Tate & Lyle PLC · LSE:TATE
Tate & Lyle — Morgan Stanley Global Consumer Conference 2011
24 slides from Tate & Lyle's conference presentation, Nov 15, 2011
Slide 1: Morgan Stanley Global Consumer Conference
Morgan Stanley Global Consumer Conference 15 November 2011, New York
Slide 2: Tate & Lyle has a long and varied history
Tate & Lyle has a long and varied history… 1921 - 2011 Sugar Corn processing Speciality Ingredients 1921-1970 1971-2000 2001- 2011 • Developed speciality • Tate & Lyle formed in • Invested in Amylum – EU ingredients offering 1921 corn processing • SPLENDA® Sucralose • Core business sugar • Invested
Slide 3: Strategic challenges identified in 2009/2010
Strategic challenges identified in 2009/2010 Different markets with different characteristics and different needs – solid competitive position in some areas Need – follower in others for clear Inconsistency between strategic intent and investments choices and focus Limited exposure to / focus
Slide 4: Some major fixes were required
Operational and organisational challenges A legacy operating model – inefficient – complex – constrained delivery Some major fixes Weak operating disciplines and processes were required Dated, non-standardised IS/IT infrastructure Some key organisational skill gaps Too many ‘silos’ vs. a s
Slide 5: Focus, Fix, Grow
What action did we need to take? 1. Need for a clear, focused strategy 2. Need for the relevant operating model, disciplines and capabilities 3. Need for creating a platform for sustainable, long-term growth Focus, Fix, Grow 5
Slide 6: Business transformation through Focus, Fix, Grow
Business transformation through Focus, Fix, Grow New strategy and business transformation programme unveiled in May 2010 Where should we focus? Focus Why should we focus there? What should we move away from? Operating model Fix Operating disciplines and processes Culture and capabilities
Slide 7: 1. Focus
1. Focus
Slide 8: Focus: A clear articulation of purpose
Focus: A clear articulation of purpose A Focused Strategy What The leading global provider of speciality food ingredients and solutions By… Disciplined focus on growing our speciality food ingredients business – deeper customer understanding, improved innovation ability, agility – stronger positio
Slide 9: Focus: Why Speciality Food Ingredients?
Focus: Why Speciality Food Ingredients? The Market Opportunity Global Food Ingredients US$30bn US$30 billion global potential addressable Regional Split1 market Rest of – growing at 5% per annum World 15% North America 30% Increasing customer demand driven by strong, underlying consumer trends 2
Slide 10: Strong foundations we can build on
Focus: Why can Tate & Lyle succeed in this market? Competitive global market positions1 Strong – #2 speciality food starches foundations we – #1 crystalline fructose can build on – #1 high intensity sweeteners Small position in emerging markets but growing strongly Strong relationships with gl
Slide 11: Focus: Our Speciality Food Ingredients business today
Focus: Our Speciality Food Ingredients business today Speciality Food Ingredients – Sales1 £805m, Operating profit1,2 £206m Starch-based High Intensity Food Systems Speciality Ingredients Sweeteners Sales £434 million Sales £185 million Sales £186 million Speciality starches: SPLENDA® Blending bu
Slide 12: Focus: Our Bulk Ingredients business today
Focus: Our Bulk Ingredients business today Bulk Ingredients – Sales1 £1,915m, Operating profit1,2 £157m Sweeteners Industrial starches, Corn Co-products acidulants & ethanol Sales £857 million Sales £709 million Sales £349 million Corn sugars Starches for Animal feed – corn paper gluten feed and
Slide 13: Focus: What should we move away from?
Focus: What should we move away from? The disposal of our Sugars businesses Tate & Lyle progressively selling sugar assets over the years - ceased to be the core business a long time ago No synergies with the rest of the business Challenged business model operating within confines of EU Sugar
Slide 14: Focus: Less complex business, better return on capital
Focus: Less complex business, better return on capital Clear strategy Streamlined portfolio What Exited Sugars The leading global provider of speciality food Sept 2010 – EU Sugar Refining ingredients and solutions Dec 2010 – Molasses By − Disciplined focus on growing our speciality food ingredients
Slide 15: 2. Fix
2. Fix
Slide 16: Fix: Our legacy operating model
Fix: Our legacy operating model Mix of regional and product based business units Support Support SAP 3 functions functions Bulk and speciality managed within same business units Food & Industrial – Go-to-market abilities compromised Ingredients, Sucralose Americas Difficult to integrate and ex
Slide 17: Fix: A new simple operating model implemented in June 2010
Fix: A new simple, operating model implemented in June 2010 Customers Global Bulk Speciality Food business Ingredients Ingredients units Global growth Innovation and Commercial Development unit Global Shared business services support and corporate functions services Global Common IS/IT platform IS/I
Slide 18: Fix: Transforming operational capabilities, processes and culture
Fix: Transforming operational capabilities, processes and culture 2-year projects to transform operational capability on track Common Global IS/IT Platform Global Support Services • Project formally launched on 1 • New Global Shared Service Centre in January 2011 Lodz, Poland started operations • De
Slide 19: 3. Grow
3. Grow
Slide 20: Grow: Creating a platform for growth in Speciality Food Ingredients
Grow: Creating a platform for growth in Speciality Food Ingredients Innovation and Enhancing customer Commercial Emerging markets engagement Development Number of projects in New global Innovation Continuing to strengthen pipeline increasing Centre in Chicago to open sales / technical teams Q1 2012
Slide 21: Measuring Performance
Measuring Performance
Slide 22: Our Key Performance Indicators
Our Key Performance Indicators Year ended 31 March KPI Measure 2011* 2010* Change Growth in Speciality Sales £805m £788m + 2% Food Ingredients Adjusted operating Profitability £321m £268m + 17% Financial profit performance1 Working capital Cash conversion Improved by 34 days 45 days efficiency cycle
Slide 23: Summary
Summary Business performing well Change programme on track: − ‘Focus’ largely complete − ‘Fix’ making solid progress Cultural change being embedded: − Stronger operational and financial disciplines − Performance driven with greater accountability Continuing to build platform to deliver long-
Slide 24: Questions & Answers
Questions & Answers
Tate & Lyle — Morgan Stanley Global Consumer Conference 2011 on 6ix