Tate & Lyle PLC · LSE:TATE
Tate & Lyle — Non-Deal Roadshow (July 2003)
27 slides from Tate & Lyle's roadshow presentation, July 2003
Slide 1: US Investor Presentation New York and Boston July 2003
WORLD LEADER IN CARBOHYDRATE INGREDIENTS WORLD LEADER IN CARBOHYDRATE INGREDIENTS US Investor Presentation New York and Boston July 2003
Slide 2: Strategy Review
Strategy Review IAIN FERGUSON, CHIEF EXECUTIVE APPOINTED MAY 1, 2003 2
Slide 3: World Leader in Carbohydrate Ingredients
World Leader in Carbohydrate Ingredients Group structure CEREAL SWEETENERS SUGAR & STARCHES Staley TLS/Alcantara • Almex (JV) • Sugar Trading • Citric Acid • United Molasses Amylum Eastern Sugar (JV) • Eaststarch (JV) Redpath Sugar Occidente Vietnam Sucralose $4,877m Sales and $203m Net Income FY 20
Slide 4: Investment Profile
Investment Profile • Listed on London Stock Exchange • Market capitalization $2.6 billion • Share price 335.75p • ADR price $21.63 • 52 week range 260p - 376.25p • Dividend Yield 5.5% • P/E Ratio 10.2x As of July 14, 2003 4
Slide 5: Cereal Sweeteners
Cereal Sweeteners Industry consolidation and rising utilization Raw Material Product Markets Corn HFCS Soft drinks Corn Syrup Confectionery Brewing Maltodextrins Polydextrose Wheat Dextrose Crystalline Dextrose Baking Fermentation & Fructose Tate & Lyle Product Volume : over 4m tonnes Tate & Lyle Po
Slide 6: Starches
Starches Innovation promoting growth Raw Material Product Markets Corn Food Food Starches Beverages Pharmaceutical Wheat Industrial Paper & Board Starches Corrugating Building Materials Textiles Tate & Lyle Product Volume : over 1.5m tonnes Tate & Lyle Position Global: No.1 Industrial Starches North
Slide 7: Fermentation & Hydrogenation
Fermentation & Hydrogenation Investment in organic growth Raw Material Product Market Cereal Fermentation Soft Drinks Sweeteners Citric Acid Foods Ethanol Detergents Alcoholic Drinks Xanthan Gum Fuel Astaxanthin Industrial Uses Sugar Molasses Farmed Fish Hydrogenation Toothpaste Chewing Gum Dextrose
Slide 8: Sugar
Sugar Stable, cash-generative businesses TLS (UK) – 42% share of UK industrial, 30% share of UK retail sugar markets Alcantara – c. 50% of Portuguese market Regulatory protection under EU sugar regime Strong consumer brands Eastern Sugar poised to benefit from EU enlargement Other Market
Slide 9: Consistent Strategy Since 1999
Consistent Strategy Since 1999 FOCUS LOW VALUE COST ADDED Focusing Developing a Growing the on our core low cost contribution business culture from throughout value added the Group products 9
Slide 10: Focus on Core Business
Focus on Core Business Overview of recent disposals US Animal Feeds UK Animal Feeds Western Domino EAP China Orsan Vietnam EAS Kenya UFIC TLS Tanzania Zambia Sugar ZSR IMASA RSSC Bundaberg Over 30 businesses sold since March 1999 10
Slide 11: Efficiency and Cost Focus
Efficiency and Cost Focus Amylum integration program Energy efficiency target Low cost culture throughout Group 11
Slide 12: Value Added and Branded Focus
Value Added and Branded Focus Use the starch value chain to grow sales and margins • Achieved 52% of Group PBI* • Exceeded our target of 50% • From less than 20% of Group sales • New initiatives Lyle’s Astaxanthin Biogums brand * before exceptional items and goodwill amortization 12
Slide 13: Current Priorities
Current Priorities • Capitalize on market position • Further integrate Amylum/Staley • Address underperforming areas • Advance the growth of value added products • Pursue long-term target of 15-20% RONOA 13
Slide 14: Financial Review and Outlook
Financial Review and Outlook Simon Gifford, Finance Director 14
Slide 15: Highlights
Highlights • Profitability improved • Disposal program largely complete • Net debt reduced • Interest cover rose • Diluted EPS before exceptional items and goodwill amortization increased by 49% to 33.0p • Proposed 0.5p increase in final dividend to 18.3p 15
Slide 16: Recent Profit History
Recent Profit History Profit before interest* - Years ended March £m % 300 Profit before interest * PBI*/ Sales Margin 10 280 9 260 8 240 7 220 6 200 5 180 4 160 3 140 2 120 1 100 0 2001 2002 2003 16 * before exceptional items and goodwill amortization
Slide 17: Profit and Loss Account
Profit and Loss Account Years ended March 2003 2002 £m 3,167 3,944 Sales -20% 254 216 Profit before interest* +18% (26) (57) Interest +54% Profit before taxation* 228 159 +43% Interest cover* 7.6 x 3.3 x +4.3 x +2.5pts PBI*/Sales margin 8.0% 5.5% 17 * before exceptional items and goodwill amortizati
Slide 18: Segmental Analysis
Segmental Analysis Profit before interest - Years ended March 2002 £m 2003 143 S&S Americas 139 91 -3% S&S Europe 111 +22% S&S Rest of World 11 4 +175% AFBS 4 10 -60% Other (10) (22) +55% Discontinued (1) +90% (10) Profit before interest* 254 +18% 216 18 * before exceptional items and goodwill amort
Slide 19: Profit and Loss Account
Profit and Loss Account Years ended March £m 2003 2002 Profit before taxation* 228 159 +43% Goodwill amortization (8) (8) = Exceptional items (33) n/a 8 Profit before taxation 187 159 +18% Taxation (57) (39) -46% Minority interests n/a 2 (2) Profit for the period +12% 132 118 19 * before exceptional
Slide 20: Efficiency and Cost Focus
Efficiency and Cost Focus Deliver the benefits of Amylum integration 2002 - Benefits over £15m, costs £15m 2003 - Target benefits £20m, costs £10m - Actual benefits over £35m, costs £10m 2004 - Target benefits £50m, costs £10m - Overall cost lower at £35m 20
Slide 21: Capital Expenditure
Capital Expenditure £m 200 Capital Expenditure Depreciation ‡ Forecast 150 100 50 0 1999 2000 2001 2002 2003 2004 Years ended March 21
Slide 22: Summary Balance Sheet
Summary Balance Sheet As at March 31 £m Net assets Net debt Net debt/EBITDA § Times 1200 1081 3 1044 1000 800 2 639 600 471 400 1 200 0 0 2002 2003 22 § EBITDA is subsidiaries only, before exceptional items
Slide 23: Net Debt History
Net Debt History Years ended March £m Net debt Interest cover ^ Times 1100 7 1000 6 900 800 5 700 600 4 500 3 400 300 2 200 1 100 0 0 2001 2002 2003 ^ before exceptional items and goodwill amortization. 2003 before unusual interest credits 23
Slide 24: Key Financial Ratios
Key Financial Ratios 2003 £m 2002 7.6x Interest cover* 3.3x 1.8x Dividend cover* 1.2x 12.5% Return on Equity 11.1% Net debt/EBITDA§ 2.1x 1.4x Gearing 59% 45% RONOA‡ 10.5% 14.2% * before exceptional items and goodwill amortization § EBITDA is subsidiaries only, before exceptional items 24 ‡ before ex
Slide 25: Summary
Summary • Disposal program largely complete • Significant improvement in performance during the year • Highest margin on sales since 1996 • Balance sheet considerably strengthened • Interest cover target exceeded 25
Slide 26: Outlook
Outlook Most businesses performing well Eastern Sugar and Citric Acid challenges 2003 Sweetener pricing outturn Reduce Develop Improve cost value efficiency base added 26
Slide 27: US Investor Presentation New York and Boston July 2003
WORLD LEADER IN CARBOHYDRATE INGREDIENTS WORLD LEADER IN CARBOHYDRATE INGREDIENTS US Investor Presentation New York and Boston July 2003