Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 FY2020 Earnings Presentation
24 slides from Tate & Lyle's earnings presentation, Nov 7, 2019
Slide 1: Results for Six Months to 30 September 2019
RESULTS FOR SIX MONTHS TO 30 September 2019
Slide 2: Overview
SIX MONTHS TO Overview 30 SEPTEMBER 2019 • Priorities to ‘Sharpen, Accelerate, Simplify’ supporting performance SHARPEN • Financial performance in line with our expectations ̶ Food & Beverage Solutions double-digit profit growth* ̶ Sucralose performed solidly ACCELERATE ̶ Primary Products profit low
Slide 3: Financial delivery
Financial delivery Six months to 30 September 2019 Sales +2%* Adjusted diluted earnings per share +3%* Adjusted profit before tax +3%* Adjusted free cash flow +£19m Statutory profit before tax +45% Interim dividend +2.3% Full-year guidance unchanged See descriptions of adjusted results in Note 1 of
Slide 4: Agenda
Nick Hampton, Chief Executive Imran Nawaz, Chief Financial Officer AGENDA Business Update Financial Results and Outlook Summary Questions 4
Slide 5: Our Purpose: Improving Lives for Generations
Our Purpose Improving Lives for Generations We believe we can successfully grow our business and have a positive impact on society Supporting healthy living Building thriving communities Caring for our planet 5
Slide 6: Improving Lives for Generations: Sustainable agriculture
Our Purpose Improving Lives for Generations Sustainable agriculture • Multi-year partnership with Land O’Lakes SUSTAINTM • Supporting sustainability on 1.5m acres of US-grown corn − Acreage equivalent to our annual global corn purchases • Bespoke support for farmers to measure and improve − Greenhou
Slide 7: Improving Lives for Generations: Reducing carbon emissions
Our Purpose Improving Lives for Generations Reducing carbon emissions • New natural gas-fired combined heat and power system at corn wet mill in Lafayette South, Indiana − To be completed in second half of 2021 • New system to deliver significant improvements − Increase energy efficiency − Reduce CO
Slide 8: Food & Beverage Solutions: Market trends driving sales growth
Food & Beverage Solutions Market trends driving sales growth Consumer trends Sales growth* Six months to 30 September 2019 Healthy Living Clean Label 8% 6% 4% In-line North America Asia Pacific and Europe, Middle Total Latin America East and Africa Sugar Reduction Plant Power >30%1 +29%2 +24%2 Custo
Slide 9: Food & Beverage Solutions: Latin America
Food & Beverage Solutions Latin America Changes in labelling Driving opportunities Solutions for customers • Front-of-pack labelling for • Technical expertise • Reformulating products to products high in sugar, fat reduce sugar and fat and salt • Category insight − No additional labelling required −
Slide 10: Primary Products: Market overview and actions
Primary Products Market overview and actions Market conditions remain challenging Clear focus and actions Bulk sweeteners • Volume in US regular carbonated • Mix management soft drinks declined by 1.6%1 − Optimise customer and product mix • Exports to Mexico slightly lower − Margin expansion opportu
Slide 11: Three Key Priorities
Three Key Priorities Supporting performance SHARPEN ACCELERATE SIMPLIFY • Increasing customer interaction • Better balance in innovation portfolio • Continuous improvement projects • Collaborating in new ways • 12% growth* in New Product sales • Capital investments to reduce costs • Expanding labs i
Slide 12: Agenda
AGENDA Business Update Financial Results and Outlook Summary Questions 12
Slide 13: Financial Highlights
SIX MONTHS TO Financial Highlights 30 SEPTEMBER 2019 SALES ADJUSTED PROFIT BEFORE TAX STATUTORY PROFIT BEFORE TAX £1.48bn £181m £164m +2%* +3%* +45% ADJUSTED DILUTED EPS ADJUSTED FREE CASH FLOW INTERIM DIVIDEND 30.5p £171m 8.8p +3%* +£19m +2.3% Adjusted results and a number of other terms and perfor
Slide 14: Adjusted Profit Before Tax
SIX MONTHS TO Adjusted Profit Before Tax 30 SEPTEMBER 2019 +£10m +£9m In-line +£2m In-line £(4)m £(2)m Commodities £(11)m £166m £171m £181m H1 FY19 Food & Sucralose Primary Primary Products Central costs Interest Joint Ventures H1 FY20 FX H1 FY20 Adj PBT Beverage Products Adj PBT Adj PBT Solutions C
Slide 15: Food & Beverage Solutions
SIX MONTHS TO Food & Beverage Solutions 30 SEPTEMBER 2019 TOTAL VOLUME SALES STRONG PROFIT GROWTH • 4%* sales growth from increased In line +4%* focus on price and mix management with comparative period ‒ +6%* North America £478m ‒ +8%* Asia Pacific and Latin America ADJUSTED OPERATING PROFIT NEW PR
Slide 16: Sucralose
SIX MONTHS TO Sucralose 30 SEPTEMBER 2019 TOTAL VOLUME SALES SOLID RESULTS (6)% (5)%* • Volume 6% lower ‒ Principally due to phasing £76m • Adjusted operating profit 1%* lower ADJUSTED OPERATING PROFIT ‒ Customer mix ‒ Cost management (1)%* £29m See descriptions of adjusted results in Note 1 of Stat
Slide 17: Primary Products
SIX MONTHS TO Primary Products 30 SEPTEMBER 2019 TOTAL VOLUME SWEETENER VOLUME CHALLENGING MARKET CONDITIONS • Total volume 2% lower (2)% In line ‒ Sweetener volume in line with comparative period ‒ Industrial starch volume 12% lower • Sweeteners and Starches adjusted ADJUSTED OPERATING PROFIT ADJUS
Slide 18: Central, Interest, Taxation and Exceptional Items
SIX MONTHS TO Central, Interest, Taxation and Exceptional Items 30 SEPTEMBER 2019 Change in the six months Item Comment to 30 September 2019 Central costs £2m lower* • Cost discipline Net finance charges £2m higher* • Mainly impact of IFRS 16 leases adoption • Adjusted Effective Tax Rate (ETR) of 20
Slide 19: Strong balance sheet
SIX MONTHS TO Strong balance sheet 30 SEPTEMBER 2019 Actions to strengthen balance sheet Net debt • US$200m debt private placement ‒ Refinancing maturing debt at lower cost Net Debt Impact of Net Debt at Underlying IFRS 16 at 31 March 2019 movement adoption 30 September 2019 • UK pension scheme buy-
Slide 20: Financial Results and Outlook
SIX MONTHS TO Financial Results and Outlook 30 SEPTEMBER 2019 Solid Financial Results Full-Year Guidance Unchanged • Performance as expected Year ending 31 March 2020 We expect continuing progress in Food & • Adjusted diluted earnings per share +3%* Beverage Solutions and gains from productivity ini
Slide 21: Agenda
AGENDA Business Update Financial Results and Outlook Summary Questions 21
Slide 22: Summary
Summary Encouraging progress SHARPEN • Solid financial delivery • Purpose-driven organisation ACCELERATE • ‘Sharpen, Accelerate, Simplify’ supporting performance • Increasing culture of pace and agility SIMPLIFY • Investing in long-term growth 22
Slide 23: Questions
Questions TATE LYLE
Slide 24: Cautionary Statement
Cautionary Statement This presentation for the Half Year Results for the six months to 30 September 2019 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 uncerta