Tate & Lyle Plc · LSE:TATE
Tate & Lyle — H1 FY2023 Earnings Presentation
28 slides from Tate & Lyle's earnings presentation, Nov 10, 2022
Slide 1: Tate & Lyle's Results for Six Months to 30 September 2022
TATE & LYLE’S RESULTS FOR SIX MONTHS TO 30 SEPTEMBER 2022 Nick Hampton, Chief Executive Dawn Allen, Chief Financial Officer
Slide 2: Cautionary statement
Six months to 30 September 2022 Cautionary statement This presentation for the Half Year Results for the six months to 30 September 2022 contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Tate & Lyle PLC. These statements and fo
Slide 3: Tate & Lyle today
Six months to 30 September 2022 Tate & Lyle today Growth-focused speciality food and beverage solutions business Purpose-led Science-driven Customer-obsessed Transforming Lives through the Science of Food 3
Slide 4: Agenda
Six months to 30 September 2022 Agenda ❑ H1 overview ❑ Strategic progress ❑ Financial results ❑ Outlook and Q&A 4
Slide 5: Key headlines
Six months to 30 September 2022 Key headlines Strong Effective management Continued H1 financial results of cost inflation investment in growth • Double-digit organic revenue • Strategic mix management • Customer-facing solutions growth across all regions capability and infrastructure • Input
Slide 6: Financial highlights
Six months to 30 September 2022 Financial highlights Group1,2 Positive Adjusted Adjusted growth Revenue operating profit operating margin momentum +20% +29% +110bps Food & Beverage Solutions1 Sucralose Adjusted Adjusted Revenue operating profit operating profit +21% +26% +8% See descriptions of adju
Slide 7: Strategic progress: delivering on our growth-focused strategy
Six months to 30 September 2022 Strategic progress Delivering on our Focus Portfolio Strengthening growth-focused on innovation expansion solutions capabilities strategy New Product1 Nutriati Sensory revenue +19% New Products Quantum Hi-Tech Nutrition as % of FBS2 revenue 15% 1 Definition of New Pro
Slide 8: Growth across each platform
Six months to 30 September 2022 Strategic progress Growth across each platform Sweetening1 Mouthfeel Fortification Platform revenue growth H1 FY23 +8% +29% +30% vs H1 FY22 New Product2 revenue growth +1% +10% +79% H1 FY23 vs H1 FY22 1 Sweetening platform includes Sucralose 2 Definition of New Produc
Slide 9: Living our purpose
Six months to 30 September 2022 Living our purpose Supporting Healthy Living Building Thriving Communities Caring for our Planet • Launched new online • Increasing support • Expanded sustainable fibre calculator with for food bank agriculture programme British Nutrition partners through for stevia i
Slide 10: Demand dynamics: supporting our customers' needs
Six months to 30 September 2022 Demand dynamics Supporting our customers’ needs • Long-term consumer trend towards healthier food and drink unchanged − Sugar reduction, fibre fortification and cleaner label solutions • Robust customer demand in the first half • Closely monitoring consumer demand in
Slide 11: Cost inflation and pricing
Six months to 30 September 2022 Cost inflation and pricing Effectively managing cost inflation Offsetting inflation • Broad-based inflation of £85m in the first half Strategic mix management • Use forward purchase commitments globally and hedging for corn and energy in the US to manage inflation and
Slide 12: Strong revenue growth across all regions
Six months to 30 September 2022 Strong revenue growth across all regions Food & Beverage Solutions Revenue growth1 by region H1 FY23 vs. H1 FY22 29% 23% 21% 14% North America Asia, Middle Asia, East, Middle East, Africa and Latin America Europe Food & Beverage Solutions Africa and Latin America FY r
Slide 13: Pricing and mix management
Six months to 30 September 2022 Pricing and mix management Food & Beverage Solutions Drivers of volume to revenue growth H1 FY23 vs. H1 FY22 Volume change Inflation Strategic mix Revenue Acquisitions excluding Primary price-through management growth Products Europe (5)% +13% +12% +1% +21% FY represe
Slide 14: Investing in growth
Six months to 30 September 2022 Investing in growth Innovation and Customer-facing infrastructure solutions capabilities • Extended scientific fibre partnership with APC • Investing further in category and consumer insights Microbiome Ireland through additional regional resources and data • Opened n
Slide 15: Primient joint venture
Six months to 30 September 2022 Primient joint venture Focus on cash flow generation • Business separation completed successfully on 1 April 2022 • Positive start to relationship with KPS Capital Partners, LP • 20-year supply arrangements operating effectively • Received US$76m cash dividends from P
Slide 16: Building strong platform for future growth
Six months to 30 September 2022 Strategic progress • Delivering on our 5-Year ambition Building strong − Positive revenue momentum platform for future growth − Operating margin expansion − New Products 15% of FBS1 revenue − Acquisitions strengthening key platforms • Continuing to invest for future g
Slide 17: Group financial highlights
Six months to 30 September 2022 Group financial highlights Strong Revenue Adjusted Adjusted operating profit profit before tax financial delivery +20% +29% +10% Adjusted Adjusted free Interim diluted EPS1 cash flow dividend +9% £62m 5.4p 1 Pro-forma adjusted diluted EPS calculated based on earnings
Slide 18: Food & Beverage Solutions: strong growth momentum
Six months to 30 September 2022 Food & Beverage Solutions Strong growth momentum Adjusted operating Revenue1 profit1 • Revenue at £752m benefitting from strategic mix management and pricing-through of inflation +21% +26% ‒ +14% North America ‒ +29% Asia, Middle East, Africa and Latin America Adjuste
Slide 19: Food & Beverage Solutions: robust customer demand
Six months to 30 September 2022 Food & Beverage Solutions Robust customer demand Three factors impacting reported volume • Underlying volume +2% higher Planned transition • Reduction in Primary Products capacity in Europe • Reported volume (8)% lower Challenges in operating environment ‒ Due to thre
Slide 20: Sucralose: steady earnings
Six months to 30 September 2022 Sucralose Steady earnings Volume Revenue1 • Volume growth ‒ Strong customer demand +9% +12% ‒ Phasing of some orders into H1 ‒ Modest optimisation of production Adjusted operating • Revenue at £97m benefitting from higher profit1 volume and good customer mix • Adjuste
Slide 21: Profit performance
Six months to 30 September 2022 Profit performance Good profit growth Adjusted operating profit • Adjusted operating profit +29% £16m in constant currency £4m £137m £21m £2m £121m • Adjusted profit before tax +10% £94m in constant currency ‒ (£18)m lower share of profits from Primient joint venture
Slide 22: Taxation, Exceptional Items and Dividends
Six months to 30 September 2022 Taxation, Exceptional Items and Dividends Adjusted effective tax rate Exceptional Items Dividends 21.9% £87m £590m Six months Pre-tax Returned to shareholders to 30 September 2022 exceptional income in last 12 months • +10bps higher than comparative • £98m provisional
Slide 23: Productivity and cost discipline
Six months to 30 September 2022 Productivity and cost discipline Productivity a key focus across the business Sagamore, Indiana • Continued good progress generating productivity benefits Installing new equipment and processes to improve reliability and efficiency of gas turbine • Productivity target
Slide 24: Adjusted free cash flow
Six months to 30 September 2022 Adjusted free cash flow Strong cash generation Adjusted free cash flow H1 FY23 vs H1 FY22 (continuing operations)1 • Adjusted free cash flow at £62m (£42m higher) ‒ +£40m from higher profits +£40m In-line (£8m) +£10m ‒ Working capital outflow £75m, in-line with compar
Slide 25: Net debt
Six months to 30 September 2022 Net debt Increased capacity to invest in growth Net debt movement 31 March 2022 to 30 September 2022 • Net debt £281m (£345m lower) +£62m ‒ £1.0bn net receipts from Primient transaction in April £(1.1)bn +£1.0bn £(626)m ‒ £497m special dividend paid in May ‒ Acquisiti
Slide 26: Looking ahead
Six months to 30 September 2022 Looking ahead Resilience in face of uncertain economic outlook Outlook • Conflict in Ukraine continues to cause significant inflation in raw material, energy and logistics costs For year ending 31 March 2023, we continue to expect: • Customer demand remains robust • R
Slide 27: Summary
Six months to 30 September 2022 Summary • Strategic re-positioning of Tate & Lyle has significantly enhanced quality and resilience of business • Strong revenue and profit performance in the first half • Managing inflation and supply chain challenges through mix, pricing, productivity and cost disci
Slide 28: Questions
QUESTIONS TATE LYLE