Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 FY2021 Earnings Presentation
34 slides from Tate & Lyle's earnings presentation, Nov 5, 2020
Slide 1: Results for six months to 30 September 2020
RESULTS FOR SIX MONTHS TO 30 September 2020
Slide 2: Thank you to colleagues across the world!
Six months to 30 September 2020 Thank you to colleagues across the world! Improving Lives for Generations 2
Slide 3: Overview
Six months to 30 September 2020 Overview • Robust first half performance ̶ Food & Beverage Solutions revenue and profit1 higher SHARPEN ̶ Sucralose softer demand, profit1 lower ̶ Primary Products profit1 steady, helped by strong Commodities • Strong operational execution and cost discipline underpin
Slide 4: Financial delivery
Six months to 30 September 2020 Financial delivery Food & Beverage Solutions revenue +1%* Adjusted profit before tax +3%* Food & Beverage Solutions profit1 +9%* Adjusted diluted earnings per share +9%* Primary Products profit1 In-line* Adjusted free cash flow +£23m Interim dividend maintained at 8.8
Slide 5: Sustainability delivery: Caring for our Planet
Six months to 30 September 2020 Sustainability delivery Caring for our Planet Greenhouse gas (GHG) emissions • Scope 1, 2 and 3 GHG targets validated by Science Based Targets Initiative • Three major GHG reduction and efficiency projects underway which will reduce GHG emissions by up to 20% and elim
Slide 6: Agenda
Nick Hampton, Chief Executive Imran Nawaz, Chief Financial Officer AGENDA Business Update Financial Results Outlook and Summary Questions 6
Slide 7: Food & Beverage Solutions: Strong profit growth
Six months to 30 September 2020 Food & Beverage Solutions Food & Beverage Solutions Strong profit growth Volume in-line Revenue +1%1 Profit +9%1 Desire for Driving Addressed by our Healthier Living consumer demand products and capabilities Sugar Calorie Clean Sweetening reduction reduction Non-GMO l
Slide 8: Food & Beverage Solutions
Six months to 30 September 2020 Food & Beverage Solutions Sweetening Texture and Mouthfeel Fibre Fortification Sugar Reduction Clean Label Fibres +20% +34% +11% Increase in revenue for ingredients Increase in revenue for Increase in revenue1 used for sugar reduction1,2 clean label texturants1 1 Six
Slide 9: Food & Beverage Solutions North America: Delivering solutions for customers
Six months to 30 September 2020 Food & Beverage Solutions North America Delivering solutions for customers Volume +3% Revenue +3%1 Dairy Category Example Sub-category approach Develop prototype products Customer collaboration Ice Cream Milk Products Dairy-free Frozen Dessert Integrated Solutions Dai
Slide 10: Primary Products: Challenging business environment
Six months to 30 September 2020 Primary Products Counter Service Restaurants1 Challenging business environment North America: January to August 2020 1.5 2019 • Covid-19 negatively impacted demand Relative 28% decline 1.0 Foot − Significantly reduced out-of-home consumption Traffic (points) 2020 0.5
Slide 11: Primary Products: Steady Earnings
Six months to 30 September 2020 Primary Products Primary Products Steady Earnings Volume (7)% Profit in-line1 Clear focus and actions to deliver strategy Strong Operational Cost Optimise product Target new and customer service efficiency discipline and customer mix growing markets 1 Adjusted operati
Slide 12: Delivering on our priorities for year ending March 2021
Six months to 30 September 2020 Delivering on our priorities for year ending 31 March 2021 Purpose at the centre of our Covid-19 response Priorities • Global Pandemic Response team in place Look after Continue our colleagues to progress • Local response teams at each site and communities strategy •
Slide 13: Look after our colleagues and communities
Six months to 30 September 2020 Look after our colleagues and communities Supporting Healthy Living Building Thriving Communities • Programme to support colleagues’ mental health • Additional support for over 20 food banks globally • Free fibre education online course in Latin America • Founding par
Slide 14: Build stronger customer relationships
Six months to 30 September 2020 Build stronger customer relationships • Strengthening customer connectivity through technology • Bespoke customer webinars and seminars − Sugar and calorie reduction, plant-based ingredients • Accelerated launch of online customer-focused programmes − Sweetener Vantag
Slide 15: Continue to progress strategy: Portfolio Expansion
Six months to 30 September 2020 Continue to progress strategy Portfolio Expansion • Agreement signed to acquire tapioca business in Thailand • Expands manufacturing footprint in Asia Pacific • Investing to increase capacity for higher functionality texturants • Extends customer offering for clean-la
Slide 16: Continue to progress strategy: Innovation
Six months to 30 September 2020 Continue to progress strategy Innovation growth New Products Six months to 30 September 2020 • Collaborating with customers to launch new products Reported Like-for-like • Value of innovation pipeline up 4%1 revenue growth2 revenue growth2 • Double digit revenue growt
Slide 17: Maintain financial strength
Six months to 30 September 2020 Maintain financial strength Robust financial position Continuous improvement Six months to 30 September 2020 • Strengthened balance sheet Examples from Sagamore, Indiana facility • Low leverage and strong liquidity Simplifying the business • Continuous improvement pro
Slide 18: Summary
Six months to 30 September 2020 Summary • Resilient performance • Delivering on our priorities • Culture of agility • Close customer connectivity 18
Slide 19: Agenda
AGENDA Business Update Financial Results Outlook and Summary Questions 19
Slide 20: Financial Highlights
Six months to 30 September 2020 Financial Highlights REVENUE ADJUSTED PROFIT BEFORE TAX ADJUSTED DILUTED EPS (4)%* +3%* +9%* £1.4bn £180m 32.1p ADJUSTED FREE CASH FLOW NET DEBT INTERIM DIVIDEND +£23m £93m lower In-line £194m £358m 8.8p • Statutory profit before tax at £157m, 4% lower due to net exce
Slide 21: Adjusted profit before tax
Six months to 30 September 2020 Adjusted profit before tax £8m £11m £3m £(4)m £(2)m £(6)m £(11)m £181m £186m £180m H1 FY20 Food & Sucralose Sweeteners Primary Products Commodities Central costs Joint Ventures H1 FY21 FX H1 FY21 Adj PBT Beverage and Starches and Interest Adj PBT Adj PBT Solutions Con
Slide 22: Food & Beverage Solutions
Six months to 30 September 2020 Food & Beverage Solutions TOTAL VOLUME REVENUE PROFIT MOMENTUM • 1%* revenue growth benefiting from In-line +1%* strong in-home demand with comparative period ‒ +3%* North America £475m ‒ +1%* Asia Pacific and Latin America ADJUSTED OPERATING PROFIT NEW PRODUCTS REVEN
Slide 23: Sucralose: Softer Demand
Six months to 30 September 2020 Sucralose TOTAL VOLUME REVENUE SOFTER DEMAND • Volume 2% lower (2)% (2)%* ‒ Reduced out-of-home consumption, mainly in beverages £72m ‒ Demand in September higher than usual due to phasing of some customer orders ADJUSTED OPERATING PROFIT • Adjusted operating profit 1
Slide 24: Primary Products: Challenging Market Conditions
Six months to 30 September 2020 Primary Products TOTAL VOLUME SWEETENER VOLUME CHALLENGING MARKET CONDITIONS • Total volume 7% lower (7)% (8)% ‒ Sweeteners volume 8% lower ‒ Industrial starch volume 9% lower • Sweeteners and Starches adjusted operating profit 13%* lower ADJUSTED OPERATING PROFIT ADJ
Slide 25: Central, Interest, Joint Ventures, Taxation and Exceptional Items
Six months to 30 September 2020 Central, Interest, Joint Ventures, Taxation and Exceptional Items Item Change Comments • Higher self-insurance costs Central costs £2m* higher • Underlying strong cost discipline • Lower borrowing costs from bond refinancing Net finance charges In-line • Loss of finan
Slide 26: Actions to reduce costs and drive productivity
Six months to 30 September 2020 Actions to reduce costs and drive productivity Rigorous cost discipline Benefits Six months to 30 September 2020 • Actions to reduce costs and offset inflation include: − Travel, consulting, recruitment freeze • Savings benefited both business divisions £11m £8m Produ
Slide 27: Balance sheet
Six months to 30 September 2020 Balance sheet • Adjusted free cash flow £23m higher at £194m Adjusted free cash flow 13% • Capital expenditure in the 2021 financial year CAGR £194m expected to be between £140m and £160m £171m £152m • Net debt of £358m, £93m lower than 31 March 2020 • Net debt to EDI
Slide 28: Robust financial delivery
Six months to 30 September 2020 Robust financial delivery • Adjusted profit before tax 3%1 higher in a challenging environment • Strong profit growth in Food & Beverage Solutions • Rigorous operational and cost discipline • Adjusted diluted earnings per share 9%1 higher • Free cash flow higher and b
Slide 29: Agenda
AGENDA Business Update Financial Results Outlook and Summary Questions 29
Slide 30: Outlook
Outlook Business environment Future uncertainties Looking ahead • Duration and severity of pandemic • Not issuing guidance for year to 31 March 2021 • Government actions • Q3 trading update on 28 January 2021 • Out-of-home demand • 2021 calendar year sweetener pricing round 30
Slide 31: Priorities remain unchanged for the year ending March 2021
Priorities Remain unchanged for the year ending 31 March 2021 Look after our Build stronger Continue Maintain colleagues and customer to progress financial communities relationships strategy strength Emerge a stronger business 31
Slide 32: Summary
Six months to 30 September 2020 Summary • Robust performance SHARPEN • Progressing strategy • Strong financial position ACCELERATE • Investing in growth SIMPLIFY • Purpose-driven organisation 32
Slide 33: Questions
Questions TATE LYLE |<
Slide 34: Cautionary Statement
Six months to 30 September 2020 Cautionary Statement This presentation for the Half Year Results for the six months to 30 September 2020 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and fo