Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 2016 Earnings Presentation
32 slides from Tate & Lyle's earnings presentation, Nov 5, 2015
Slide 1: Results for six months ended 30 September 2015
Results for six months ended 30 September 2015 London, 5 November 2015 © Tate & Lyle 2015
Slide 2: Cautionary Statement
Cautionary Statement This Statement of results for the six months ended 30 September 2015 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 uncertainty because th
Slide 3: Overview
Overview Encouraging first half of the year with adjusted profit before tax up 18%1 Speciality Food Ingredients performed well with good mix management Bulk Ingredients performed steadily despite challenging commodities markets Volume from New Products increased by 50% Executional discipli
Slide 4: Half Year Financial Results
Half Year Financial Results Nick Hampton, Chief Financial Officer © Tate & Lyle 2015 4
Slide 5: Improved communication
Improved communication Disposed elements of Eaststarch Increased clarity and simplicity joint venture reported within discontinued operations Reduced number of adjustments Revised disclosure framework Clearer understanding of drivers of performance Equity accounting for joint ventures ©
Slide 6: Headline Financial Results
Headline Financial Results Half Year ended 30 September Continuing operations1 2015 2014 Change2 £m, unless stated (£1 = US$1.54) (£1 = US$1.68) Sales 1,176 1,200 (6%) Adjusted operating profit3 100 81 12% Adjusted profit before tax4 103 80 18% Adjusted diluted earnings per share4 18.1p 13.8p 20% Ne
Slide 7: Analysis of Adjusted Profit before Tax
Analysis of Adjusted Profit before Tax Half Year ended 30 September Continuing operations1 2015 2014 £m Adjusted profit before tax 103 80 Adjusted for: - Business realignment – impairment and related net costs (32) - - SPLENDA® Sucralose – table top agreement (2) - - Tate & Lyle Ventures – investmen
Slide 8: Speciality Food Ingredients
Speciality Food Ingredients Half Year ended 30 September Continuing operations1 Volume change 2015 Sales Sales change2 £m, unless stated Total Speciality Food Ingredients 0% 447 3% Total excluding SPLENDA® Sucralose (2%) 275 4% and Food Systems North America (2%) 163 0% Asia Pacific and Latin Americ
Slide 9: Speciality Food Ingredients
Speciality Food Ingredients Half Year ended 30 September 2015 Adjusted Adjusted Continuing operations1 Volume Sales Sales Operating Operating £m, unless stated change change2 Profit Profit change2 Total excluding SPLENDA® (2%) 275 53 4% 21% Sucralose and Food Systems Food Systems 25% 95 13 5% (4%) S
Slide 10: Bulk Ingredients
Bulk Ingredients Half Year ended 30 September 2015 Adjusted Adjusted Continuing operations1 Volume Sales Sales Operating Operating £m, unless stated change change2 Profit Profit change2 North American Sweeteners 2% North American Industrial Starches (5%) Total Bulk Ingredients 0% 729 42 (11%) (15%)
Slide 11: Financial Results
Financial Results Half Year ended 30 September 2015 Continuing operations1 2014 (£1 = Change2 £m, unless stated (£1 = US$1.68) US$1.54) Adjusted operating profit - Speciality Food Ingredients & Bulk Ingredients 118 106 4% - Central (18) (25) 25% Adjusted operating profit3 100 81 12% Adjusted net fin
Slide 12: Discontinued Operations
Discontinued Operations Half Year ended 30 September £m 2015 2014 Share of post-tax profits of disposed elements of Eaststarch 17 16 Exceptional charge for professional and other disposal costs (2) Exceptional charge for EU Sugars litigation (18) (Loss) / profit for the period (3) 16 Second half Inc
Slide 13: Net Debt and Adjusted Cash Flows
Net Debt and Adjusted Cash Flows Half Year ended 30 September 2015 Net Debt is £34m lower than at the start of the year £m Adjusted free cash1 flow of £92m 17 17 100 (92) (13) 53 (22) (81) 55 (555) (521) (521) 30 March 2015 Adjusted Working Capital Net retirement Dep'n, Capex Interest Dividends paid
Slide 14: Supply Chain and Performance Management Update
Supply Chain and Performance Management Update Introduction of robust supply chain and performance management capabilities Improvements to global supply chain and demand / supply planning processes – Creation of strong demand / supply planning team embedded in each region – Monthly reporting to co
Slide 15: Full Year Guidance
Full Year Guidance Expectations for the full year remain unchanged from our guidance issued at our full year results in May 2015 that the Group’s adjusted profit before tax from continuing operations in constant currency and on an equity accounting basis will be broadly in line with that of the 2015
Slide 16: Strategy Update
Strategy Update Javed Ahmed, Chief Executive Officer © Tate & Lyle 2015 16
Slide 17: Ambition to further strengthen the business mix by 2020
Ambition to further strengthen the business mix by 2020 2020 Ambition Mix of Geographic spread Contribution from Group profits1 of SFI Sales New Products Adjusted SFI New Products operating profit Sales2 Sales $200m 30% 30% 50% 70% 20% $69m 3 Speciality Food Ingredients North America 2015 2020 Bulk
Slide 18: Achievement of ambition driven by clear executional priorities
Achievement of ambition driven by clear executional priorities Bulk Ingredients Speciality Food Ingredients Steady earnings and cash generation Growth engine Priorities Priorities Optimise product mix and margins Drive growth in North America Manage contract mix Build on growth in Asia Pacif
Slide 19: Bulk Ingredients: Core Business
Bulk Ingredients: Core Business North Solid structural base Large, well-established markets America % of Bulk Ingredients Profit from North America1 Today >90% Strong market positions + Long-standing customer relationships North America Rest of World Eaststarch re-alignment a significant Bulk swee
Slide 20: Bulk Ingredients: Commodities
Bulk Ingredients: Commodities Enables efficient operation of corn-based business for both divisions Principal activities Dampening volatility Corn procurement Conservative hedging strategy Operates network of storage facilities Investments in elevator network to manage cost effectiveness and
Slide 21: Bulk Ingredients: Re-shaped and re-focused business
Bulk Ingredients: Re-shaped and re-focused business Focus on steady earnings, sustained cash generation, dampening volatility Purpose Operate efficient assets which also support growth in Speciality Food Ingredients Steadily re-deploy primary capacity to Speciality Food Ingredients Optimise
Slide 22: SFI: High quality business with strong structural growth drivers
SFI: High quality business with strong structural growth drivers Attractive global SFI market Leading positions Benefiting from global trends #2 Speciality food starches Wellness ‘Natural’ Other #2 Dairy stabilizers 7% Texturants #2 Locust bean gum 23% #1 Crystalline fructose ~US$42bn #1 Sucralose F
Slide 23: Regional priority: Driving SFI growth in North America
Regional priority: Driving SFI growth in North America Volume opportunity in North America Key Actions in North America New leadership and strengthened go-to-market SFI volume growth1 team CAGR (%) 2011 ‒ 2015 ‒ New General Manager, Finance Director and 4% Head of Sales since 2014 ‒ Significantly
Slide 24: SFI North America: Focus on higher growth sub-categories
SFI North America: Focus on higher growth sub-categories ‘Healthy-snacking’ sub-category growth in North America1 Beverages Dairy Bakery 6.1% 6.0% 10.8% 4.7% 9.5% 3.7% 2.3% 0.7% -0.2% Overall Smoothies Sports Overall Yoghurt Flavoured Overall Nutritional Popcorn category category drinks milk categor
Slide 25: Regional priority: Continue to drive growth in Asia Pacific and Latin America
Regional priority: Continue to drive growth in Asia Pacific and Latin America Build on growth in Asia Pacific and Latin America Leverage technical expertise in China Strong growth from a low base ‒ 50% volume growth since 2012 China Asia Pacific F&B2 Dairy Category Increasingly meaningful part o
Slide 26: Delivering strong growth in New Products
Delivering strong growth in New Products Sales ($m) FY12 FY13 FY14 FY15 FY16 FY17 2020 H1 only =>10% 200 SFI sales 48 69 37 43 18 Main New Products in the market REZISTA® Ambition for New Products DOLCIA PRIMA® Allulose Potentially very exciting opportunity New Products launched within the last
Slide 27: Case Study: Growing success of Promitor Soluble Corn Fibre
Case Study: Growing success of Promitor® Soluble Corn Fibre Strong volume momentum1 H1 2016 volume growth 31% >100% CAGR Created and developed by Tate & Lyle – High fibre product launched in FY11 FY12 FY15 #1 global soluble corn fibre Promitor® can be used across nearly Key drivers of customer
Slide 28: Disciplined innovation process; continuous innovation approach
Disciplined innovation process; continuous innovation approach SFI New Products Pipeline at September 2015 SFI New Products Project Bridge 22 projects March 2014 to September 2015 8 5 5 5 12 11 28 3 22 1 Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Moved to Killed or New commercialisation placed on hold
Slide 29: Speciality Food Ingredients: Growth engine
Speciality Food Ingredients: Growth engine Drive growth in North America Build on growth in Asia Pacific and Latin America New SFI Increase contribution from New Products management Priorities Restructure Europe to enhance margins team making a real difference Focus on top line growth in F
Slide 30: Disciplined use of cash; re-building cash dividend cover
Disciplined use of cash; re-building cash dividend cover Increasing expansion and cost reduction capital expenditure Target Capital and operating cash flow discipline Transformation IRR Payback capex Capital discipline 23% Transformation infrastructure now in place 45% 20-25% 4-6 yr 25% Mix of s
Slide 31: Tate & Lyle 2020 Ambitions
Tate & Lyle 2020 Ambitions Businesses Group Shareholders Speciality Food Ingredients Grow on average modestly ahead of the market Margin expansion over time Attractive dividend Broaden geographic sales mix Growing with growing earnings $200m sales from New Products cash cover Bulk Ingredient
Slide 32: Questions
Questions © Tate & Lyle 2015 32