Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 FY2022 Earnings Presentation
37 slides from Tate & Lyle's earnings presentation, Nov 4, 2021
Slide 1: Results for Six Months to 30 September 2021
RESULTS FOR SIX MONTHS TO 30 SEPTEMBER 2021 4 November 2021
Slide 2: Presenters and Agenda
PRESENTERS Nick Hampton, Chief Executive Vivid Sehgal, Chief Financial Officer AGENDA H1 highlights Financial results Food & Beverage Solutions Outlook and summary Questions 2
Slide 3: Headlines
Six months to 30 September 2021 Headlines Strong performance while progressing major strategic transformation Double digit revenue growth in Food & Beverage Solutions New Product revenue growth acceleration Effective management of cost inflation through productivity, cost discipline and pricing Tran
Slide 4: Financial Highlights
Six months to 30 September 2021 Financial Highlights REVENUE ADJUSTED PROFIT BEFORE TAX ADJUSTED DILUTED EPS Continuing operations1 +19% +20% +25% £656m £85m 14.4p ADJUSTED DILUTED EPS1 NET DEBT INTERIM DIVIDEND Total operations +3% £8m lower +2.3% 29.8p £409m 9.0p • Statutory profit after tax for t
Slide 5: Strong performance in top-line, New Products and pipeline growth
Six months to 30 September 2021 Strong performance in Food & Beverage Solutions Top-line Growth New Products Growth Pipeline Growth Total revenue1 New Products revenue1 New business pipeline value2 +19% +48% +4% Revenue growth from acquisitions1 % of Food & Beverage Solutions revenue Innovatio
Slide 6: Delivering on our near-term priorities
Six months to 30 September 2021 Delivering on our near-term priorities Look after our colleagues Strengthen relationships Continue to Maintain financial and communities with customers progress strategy strength • New Employee Resource • New Technical Application • Re-positioning Tate & Lyle
Slide 7: Living our purpose
Six months to 30 September 2021 Living our purpose Supporting Building thriving healthy living communities • Partnered with Kellogg’s • Mentorship programmes Nutrition and Health Institute in Brazil, UK and US for on free online course on school children and young fibres in Latin America adults ente
Slide 8: Caring for our Planet
Six months to 30 September 2021 Caring for our Planet Eliminated use of coal Sustainable stevia • Multi-year programme to • Launched programme to reduce greenhouse gas promote sustainable stevia emissions and increase farming in East China with energy efficiency by Earthwatch and Nanjing replacing c
Slide 9: Creating two focused businesses
Six months to 30 September 2021 Creating two focused businesses • Work to separate Tate & Lyle and NewCo (Primary Key completion conditions Progress Products business in the Americas and certain joint ventures) is progressing well Received on ✓ Shareholder approval 30 September 2021 • Tate & Lyle an
Slide 10: Presenter Vivid Sehgal and Agenda
PRESENTER Vivid Sehgal, Chief Financial Officer AGENDA H1 highlights Financial results Food & Beverage Solutions Outlook and summary Questions 10
Slide 11: Reporting framework
Six months to 30 September 2021 Reporting framework FORMER REPORTING FRAMEWORK REPORTING FRAMEWORK FOR YEAR ENDING 31 MARCH 2022 Continuing operations Food & Beverage Solutions Food & Beverage Solutions Sucralose • Primary Products Europe • Stranded costs Sucralose Discontinued operations Primary Pr
Slide 12: Financial Highlights
Six months to 30 September 2021 Financial Highlights Continuing operations1 Discontinued operations Food & Beverage Solutions Food & Beverage Solutions Primary Products profit1,2,3 (10)% Revenue Profit2 +19% +9% +2% Total operations Before reporting changes Reported Adjusted diluted EPS +3%1 Sucralo
Slide 13: Adjusted profit before tax – Continuing operations
Six months to 30 September 2021 Adjusted profit before tax – Continuing operations £6m £9m £(7)m In-line £8m £94m £(9)m £85m £78m H1 FY21 Food & Sucralose Central costs Primary Products Interest H1 FY22 FX H1 FY22 Adj PBT Beverage Europe Adj PBT Adj PBT Solutions Constant Currency See descriptions o
Slide 14: Strong top-line growth
Six months to 30 September 2021 Food & Beverage Solutions TOTAL VOLUME REVENUE1 STRONG TOP-LINE GROWTH • Revenue1 +19% benefiting from volume +9% +19% growth and good mix ‒ +19% North America £578m ‒ +20% Asia, Middle East, Africa and Latin America ADJUSTED OPERATING PROFIT1 NEW PRODUCTS REVENUE1 ‒
Slide 15: Sucralose: higher demand in beverages
Six months to 30 September 2021 Sucralose TOTAL VOLUME REVENUE1 HIGHER DEMAND IN BEVERAGES • Volume +23% higher +23% +17% ‒ Recovery in out-of-home consumption, particularly in beverages £78m ‒ Phasing of customer orders into H1; expected to mostly unwind in H2 ADJUSTED OPERATING PROFIT1 • Revenue1
Slide 16: Central, Net Finance Charges, Taxation and Exceptional Items
Six months to 30 September 2021 Central, Net Finance Charges, Taxation and Exceptional Items Item Exceptional Item Six months to Change (continuing operations) (total operations) 30 September 2021 Central costs £(6)m* lower Pre-tax exceptional charges £(61)m Comments Net finance charges In-line* Con
Slide 17: Discontinued operations
Six months to 30 September 2021 Discontinued operations VOLUME ADJUSTED OPERATING PROFIT1 RESILIENT PERFORMANCE Total • Adjusted operating profit1 (10)% lower at £74m (10)% • Sweeteners and Starches adjusted operating +3% profit1 (13)% lower £74m ‒ Cost inflation Sweeteners ‒ Productivity-related op
Slide 18: Actions to mitigate inflation
Six months to 30 September 2021 Actions to mitigate inflation • Cost inflation of £26m in H1 Net inflation impact on total operations − Energy, labour and consumables Six months to 30 September 2021 − Transportation and supply chain • Cost inflation excludes impact of corn price changes £26m £(10)m
Slide 19: Productivity programme continues to deliver benefits
Six months to 30 September 2021 Productivity programme continues to deliver benefits Productivity programme Productivity examples • Six-year programme to deliver US$150m of benefits Energy efficiency by March 2024 Replacing coal boilers with natural gas powered systems in the US • US$20m (£14m) bene
Slide 20: Balance sheet
Six months to 30 September 2021 Balance sheet • Adjusted free cash flow £127m; £67m lower Adjusted free cash flow − £54m investment in working capital from higher revenue and higher corn costs £194m • Capital expenditure in the 2022 financial year £171m expected to be between £160m and £180m 1 £127m
Slide 21: Financial delivery
Six months to 30 September 2021 Financial delivery • Strong top-line growth in Food & Beverage Solutions • Focus on productivity, cost discipline and pricing to mitigate cost inflation • Adjusted profit before tax for continuing operations +20%1 higher • Strong balance sheet maintained • Interim div
Slide 22: Presenter Nick Hampton and Agenda
PRESENTER Nick Hampton, Chief Executive AGENDA H1 highlights Financial results Food & Beverage Solutions Outlook and summary Questions 22
Slide 23: Food & Beverage Solutions delivered growth through the pandemic
Six months to 30 September 2021 Food & Beverage Solutions delivered growth through the pandemic Revenue Growth1,2 Pipeline Growth2 H1 FY20 to H1 FY22 +21% £528m constant New Business Pipeline currency Increase in value £478m £475m +13% Innovation Pipeline Increase in value3 +23% H1 FY20 H1 FY21 H1 F
Slide 24: Growth aligned to long-term structural consumer trends
Food & Beverage Solutions Growth aligned to long-term structural consumer trends Sweetening Mouthfeel Fortification Consumers 95% 84% 53% decreased intake of read ingredient plan to eat or drink sugar in food in past year1 labels1 more fibre1 Sugar Reduction Clean Label Gut health Tate & Lyle +58% +
Slide 25: Strategic framework driving growth
Food & Beverage Solutions Strategic framework driving growth Market Focus Accelerate Innovation • Continued growth momentum in • Increase investment in R&D developed markets • Expand open innovation • Expand in higher growth markets of Asia, • Leverage deep scientific knowledge Middle East, Africa a
Slide 26: Market Focus
Six months to 30 September 2021 Market Focus Revenue growth by region1,2 Driven by category focus and expertise Revenue growth in H1 FY222 24% 20% 19% Beverage 18% 18% Dairy 16% +18% +17% Latin America North America Soups, sauces Bakery and dressings and Snacks North America Asia, Middle East, Afric
Slide 27: Portfolio expansion
Six months to 30 September 2021 Portfolio expansion Plant-based protein Integration of acquisitions progressed well Stevia growing strongly Chickpea protein and flour Tapioca business in Thailand Global stevia business Stevia revenue growth Six months to 30 September 2021 Distribution agreement with
Slide 28: Integrated Solutions
Six months to 30 September 2021 Integrated Solutions Category insight Technical expertise Customer solutions Sensory Applications Nutrition Beverages Dairy Sweetening Mouthfeel Sweetening Formulation Blending Prototyping Soups, Sauces Bakery Taste and Dressings and Snacks Processing Regulatory Modul
Slide 29: Accelerate Innovation
Six months to 30 September 2021 Accelerate Innovation Demand for New Products accelerating New Products revenue growth1,2 by platform in H1 FY22 New Products Revenue £80m +21% Sweeteners +213% CAGR (97% excluding acquisitions) £58m £55m Health & Wellness +23% Texturants +9% H1 FY20 H1 FY21 H1 FY22 1
Slide 30: Open Innovation unlocking new opportunities
Six months to 30 September 2021 Accelerate Innovation Open Innovation unlocking new opportunities for future growth Enzyme immobilisation 3D food printing Metabolic health Partnership with: Partnership with: Partnership with: Enhancing Connecting personal nutrition Health benefits of combining proce
Slide 31: 5-Year ambition
Food & Beverage Solutions Performance underpins strategic transformation of Tate & Lyle and 5-Year ambition Ambition for 5 years following completion of transaction1 Organic revenue Operating margin R&D spend as % of FBS revenue At least + Mid-single digit + 50 to 100 bps percent growth per annum ex
Slide 32: High-quality business with significant growth potential
Food & Beverage Solutions High-quality business with significant growth potential Strong top-line performance underpins strategic transformation Global leader in sweetening, mouthfeel and fortification Creates solutions to meet growing structural consumer trend for healthier food and drink Pace of i
Slide 33: Presenter Nick Hampton and Agenda
PRESENTER Nick Hampton, Chief Executive AGENDA H1 highlights Financial results Strategic progress Outlook and summary Questions 33
Slide 34: Outlook
Six months to 30 September 2021 Outlook •Outlook for year ending 31 March 2022 We continue to work on completing the sale of a controlling interest in the Primary Products business in the Americas and certain joint venture interests to KPS Capital Partners, LP in the first quarter of the 2022 calend
Slide 35: Conclusion
Six months to 30 September 2021 Conclusion Strong H1 performance in a year of significant change Strong top-line growth in Food & Beverage Solutions Strategic transformation progressing well Delivering on our near-term priorities, purpose and environmental commitments Mitigating cost inflation headw
Slide 36: Questions
QUESTIONS 36
Slide 37: Cautionary Statement
Six months to 30 September 2021 Cautionary Statement This presentation for the Half Year Results for the six months to 30 September 2021 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and fo