Tate & Lyle PLC · LSE:TATE
Tate & Lyle — Non-Deal Roadshow (March 2005)
30 slides from Tate & Lyle's roadshow presentation, March 2005
Slide 1: European Investor Relations Roadshow
European Investor Relations Roadshow March 2005
Slide 2: Investment Profile
Investment Profile • Member of the FTSE 100 index • Listed on London Stock Exchange • Member of original FT-30 founded Tate & Lyle Share Price VS FTSE100 and FTSE Allshare since 1932 January 2004 70% • UK Food Producers’ Sector 60% 50% Tate & Lyle rebased • Market Capitalization £2.4 billion 40% FTS
Slide 3: The leading renewable ingredients business
The leading renewable ingredients business One Company, One Brand, One Tate & Lyle FOOD AND SUGARS VALUE-ADDED INDUSTRIAL RELATIONSHIPS INGREDIENTS EUROPE EUROPE Amylum TLS/Alcantara SPLENDA® Sucralose • Eaststarch • Sugar Trading • United Molasses Sorona® Bio 3G Eastern Sugar AquastaTM Astaxanthin
Slide 4: Choosing How We Will Grow: Cash Generation per Unit
Choosing How We Will Grow Economics of the Four Segments Cash for Growth Value Added – Consumer Excellent Growth Cash Generation per Unit Branded Opportunities Quota Constrained Cash and Low Cost/ High Volume Substrate for Growth Commodity 4 Growth Opportunities Data: Illustrative not to scale
Slide 5: Contribution to Profitability
Contribution to Profitability Year Ended March 2004 Margin Category % Sales EBITA/Sales % % Contribution to Mgn Value added 15 23 3.4 Consumer branded 5 20 1.0 Quota constrained 16 10 1.6 Commodity 64 3 1.9 Group total 100 7.9 7.9 5
Slide 6: The Starch Process
The Starch Process Commodity Base Supports Value Added Growth and Overall Group Margin Enhancement Corn Wet Milling Separation Starch Wheat Dry Milling Value Added Conversion Starches Co-products Glucose Syrup Hydrogenation Fermentation Refining Sorbitol 42 & 55 HFCS AquastaTM Crystalline Dextrose B
Slide 7: What Do Our Products Do?
What Do Our Products Do? • Thicken • Enrich / Fortify • Bind • Encapsulate • Adhere • Emulsify • Strengthen • Gel • Sweeten • Agglomerate • Preserve • Coat • Suspend • Stabilise • Carry • Acidify • Improve Appearance • Provide Body • Extend Shelf-Life • Add Bulk • Provide Humectancy • Reduce Calorie
Slide 8: Product Analysis by Unit
Product Analysis by Unit UNIT Value Added Consumer Quota Commodity Branded Constrained Staley Redpath T&L Sugars Alcantara Amylum Sucralose Bio-3G 8 Astaxanthin
Slide 9: Where Can We Look For Added-Value Growth?
Where Can We Look For Added-Value Growth? Where Is The Opportunity In Foods? Forecast category values, Retail Sales $bn Price, $bn 200 (North America, Western Europe) 22% 153 150 125 22% 103 23% 32% 100 84 84 82 2003 68 25% 2008 62 49 50 39 17% 38% 16 18 8 11 0 Beverages Bakery Confectionery Dairy S
Slide 10: From Supplier to Partner
From Supplier to Partner Strategic Relationship Top-to-Top • Sharing strategic priorities and consumer/market insights • Set frameworks • Listen to needs and set priorities • Agree review process Account Co-ordination/Planning Collaborative project • Routine price negotiation for commodities • Partn
Slide 11: We Are Helping Our Customers Respond Effectively
We Are Helping Our Customers Respond Effectively Consumer pressure Customer response Our new services Increasing the pace of . . . on brands innovation and new product development C TATE & LYLE CREATETM Innovations in taste, texture, form, coating, etc . . . on the bottom line Cutting costs and opti
Slide 12: SPLENDA Sucralose
SPLENDA® Sucralose • Realignment completed April 2004 – $132m cash paid • Two expansions of Alabama facility – totalling US$75m to more than double capacity by April 2006 • US$175m (£97m) investment in new facility in Singapore – completion by January 2007 • Plant will have approximately two-thirds
Slide 13: Barriers to entry
Barriers to entry SPLENDA® Sucralose brand Regulatory & Specifications Economy of Scale Technology Know-how Patents 13
Slide 14: Intense Sweetener Market Relative Value
Intense Sweetener Market Relative Value Split by Geography and by Product, Total Value US$1bn US$m, Manufacturers’ Sales 2003 10 110 220 80 130 550 550 220 10 120 Aspartame Acesulfame K Americas Europe Stevia Sucralose Asia Rest of World Saccharin Cyclamate 14 Data: Company Estimates
Slide 15: SPLENDA Sucralose Ingredient Use
SPLENDA® Sucralose Ingredient Use % Split by sales revenue Pharma, 6% Beverages, 32% Food, 62% 15 Data: Company Estimates
Slide 16: Bio-products
Bio-products • Bio-3G (1,3-Propanediol) • Bio-gums • AquastaTM Astaxanthin 16
Slide 17: Developing Partnerships – Bio-3G with DuPont
Developing Partnerships – Bio-3G with DuPont • Combined investment approx. US$100m by March 2006 • Initial commercial manufacturing facility in Loudon, Tennessee • Construction complete 31 March 2006 • Sales forecast US$75m by 2008 • Total addressable market estimated at US$2bn Bio-3G Loudon Plant (
Slide 18: Market – Polyester Grows Globally
Market – Polyester Grows Globally 18
Slide 19: Bio-Gums - An Example of Organic Growth
Bio-Gums - An Example of Organic Growth • A family of hydrocolloid gums produced by fermentation • A thickener: high viscosity at low concentrations • Opportunity for a portfolio of unique bio- gums - Xanthan gum first entry • Complementary to food and industrial ingredients • Highly value added - a
Slide 20: Aquasta Natural Astaxanthin
AquastaTM Natural Astaxanthin • Joint venture with US bio-tech company, Igene, announced in March 2003 to produce natural 3000 Global Farmed Salmon Production astaxanthin, AquastaTM 2500 Total Salmon Demand • Selby, UK plant is being 2000 commissioned ThousandTonnes 1500 • Essential nutrient for far
Slide 21: Key Results
Key Results Six Months to September 2004 • 9% increase in profit before tax, amortisation and exceptional items to £130m • Exceptional growth in SPLENDA® Sucralose • Better than expected performance at Amylum • Continued growth in value added food ingredients • PBI*/sales margin increased from 8.0%
Slide 22: Profit and Loss Account
Profit and Loss Account Six Months to September HALF YEAR FIGURES £m 2004 2003 Sales 1,666 1,663 - Profit before interest* 142 133 +7% Interest (12) (14) +14% Profit before taxation* 130 119 +9% PBI*/Sales margin 8.5% 8.0% Interest cover* 13.6 x 8.5 x 22 * before exceptional items and amortisation
Slide 23: Profit and Loss Account
Profit and Loss Account Six Months to September HALF YEAR FIGURES £m 2004 2003 Profit before taxation* 130 119 Amortisation (7) (4) Exceptional items (42) (4) Taxation (20) (35) Minority interests (3) 1 Profit for the period 58 77 Dividend per share (pence) 5.7 5.6 Diluted earnings per share* (pence
Slide 24: Sweeteners and Starches Americas
Sweeteners and Starches Americas HALF YEAR FIGURES £m 2004 2003 61% Group PBI* Sales 660 643 +3% Profit before interest* 87 60 +45% Margin* 13.2% 9.3% +3.9 pts Exchange translation reduced profits by £6m • Strong performance from food ingredients • HFCS market slightly down • Industrial starch gross
Slide 25: Sweeteners and Starches Americas: Sucralose
Sweeteners and Starches Americas Sucralose • Very strong demand buoyed by pipeline for product launches • Pipeline fill, sales met out of stock • Stock rebuild in H2 • Sales US$113m, PBI* $51m • Transitional costs lower than expected • Coca Cola North America launching a new Diet Coke Sweetened with
Slide 26: Sweeteners and Starches Europe
Sweeteners and Starches Europe HALF YEAR FIGURES £m 2004 2003 41% Group PBI* +4% Sales 716 691 Profit before interest* 58 73 -21% Margin* 8.1% 10.6% -2.5 pts Profits decreased by £2m due to exchange translation • Wheat & corn prices fall to more normal levels • Profitability reduction lower than exp
Slide 27: Capital Expenditure & Investments
Capital Expenditure & Investments HALF YEAR FIGURES £m Capital Expenditure Investments Depreciation 140 120 100 80 60 40 20 0 Sep 01 Mar 02 Sep-02 Mar 03 Sep-03 Mar 04 Sep-04 27
Slide 28: Summary Balance Sheet
Summary Balance Sheet Total net assets Net debt Net debt / EBITDA § £m Times 1200 2.5 1000 2 800 1.5 600 1 400 200 0.5 0 0 Mar-04 Sep-04 28 § subsidiaries only, annualised, before exceptional items
Slide 29: Key Financial Ratios
Key Financial Ratios Six Months to September HALF YEAR FIGURES 2004 2003 Interest cover* 13.6 x 8.5 x Net debt / EBITDA § 1.5 x 1.4 x Gearing 51% 43% Long term debt / Total capitalisation 21% 26% RONOA ‡ 17.0% 15.9% * before exceptional items and amortisation 29 § annualised, subsidiaries only, befo
Slide 30: Conclusion
Conclusion • Strong balance sheet • Proven management team • Sound strategy based on continued growth in value added products • Success in growing the business both organically and through partnerships • Investing in research and development, consumer research and customer focus • Excellent start to