pensions Healthcare 20 * Sep 04 numbers are shown under FRS 17 This slide shows the deficit for pensions and healthcare liabilities. The March and September 2005 figures a
Slide 21: Key Financial Ratios
Key Financial Ratios Six Months to September HALF YEAR FIGURES 2005 2004 Interest cover* 9.0 x 10.8 x Net debt / EBITDA§ 1.4 x 1.3 x Gearingτ 58% 58% RONOAω 18.4% 18.7% * Before exceptional items and amortisation of patents § Annualised, before exceptional items and total amortisation τ Gearing for
Slide 22: Iain Ferguson, Chief Executive
Interim Results Presentation Iain Ferguson Chief Executive 3 November 2005 Thank you Simon. As Simon has demonstrated in his presentation, we have made good progress in the six months to 30 September. Before I tell you about how we are continuing to drive value added growth, no presentation would be
Slide 23: EU Sugar Regime
EU Sugar Regime Nothing new to report • Reform date 1 July 2006 • Current proposals – Sugar selling price reduced by 39%, EU beet sugar production reduced by 4m tonnes, Beet refiners’ margin reduced by 44%, Cane refiners’ margin reduced by 77% • Potential impact on Tate & Lyle operating results1: –
Slide 24: Macro Trends
Macro Trends • Health & Wellness – Obesity – Aging boomers – Awareness • Convenience – Active lifestyles – Disposable income • Indulgent – I deserve… • Value – Trade up…trade down • Taste – No compromise 24 Our approach today is customer and consumer orientated. Everything we do starts with understa
Slide 25: New Global Food Ingredients Group
New Global Food Ingredients Group Changing what we take to market, and how we take to market +22% 153 160 Forecast category values, Retail Sales Price, US$bn (North America, Western Europe) 140 125 120 +22% Source: Euromonitor, 2004 103 +23% +32% 100 84 84 2003 82 80 68 2008 62 +25% 60 49 39 40 +17%
Slide 26: Sagamore and Loudon Expansions
Sagamore and Loudon Expansions Growing the base for value added 07 7 0 00 n2 t2 J a Oc in in n al n al t io t io p era p era i tyo i tyo c c a pa a pa ewc ewc N N Sagamore Loudon • c£60m expansion will: • c£40m expansion will: – increase capacity for food – increase production of value added ingredi
Slide 27: SPLENDA Sucralose Capacity Expansions
SPLENDA® Sucralose Capacity Expansions We are on track 06 7 pr a n0 yA yJ le db ed b o ub r ipl it yd it yt ac ac a p ap lc lc t ia t ia In i In i McIntosh Singapore • £40m expansion programme: • £100m construction: – First phase debottlenecking – On track and on budget – Second phase further expans
Slide 28: Outlook
Outlook • Good start to the year • Continued progress in value added • All expansion projects on track • Strong balance sheet • We expect results for the full year to show satisfactory progress 28 We have made a good start to the year, with continued progress in value added growth. And, as we have d
Slide 29: Question and Answers
Question and Answers Please wait for the microphone and state your name and that of your organisation. 29 Interim Results six months ended 30 September 2005 Page 29