Slide 1: Results for the Year Ended 31 March 2018
RESULTS FOR THE YEAR ENDED 31 March 2018
Slide 2: Sharpen Accelerate Simplify
SHARPEN ACCELERATE SIMPLIFY 2
Slide 3: Agenda
Nick Hampton, Chief Executive Chris McLeish, Group VP Finance and Control AGENDA Financial Review Outlook Accelerating Business Performance Questions 3
Slide 4: Simplifying presentation
Simplifying presentation Two divisions Three reporting segments • Divisions renamed to reflect • Food & Beverage Solutions business fundamentals − Food & Beverage Solutions (includes • Sucralose Sucralose) Formerly Speciality Food Ingredients − Primary Products • Primary Products Formerly Bulk Ingre
Slide 5: Agenda
AGENDA Financial Review Outlook Accelerating Business Performance Questions 5
Slide 6: Year of progress
YEAR ENDED Year of progress 31 MARCH 2018 Commercial Operational Financial Food & Beverage Solutions Consistent execution Earnings growth volume momentum Sucralose Building Strong margin improvement commercial capabilities cash generation Primary Products Investing in applications Robust delivers st
Slide 7: Financial Highlights
YEAR ENDED Financial Highlights 31 MARCH 2018 SALES ADJUSTED PROFIT BEFORE TAX ADJUSTED DILUTED EPS £2.7bn £301m 50.1p (1)%* +13%* +7%* ADJUSTED FREE CASH FLOW NET DEBT RETURN ON CAPITAL EMPLOYED £196m £392m 16.2% +£22m £60m lower +190 bps Adjusted results and a number of other terms and performance
Slide 8: Adjusted Profit Before Tax
YEAR ENDED Adjusted Profit Before Tax 31 MARCH 2018 +£39m Includes Commodities £(4)m +£10m +£3m +£26m £(14)m £305m £(4)m £301m £271m FY17 Food & Sucralose Joint Interest/ FY18 FX FY18 Primary Adj PBT Beverage Products Ventures Central costs Adj PBT Adj PBT Solutions Constant Currency See description
Slide 9: Food & Beverage Solutions
YEAR ENDED Food & Beverage Solutions 31 MARCH 2018 TOTAL VOLUME SALES VOLUME MOMENTUM • Volume growth in all regions +3% £850m ‒ North America +1% ‒ Asia Pacific and Latin America +7% +2%* ‒ Europe, Middle East and Africa +6% ADJUSTED OPERATING PROFIT NEW PRODUCTS SALES • +8%* adjusted operating pro
Slide 10: Sucralose
YEAR ENDED Sucralose 31 MARCH 2018 TOTAL VOLUME SALES STRATEGY DELIVERING • Volume 12% lower (12)% £146m ‒ Lapped FY17 excess inventory sell-down (9)%* • Adjusted Operating Profit +5%* ADJUSTED OPERATING PROFIT OPERATING MARGIN ‒ Lower cost of single source production in US £55m +560 bps +5%* See de
Slide 11: Primary Products
YEAR ENDED Primary Products 31 MARCH 2018 NORTH AMERICAN TOTAL VOLUME SWEETENER VOLUME STRONG PERFORMANCE • North American Sweeteners volume +1% +3% ‒ +3% higher on robust demand and consistent execution • Industrial starch volume flat • Sweeteners and Starches adjusted ADJUSTED OPERATING PROFIT ADJ
Slide 12: Strong cash generation and robust balance sheet
YEAR ENDED Strong cash generation and robust balance sheet 31 MARCH 2018 Adjusted free cash flow 2016 2017 2018 £196m Cash dividend cover 0.4x 1.3x 1.5x £174m Net debt (£m) 434 452 392 Leverage 1.2x 0.9x 0.8x £53m (Net debt/EBITDA) Return on Capital FY16 FY17 FY18 11.3 14.3 16.2 Employed (%) • FY18
Slide 13: Year of progress: profit and cash delivery
YEAR ENDED Year of progress: profit and cash delivery 31 MARCH 2018 • Volume momentum in Food & Beverage Solutions • Strong performance in Primary Products • Adjusted profit before tax 13%* higher • Adjusted diluted earnings per share 7%* higher • Adjusted free cash flow up £22m at £196m • Net debt
Slide 14: Agenda
AGENDA Financial Review Outlook Accelerating Business Performance Questions 14
Slide 15: Outlook and calendar
Outlook and calendar Outlook Timetable For year ending 31 March 2019 • No Q1 Trading Statement • We expect growth in earnings per share1 in constant currency to be in a mid-single digit range, albeit • Capital Markets Day to be held towards the lower end due to energy and transport on 12 and 13 Sept
Slide 16: Agenda
AGENDA Financial Review Outlook Accelerating Business Performance Questions 16
Slide 17: Business Priorities Investment Case
1 2 3 BUSINESS PRIORITIES INVESTMENT CASE 17
Slide 18: An integrated business
An integrated business Two important divisions Managed together to optimise overall return Food & Beverage Primary Growth Cash Solutions Products • Shared assets • Common customers Innovation Global Operations Support Functions 18
Slide 19: Strong value propositions
Strong value propositions FOOD & BEVERAGE SOLUTIONS PRIMARY PRODUCTS Value proposition Value proposition Shared assets • Growing, global market • Stable North American market • Provide solutions: − Lower sugar, calories and fat • Strong positions − Add fibre − Sweeteners − Clean label − Industrial s
Slide 20: Three key priorities
Three key priorities Areas of focus 1 • Grow Food & Beverage Solutions Sharpen − Accelerate volume growth Focus on − Margin accretion Customer − Expand portfolio 2 3 • Value from Primary Products − Steady volume and profit Accelerate Simplify − Mix management Portfolio and Drive − Cash generation De
Slide 21: Sharpen Focus on Customer
Sharpen Focus on Customer Focus Actions • Move focus: product to category Selected categories − Global categories: beverages, dairy and soups, sauces and dressings Solutions approach − Regional categories: 2 to 3 per region where we have expertise − Implement category-led teams Partner for growth •
Slide 22: Solutions in local markets
Solutions in local markets • Sugar reduction initiative • Solutions based on PROMITOR® fibre • Delivered 30-40% sugar reduction • Multiple support provided: − Applications − Analytical − Regulatory − Nutrition − Logistics − Quality 22
Slide 23: Accelerate Portfolio Development
Accelerate Portfolio Development Focus Actions • Accelerating pipeline New product development development Open Innovation • Increasing focus on Open Innovation New partnerships • Building partnership with Codexis Acquisitions and joint ventures • Acquired minority stake in Sweet Green Fields (stevi
Slide 24: Simplify and Drive Productivity
Simplify and Drive Productivity Focus Actions Simplify business • US$100m productivity Re-deploy resources programme over 4-year period Increase efficiency • Reinvest in business to underpin growth and cash generation Reduce costs 24
Slide 25: Well-balanced business
Well-balanced business Investment case Primary Food & Beverage Sucralose Products Solutions Manage for stable earnings; Growth driver; Manage for cash; cash generation top and bottom line growth high return on assets EARNINGS PER SHARE1 – Accelerate growth ORGANIC RETURN ON CAPITAL EMPLOYED2 – Impro
Slide 26: Clear capital allocation framework
Clear capital allocation framework Capital allocation priorities to maintain Balance investment grade credit rating Sheet Invest in organic growth (capex £130-£170m p.a.) Strong returns on capital employed Acquisitions, joint ventures, partnerships Progressive dividend policy Forward leverage1 range
Slide 27: Summary
Summary • Integrated business managed to optimise overall return • Strong value propositions − Food & Beverage Solutions aligned to growing global consumer trends − Primary Products operates in large, stable markets • Three programmes underway to realise growth potential − Sharpen focus on customer
Slide 28: Sharpen Accelerate Simplify
SHARPEN ACCELERATE SIMPLIFY 28
Slide 29: Agenda
AGENDA Financial Review Outlook Accelerating Business Performance Questions 29
Slide 30: Cautionary Statement
Cautionary Statement This presentation for the Full Year Results for the year ended 31 March 2018 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 be